Monday, December 11, 2006

Auto Shops Expect Displacement Manhattanville Tenants Fight For Fair Rent Negotiations, Await Relocation Details

Home > News

Auto Shops Expect Displacement
Manhattanville Tenants Fight For Fair Rent Negotiations,
Await Relocation Details
By Anna Phillips
Issue date: 12/11/06 Section: News

Media Credit: Daniella Zalcman
Manhattanville auto shop owners are cautiously
approaching Columbia's offers of relocation.
Both sides in the dispute now have lawyers to handle
the issue.

For several of the owners of auto repair shops at 3251 Broadway, negotiations with Columbia about relocation and payment of rent have begun in earnest.

As of last spring, Columbia, which bought the building in February for about $4.9 million, had notified the tenants-five auto repair shops-that due to safety concerns over the building's freight elevator, the University wanted to relocate them.

Although no specific locations were designated at the time, the University said that the relocation sites would be within Columbia's proposed expansion zone in West Harlem, meaning that the businesses would likely undergo a second move if Columbia were able to build its Manhattanville campus. This incited protest from the tenants and community groups opposed to the expansion.

In February, the repair shop on the building's third floor closed. The tenants' attorney, Philip van Buren, said the owners left after Columbia gave notice that it was going to shut down the elevator.

The other four businesses remain, but their leases have expired and they have yet to sign new ones. In the interim, they are operating on a month-to-month holdover, meaning that the terms of the expired leases are extended each month provided that the tenants pay rent and Columbia does not evict them.

According to van Buren, for about 6,000 square feet of space, each tenant is paying roughly $2,400 a month-below market rate, according to University Senior Executive Vice President Robert Kasdin. Currently, two of the four tenants are withholding rent to "defray their costs of moving if they have to move out," though van Buren would not specify which ones.

And they likely will have to move. Although the University has repeatedly postponed the date by which the tenants have to relocate, Carol Shuchman, Columbia's director of institutional real estate, and van Buren have been exchanging letters and holding meetings for months to negotiate leases. Shuchman declined to comment for this article.

According to van Buren, negotiations up until this point have been unacceptable to the tenants. In early fall, the University offered a one-year lease with a provision stating that if Columbia desired, it could terminate that lease with 60 days' notice. It also offered to pay $8,384.64-three months of rent-to the three businesses that have been offered new locations provided that they cover moving expenses.

"It was financial suicide," van Buren said. "These are completely raw spaces, there's no lighting."

Jose Luis Jimenez, the owner of Los Compadres Auto Repair on the building's second floor, agreed. "The space is good but the lease is bad, that's why we haven't signed," he said, adding that he would be satisfied with a three- to five-year offer.

"You're going to have one year and then, pfft... you're out," said Roland Sally, the main mechanic at 3251 Broadway Auto Center on the first floor.

Columbia has since hired David Zinberg, an attorney from the firm Ingram Yuzek Gainen Carroll and Bertolotti, LLP, to handle its negotiations with the tenants.

Zinberg's most recent lease offer has been to the owners of Los Compadres. It is a one-year lease for a new location at 630 W. 131st St. Within this year, Los Compadres can terminate its lease with 60 days' notice if business is not going well and not pay the full year's rent. The new lease also includes an offer of $25,000 should the business have to relocate for a second time.

The new offer "begins to address the issue of the very unpredictable future that these guys are otherwise looking at," van Buren said. Still, he has his complaints.

According to a recent letter from Zinberg regarding Los Compadres, the New York City Commissioner of Buildings requested on Jan. 26 that Columbia erect a "sidewalk shed" to correct building violations. Jimenez and Sally believe that this scaffolding is obstructing potential customers' view of the businesses' signs and is responsible for how poor business has been this year. In the letter, Zinberg wrote, "the University is not responsible for the claimed loss of business" and offered to have the tenants pay their arrears in 12-month installments over the lease term, but van Buren is hoping to negotiate for a 50 percent reduction in rent arrears.

How further negotiations will result is uncertain, but Columbia is getting antsy. In his letter regarding Los Compadres, Zinberg wrote that the University "will not be willing to hold these premises available indefinitely." While the first move appears inevitable, the possibility of a second relocation is complicated by whether the auto repair shops are compatible with Columbia's vision of the proposed campus.

"If there are tenants in good standing who can continue to exist in Columbia facilities, our preference will be to relocate them within the project area," Kasdin said in a September meeting with Spectator. He added that the first and second floors of buildings along Broadway, 12th Avenue, and 125th Street would have retail outlets.

"There are some businesses that are fundamentally incompatible and those we would try to relocate outside the project area," he said adding that "there are problems with that building which preexist our ownership. We want those businesses that can continue to thrive to continue to thrive, and we're not raising their rents as we find better space."

No comments: