How a New York City Tenant Holds a $ 70 Million Contract

NEW YORK – Ahmet Nejat Ozsu will not budge.

For 15 years, he has lived in the same apartment – a one-bedroom apartment with an enviable private deck on the top floor of a building on New York’s Upper West Side.

So when a developer, Naftali Group, bought the Manhattan building for $ 70 million in June and told tenants they had to move, Ozsu had plans to stay. He could not be influenced by a $ 30,000 takeover bid, a notice of eviction or even a $ 25 million lawsuit that Naftali recently filed against him. In April, the new landlord placed an industrial air filter outside Ozsu’s door, and the fan has been roaring incessantly, driving him and his 13-year-old boxer mix, Penelope, up the wall.

Still, Ozsu will not move. “There are two things: I have the right to be here and I have nowhere to go,” he said.

Naftali Group says Ozsu is keen on a seven-figure payout and has put its multi-million dollar investment in limbo, which has set in motion a stalemate between landlord and tenant, which is the legend of New York City real estate. But the pandemic has added a new twist: A tenant protection plan adopted to prevent evictions during the crisis could help drag the conflict out for years.

Under normal circumstances, Ozsu, 52, may have already been thrown out of the building at 215 W. 84th St. His apartment is not rent stabilized, and like many of his neighbors, he was on a month-to-month lease, which the new landlord was not obligated to renew.

But until recently, Ozsu, a freelance software engineer, was unemployed. In January, Ozsu applied for the Emergency Rental Assistance Program, a government program created during the pandemic to help tenants pay overdue rent. In most cases, a tenant cannot be evicted while their application is open. If Ozsu’s request for support is approved, he may be eligible to stay in the apartment for at least another year – the time he says he will have to build up savings from a job he started in March to meet the income requirements for other rental buildings.

Of the building’s 128 apartments, only 16 still have occupants, said Y. David Scharf, chairman of Morrison Cohen, a law firm representing the developer. Ozsu is the only tenant who has not said yes to moving, he said.

Ozsu and Adam Leitman Bailey, his lawyer, believe the air filter and a security camera recently installed in the hallway outside his apartment, trained on his front door, are bullying tactics.

“It sounds like a jet,” Ozsu said of the air filter. “It feels like it’s in the back of my mind all the time.”

Scharf said the air filter “is actually for his health and safety,” even though there was no active construction near the apartment during a recent visit.

“There has been no harassment, period, period,” Scharf said, adding that there are more cameras in the building. The one near Ozsu’s apartment was installed due to “general security issues,” Scharf said, referring to an incident between Ozsu and one of the building’s workers. Ozsu said he called police after the worker became aggressive toward him over a parking dispute.

Ozsu moved into an apartment in the building, called Eagle Court, in 2006 on the recommendation of a friend who had lived there. He landed the coveted unit on the top floor a year later with its deck overlooking the Upper West Side. His job as a software engineer helped him keep pace with rising rents over the years. By October, however, Ozsu was unemployed, had exhausted his savings and could no longer pay the $ 3,350 rent on his 700-square-foot apartment.

The complex was once a thriving community, former residents said. In 1984, Rockrose Development converted a variety of buildings – including the former Borden Milk Co. dairy (later converted into a garage) and a former Con Edison transformer station – into the Eagle Court apartments.

The strange association led to interesting design choices: studios ranging from 400 to 1,000 square feet with 12-foot ceilings; duplex and triplex with private gardens; dark corridors with steep stairs leading to sunlit corridors.

Attracted by the distinctiveness of the building, many tenants lived in the building for years, Ozsu said.

“It was like Melrose Place, without the sexual scandals,” he said, recalling a couple who hosted open doors in their apartment on weekdays. Some days, Ozsu leaned over his deck and yelled at his neighbors downstairs to join him for impromptu barbecues.

A former resident who spoke on condition of anonymity because she did not want “drama” with the new landlord said she traveled several months before the expiration of her lease because the building was quickly emptied and no longer felt like home.

Another resident said some tenants reached a settlement to end their tenancy early and signed confidentiality agreements with the developer. A spokesman for the Naftali group said the developer could not discuss confidential conciliation discussions.

Naftali Group has not yet submitted plans for its new condominium project. However, the site could support an approximately 210-foot tower, not including potential elevation bonuses that the developer can get for including affordable units or making subway improvements, according to George M. Janes, a New York City planner who has studied the local zoning. .

On the corner of East 86th Street and Madison Avenue, Naftali is building a 210-foot, 13-story tower with commercial space and 11 condominiums, including a quadruplex penthouse, according to city archives. Prices range from about $ 8.5 million to $ 40 million, according to government records.

The most likely scenario on West 84th Street is a complete demolition of the 128-unit rental building to make way for a condominium tower with a similarly small number of units, Janes said. A spokesman for the developer said it “is still reviewing the possibilities for the site.”

The condominium market is rising, a potential boon for holdouts like Ozsu. Manhattan had the largest apartment sales in any first quarter in 33 years, with nearly twice as many new development sales as in the same period last year, according to a recent report from real estate firm Douglas Elliman.

Similar conditions have led to a small number of conspicuous settlements for holdout tenants. In 2005, Herbert Sukenik, a longtime resident of the Mayflower Hotel, negotiated in the way of 15 Central Park West, a luxury tower, a $ 17 million purchase plus the right to live in a nearby two-bedroom apartment overlooking the park for $ 1. one month. His lawyer, David Rozenholc, who specialized in tenant retention cases, cashed a third of the settlement.

“I have already settled three cases this year, which is a fast pace,” Rozenholc said, noting that the pandemic has not stopped developers from continuing with ambitious projects.

Developers sometimes accept large rent payments because they can be cheaper than postponing construction, said Steven Kirkpatrick, a partner at Romer Debbas, who primarily represents property owners but is not involved in the West 84th Street case.

“The theme for this is delay, delay, delay,” he said, noting that extended lawsuits and procedures could allow Ozsu to stay in the apartment for a year or two.

Scharf, a lawyer for the developer, said Ozsu simply bid his time. In a statement filed in housing court in April, a member of the property owner’s legal team said they heard Ozsu’s lawyer bet he could keep his client in the apartment for five years. (Bailey said such a testimony “is a lie” – and that he does not play.)

“Through attorney, he has made it clear that he is holding out for a ransom of up to a million dollars,” Scharf said.

Ozsu insists he is exercising his rights to stay in the apartment during the tenants’ pandemic relief program. This week he tried to pay that rent of approx. $ 13,600 left, which he owed before filing for rent assistance; The owner’s legal team said it would reject the payment, according to the courts.

Ozsu said that shortly after the $ 25 million lawsuit was filed against him, he was offered about $ 30,000 to leave the building, but declined. Naftali Group declined to confirm the offer.

It is also a matter of principle, Ozsu said. “That’s the slander of my character – that was when I said, ‘No, I want to fight this.'”

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