TA Attorney Sets the Record Straight
Tim Collins, TA’s attorney, responded to “Before and After: What Was Hoped For in the MCI Matter” (April 20, 2014), a post that appeared on the blog The Stuyvesant Town Report. STR’s summary contains misinformation and appears to discredit the MCI Settlement and the negotiations. Mr. Collins’s response, which was shared with STR the same day, addresses every point made in the STR post and is shown below:
Statement by Tim Collins, the Tenants Association’s Attorney
My statement at the November TA meeting that DHCR’s initial orders were issued in error (because our submissions had not been considered) was correct. I never suggested that this would result in a complete elimination of the MCI’s — only a reopening of the proceedings. Ultimately DHCR did admit its error and agreed to reconsider its orders and our submissions. Although not in form, in substance DHCR rescinded the prior orders by modifying their impact in significant ways. The retroactive increases were totally eliminated and a portion of the permanent increase was reduced by 5% to 100% depending on the class of tenants affected.
What needs to be understood is that some of the objections we initially submitted to the DHCR were already recognized by DHCR in its first set of orders. In those orders DHCR had already reduced the permanent MCI increases applied for by 23%. The additional reduction in the permanent increase we achieved at the bargaining table resulted in an effective 28% overall reduction in the permanent increases applied for (and a 100% reduction for some tenants who pay high rents).
DHCR did not formally consider all of our objections after it agreed to reconsideration for the simple reason that we entered negotiations which preempted such a review. At the bargaining table we used our objections as leverage to achieve a global resolution which, on balance, was thought to be superior to the cost and uncertainty of maintaining over 300 proceedings, and the inevitable administrative and court appeals that would follow.
No one can ever tell for sure what would have happened if we had abandoned negotiations and allowed the administrative (and ultimately judicial) challenges to proceed. We do know that the bulk of MCI increases applied for by CW Capital were legally appropriate and properly documented. We also know the DHCR almost invariably grants owners opportunities to correct defects in workmanship. In the long run it is quite likely the CW Capital would have prevailed on most of its claims. That may have occurred years from now at a cost of hundreds of thousands of dollars in legal fees. In the interim, tenants would have continued to pay the full permanent increases.
The negotiations themselves covered a complex array of legal and practical issues — with three major negotiating sessions taking place over a three-month period, including dozens of phone conferences. The TA’s negotiating team was vigorously involved every step of the way. The TA’s legal committee — composed of several exceptional and accomplished attorneys — reviewed and commented on all proposed changes and the TA Board carefully reviewed the deal before accepting it.
We went into the negotiations armed with a sound understanding of the law and past DHCR practices. We recognized several weaknesses and vulnerabilities in CW’s MCI applications. And we knew that DHCR had already addressed many of those problems. As noted, we had the extraordinary backing and involvement of the TA leadership. But the most important asset we had at the bargaining table was a strong TA. As the MCI and service issues arose over the past year the ranks of TA members who signed public member pledges swelled to nearly 4,000. That was, far and away, our most powerful weapon in obtaining a beneficial settlement.
Going forward, strong leadership and widespread tenant support remain the most valuable assets for every member of the ST/PCV community. And there are many challenges yet to come.
I will be in attendance at the May 10th TA meeting to answer more questions about the settlement. If anyone feels disappointed or critical of the agreement, I ask that they withhold judgment until these issues can be fully aired at the meeting. On many levels this agreement was a significant achievement for the TA and I was honored to participate in it.