Manhattan Plaza Near Rental Deal?

The federal Department of Housing and Urban Development (HUD) is involved in the slow process of finalizing an agreement that could protect tenants' rents at Manhattan Plaza for 20 years.

That's the word from representatives -- including the Manhattan Plaza Tenants Association (MPTA), the unions that make up the residence's policy advisory committee, and the office of U.S. Rep. Jerrold Nadler (D-NY) -- who helped form the deal. The proposed 20-year pact is with Manhattan Plaza's new owner, the Related Companies, which saw its purchase of the 1,688-unit facility completed in March. HUD had to approve the sale, as did the New York City Department of Housing Preservation and Development, which oversees who resides at Manhattan Plaza.

"Protecting the homes of the performing artists and other tenants of Manhattan Plaza has been a major concern of mine since the announcement that the building had been sold," Nadler said in a written statement to Back Stage. "I have been working with the Manhattan Plaza Tenants Association, the affiliated unions, and the new owners to ensure that the pioneers who moved into the Midtown area more than twenty years ago are not priced out of the very neighborhood they helped establish. In speaking with the assistant secretary at the U.S. Department of Housing and Urban Development, I stressed the importance of maintaining affordability in Manhattan Plaza, and I am hopeful an agreement accomplishing this goal will soon be reached."

According to Mary Lou Westerfield, chairman of the Manhattan Plaza policy advisory committee, the proposal involves "a 20-year, Section 8 contract with no opt-out dates." The current Section 8 contract for Manhattan Plaza allows the landlord an "opt out" date every five years, but HUD must agree to it.

Mark Carbone is president of Related Apartment Preservation, LLC -- a subsidiary of the Related Companies -- which is overseeing the new rental deal. Carbone on Monday told Back Stage, "Section 8 is a HUD program that's fairly complicated. But, in a nutshell, tenants pay no more than 30% of their income toward rent, and the HUD Section 8 program pays the rest."

"This [new] agreement allows no harm to come to anyone," stated Westerfield, who is national director of policy at Actors' Equity Association. The Manhattan Plaza policy advisory committee consists of representatives from all the performers' unions: Equity, the Screen Actors Guild, the American Federation of Television and Radio Artists, the American Guild of Musical Artists, the American Guild of Variety Artists, the American Federation of Musicians, Local 802, and the Society of Stage Directors and Choreographers. The committee also includes representatives from Manhattan Community Board 4 and the Clinton Planning Council because Manhattan Plaza sits within those jurisdictions. The apartment complex is located at 400 West 43rd St.

Westerfield said on Monday that the advisory committee and the MPTA had operated independently of each other until they found out earlier this year that Related was preparing to purchase Manhattan Plaza. They were particularly concerned when they learned that Related wanted to become involved in HUD's Mark Up to Market program. The program would basically bring rents up to market levels -- with HUD still paying the difference between those levels and the rents paid by tenants -- and restructure the owner's existing debt to levels supportable by the rents.

Alarmed Over Mark Up

Elected officials also became alarmed when they learned of Related's plans. On March 1, 2004, state Sen. Thomas Duane of Manhattan sent a fax -- on his letterhead -- co-signed by Nadler, state Assemblyman Richard Gottfried, and City Councilwoman Christine Quinn. It went to Stephen Ross, president of the Related Companies, with copies to executives of other Related subsidiaries, including Carbone, as well as the advisory committee's Westerfield and Marisa Redanty, the MPTA president. A copy of the letter is on the MPTA's website.

"As you know, the Mark Up to Market program could significantly alter the rent payment scales -- and ultimately the diversity and permanency -- of Manhattan Plaza's thousands of tenants," the public officials' letter stated. "This cannot be allowed to happen. Having engaged in long discussions with the MPTA and the Manhattan Plaza policy advisory committee, we believe that there are fair and equitable ways for Related both to engage in Mark Up to Market and to keep its promises to its tenants."

Those promises, the letter noted, included "that tenants could expect to continue renting under the same provisions as they had before the property's sale."

Following that letter, Related, the MPTA, the policy advisory committee, and the staffs of the elected officials began a negotiating process that has led to the current plan before HUD.

The MPTA's Redanty and the advisory panel's Westerfield both said they couldn't discuss specifics of the plan because HUD is still reviewing it. But both said that Related has been cooperative in the bargaining. According to Westerfield, "They've been wonderful. Now, they've been tough, but we've been tougher." Both women also reported that the plan will protect tenants' rents, with reasonable increases through the 20-year period of the plan.

Related's Carbone also wouldn't deal with specifics, but indicated that his firm is still meeting with HUD, working out fine points of the plan. "We're in agreement with the overall structure," he said Monday. "We're communicating with HUD on specifics. We've had a lot of favorable feedback to date." Asked if he saw a date for HUD approving the plan, he said, "We're hoping well before the end of the year."

The MPTA's Redanty said last week that Manhattan Plaza has about 3,500 tenants. Of those, about 850 are dues-paying members of the MPTA.

Not all tenants, however, are in alignment with the MPTA. Another group, called the Manhattan Plaza Residents Alliance (MPRA), recently formed and hired an attorney, apparently to protect their interests in the dealings with Related. (See the Page 1 story "Manhattan Plaza Tenant Turmoil" in Back Stage's June 25 issue.)

The MPRA has argued that the facility has never met its government-mandated requirement of renting 70% of its apartments to performing artists, and that 168 apartments were "siphoned off" by the previous owner, spaces that should have gone to performers.

But the advisory committee's Westerfield negates those arguments, saying that the 70% performer resident requirement has been met by the city Department of Housing Preservation and Development (HPD). Regarding the 168 apartments the MPRA questions, Westerfield says that the 1976 affirmative marketing study -- the original document that set forth how Manhattan Plaza apartments would be rented -- specifically states that up to 10% of the apartments should be rented at market rate.

The MPTA's Redanty noted that her tenants organization -- and not the MPRA -- is the legally recognized organization that deals with HUD and the HPD. Still, that may not keep the MPRA from taking its case -- including opposition to a HUD contract with the new owners -- to court.