NEW YORK, June 19, 2003 (PRIMEZONE) -- Mitchell Lama low and middle income tenants, 894 of whom reside in Phipps Plaza West apartments between 26th and 29th Streets on Second Avenue, filed a $1.3 billion lawsuit in New York State Supreme Court on April 15, 2003 against Phipps Houses and their 65 partners for damages and to halt conversion of their homes into luxury apartments.
Most of the 894 tenants can ill afford to be turned out of their apartments as they will not be able to pay the proposed luxury rents.
Phipps Plaza West, the complex on Second Avenue between 26th and 29th Streets, was built under the Mitchell Lama program, the most successful affordable housing program ever developed by the federal government. It has been home to lower and middle-income residents -- teachers, nurses, municipal workers, public interest lawyers, writers and artists, many of who are now senior citizens -- since 1976. Under the Mitchell Lama program, landlords agreed to charge affordable rents and in return paid greatly lowered real estate taxes and received other financial benefits. At Phipps Plaza West, the landlord managed to amass a 6% annual profit as well as a reserve of close to $9 million while collecting Mitchell Lama rents, according to Phipps Plaza West Tenants Association.
The New York State legislature passed legislation years ago allowing owners to buy out of the Mitchell Lama program after twenty years. The tenants were the only parties never thought of when that legislation was passed. But the tenants are fighting back. They fought back at Ruppert Yorkville Towers on the Upper East Side of Manhattan and it took four and a half years until the landlord could buy out, they fought back at Waterside Plaza on East 23rd Street, and they are fighting back at Independence Plaza in Tribeca. At Phipps Plaza West, the tenants are questioning the landlord's legal right to buy out in addition to filing a lawsuit for more than a billion dollars in damages.
"Where are middle-income families supposed to live in this city? Where are the families that make up the workforce and the tax base supposed to go?" asks Sylvia Mendel, President of the Phipps Plaza West Tenants Association. At Phipps Plaza West, according to the figures distributed to tenants by management, the rents will double, triple and quadruple overnight if the tenants do not prevail. And a major "advocate" for affordable housing, Phipps Houses, will be managing a luxury property that has displaced the very people the organization set out, in their mission statement, to assist and support.