Matter of SH Harman LLC v New York State Div. of Housing & Community Renewal

Annotate this Case

Download PDF

Matter of SH Harman LLC v New York State Div. of Housing & Community Renewal 2021 NY Slip Op 32205(U) November 4, 2021 Supreme Court, Kings County Docket Number: Index No. 505537/21 Judge: Ingrid Joseph Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] KINGS COUNTY CLERK 11/08/2021 04:25 PM INDEX NO. 505537/2021 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 11/08/2021 At an L \S lcrrn, Part 83 of the Sup1e111c Court of the State i\',:w York_ held in and !(Jr the (\,unty Kings. at the Courtlhntsc, 0 or or at ]60 1\dams Street. Brooklyn, 1\l'\V '{ork. 011 the 4th day or November. 2021. PR[:SINT: I IOI\ lNCiR[D JOSI Pl L Jus1ie1.·. -----------------------------------------------------------------------X [n the tvlatter or the i\pplication SI l I L\1Uv1:\N LLC. ur Index No. 'i05'i37 21 Pt.:titioncr. .fl fl)(i~H"i'-s'l h)r a Jud1=1-111l'lll Pursuant to .\nick 78 nt'the Ci\il Practice la\\ and Rules. -against!\I.\\ '{ORK SI/\ 11-. l)IVISIUI\ OI· I lOUSl'\JC, -\1\1) CO\H'vll "I\IT't' RFNI \\'AL Respondent. RI : DI !CR Dkt. '\Jo. l\'-:210004-RO (G\\'-2I0004-UC) -----------------------------------------------------------------------X I he fullsy_~:Jng c-tilcd papers read hcr(·in: N'{SCLI· l\os: '\J\1t11.·e of Mntion•On.kr to Sho\\ Cause' Pclition<('rnss t\-fotion and \ilida\its (AffirrnationsJ r\nnc,ed ( )pposing i\ !Jidd\ ih ( ,\ !linnations) -\tfo.bvitsi At'li11natio11s in Rl·ply 17 21 - :2,() "\2 - 4(1 t rpon the tr1rcg1,ing p<1pers. pctitiu111.T. SI I I hmnun I .LC ( .. petitioner") sc,:ks judiL·ial 1\:\ IC\\, under i\rt1clc 78 or the ( 'ivil l'rc1cticc I.a\\ and Rules. (ii Zill urdcr by respondent, Nn\ York State Division of Housing and Community Renewal (DHCR). which denied petitioner·s Petition f<.lr Administrative Review r·PAR"") and affirmed an order hy the Rent Administrator (""RA"") dated August 18. 2020. who fi.)Und that the petitioner foiled to prove substantial 1 1 of 8 [*FILED: 2] KINGS COUNTY CLERK 11/08/2021 04:25 PM NYSCEF DOC. NO. 49 INDEX NO. 505537/2021 RECEIVED NYSCEF: 11/08/2021 rchahi1itation of the building at 287 llammn Street, Brooklyn, New York, so as to exempt the building from rent regulation under the Rent Stabilization Law (.. RSL") and Code ("RSC"). Petitioner is the owner of the subject huilding at 287 Harman Street in Brooklyn. On November 21, 2018, petitioner filed an application with the DIICR to determine whether the subject building is exempt from regulation based on a substantial rehabilitation. Petitioner alleged that a gut renovation was performed to the vacant building under Department of Buildings (DOR) Alteration Job # 321245274 at a cost of $860,037.64. which renovation included the complete replacement of all building-wide and individual apartment systems. Among other documentation, petitioner submitted a sworn statement of architect ShaVvn Erica Stiles who filed the plans with the DOB and listed the following as being completely replaced under DOB Job #321245274: entire plumbing and heating systems; electrical wiring: intercoms: windows; roof: lire escapes: interior stairways; kitchens; bathrooms; all floors; ceilings and wall surfaces~ exterior repair and pointing: and all doors and frames. On August 28. 2020. the RA issued an order denying petitioner's application for suhstantial rehahilitation, determining that petitioner failed to demonstrate that the building was in substandard condition or at least 80% vacant when the renovation commenced. The RA noted that in a statement dated July 27, 2020, petitioner conceded that there were tenants living in the building when construction started on the first tloor but they moved out before work began on the other floors. The RA noted that DOB records indicated that the DOB granted approval on February 8. 2016. under DOR Job # 321245274. for petitioner to renovate the existing residential building: to install new plumbing fixtures and new hot water heaters: to correct ECB Violation No. 3517670 l I, and ECB Violation No. 3514054 7X. by capping/removing the existing boiler: and to obtain a new ce11ilicate of occupancy. According to the cost affidavit submitted to the 2 2 of 8 [*FILED: 3] KINGS COUNTY CLERK 11/08/2021 04:25 PM NYSCEF DOC. NO. 49 INDEX NO. 505537/2021 RECEIVED NYSCEF: 11/08/2021 DOI3 by petitioner. the RA further noted that cost for interior renovations totaled only $62.900.00. The RA indicated that petitioner foiled to adequately explain why DOB records did not support all the claimed replacements and that petitioner failed lo provide verifiable evidence that at least 75% of the building-wide and individual apartment systems, including common areas. were completely replaced. The RA also found that petitioner failed to demonstrate that the renovations which may have been done complied with all applicable building codes and requirements. Petitioner thereafter filed a PAR challenging the RA ·s order. Petitioner contended that the building was entirely vacant when the substantial rehabilitation was completed. and the Petitioner represented that the tenant of apartment 21 ., who was in occupancy when the substantial rehabilitation commenced. signed a stipulation and temporarily moved out of the subject premises during the renovations. Additionally, Petitioner represented that apartment 21. was the only apartment that had a prior tenant reoccupy their apartment after the substantial rehahilitation was complete. Petitioner maintained that it was entitled to a presumption that the subject building was substandard. because the building was 83.33% vacant with only one tenant still in possession out of six units. Petitioner produced photographs in further support nf its argument. Petitioner alleged that the photographs alone showed that the building was in substantial disrepair when the Petitioner acquired it. Petitioner claimed that the before and after photographs also revealed the extent and breadth of the renovations completed. Petitioner also submitted various proofs of payment, including checks. to prove that the substantial rehabilitation cost exceeded $860,037.64. Additionally, the Petitioner's architect, Shawn Styles. submitted atlidavits in support of petitioner's application and provided the RA with an affidavit confirming that the cost 3 3 of 8 [*FILED: 4] KINGS COUNTY CLERK 11/08/2021 04:25 PM NYSCEF DOC. NO. 49 INDEX NO. 505537/2021 RECEIVED NYSCEF: 11/08/2021 affidavit submitted lo the DOB was incorrect. Petitioner contended that it produced sufficient evidence proving that at least 75% or the building-wide and individual apartment systems, including common areas, were completely replaced. Petitioner further contended that when the work commenced in the building, the owner mistakenly did work in Apartments IL and IR without a pem1it but after receiving the stop work order from the 008, Petitioner instal1cd a fire guard and thereafter, fully complied with DOB requirements. Petitioner maintained that it received the appropriate permits. passed inspections, complied with DOB rules and further, that based upon the issuance of a new Certificate of Occupancy and DOB sign off alone, the building wa.;; legally substantially rehabilitated. By order dated January 8, 2021, the Deputy Commissioner denied petitioner's PAR and atlim1ed the order of the RA. The Deputy Commissioner found, as a threshold matter, that petitioner failed to prove that the building was at least 80% vacant of residential tenants or was otherwise in substandard or seriously deteriorated condition when the renovations commenced. The Deputy Commissioner noted that petitioner conceded that there were tenants living in the building when the construction started on the first floor and DOB records further evidence the fact that when the renovation commenced in 2016 apartments 2L and 2R (33% of the total units in the building) were occupied during the construction. Among those DOB records cited by the Deputy Commissioner were petitioner's application under DOB Job # 321245274, wherein it indicated that the subject premises remained partially occupied, as well as violations issued by DOB inspectors on March 9, 2016 and March 17, 2016 which indicated that apartments lL. 2L and 2R were occupied during the renovations. The Deputy Commissioner stated that these violations were affirmed by the DOB atlcr a hearing on the merits. The Deputy Commissioner further found that other evidence in the record belied the fact that petitioner met the threshold 4 4 of 8 [*FILED: 5] KINGS COUNTY CLERK 11/08/2021 04:25 PM NYSCEF DOC. NO. 49 INDEX NO. 505537/2021 RECEIVED NYSCEF: 11/08/2021 requirement for a substantial rehabilitation and that the photographs submitted did not establish that the building was in a substandard or seriously deteriorated condition. Finally, the Deputy ( 'ommissioner stated that the record further supported the other determinations made by the R/\ regarding petitoner·s substantial rehabilitation evidence. which the RA found was insufficient to establish that the requisite number of building-wide and apartment systems were replaced. The instant Article 78 proceeding ensued. In its petition, petitioner contends. in sum and substance. that the DI ICR was arbitrary and capricious in overlooking or ignoring proofs submitted hy petitioner to support its claims that the building was more than 80% vacant when work commenced. that the building was in substandard or seriously deteriorated condition and that the requisite number of building systems were replaced. In particular, petitioner contends that the agency arbitrarily and capriciously ltlcused on the petitioner's initial submission and denied its exemption application, despite the evidence and statements to the contrary that the petitioner produced in response to requests for additional information. A court's fonction in an Article 78 proceeding is to determine. upon the proof before the administrative agency. whether the determination had a rational basis in the record or was arbitrary and capricious (Pell r Rd ,~(Educ., 34 NY2d 222. 230-231 Ll974j). ··Arbitrary action is without sound basis in reason and is generally taken without regard to the facts" (id. at 231 ). If a rational hasis exists for its determination. the decision of the administrative body must be sustained (id. at 230: Maller of Tener v New York S1a1e Div. <?f Hous. & Community Renewal. (?fl <?f Rent Adm in.. 159 J\D2d 270 11 st Dept I 990 ]). If the determination is rational, it must he upheld. even though the court, if viewing the case in the first instance. might have reached a different conclusion (see Matier <?f A-lid-Stale A(e;I. Corp. Appeals Rd.. I 12 AD2<l 72 L1 st l' New York City Conciliation & Dept 1985]. t{ffi.l 66 NY2d 1032 119851). Stated simply. this 5 5 of 8 [*FILED: 6] KINGS COUNTY CLERK 11/08/2021 04:25 PM INDEX NO. 505537/2021 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 11/08/2021 c1iurt ··rnc1y not substitute its judgment Ji1r that of thL' I DI I( 'R ]." so !(1ng as the aµenc~ 's i.kcisinn is r;iti,m:illy h:1scd in th.: rec\1rd ( \lurrcr of ,'-:5 1\ ( ·0111m1111i11 Re11c1111!. r· l'urkmn ( ·or;1 1· \e11· }'ork Srufr /lfi' of I/om. _2()7 /\1)2d (17S. h7612d D,:pl 2002]). Dl·l-.._·renn: tu Df IC R's ckll'r111i11atiu11s 111c1y tll'. particularly a1~propriatc ,vhcrc they n.:lak to "fact-intcnsi\c issucrsl foiling \\ithin the arc~, \11 !till· agency's] expertise" ( \lulla of Hrnsco II' -s,11 SI. ./1,un 1· !)//CR, 281 .\D2d 165. 1(15 I 1st Dept 20CJ\ ]). An agency·s inkrpret1tion and u1nstructiz1n of its O\\n rqzul;ition.s and the kgisl<1tion under \\hich it !unctions arc gin:n special dekrenee by the courts. it' that cu11structi1J11 i..., not irr,1tional nr unreasonable ( 'L'<' S,1111it"nfo .\1urc 1· l>e11r /l'nrld J"och! Inc. 1f} t\Y3d 7il. 7() 12008 ]: .\/a/la o(( '!icster/ield. l.lsoc. ol luhur. • !\Y.1 d 597. Ml-t 120051). 1 .\'e11 _1 \'u11i111. ork Rc12arding fact-based inquirie.s;, an ctdministrnti,,._• :,gene:, may determine the type ot' docu111enlalion necessary ur appropriate \l11ff,'1 of Rodl'igue:: ,. ( ·o/11)!_\ of ) (1t"C 80 ;\[)Old 702, 702 12d Dept 2011 ]: .\lurra of ]081- 086 /Jrom !'u1k I:' 1· .\'n1· rork .\'tutc Di,·_ o/ I lu111 & Co1111111111if_1· Re11c1ru/_ ;,():-; .-\D2d 315. } I h 11st Dept 2003j: (;n11ro11e .\Zr,t. ('()Ip 1· ('n11ciliurio11 <\" .tf'l1cu/s !Jd. q._i 1\l)2d 1,1-L 61/i 11st Dept I()~-; I, u/,td 62 '\'{2d 7(,1 [ l 98--tl). Important I:,, "an <1gency has great discretion in dl'ciding \\hich .._., i(kncc t() accq1t and hm, nrnch \\l'.lglit should hl· acc,1rded particular documents m ll'stirn,rni;1l stall'ments, and its determination in that respect is subject only tP till· lcµ,il requirement that thl· :1drninistrati\e limling he rati,rnall:, based" (Kogun ,. Pupoli::w. 141 Al)2d 33()_ :;..i--i lht Dept llJ88]). "t\f(1rl·u,n. ,,here. as here, th<..' detcnnination of till' agency imol\es tactual c\"alu:1tions in the area ol tl1L· :1ge1ll·y·s e:,;pert1Sl' and is supported by the rec,,rct. ,,c mu-.t accord such dctcrminatilln 1::rea! \\eight and _judicial deference" (I'u!ma of 1· .\'ell' York ,C..:tuh' /)eJJ!. /-,111·!1 ( ·onse1Tufio11, I "\2 t\D2d ()%_ 997 [• th D1.:p1 1C)X7]). Thus. "in an Anick 78 1,rocel·ding. the IT\i1_·\,i11g C(111rt 11uy 1101 \\Cigh the i.'.\idl'nce, choose hct\\C<..'tl con1lictint' prnoL 6 6 of 8 [*FILED: 7] KINGS COUNTY CLERK 11/08/2021 04:25 PM NYSCEF DOC. NO. 49 INDEX NO. 505537/2021 RECEIVED NYSCEF: 11/08/2021 or substitute its assessment tor that of the administrative fact finder·· ( Malter <f Porter ,, New York Citv . I !<ms. A uth.. 42 AD3d 314,. 314 11 st lkpl 20071). . RSC 2520.11 (c) exempts from rent stabilization housing accommodations in buildings completed or buildings substantially rehabilitated as family units on or after January I. 1974. A building must meet certain criteria under the regulation and Operational Rulletin (OR) 95-2 to he exempt from rent stabilization due to a substantial rehabilitation. Among the criteria is that al least 75% of certain building-wide and apm1ment systems must each have been completely replaced with new systems, and that the rehabilitation must have been commenced in a building that was in a substandard or seriously deteriorated condition. RSC 2520.11 (e) (3) and OR 95-2 (I) (R) provide that the extent to which the building was vacant of residential tenants when the rehabilitation was commenced shall constitute evidence of whether the building was in fact in such condition, and where the rehabilitation was commenced in a building in which at least 80% of the housing. accommodations were vacant of residential tenants, there shall he a presumption that the building was substandard or seriously deteriorated at that time. Thus. under RSC 2520.11 (c) (3) and OB 95-2 (I) ( B ), even where there is no question that the requisite number of building-wide and apartment systems were completely replaced, an owner must establish, as a threshold matter. that the rehabilitation was commenced in a building that was in a substandard or seriously deteriorated condition. In this matter, the court finds the DI ICR 's determination of this threshold issue is rationally based in the record and is neither arbitrary nor capricious. First. the [)f I( 'R rat1()11allv found that pl'litionn was nPI l'lltilled 10 the prc-sumplil1n that the building \\as suhstllldard ()r sniously dctcrior,1tcd based nn 80'\o vaecmcy. \vhich finding \\as supr1ortcd by the ])( >n , iolations indiciting that l\vo or 7 7 of 8 ev.._·11 thr.._-c of the apartm<:nts in thL' si-:- [*FILED: 8] KINGS COUNTY CLERK 11/08/2021 04:25 PM INDEX NO. 505537/2021 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 11/08/2021 u111t building were \iccupicd during the renovations. as well as petitinner·s July 27. 2020 rL'SfXH1se to the 1)11( 'R ·s rL·quest for additional information which staled that tenants were occupying the building \\hen renovations commC'nced. petitioner foikd t\i i\1meo\er, the DIICIC" lindinL' that submit sufficient evidence to show that the building was suhstancLud or seriously ckkrinratC'd is 11<.'ither arbitrary nor capricious. Petitioner's prrnii' on this issue c\1nsistcd ot' a series 01· p!l()tographs of' ccrL1in apartments and area.'> of' thL' building taken prior to the cornmcncL'll1Cnt o!' the 111ade foctu:tl C\ \V1ffk. / lowcvn, the DI ICR ,veighC'd all of thC' evidrncc provid,.-d ,md ;1]uations in the area or the agency's expertise. Thus, the court, up()ll review. concludes that the DI !CR 's rejection 01· pctitioner"s photographs to establish that till· building was in a substandard or deleterious condition \Vas not irrational. Since the DHCR"s thrcsh()ld ltnding Lhal the building \\as not 111 a suhstandar·d 11r delcterious con<litiun at the Lime the renovations commenced \Vas rationally based in the record. th(· agency· s ultimate determination that petitioner \\as not entitled to deregulate the'. building on the ground or substantial rehabilitation is neither arbitrary 11()1' capricious. regardless of whether the requisite number or huilding-\\idc and apartment systems \Vere in i~1ct replaced. ;\ccor<lingly. the instant Article 78 petition is denied. and this proceeding is dismissed. The li,lrcgoing constituks the lk'cision, order ,tnd i udgmcnt of the court. 1-:'\JT I·. R 8 8 of 8

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.