Pryor Cashman partner Ronald B. Kremnitzer was the architect behind the landmark settlement reached today resolving the lawsuit filed earlier this year by New York Attorney General Eric Schneiderman against Ft. George Apt. Corp. The suit alleged that the owners of the Washington Heights apartment building were operating the building as a rental property, not a housing cooperative which promotes homeownership.?xml:namespace prefix = "o" ns = "urn:schemas-microsoft-com:office:office" /

The Sponsor and The Office of the Attorney General worked together to achieve a win-win resolution whereby the AG’s Office was able to achieve its goal of promoting affordable options of home ownership and housing, as well as providing rent stabilized leases for the existing tenants and the Sponsor will continue to operate the building under cooperative and rent regulated regimes. 

The Pryor Cashman team representing Ft. George Apt. Corp. consisted of Ronald B. Kremnitzer, co-chair of Pryor Cashman’s Real Estate Group, and partner Todd E. Soloway of Pryor Cashman’s Real Estate Litigation Group.  Erica Buckley, Bureau Chief of the Real Estate Finance Bureau of the Attorney General’s Office, and Richard J. Shore, Assistant Attorney General, represented the State of New York.

Pryor Cashman’s achievement was highlighted by Law360 in its November 13, 2015 article about the settlement. 

In an interview with Law360, Kreminitzer stated that he considers the settlement a win-win for the state, tenants and owners, which will continue to operate the building under both cooperative and rent-regulated structures. “This was a great deal,” he said.  It may also serve as a precedent-setting.  While it is rare for a sponsor building owner to own all 100 percent of a cooperative, there are many owners across New York that have bought majority shares — as much as 80 or 90 percent — of a co-op that was once rent-stabilized. 

Kremnitzer told Law360:  “I think this is an eye-opener because the attorney general’s office now is saying this is wrongful.”  But the deal with Ft. George, which has also agreed to work with city agencies to provide below-market financing to tenants interested in purchasing their apartments, may provide a framework for how the state may be able to work out deals with other building owners.  Kremnitzer pointed out:  “We set [the settlement] up in  way that they can try to use this as a model in other building negotiations.”

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