LEG A L DIVISIONS
Defeating a Landlord’s Attempt
to Void Participation in an
Affordable Housing Program
The Division overcame a landlord’s bid to
rescind its participation in the City’s J-51
tax abatement program. The program is
an important component of affordable
housing policy, in which owners abiding by
rent stabilization laws receive certain tax
incentives. London Terrace, the owner of a
residential housing complex in Manhattan,
had begun charging market rate for some
units while still in the J-51 program. London
Terrace argued that it should be able to exit
the program upon reimbursing its tax credits,
similar to rescinding a contract. The City
argued that the program is not a contract,
and the Court agreed.
PHOTO: 1 BOWLING GREEN, MANHATTAN
Defending a Parking Surtax Exemption
for Certain Manhattan Residents
Division attorneys successfully defended
a federal class action challenging an
exemption to the City’s parking surtax, which
only certain Manhattan residents receive.
The City moved to dismiss the plaintiffs’
complaint on various grounds. Relying on
a U.S. Supreme Court decision in Levin v.
Commerce Energy, both the District Court
and Second Circuit found for the City, holding
that cases such as these should not be
heard by federal courts in accordance with
established comity principles.
TAX & BANKRUPTCY
LITIGATION
CHIEF R ita D. Dumain
DEPUTY Lisa Bova-Hiatt
DEPUTY Vincent D’Orazio
The Tax & Bankruptcy Litigation Division plays a vital role in
protecting the City’s fiscal health by defending court challenges
to real property tax assessments and advancing initiatives to
modernize the City’s infrastructure and enhance quality of life
for City residents. The Division actively acquires property for a
variety of projects, such as creating parks, constructing libraries,
and building affordable housing. It also litigates various tax issues
and matters related to property acquisition and defends the City’s
interests in bankruptcy proceedings.
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Defending the Tax Commission’s
Authority on a Fee to Review
Property Tax Assessments
Division attorneys prevailed in a challenge
to the Tax Commission’s authority to
implement a rule setting a $175 fee for
an administrative review of applications
concerning properties with an assessed value
of $2 million or more. Four Queens property
owners claimed that the Tax Commission
lacked authority to adopt the fee rules and
that the rules are unconstitutional. The Court
rejected the arguments and recognized the
City’s ability to assess fees, provided the
fees charged are reasonably related to a
regulatory program’s accomplishments.
Enforcing City Billboard Regulations
in Bankruptcy Court
The Division convinced a Bankruptcy Court
to deny a preliminary injunction against the
City’s enforcement of billboard regulations.
The injunction was sought by a Chapter 11
debtor, Contest Promotions, that rents space
to post billboards on building exteriors.
Contest Promotions is involved in a legal
dispute with the Department of Buildings
(DOB) over whether its billboards comport
with City regulations. The company ?led for
Chapter 11 protection and asserted that,
under the Bankruptcy Code, it is thus entitled
to an automatic stay from enforcement
by the DOB and the Environmental Control
Board (ECB). Division attorneys argued that
the DOB and ECB activities were exempted
from the automatic stay based on precedent
establishing that the City’s regulation of
signs is designed to protect substantial
public interests in promoting traf?c safety
and preserving aesthetics.
PR ACTICE SPOTLIGHT
Advancing Signi?cant Development
Projects to Shape the City’s Future
Division attorneys are engaged in
matters related to the City’s acquisition,
through eminent domain, of property
to enable the Number 7 subway line
extension. The Division is also involved
in the acquisition of land for the Staten
Island Bluebelt, an initiative preserving
open spaces and wildlife habitats,
while naturally improving drainage and
?ltering storm water. In Queens, the
Division is defending the City’s right to
acquire property for the Willets Point
Redevelopment Plan to revitalize the
largely industrial neighborhood.
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