Matter of Gurkin OATH Index No

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Matter of Gurkin OATH Index No. 489/12 (Dec. 14, 2012), adopted, Loft Bd. Order No. 4186 (Oct. 17, 2013) [Loft Bd. Dkt. No. TR-0792; 206 Bowery, New York, N.Y.]

In coverage proceeding, petitioner demonstrated that the buildings known as 206 Bowery and 208 Bowery are a single horizontal multiple dwelling, that there were four residentially occupied units during the applicable window period, and that petitioner’s unit is more than 550 square feet in area. Moreover, petitioner showed that he qualifies for protection under the Loft Law. ALJ recommended that the application be granted. ______

NEW YORK CITY OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS

In the Matter of RALPH LEWIS GURKIN Applicant ______AMENDED REPORT AND RECOMMENDATION ALESSANDRA F. ZORGNIOTTI, Administrative Law Judge This application was filed on July 21, 2010, pursuant to Article 7-C, section 281 of the Multiple Dwelling Law (“Loft Law” or “MDL”) and title 29 of the Rules of the City of New York (“RCNY” or “Loft Board Rules”). Petitioner, Ralph Lewis Gurkin, seeks a finding that the buildings known as 206 Bowery and 208 Bowery, New York, New York are a horizontal interim multiple dwelling (“IMD”) with four units on the second and third floors that were residentially occupied during the applicable window period and that he is the protected occupant of the third floor unit in 206 Bowery (ALJ Ex. 1; Tr. 8-9). The respondent-owners, 206 Bowery Realty Corp. and 208 Bowery Realty Corp., oppose the application and allege that: the buildings are separate and distinct properties; Mr. Gurkin was not a residential occupant of 206 Bowery during the applicable period but instead lived at 595 Broadway; the owner never consented to residential occupancy; Mr. Gurkin’s unit is less than 550 square feet and, therefore, cannot qualify as an IMD under the Loft Law; and that the Loft Law violates the Fifth and Fourteenth Amendments (ALJ Ex. 2; Tr. 12-13). - 2 -

On August 29, 2011, the Loft Board docketed the matter with this tribunal for a settlement conference and a possible hearing. See 29 RCNY § 1-06(j)(2)(ii). A hearing was held on March 22 and 30, and April 27, 2012. At the hearing both parties submitted documentary evidence. Mr. Gurkin testified on his own behalf and presented the testimony of: Mr. Townley, a former tenant at 208 Bowery; Ms. Yoshida, a friend who lives at 595 Broadway; and Mr. Peachy, an architect who was qualified as an expert in architecture and loft conversion under the Loft Law (Tr. 17-18). Respondents presented the testimony of: Mai Lau and Lily Lau, shareholders in the respondent-corporations; Mr. Melzer and Mr. Paknia, licensed architects; and Ms. Dierickx, a historic preservation consultant. The record was held open until July 6, 2012, for the filing of post-hearing briefs. For the reasons below, I find the record supports a finding that: 206 Bowery and 208 Bowery are a horizontal multiple dwelling; there were four residentially occupied units during the applicable window period; and Mr. Gurkin’s unit qualifies as an IMD with at least 550 square feet in area. Moreover, Mr. Gurkin qualifies for protection under the Loft Law. Accordingly, I recommend that the application be granted.

ANALYSIS In 2010, the state legislature passed amendments to the Loft Law, which added section 281(5) to the MDL. L. 2010, Ch. 135 § 1 (eff. June 21, 2010) (adding MDL § 281(5)); L. 2010, Ch. 147 § 1 (eff. June 21, 2010) (amending MDL § 281(5)). Amended section 281(5) defines an IMD as any building that: (1) at any time was occupied for manufacturing, commercial, or warehouse purposes; (2) lacks a certificate of compliance or occupancy pursuant to section 301 of this chapter; (3) is not owned by a municipality; and (4) was occupied for residential purposes as the residence or home of three or more families living independently from one another for a period of 12 consecutive months during the period commencing January 1, 2008, and ending December 31, 2009, “provided that the unit” (i) is not located in a basement or cellar and has at least one entrance that does not require passage through another residential unit to obtain access to the unit, (ii) has at least one window opening onto a street or a lawful yard or court as defined in the zoning resolution for such municipality, and (iii) is at least 550 square feet in area. MDL § 281(5) (Lexis 2012). - 3 -

Contrary to respondents’ assertions, the Loft Law has been found to be constitutional. Spring Realty Co. v. NYC Loft Bd., 69 N.Y.2d 657, 658 (1986) (“article 7-C of the Multiple Dwelling Law (legalization of interim multiple dwellings) is not in conflict with the due process clauses of the Fourteenth Amendment of the United States Constitution … nor is there any showing that the statute, as applied to the particular properties of plaintiff, contravenes the State or Federal Constitutions as a taking without just compensation”); see also Matter of Tenants of 51-55 West 28th Street, OATH Index No. 2877/09, mem. dec. at 4-5 (June 26, 2009), adopted, Loft Bd. Order No. 3580 (June 17, 2010) (“Any new constitutional attacks on the Loft Law as applied . . . would lie within the jurisdiction of the courts, not the Loft Board”).

Petitioner demonstrated that 206 and 208 Bowery constitute a horizontal multiple dwelling Loft Board Rule 2-08 enumerates factors to consider when determining whether multiple dwellings constitute a horizontal multiple dwelling for purposes of classification as an IMD. 29 RCNY § 2-08(a)(1)(iii) (Lexis 2012). The factors are: (A) whether the structure is under common ownership;

(B) whether contiguous portions of the structure within the same zoning lot are separated by individual load-bearing walls, without openings for the full length of their contiguity, as distinguished from non-load-bearing partitions;

(a) a common boiler; (b) a common sprinkler system; (c) internal passageways; (d) common fire escapes; or (e) other indicia of operation as a single entity.

(D) whether the owner or a predecessor has at any time represented in applications or other official papers that the structure was a single building;

(E) whether a single certificate of occupancy has been requested or issued for the structure; and

(F) the pattern of usage of the building during the applicable qualifying - 4 -

window periods . . . .

29 RCNY § 2-08(a)(1)(iii). Each of the factors must be weighed by the tribunal. Compare Matter of Tenants of 51-55 West 28th Street, OATH Index No. 2877/09 at 9-11 (Jan. 15, 2010), adopted, Loft Bd. Order No. 3580 (June 17, 2010) (four buildings managed and operated collectively “since the turn of the century” found to constitute a single horizontal multiple dwelling) with Matter of Live Centre Tenants Ass’n, OATH Index No. 834/05, mem. dec. at 7 (Dec. 1, 2005) (“insufficient indicia of commonality to render all seven buildings a single HMD” where the seven shared only two factors, common ownership and a common boiler). In applying this set of factors, the tribunal must consider that each case presents “‘different combinations of those factors and no one factor can be said to be determinative,’” Matter of Wolff, Loft Bd. Order No. 1477, 14 Loft Bd. Rptr. 203, 206 (Sept. 8, 1993) (quoting Bambeck v. NYS Division of Housing & Community Renewal, 129 A.D.2d 51, 54 (1st Dep’t 1987)), and “the evidence of common characteristics must ‘predominate’ over the evidence of individual characteristics,” Wolff, 14 Loft Bd. Rptr. at 206 (quoting Nine Hunts Lane Realty Corp. v. NYS Division of Housing & Community Renewal, 151 A.D.2d 465 (2d Dep’t 1989)). The courts have found buildings to be a horizontal multiple dwelling based on a variety of these factors. See e.g. Pittis v. NYC Loft Board, 201 A.D.2d 388, 389 (1st Dep’t 1994) (common ownership, common entranceway, common stairwell, common roof and drainage system, and buildings conveyed by one deed); Digby v. NYS Division of Housing & Community Renewal, 189 A.D.2d 554, 554 (1st Dep’t 1993) (history of common ownership, common heating system, common electrical meter, common chimney, common facade and roof, and combined tax, sewer and water paid by common owner); Ruskin v. Miller, 172 A.D.2d 164, 164 (1st Dept 1991) (common management, common fire exit, common mortgage, common insurance, openings between the buildings, and treatment as a single entity); Krakower v. NYS Division of Housing & Community Renewal, 137 A.D.2d 688, 688 (2d Dep’t 1988) (a long history of common ownership, connected basements, and common heating plant). This tribunal and the Loft Board have used similar factors to find buildings to be a horizontal multiple dwelling. See, e.g., Matter of Pels, OATH Index No. 2841/11, mem. dec. at 8-9 (Mar. 8, 2012) (common ownership, common bank account, common identification, representations by owners on official documents, and owner’s application for a single certificate - 5 - of occupancy); Matter of Tenants of 51-55 West 28th Street, OATH 2877/09 at 9-11 (common ownership, similar layouts, openings, same owner among overwhelming number of factors); Matter of 333 PAS CoO Tenants Group, OATH Index No. 968/08 at 4-5 (June 30, 2009), adopted, Loft Bd. Order No. 3552 (Nov. 19, 2009) (three internally connected buildings sharing common mechanical systems and common owner); Matter of Live Centre Tenants Ass’n, OATH Index No. 834/05, mem. dec. at 8 (Dec. 1, 2005) (common ownership, common boiler and sprinkler system, uniform façade, and internal passage connecting buildings and providing a second means of egress). Currently, 206 Bowery is owned by respondent, 206 Bowery Realty Corp., and 208 Bowery is owned by respondent, 208 Bowery Realty Corp. The shareholders of both corporations are the family members of King Chun Lau, now deceased, and include his daughters Mai and Lily Lau (Tr. 281; Resp. Exs. M, P). At various times, the two buildings were owned by the same owners but they have also been owned by different owners (Resp. Ex. FF). Prior to respondents’ ownership, both buildings were owned by Lau & Son Realty Corp. (“Lau & Son”) whose president was King Chun Lau. On December 17, 1986, Lau & Son purchased 206 Bowery from Soho Realty Corp. and 208 Bowery from Max-El Realty Corp. (Pet. Exs. 25A, 26B). When purchased, each building had a separate mortgage and title insurance from the same lenders and insurance companies (Pet. Exs. 28A, 29A, 30A-B). On January 27, 1987, certificates of incorporation were filed with New York State for respondents, 206 Bowery Realty Corp. and 208 Bowery Realty Corp. (Pet. Exs. 20-22). The officers of the corporations were members of the Lau family (Pet. Ex. 20). On February 9 and 12, 1987, Lau & Son filed Real Property Transfer Tax Returns stating that it was transferring 206 Bowery to 206 Bowery Realty Corp. and 208 Bowery to 208 Bowery Realty Corp. as transfers without consideration (Resp. Exs. CC1-2). However, on February 27, 1987, Lau & Son transferred 208 Bowery to both 208 Bowery Realty Corp. and 206 Bowery Realty Corp. in separate deeds (Pet. Exs. 26C-D). This was corrected on January 28, 1991, when Lau & Son transferred 206 Bowery to 206 Bowery Realty Corp. and 206 Bowery Realty Corp. transferred 208 Bowery to 208 Bowery Realty Corp. (Pet. Exs. 25B, 26E). - 6 -

In 1997 the mortgages for 206 Bowery and 208 Bowery were independently satisfied (Pet. Exs. 28B, 29B). Both properties were again mortgaged independently with the same lender in 1999 and those mortgages were satisfied in 2009 (Pet. Exs. 28C, 28D, 29C, 29D). The current shares of each corporation are owned by Lau family members, though they do not have identical shares in each corporation (Tr. 250, 289; Resp. Exs. M-S). Mai Lau testified that the shareholders in both corporations are the same except that her brother is not a shareholder in both corporations (Tr. 281). Since 2008, Mai Lau has been responsible for maintaining the records for both respondents including the corporate documents, leases, bank statements, and insurance (Tr. 252, 256, 258, 263, 272, 281). When her father King Chun Lau was alive, he managed everything (Tr. 253). The records for both corporations are kept in the same office (Tr. 282). Since 2008, Mai Lau’s sister, Lily and her brother have had signatory powers for both corporations. Prior to that, her father and brother had signatory power for both corporations (Tr. 282-83). Lily Lau, who is identified on the corporate documents as Mei Wai Lau, prepares the tax returns for each corporation and signs the checks (Tr. 261, 277, 289). The respondent- corporations file individual tax returns (Pet. Exs. 38A-B; Resp. Exs. Y, Z) and maintain separate bank accounts at the same bank (Resp. Exs. AA, BB). The expenses for each building are handled separately and are paid from their named accounts (Tr. 280, 285; Resp. Ex. DD; Pet. Exs. 55, 56, 58). Each respondent has had its own insurance policy purchased through the same brokerage company. At times they have used the same insurance company (Resp. Exs. W-X). In 1987, respondents entered into separate eight-year net leases for both buildings with Yuk Lam Chan (Resp. Exs. T-1, U-1). Newspaper articles from 1995, a court decision entitled United States v. Morales, 916 F. Supp. 336 (S.D.N.Y. 1996), and the testimony of Mr. Townley indicate that 206 and 208 Bowery were used as a brothel in the early 1990’s (Townley: Tr. 102- 03; Pet. Exs. 47, 49; Resp. Ex. A). In March 1994, 206 Bowery Realty Corp. leased its building to J & D Restaurant Equipment (“J & D”) pursuant to two leases one for the first floor and cellar and the other for the second and third floors (Resp. Exs. T-2-3). In December 1994, 208 Bowery Realty Corp. leased its building to Best Quality Restaurant Equipment, Inc. (“Best Quality”) (Resp. Ex. U-2). In 2002, 206 Bowery Realty Corp. extended J & D’s leases by five years through February 2010 - 7 -

(Resp. Ex. T-4). In 2004, 208 Bowery Realty Corp. leased its building to J & D through February 2010 (Resp. Ex. U-3) after it reached an agreement with Best Quality to vacate the premises (Pet. Ex. 39). J & D paid rent separately to each respondent (Resp. Ex. T-5). In September 2010, 206 Bowery Realty Corp. entered into a net lease with Sino American International Corp. (Resp. Ex. V-1). In March 2011, 208 Bowery Realty Corp. leased the first floor and cellar to the same tenant (Resp. Ex. V-2). The buildings at 206 Bowery and 208 Bowery have separate block and lot numbers: Block 492, Lot 32 and Block 492, Lot 31, respectively (Pet. Exs. 33A-B). Based on historical records (Resp. Ex. EE), 206 Bowery and 208 Bowery were once similar federal style three-story residences with cellars built around 1800. The buildings have undergone a number of exterior renovations and no longer share uniform architectural features or facades. The most notable exterior alteration was in the early 1900’s: the third-floor dormer windows and slanted roof on 208 Bowery were removed. New windows and a flat roof were installed at the same height as the peak of the original dormers. 206 Bowery retains the original sloped roof and dormer windows on the third floor where Mr. Gurkin’s unit is located (Peachy: Tr. 49-50; Dierickx: Tr. 306-07; Pet. Ex. 1A; Resp. Exs. EE, HH). Also, one-story extensions at the rear of each building were built to the lot-lines at different times in the early 1900’s (Peachy: Tr. 51, 58, 60; Dierickx: Tr. 307; Resp. Ex. EE). An application to have an opening made between the first floors of 206 and 208 Bowery was filed in 1964 (Pet. Exs. 30A, 48A). Due to renovations, the second and third floors of 208 Bowery are roughly the same size and are larger than the second and third floors of 206 Bowery. Moreover, the second floor is larger than the third floor in 206 Bowery (Pet. Exs. 1W-Y; Resp. Ex. B). In 1965, a fire escape ladder was added on the third floor of 208 Bowery that extends to the second floor extension on 206 Bowery (Peachy: Tr. 32; Pet. Ex. 1Y; Resp. Ex. EE at 4). Mr. Townley testified that after he moved into 208 Bowery in 1995, new roofs were simultaneously installed on 206 and 208 Bowery by the same roofing company (Tr. 99-100). The parties agreed that each building has its own meters for electrical, gas, and water, that each building has its own water main connection, and that neither building has a boiler, sprinkler, or furnace (Peachy: Tr. 43; Paknia: Tr. 179-80, 188-90). The testimony about whether there are pipes and electrical conduits running between the two buildings was inconclusive. Mr. - 8 -

Peachy initially claimed that there are pipes and electrical conduits that run between the buildings (Tr. 23-26; Pet. Exs. 1G, 1H, 1J, 1L) but acknowledged on cross-examination that they “may” go between the two buildings on the first floor (Tr. 53-55). Mr. Paknia testified that there was a waste pipe in 206 Bowery that branched into 208 Bowery that had been disconnected but was not sure when (Tr. 180-85, 191; Resp. Exs. D, E). Testimony about whether a water heater on the second floor of 206 Bowery serviced both buildings was also inconclusive (Peachy: Tr. 27-29, 69; Paknia: Tr. 186; Pet. Exs. 1O-Q). When Mr. Townley moved into 208 Bowery in 1995, the first floor was occupied by Best Quality who used it as a commercial space. At the time J & D occupied the first floor of 206 Bowery as well as the enclosed rear yard of 208 Bowery which made the area an “L” shape (Tr. 83, 85, 87-89, 98). Mr. Gurkin testified that when he moved into 206 Bowery in 2001, J & D was still occupying the “L” shaped store on the first floor and a chair store was in the front of 208 Bowery (Tr. 150-51). Since 2011, the first floors and cellars of the buildings are occupied by the current commercial tenant who is selling restaurant equipment. There are two openings between 206 and 208 Bowery on the first floor (Peachy: Tr. 21-22; Pet. Exs. 1B-C, 1F). Access to the buildings’ cellars is from the first floor of 208 Bowery and a hatchway on the sidewalk in front of 206 Bowery (Tr. 23-25; Pet. Ex. 1J). Apparently the stairway from the first floor to the cellar of 206 Bowery was removed and the hatchway to the cellar in front of 208 Bowery was sealed (Tr. 42; Pet. Exs. 8B-C). The cellars are connected (Peachy: Tr. 24; Dierickx: Tr. 315; Pet. Ex. 1I;). Mr. Peachy testified that to be code compliant the opening between the cellars must exist so that there are two means of egress: one from the stairway in 208 Bowery leading from the cellar and the other from a stairway leading to a hatchway in front of 206 Bowery (Tr. 24). Mr. Melzer disagreed and stated that the provisions relied upon by Mr. Peachy applied only to occupied spaces, not cellars used for storage (Tr. 325-27). It was undisputed that the buildings have separate entrances and stairways that lead to their respective second and third floors (Peachy: Tr. 56-57). Mr. Townley testified that when he moved into 208 Bowery in 1995, there were two openings between his unit and the third floor of 206 Bowery that had been sealed off. The first consisted of a doorway that looked like a bookcase. The tenant on the 206 side had installed sheet rock. Mr. Townley removed the book case and filled it with brick to mitigate the sound from next door. The second opening was a - 9 -

window that had been modified to accommodate a ventilation duct from 206 Bowery. He covered the window with sheetrock to hide the duct (Tr. 97, 112-13). Mr. Peachy testified that he observed two sealed openings between the buildings on the second floors when he visited in 2012. On the 206 side there is a seven-foot opening that penetrates the wall between the buildings that now has recessed shelves with sheetrock. Mr. Peachy surmised that this was a former window and that there is a step on the 208 side leading to an addition on the first floor extension (Tr. 26, 61-65; Pet. Exs. 1M-N). Also on the second floor of 206 Bowery is a door that opens to a small room with a hot water heater. On the other side is a door-sized opening that leads to 208 Bowery that is sealed with plywood. On the corresponding 208 side is a recess sealed with sheetrock (Tr. 27-29, 69; Pet. Exs. 1O-Q). Mr. Peachy asserted that the second and third floor openings between 206 and 208 Bowery likely predated the recent residential use to when the buildings were used as a brothel (Tr. 57, 72-73). Here, there is no dispute that 206 Bowery and 208 Bowery have been owned by different corporations since 1991. Moreover, the respondent-corporations are distinct legal entities each maintaining their own corporate documents, leases, bank accounts, insurance policies, and income tax filings. The courts have stated that while no one factor can be said to be determinative, “in all probability diversified ownership alone would indicate separate units.” Love Securities Corp. v. Berman, 38 A.D.2d 169, 170 (1st Dep’t 1972) (citing Amorelli v. Berman, 19 N.Y.2d 960 (1967)); see also Bambeck v. NYS Division of Housing & Community Renewal, 129 A.D.2d 51, 54 (1st Dep’t 1987). Here, diversified ownership alone is not dispositive because other factors suggest that these are not separate and independent buildings. Both buildings were purchased by Lau & Son in January 1987. Two similarly structured family-owned corporations were created at the same time in the same manner to own each building. However, this was not accomplished until 1991 when Lau & Son transferred 206 Bowery to 206 Bowery Realty Corp. and 206 Bowery Realty Corp. transferred 208 Bowery to 208 Bowery Realty Corp. Thus, there was a brief time when Lau & Son owned both properties, and a four-year period when 208 Bowery was owned by both respondent-corporations. The most significant factor in favor of finding the buildings to be a horizontal multiple dwelling is that the respondents have represented themselves to be the same entity in relevant net leases. For example, the Modification and Extension of Lease dated March 20, 2002, which - 10 - extended the lease dated March 24, 1994, between 206 Bowery Realty Corp. and J & D for the 2nd and 3rd floors at 206 Bowery, states in relevant part: The Landlord herein is also the landlord of the adjoining premises known as and by 208 Bowery, New York, New York. Said premises is presently leased to a third party tenant. Upon the expiration of the current lease for 208 Bowery, New York, New York, the Landlord shall offer to Tenant herein a Lease Agreement for the entire building at 208 Bowery, New York, New York, for a Five (5) Year term at a rental rate of $5,100.00 per month with an increase of rent of $100.00 per month per year. All other terms and conditions of the Lease to be substantially the same as this Lease Agreement between the parties for 206 Bowery. Landlord shall issue a Lease Agreement pursuant hereto at least six (6) months prior to the expiration of the current lease and thereafter it shall be the obligation and liability of the Tenant herein to obtain possession of the premises from the former tenant.

(Resp. Ex. T-4 at 1, emphasis added). The same paragraph appears the March 20, 2002, lease between the same parties for the 1st floor and rear yard of 206 Bowery (Resp. Ex. T-4 at 2). In addition, the Second Rider to Lease dated November 30, 2004, between 208 Bowery Realty Corp. and J & D for the entire premises at 208 Bowery states: Landlord shall use its best efforts to deliver vacant possession of the store and basement, up to code and free of occupants, pursuant to the terms of the Lease Agreement. However, in the event vacant possession is delayed due to the occupancy of the existing tenant, then the term of this lease and the term of the lease for the adjoining property at 206 Bowery, New York, New York, shall be extended accordingly.

(Resp. Ex. U-3). These net leases were in effect before, during, and after the window period and suggest that respondents did not manage the buildings as independent owners. It is also significant that both buildings were operated by the same net lessees, J & D before, during, and after the window period. J & D operated its business on the connected ground floors and cellars and rented out the second and third floors for residential use. A net lessee is an owner for purposes of the Loft Law. See Mult. Dwell. Law § 4(44) (Lexis 2012) (“owner” shall include “the owner or owners of the freehold of the premises or lesser estate therein . . . lessee, agent, or any other person, firm or corporation, directly or indirectly in control of a dwelling”); see also 29 RCNY § 2-04(a) (Lexis 2012) (“landlord shall mean the - 11 -

owner of an interim multiple dwelling, the lessee of a whole building part of which is an interim multiple dwelling, or the agent or other person having control of such dwelling.”). The residential tenants paid rent to J & D and communicated with J & D concerning building issues (Townley: Tr. 99-100; Gurkin: Tr. 123, 127). In addition to J & D operating the buildings from 2004 to 2010, respondents have a history of renting to common tenants. In 1987, respondents leased both buildings to the same tenant on the same date for an eight-year term and a brothel occupied the second and third floors of both buildings around 1994. Currently respondents have the same tenant on the connected ground floors and cellars of both buildings. Although respondents keep expenses for their buildings separate, they have the same accountants, book keepers, managers, lenders, insurance brokers, and lawyers who manage the buildings in conjunction with each other. At one-time respondents hired the same roofing company to simultaneously repair the roof of both buildings. Even though each building has its own meters for water, heat, and electricity, there is a fire escape that goes from one building to the other. While there are separate entrances to the buildings, there are and have been openings between the buildings on the first floor and cellars for a long period of time and there were openings on the second and third floors when residential tenants arrived in 1994 or 1995. The absence of a certificate of occupancy and a boiler or sprinkler system renders these factors insignificant. Finally, while the adjacent buildings are on separate tax blocks, the window-period lease for the ground floor at 206 Bowery includes the enclosed “rear yard” of 208 Bowery (Tr. 307; Resp. Exs. T-2; EE at 4, 6). Thus under one lease, J & D had the use and enjoyment of both zoning lots before, during, and after the window period. Weighing the existing facts, the evidence of common characteristics predominates over the evidence of independent characteristics and leads to the conclusion that even though they are owned by different corporate entities, that differentiation is nominal, and the buildings known as 206 Bowery and 208 Bowery constitute a horizontal multiple dwelling.

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Petitioner established sufficient residential occupancy during the applicable window period A building qualifies for Loft Law coverage if at least three units were residentially occupied within the window period for twelve consecutive months. Mult. Dwell. Law § 281(5). In order for a unit to qualify as a covered residence under the Loft Law, “it must possess sufficient indicia of independent living to demonstrate its use as a family residence.” Anthony v. NYC Loft Bd., 122 A.D.2d 725, 727 (1st Dep’t 1986). The determination of coverage requires a case by case analysis of the indicia of residential use. Matter of PAS CoO Tenant Group, OATH 968/08 at 7. As noted in Matter of South 11th Street Tenants Association, OATH Index Nos. 1242/96, 1243/96, 1244/96 at 39-40 (Mar. 30, 1999), adopted, Loft Bd. Order No. 2397 (Apr. 29, 1999), “no one factor is dispositive. . . the regulations defining a residential unit were deliberately left open-ended to allow for a more flexible approach to coverage determination” (citations omitted). Here, the record supports a finding that starting in 1994, the commercial tenants in 206 and 208 Bowery used the first floors and cellars to sell restaurant supplies and subsequently subleased the two upper floors as residences to various tenants until 2010. Mr. Townley testified that he lived on the third floor of 208 Bowery from December 1995 until the spring of 2010. Best Quality gave him a lease and it was renewed in 2005 by J & D who by then had become the prime lessee of 208 Bowery (Tr. 98-99). Mr. Townley stated that he worked on his unit before moving in because it was a wreck. He installed a kitchen and bathroom, put up sheetrock, and ran new electrical wires so that he could live there with his wife and son (Tr. 83-84). Mr. Townley also testified that in 1995 the third floor “garret” apartment in 206 Bowery was occupied by a man named Dutch who was living in a “funky” space that was not totally finished (Tr. 85-86). Ms. Yoshida testified that she has lived at 595 Broadway since 1977. She and Mr. Gurkin are now best friends but that they previously lived together at 595 Broadway from 1986 to 2001. In 2001 Mr. Gurkin gradually moved out of her unit and moved into 206 Bowery while they continued to see each other for about a year. Mr. Gurkin has a theater company called Peculiar Works Projects that uses 595 Broadway for rehearsals and to store props and costumes. When he moved out in 2001, Mr. Gurkin kept 595 Broadway as his mailing address (Tr. 77-81). - 13 -

Mr. Gurkin corroborated Ms. Yoshida’s testimony that he slowly moved out of 595 Broadway and moved into the third floor of 206 Bowery in January 2001. He testified that he found the apartment in the Village Voice (Pet. Ex. 5A) and moved in with Dutch and another roommate. Mr. Gurkin stated that their roommates did not stay very long because someone always had to walk through someone else’s bedroom to get to their room (Tr. 118-23). Mr. Gurkin testified that in 2001 he installed a telephone in his name at 206 Bowery (Tr. 152-53; Pet. Ex. 17). Photographs which Mr. Gurkin claimed to have taken in 2004 were submitted into evidence. Mr. Gurkin testified that they show the unit as well as his bedroom which consisted of an upper and lower level. His bed was on a mezzanine accessed by a set of stairs. Below was a study area next to the kitchen (Tr. 131-33; Pet. Exs. 12A-F). Mr. Gurkin stated that in 2006, J & D asked Dutch to leave. Consequently, he took over the unit and signed a new sublease with J & D (Tr. 123-24; Pet. Ex. 6; Resp. Ex. I). Mr. Gurkin wrote rent checks to J & D that bore the 595 Broadway address (Tr. 127-28, 205; Pet. Ex. 7). At some point Mr. Gurkin installed electric baseboard heaters and got his own electrical meter with Con Edison (Tr. 154, 201; Pet. Ex. 18). In the spring of 2006 he renovated the third floor unit (Tr. 134-35). The renovation included moving some walls, updating the kitchen, and replacing the vanity in the bathroom (Tr. 134-35). He provided receipts for some of his expenses (Pet. Ex. 16). Photographs of the renovation were submitted into evidence (Pet. Exs. 13A-D). In addition, Mr. Gurkin provided photos of the unit that he claimed were taken between 2007 and 2009. One photo shows him with a friend standing in front of a Christmas tree. Some of the other photos were used to advertise the front bedroom for rent. A response to such an advertisement was also submitted into evidence (Tr. 137-41; Pet. Exs. 5B, 14A-D, 15A-E). Mr. Gurkin’s YMCA card and membership documents between 2006 and 2010 were admitted into evidence. They list his address as 206 Bowery (Gurkin: Tr. 156; Pet. Ex. 19). Mr. Gurkin explained that he did not get mail at 206 Bowery because when he moved in, his roommate Dutch did not get along with the landlord and there were no mailboxes in the building. Because it was “very sketchy” Mr. Gurkin continued to use his former address at 595 Broadway for his credit cards, bank statements, and other important mail (Tr. 146, 197). Since his theater company was still located there, it made more sense to have an address where things could be delivered (Tr. 146). Bills that could be e-mailed were paid electronically (Tr. 197-99). Mr. - 14 -

Gurkin acknowledged that some of his accounts, including Con Edison, listed Ms. Yoshida’s address and phone number (Tr. 199-200). Mr. Gurkin also identified 595 Broadway as his home address and 206 Bowery as a business address on his 2007, 2008, and 2009 income tax returns (Tr. 223-24; Resp. Ex. J). While his tax returns reflect an expense for the rental of business property, which was used to calculate his deduction, the tax forms do not identify the property for which the deduction was taken. Moreover, the deduction was less than the rent for 206 Bowery. Mr. Gurkin’s rent was $24,000 in 2007-2008, $25,200 in 2008-2009, and $26,400 in 2009-2010 (Pet. Ex. 6) and he listed business rent expenses of $7,200, $6,000, and $3,000 respectively (Resp. Ex. J). Mr. Townley and Mr. Gurkin also testified about the succession of residential tenants who resided in the second floor units of both buildings from 1995 to 2010. With regard to 208 Bowery, Mr. Townley testified that when he moved into his third floor unit in 1995, the second floor was vacant. Within a year, two men named Victor and Sebastian moved into an open space with a stove, refrigerator, and sink as well as a bathroom with a toilet, sink, and shower. Subsequently they moved out and two men named Anthony and Sam moved in. They were still living there in 2001. In 2003 or 2004 Sam left and Keith took his place. In 2007 Anthony’s fiancé moved in and Mr. Townley, a real estate broker, facilitated Keith’s move to the second floor of 206 Bowery. Anthony moved out of the second floor in 2010 around the same time as Mr. Townley (Tr. 85, 89-91). Mr. Gurkin testified that after he moved into 206 Bowery in 2001, he was aware that people were living in 208 Bowery because he would see them and would sometimes get their mail by mistake (Tr. 151-52). According to Mr. Townley, there were two women living on the second floor of 206 Bowery prior to 2007. He would sometimes see them eating on their roof terrace (Tr. 87). Mr. Gurkin testified that he also saw two women on the second floor when he was going in and out of the building and that he could hear them play music and would smell food when they cooked (Tr. 147-48). When the two women moved out in 2007 and Keith moved in from 208 Bowery, J & D updated the kitchen and bathroom. Keith had a roommate named Serena who kept the unit after he moved out and she lived there until the spring of 2010 (Townley: Tr. 91-92, 97-98). Mr. Gurkin testified that he saw the second floor unit when the cable company needed to get access - 15 -

to the terrace to fix his cable. Mr. Gurkin observed a kitchen, two bedrooms, and a living area (Tr. 148-49). Mr. Gurkin also provided Mr. Townley’s driver license issued on December 31, 2009, that lists 208 Bowery as his address (Pet. Ex. 3). He also submitted certified voter registration records between 2001 and 2009 for tenants including: Townley family members (208 Bowery 3rd floor), Keith (208 Bowery 2nd floor), Polly (206 Bowery 2nd floor), Helena (206 Bowery), Leslie (208 Bowery), and Michelle (208 Bowery 2nd floor) (Townley: Tr. 101-02; Pet. Ex. 4). According to Mr. Peachy, the second and third floors of 208 Bowery currently have commercial tenants in spaces “fixtured for residential use” (Tr. 36). It appears that the second floor of 206 Bowery is vacant leaving Mr. Gurkin as the only remaining residential tenant. Mr. Gurkin testified that in 2010 J & D’s lease expired and he was served by 206 Bowery Realty Corp. with a notice of eviction in June 2010 (Tr. 208-11; Resp. Ex. I). Consequently, he hired counsel, had an official mailbox installed, and changed his addresses from 595 Broadway to 206 Bowery including his bank account, driver’s license, credit card, and voter registration (Tr. 203-04, 215-19, 226; Resp. Ex. G). Mr. Gurkin’s 2010 tax returns also reflect that 206 Bowery is his residence and 595 Broadway is his business address (Resp. Ex. J). The unrebutted credible testimony of Mr. Townley and Mr. Gurkin, as corroborated by voter registrations and Mr. Townley’s driver license, supports a finding that the second and third floor units in 208 Bowery and the second floor unit in 206 Bowery were occupied as residences with various tenants from 1995 until the spring of 2010. Specifically, during the window period, in 208 Bowery, the third floor was occupied by the Townley family and the second floor was occupied by Anthony and his fiancé. The second floor of 206 Bowery was occupied by Keith and Serena. In terms of the third floor of 206 Bowery, the evidence was also sufficient to show that it was residentially occupied by Mr. Gurkin during the window period. In fact, there was ample evidence that the unit was physically converted to a residence prior to Mr. Gurkin moving in and that he made additional renovations while he resided there. That evidence consisted of the testimony of Mr. Townley, Ms. Yoshida, and Mr. Gurkin and documentary evidence including photographs before and after the renovation and photographs of Mr. Gurkin in the unit, receipts for the renovation, Mr. Gurkin’s lease with J & D and rent checks made out to J & D, Mr. - 16 -

Gurkin’s on-line advertising for a roommate, utility bills in Mr. Gurkin’s name, and Mr. Gurkin’s YMCA membership documents. Collectively, they established that Mr. Gurkin moved into the unit in 2001 and that he has lived there to the present. This determination is not affected by the evidence that Mr. Gurkin may have also maintained a residence at 595 Broadway. Respondents are correct that a party may not assert a position contrary to a position taken in an income tax return. Mahoney-Buntsman v. Buntzman, 12 N.Y.3d 415, 422 (2009); see also Mikkelson v. Kessler, 50 A.D.3d 1443, 1444 (3d Dep’t 2008) (a party may not assert “a factual position in a legal proceeding that is directly contradicted by his or her tax return”). However, Mr. Gurkin’s statements on his tax returns that 595 Broadway was his home address and that 206 Bowery was his business address do not directly contradict his position that he residentially occupied 206 Bowery during the window period. Mr. Gurkin did not state that the addresses were used exclusively for residential or business purposes and respondents have not cited any section of the Tax Code requiring that the addresses listed be exclusively used for the purposes identified. Indeed, such a requirement is not contained in the instructions for the income tax forms. Dep’t of Treasury, Internal Revenue Service, Instructions for Form 1040 (2009), available at http://www.irs.gov/pub/irs-prior/i1040-- 2009.pdf. Had Mr. Gurkin used his unit at 206 Bowery exclusively for business purposes he would have been entitled to list his entire rent as a business expense which he did not do. 26 U.S.C. §§ 162(a)(3), 280A. Instead, he seems to have refrained from any representation on his tax returns that he used 206 Bowery exclusively for business purposes. As the Second Circuit has recognized “one may have more than one residence.” Rosario v. I.N.S., 962 F.2d 220, 223-24 (1992). Likewise, a business may have multiple locations. Finally, a unit need not be the sole residence of the occupant during the window period in order for it to count as a residentially occupied unit. Vlachos v. NYC Loft Bd., 70 N.Y.2d 769, 770 (1987) (“[t]here is no requirement for Loft Law coverage that residentially occupied units be the primary residence of their tenants.”); see also Kaufman v. American Electrofax Corp., 102 A.D.2d 140, 142 (1st Dep’t 1984) (unit covered by Loft Law even though occupant maintained a separate primary residence); Little West 12th St. Realty L.P. v. Inconiglios, 19 Misc. 3d 508, 516- 17 (N.Y. Civ. Ct. 2008) (“the initial determination regarding Loft Law coverage depends on whether three or more units were occupied for residential purposes during the window period, - 17 -

not on whether they were occupied as the primary residences of their tenants”). Similarly, a residentially occupied unit may qualify for coverage even when limited non-residential use is made of the unit. 29 RCNY § 2-08(l) (Lexis 2012) (a residential unit may contain a non- residential use by its occupants that is secondary to the residential use and does not use more than 49% of the total floor area). There is no evidence that Mr. Gurkin used 206 Bowery exclusively as a business for his theater company.

Petitioner demonstrated that his unit is 550 square feet in area Under the 2010 amendments, an IMD unit must, among other things, be “at least five hundred fifty square feet in area” to be covered by the Loft Law. Mult. Dwell. Law § 281(5) (Lexis 2012); 29 RCNY § 2-08(a)(4)(iii)(D). Here, respondents challenge the size of Mr. Gurkin’s unit only. Mr. Gurkin’s unit is on the top floor of 206 Bowery. The unit is roughly a rectangle which runs approximately 41 feet from west to east and is approximately 16 feet from north to south.1 Because of the slanted roof, the ceiling slopes along the east-west length of the unit from a center high of approximately 14’ 10” downwards to a low point of approximately 2’ 9” across the east and west walls. The east and west sides also have dormer windows which interrupt the slope of the ceiling and create approximately two-foot wide corridors of space several feet above the slope. As a result, the ceiling height in the unit is irregular with most of the height along the east and west walls low (Pet. Ex. 65; Resp. Ex. LL). The unit is divided into three distinct living spaces which are described below from the back (west) to the front (east) of the unit. The entrance to the unit is in the northwest corner of the building at the top of the public stairway. The front door is set inside the unit’s rectangular footprint and opens into a small entry

1 The directional descriptions used do not correspond exactly to a compass, however, they are consistent with the way the parties described the unit and with the top of Manhattan island being considered north. - 18 -

area. Along the north wall of the entry area is a small closet and then a shower stall (Pet. Ex. 65; Resp. Ex. LL; Tr. 339-40). To the right of the entrance, along the west wall, is a bathroom with enough room for a toilet and vanity that is set into the low ceiling. The southwest corner of the unit consists of a study-like area with a closet and a dormer window overlooking the back of the building and first-floor extension (Pet. Exs. 64B-C, 64E). Beyond the entry area, in the center of the unit, is a space consisting of an open kitchen along the north wall and a living room/dining area along the south wall. A portion of the living room/dining area occupies the entire width of the unit beyond the kitchen. Also in the center, is a 6’ 9” high mezzanine over portions of the kitchen and living room. Mr. Gurkin’s bed and miscellaneous furniture are located there. The mezzanine is about 10’ 8” wide by 11’ 7” long (Tr. 335; Pet. Ex. 65; Resp. Ex. LL) and occupies roughly two-thirds the width of the unit. It is accessed by a staircase in the rear study area. The ceiling height above the mezzanine ranges from 4’ 1” to 7’ 5” but there is a beam at the peak of the ceiling that reduces the maximum standing height to 5’ 6” (Tr. 343-44). The majority of the kitchen is adjacent to the living room/mezzanine area. Both the kitchen and mezzanine have skylight-type windows in the sloped ceiling (Pet. Exs. 64A, 64C, 64F; Resp. Ex. LL). Beyond the full-width living room/dining area to the east is a bedroom which is approximately 13’ by 16’. To the left of the doorway is a closet that was once a shower stall that most likely dates back to when the third floor was used as a brothel (Tr. 139-41; Pet. Exs. 14C, 14D, 15B). The first third of the bedroom is an open area. Beyond that are two dormer windows set into the sloped ceiling that overlook the Bowery (Tr. 388-89; Pet. Ex. 64D; Resp. Exs. EE, HH). The head of a queen-sized bed is against the east wall below the 2’ 9’’ sloped ceiling between the dormer windows. The bed is on the floor (Peachy: Tr. 386; Pet. Ex. 64D). Mr. Meltzer was hired by respondents to measure Mr. Gurkin’s unit (Tr. 324-25, 330). He measured the unit within the inside walls and found that it consists of over 600 square feet of floor area but that only a portion is considered “habitable.” Mr. Melzer testified that under Building Code section 27-751, a habitable room must have a minimum ceiling height of eight - 19 -

feet (Tr. 331-33).2 Because of the slanted roof, many areas in the unit have less than eight foot high ceilings leaving 319 square feet of habitable space with the mezzanine or 438 square feet if it is removed (Tr. 333-35). Mr. Meltzer’s office prepared a floor plan showing the areas that have a ceiling height of eight feet or greater. These areas consist of: a portion of the entry area; a portion of the study area including where the dormer window is located; the kitchen area not covered by the mezzanine; the living/dining room area not covered by the mezzanine; and one-third of the front bedroom and closet plus the areas where the two dormer windows are located. Areas that are excluded because they have ceiling heights less than eight feet consist of: a portion of the entry area including the entire closet, shower, and bathroom; a portion of the study and stairway to the mezzanine; the entire area where the mezzanine is located; and two-thirds of the front bedroom except where the two dormer windows are located (Resp. Ex. LL). Mr. Peachy testified that, pursuant to his calculations, the third floor unit consists of 595 square feet of floor area. Mr. Peachy followed section 12-10 of the Zoning Resolution. His measurement included the 6” space between the interior wall of the unit and the exterior wall of the building where electrical and plumbing fixtures are located, an enclosed chimney, the distance from the outside of the glass in the dormer windows to the exterior of the building, and all the areas that had ceiling heights below eight feet. Mr. Peachy did not include the stairway to the mezzanine and counted the mezzanine area only once (Tr. 379-85; Pet. Ex. 65). In anticipation that Mr. Gurkin would ask 206 Bowery Realty Corp. to make his ceilings eight feet high through the unit, Ms. Dierickx testified that the Landmarks Commission is considering landmark status for 206 Bowery because of its peaked roof and dormer windows (Tr. 301, 309-12; Resp. Exs. EE, GG). Ms. Dierickx also testified that if an application to raise the

2 Section 27-751 of the Building Code, as provided by respondents (Resp. Ex. MM), states in relevant part: Minimum dimensions of habitable rooms – Habitable rooms shall have a minimum clear width of eight feet in any part, a minimum clear area of eighty square feet and a minimum clear ceiling height of eight feet for the minimum area except:

(a) A room which complies with the requirements for a natural light and ventilation and in addition has an opening of not less than sixty square feet into an immediately adjoining room may have a minimum floor area of seventy square feet and at least horizontal dimension of seven feet.

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roof in a manner similar to 208 Bowery were to be filed with the Department of Buildings, it would not be acted upon until the Landmarks Commission makes a decision (Tr. 311-12). While the parties’ architects had different methods of measuring Mr. Gurkin’s unit, they agreed that it has more than 550 square feet of floor area. In their post hearing brief, respondents did not pursue Mr. Meltzer’s opinion regarding section 27-751 of the Building Code but instead argued that 206 Bowery is a “converted dwelling” under MDL section 4(10)3 and that Mr. Gurkin failed to demonstrate that his unit meets the height and size requirements in Article VI, section 174 of the MDL.4 Thus, the issue is what effect, if any, does the sloped ceiling have on determining the size of the third floor unit. This question appears to be an issue of first impression. “The starting point of statutory interpretation is, of course, plain meaning.” People v. Owusu, 93 N.Y.2d 398, 401 (1999). MDL section 281(5) specifies the area of the unit must be 550 square feet but makes no mention of ceiling height. It is generally held true that what is left out of a law is presumed to be intentionally left out. Matter of McIntosh, OATH Index No. 604/02 at 10 (Oct. 15, 2002), aff’d, Loft Bd. Order No. 2763 (Nov. 19, 2002) citing N.Y. Statutes § 74, entitled “Implications from legislative silence” (“A court cannot by implication supply in a statute a provision which it is reasonable to suppose the Legislature intended intentionally to omit; and the failure of the Legislature to include a matter within the scope of an act may be construed as an indication that its exclusion was intended.”); see also People v. Anonymous, 43 A.D.3d 806, 807 (1st Dep’t 2007) (“failure of legislature to include a matter within a particular statute is an indication that its exclusion was intended”); People v. Sommersell, 166 Misc. 2d 774, 776 (2d Dep’t 1995) (omission of provision from statute is “indication that its exclusion was intended,” and “in such instance the court may not give a statute a reading which would include matters not contemplated by legislature in its enactment of the statute”); MBNA America Bank, N.A. v. Coe, 2 Misc. 3d 355, 357 (City Ct. White Plains 2003) (the failure of the legislature to

3 MDL section 4(10) defines a “converted dwelling” in relevant part as “erected before April eighteenth, nineteen hundred twenty-nine, to be occupied by one or two families living independently of each other and subsequently occupied as a multiple dwelling. . .”

4 MDL section 174 states in relevant part: “Every living room shall contain five hundred fifty cubic feet or more of air, shall be at least six feet wide at its narrowest part and shall have a minimum height of seven feet if such room is in the basement, of seven feet at all points more than six feet from the front of such room if it is on a top story. . .”

- 21 - include a matter within the scope of a statute may be construed as an indication that its exclusion was intended). Respondents’ have failed to provide any support for the proposition that either section 27-751 of the Building Code or Article VI of the MDL should be read into the Loft Law to determine the size of the unit for purposes of coverage. The ordinary meaning of “area” is the length times the width of the unit’s floor space. Since the legislature did not include a minimum ceiling height when defining a unit’s area, one should not be implied. See Thorgeirsdottir v. NYC Loft Board, 161 A.D.2d 337 (1st Dep’t 1990) (Loft Board has no authority to add additional conditions or to impose further qualifications to an entitlement or status declared by the MDL); Schenkman v. Dole, 148 A.D.2d 116, 121 (1st Dep’t 1989) (eligibility requirements for coverage are set forth in MDL, Loft Board has no discretion to interpose additional governing criteria). This interpretation is consistent with the general intent of the Loft Law to be liberally construed in favor of coverage. In Association of Commercial Property Owners v. NYC Loft Board, 118 A.D.2d 312, 318 (1st Dep’t 1986), the Court stated: “Given the choice of two interpretations of the Loft Law, one restricting coverage and one broadening it, the remedial nature of the legislation forcefully argues for the adoption of the latter course . . . To the extent the Loft Law is restricted in its coverage, the purpose of the law is defeated.” (quoting Ancona v. Metcalf, 120 Misc. 2d 51, 55-56 (Civ. Ct. N.Y. Co. 1983)). Moreover, respondents’ arguments concerning a minimum ceiling height requirement go to whether the unit may be legalized. Past cases hold that legalization issues are not to be used by owners to avoid Loft Law coverage. See, e.g., Katz v. NYC Loft Board, 163 A.D.2d 207, 209 (1st Dep’t 1990), aff’d, 78 N.Y.2d 1018 (1991) (the fact that the units contain less than the mandated minimum square footage required by the applicable zoning resolution does not preclude coverage since that issue is deferred until the subsequent legalization proceeding); Nirco Investors v. NYC Loft Board, 131 A.D.2d 325, 326 (1st Dep’t 1987) (same); Application of Kilik, Loft Bd. Order No. 401, 4 Loft Bd. Rptr. 21, 22 (Aug. 21, 1986) (“Problems in legalizing the space for residential purposes are to be resolved in the course of the legalization process; they do not themselves serve as a defense to coverage”). - 22 -

In any event, the lack of a ceiling height requirement in this particular case would not “lead to unreasonable or absurd results.” McKinney’s Cons. Laws, Statutes §§ 141, 143-46. As the United States Supreme Court has stated: There is, of course, no more persuasive evidence of the purpose of a statute than the words by which the legislature undertook to give expression to its wishes. Often these words are sufficient in and of themselves to determine the purpose of the legislation. In such cases we have followed their plain meaning. When that meaning has led to absurd or futile results, however, this Court has looked beyond the words to the purpose of the act. Frequently, however, even when the plain meaning did not produce absurd results but merely an unreasonable one ‘plainly at variance with the policy of the legislation as a whole’ this Court has followed that purpose, rather than the literal words.

United States v. American Trucking Assn’s., 310 U.S. 534, 543 (1940); see also Lower Manhattan Loft Tenants v. NYC Loft Bd., 66 N.Y.2d 298, 304-05 (1985) (effectuating the purpose of the Loft Law should be the “primary guide”). This is not a situation where the entire unit has extremely low ceilings. According to respondents’ architect, if the center mezzanine is removed, there would be 438 square feet of area with eight foot-plus ceilings. Moreover, respondents have not alleged, let alone demonstrated, that the third floor unit cannot be legalized. Even if 206 Bowery is a “converted dwelling” under MDL section 4(10) and MDL section 174 and/or Building Code section 27-751 apply it is conceivable that with modifications, not including raising the roof, the third floor unit could be legalized. There is natural light and ventilation from the sky lights and dormer windows. The removal of non- essential walls and the mezzanine would create a large center room that would be more than 438 square feet of area with eight foot-plus ceilings. This would most likely provide a room that contains “five hundred fifty cubic feet or more of air . . . be at least six feet wide at its narrowest part and have a minimum height . . . of seven feet at all points more than six feet from the front of such room” as required by MDL section 174. Mult. Dwell. Law § 174. Similar renovations would also likely provide, “a minimum clear area of eighty square feet and a minimum clear ceiling height of eight feet for the minimum area” as required by Building Code section 27-751. Admin. Code § 27-751(a) (Lexis 2012).

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Petitioner demonstrated that he qualifies for protection under the Loft Law Unlike building coverage, a determination that an applicant is a residential occupant qualified for protection requires a showing that the applicant currently occupies the unit residentially. 29 RCNY § 2-09(b)(1) (2012) (“Except as otherwise provided herein, the occupant qualified for protection under Article 7-C, is the residential occupant in possession of a residential unit, covered as part of an IMD.”).5 The Loft Board Rules provide for such protection if the current residential occupant was in possession of the unit prior to June 21, 2010, the effective date of the Loft Law, even when the occupant does not have a written lease and occupies the units without consent of the landlord. 29 RCNY § 2-09(b)(2) (Lexis 2012); see also 545 Eighth Ave. Assocs. v. NYC Loft Bd., 232 A.D.2d 153, 154 (1st Dep’t 1996) ) (residential occupants in possession on the requisite dates are entitled to be considered protected occupants); Korn v. Batista, 131 Misc. 2d 196, 200 (Sup. Ct. N.Y. Co.), aff’d, 123 A.D.2d 526 (1st Dep’t 1986) (“The Loft Law was designed to protect all residential occupants whether or not they are in privity of contract with the landlord.”); Dworkin v. Duncan, 116 Misc. 2d 853, 862 (N.Y. Civ. Ct. 1982) (“Under the Loft Law we are not constrained by the word ‘tenant’, but are instead given the more elastic term ‘residential occupant, a term whose intention was clearly to free triers of fact from the strictures of more traditional and stable housing arrangements.”). Here, the testimony of Mr. Townley, Ms. Yoshida, and Mr. Gurkin, and Mr. Gurkin’s 2010 income tax returns, bank account statements, credit card, voter registration, and electric bills, credibly established that Mr. Gurkin currently occupies the third floor of 206 Bowery as a residence and that he did so prior to the effective date of the Loft Law.

FINDINGS AND CONCLUSION 1. Petitioner demonstrated that 206 Bowery and 208 Bowery constitute a horizontal multiple dwelling under the Loft Law.

5 The report and recommendation issued on August 23, 2012, was amended to correct a citation error in this paragraph and to reflect that the cited proposed amendments to Loft Board Rule 2-09 were adopted on October 4, 2012, and can be found at www.nyc.gov/html/laws/laws.shtml. - 24 -

2. Petitioner demonstrated that 206 Bowery and 208 Bowery each had two residentially occupied units during the applicable window period.

3. Petitioner demonstrated that the third floor unit in 206 Bowery is at least 550 square feet in area.

4. Petitioner demonstrated that he qualifies for protection under the Loft Law.

RECOMMENDATION The application should be granted.

Alessandra F. Zorgniotti Administrative Law Judge

December 14, 2012

SUBMITTED TO:

ROBERT D. LIMANDRI Chair

APPEARANCES:

ROBERT PETRUCCI, ESQ. Attorney for Petitioner

BORAH, GOLDSTEIN, ALTSCHULER, SCHWARTZ & NAHINS Attorneys for Respondents BY: DAVID BRODY, ESQ. JESSICA Y. PARK, ESQ.

GOLDBERG, SCUDIERI & LINDENBERG, P.C. Attorneys for Respondents BY: ROBERT GOLDBERG, ESQ.