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Private Equity Firm to Refund Parker Towers Tenants Total of $1.1M

Parker Towers complex (QP)

April 23, 2019 By Meghan Sackman

A private equity firm that bought Parker Towers, a rent-stabilized housing complex, last year has agreed to pay $1.1 million to tenants who are owed rent reductions, announced the tenant watchdog group Housing Rights Initiative (HRI) Friday.

The Blackstone Group, the firm that bought the 1,327-unit property in November 2018 from Jack Parker Corporation for $500 million, recognized from the time of purchase that a number of renters in the 104-20 Queens Blvd. complex were owed money.

Jack Parker Corporation failed to implement rent reductions despite receiving benefits from a J-51 tax exemption, which requires the landlord to keep their apartments rent stabilized.

Newman Ferrara, the legal firm brought on by HRI, filed suit on behalf of the tenants against Jack Parker Corporation in March 2018. Blackstone took on the lawsuit when it acquired the complex.

Blackstone said that it would be reducing the rent by an average of $230 per month for tenants in 110 units. Furthermore, 82 units will go back to being rent regulated, as they were supposed to be. The company said that these changes equate to about $1.1 million charge.

Blackstone also emphasized that they came into the purchase of the complex with knowledge of this malfeasance and the full intention of correcting the issues.

“We have been working diligently to resolve the litigation that ties to actions taken by the prior owner,” said a spokesperson from Blackstone.

“We are pleased that we were able to voluntarily address this issue quickly and fairly for our residents. We will continue to review the prior owners’ lease files with the expectation of resolving any remaining issues expeditiously.”

Despite the rent reductions, HRI believes that this does not fairly reimburse the tenants harmed throughout this process.

“The goal here is not to get back some of what was stolen, but to get back all of what was stolen,” said Aaron Carr, executive director of HRI.

Lucas Ferrara, of Newman Ferrara LLP, admits that he is pleased with the fast response and cooperation by Blackstone, but believes that the calculations made by the landlord, may not be accurate, and that the judge overseeing the case will likely award tenants more money.

“For a major landlord to make these kinds of concessions, at such an early stage of our litigation, is pretty unique, if not downright historic,” Ferrara said. “We look forward to aggressively fighting this case to completion, as it is our view, these refunds are only the tip of the iceberg…But, this is certainly a step in the right direction.”

In the meantime, Blackstone says that is focused on making Parker Towers a better place to live.

The firm said that it has addressed ADA compliance issues; rectified hazardous conditions in the courtyard by removing debris and laying sod; and added better security.