Gotham West Management's latest assault on tenants is the elimination of the utility allowance/credit at the time of each lease renewal. Management's flippant explanation to tenants has been that they've simply decided not to "participate" in that any more. Never mind that the utility allowance is included in the HFA agreement and leases. They've simply decided not to "participate" any more as if the monthly utility allowances of $57-70+ have been their "gift" to tenants for the past six years.
What Gotham West Management told the HFA, however, is quite different.
According to Gotham West Management's answer to the HFA, the original managing agent (that would be Rose Associates) misinterpreted the requirement of utility allowances and applied them to not only the income-restricted units but also to the middle-income and moderate-income units. They claim that for six years they've been crediting utility allowances to middle- and moderate- income units when they never had to in the first place. So, now they are going to stop — apparently also trying to eliminate the utility allowances of the low-income units which have utility allowance entitlement in the HFA agreement and their leases.
Low-income (income-restricted) tenants have experienced nothing short of rude pushback from management about the elimination of the utility allowance. Even a currently dated letter from the Vice President & Compliance Manager at HFA which states that low-income (income-restricted) tenants ARE entitled to a true utility allowance could not change their stance. So unfortunately, these tenants are seeking legal assistance and filing complaints through the DHCR–all of which will end up costing Gotham. There isn't much chance that these tenants will lose their cases.
Meanwhile, the middle-income and moderate-income tenants are coordinating their efforts through Assembly Member Linda Rosenthal's office which is forwarding their complaints to the DHCR.
Wouldn't you think that if Rose Associates fouled up so badly by giving away utility allowance amounts to tenants unnecessarily to the tune of at least $2,000,000 over six years, that Gotham Organization would be incensed enough by Rose's ineptness to sue them? But they're not. So why not?
One possible answer would be that everyone on all sides was in complete agreement at the beginning that all of the low-, middle-, and moderate-income tenants would receive utility allowances/credits. In other words, there was a true meeting of the minds by all involved and that this is precisely how the leases of the First Tenants were explained, agreed upon, and signed. There was never any reference in the leases to an ending date of the utility allowance/credit for these First Tenants. It was never intended to be temporary. A posse of expensive lawyers in Brooks Brothers suits combed over these agreements before the first lease was signed.
It is very doubtful that if pressed, Rose Associates would admit to making a multi-million dollar error on the utility allowance/credit issue as Gotham claimed to the HFA. It's doubtful that they would not put up a fight if Gotham tried to recoup that money from them. They would argue that there was indeed a clear meeting of the minds that all three classes of tenants should get the utility allowance/credit. That's precisely where First Tenants in the middle- and moderate- income units should aim in order to get to the bottom of this matter.
If Rose Associates claims that there was no mistake on their part, and Gotham isn't willing to pursue Rose to recover the millions in allowances which they now claim were mistakenly given, perhaps there was no mistake at all. Perhaps all First Tenants in the middle- and moderate-income units should continue to get their utility allowances because that was everyone's understanding of the agreement at the time of the original leases. Future tenants perhaps will not receive the benefit, but First Tenants should fight with all their might.
