Brookfield Suit Aims to Crack the Code of 421-a
Herrick special counsel, Brett J. Gottlieb, was featured in The Real Deal discussing a recent lawsuit filed by Brookfield Properties against the city. The city denied Brookfield's application for 421-a, the exemption that waives decades of property taxes for new apartment buildings that qualify. Brett is not involved in the matter but examined it for the article.
The article explained that "421-a applications require two submissions – preliminary and final. It’s possible that Brookfield submitted a preliminary application before the law changed, then a final application under Affordable New York." Affordable New York is the successor program to 421-a.
The article explains the source of the confusion: "the state agency shows the Brookfield building in 2019 as receiving the old 421-a, but the most recent registration, from 2020, shows it receiving Affordable New York."
"That’s how I know it was revoked," Brett said, noting that the change in denotation shows the benefits switched from former 421-a to Affordable New York then back.
"Somebody in HPD probably awarded the [new] benefit," he said, adding, "And then they caught up to it at some point down the road, most likely through some sort of an audit." The article states that Brett "believes Brookfield may be entitled to the new 421-a so long as the Eugene did not receive benefits before April 2017."
"I think this is the immediate and larger concern for the landlord at the moment – treble damages under a (potential) rent overcharge complaint," Brett noted in reference to a provision in the new rent law.