April 2011
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Strong Words About "Bad Actors": BOMA/NY Testifies For Industry Rights at City Hall

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Bad actors—political parlance for property owners with outstanding charges owed to the City—are the target of new legislation entitled Intro 379, an amendment to the City’s administrative code that would deny building permits to such owners until the charges are paid. The permit denial would kick in as soon as any ownership partner with a stake of at least 10 percent owes more than $25,000 in property taxes, building fines, water bills or other city fees.

Good in concept—complex, and potentially damaging, in execution. Hearings on the legislation were held March 9 and BOMA/NY once again took on a familiar role when presenting its testimony: agreeing with the principle, but opposing the bill and providing detailed reasoning and examples as to why the amendment won’t work as currently written.

Appearing before the City Council’s Housing and Buildings Committee, BOMA/NY was represented by Board Member Jessica Handy, who brought to the table arguments crafted by our Advocacy Response Committee (ARC), BOMA/NY’s issues "swat team."

She opened with BOMA/NY’s position: the bill would unfairly hurt those who strive to be compliant, or "good actors", and the "bad actors" would simply do the work without permits. The law excludes tenant work, and the bad actors would use that to their advantage, requiring the tenants, instead, to do the work.

BOMA/NY’s testimony that day also pointed out other loopholes:

• The proposed legislation does not account for the intricate ways ownership partnerships are structured, and can include banks holding mortgages or investments in the property.

• It assumes the owner is the primary responsible party, but tenants may actually be responsible for the violations. One tenant in violation affects the entire building.

• Violations are often issued in error, as Jessica pointed out from her own experience as a property manager for eight buildings managed by Newmark Knight Frank. "I spent three weeks and $500 on an expeditor to research and get an FDNY violation dismissed—it had been issued to the wrong building."

• The bill does not apply to buildings seeking permits to resolve violations, and therefore gives no incentive for builders to be pro-active.

The bill is unnecessary—the 2008 Construction Code gives the City broad, enforceable powers concerning unpaid fines. It is fair, equitable and leaves matters with the courts.

To reduce the number of Bad Actors, BOMA/NY recommends:

• Limit the bill to residential buildings—a Bronx residential building in major violation inspired the writing of the bill—and specifically to new buildings, major gut renovations and change of occupancy/use. If it proves successful, expand to commercial properties.

• Change the criteria, i.e. from 10 percent ownership to whole ownership.

• Raise the penalty amount, clarify terms and require an owner statement only once a year to save costs.

Support from Councilman Dilan, Keeping up the Pressure

BOMA/NY was joined in its opposition of the bill by New York City’s Departments of Buildings and Finance, REBNY, and Councilman Erik Martin Dilan (D-Brooklyn) who chairs the Housing and Buildings Committee.  He told BOMA/NY that he does not support the bill in its current form and would like industry stakeholders to be part of the revision process.

BOMA/NY continued to apply pressure March 21 when ARC members and BOMA/NY staff met with representatives from Deputy Mayor Goldsmith’s office to once again voice our opposition. ARC’s Chair Ronald Zeccardi reported the additional good news that Mayor Bloomberg supports the intent of the legislation, but not the details, and thinks the current version is unworkable.

Our next step? Continue to work with the Mayor’s Office and industry stakeholders to redraft the legislation, a process that could take from several months to a year. And while that may sound ponderous, we see the prospects as hopeful. BOMA/NY, its industry colleagues and the Mayor are on the same side working together to redress the onerous aspects of this bill—a good sign, and one that points to how good actions can overcome bad.