Ex-Legal Aid Lawyer Among Attorneys $uccessfully $queezing NYC Developers For Million$ On Behalf Of Rent-Regulated Tenants Seeking Hefty Buyout$ Of Their Leasehold Rights; Contingent Fee Arrangement Makes His Legal Services Affordable To Potential 'Lottery Winners'

In New York City, The New York Times reports:

• Tishman Speyer Properties, one of New York City’s most active real estate developers, had bought two parcels of land on the Far West Side of Manhattan to clear the way for a 2.8-million-square-foot office tower planned for Hudson Yards.
  
  Standing in the way, though, were the occupants of two apartments on the site. So this year, the developer turned to a lubricant that can be counted on to ease New York City tenants out of their rent-regulated units — a buyout, in this case, for $25 million in total to three tenants.
  
  In New York’s exceptionally lucrative real estate market, multimillion-dollar buyouts are becoming more common, lawyers who negotiate for tenants and property owners say.
  
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  Mitchell Posilkin, general counsel to the Rent Stabilization Association, a landlords’ group, said suggesting owners are willing to pay “was akin to suggesting a payment in response to extortion is a voluntary one.”
  
  But for the people in the path of the highest-priced projects, a buyout can be like winning the lottery (complete with taxes). Lawyers for some tenants now look down at anything under $10 million for a single resident.
  
  “There are cases where I’ve made it clear to the developers that in order to start negotiations the settlement has to be in the eight figures per tenant,” said David Rozenholc, a lawyer who negotiated the Tishman Speyer deal on behalf of the tenants and has made such buyouts his signature practice.
  
  Most buyouts are much smaller. Some are just a few thousand dollars, and are sometimes used to coerce poor, vulnerable tenants to leave. There are not many projects like Hudson Yards, Sherwin Belkin, a lawyer for Tishman Speyer, said. “This is a unique site,” he said. “That’s what drives numbers like these.”
  
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  Tenants, of course, argue that they have the right to fight for their homes or at least for fair compensation. The landlord, they note, is asking them to surrender apartments that afford tenants protections against eviction and large rent increases.
  
  “What I’m giving up is so valuable to me,” said Veronica Sofio, 60, a preschool teacher who refused an offer of $700,000 from her landlord to leave her one-bedroom on the Upper East Side where she has lived for 35 years. “I raised my children here. We fought for parks in this neighborhood. We’re part of this neighborhood.”
  
  Mr. Rozenholc, who represents Ms. Sofio and five other holdouts in two buildings owned by the same landlord, has staved off the owner’s eviction efforts for at least the last eight years.
  
  A former Legal Aid Society lawyer, he has a reputation for patience. He works on contingency, taking a third of the buyout money.
  
  Lawyers who negotiate such buyouts reject the notion that they are shaking down developers.
  
  “That’s what the market is,” Samuel J. Himmelstein, another tenant lawyer who negotiates expensive buyouts, said. “People make an economic decision to pay because they’re still going to make a tremendous amount of money. My heart doesn’t bleed for them.”
  
  Indeed, on the other side of the table, lawyers like Mr. Belkin make their own calculations and draw up battle plans before deciding whether to break out the checkbook.
  
  They hire private investigators to identify tenants who are violating rent regulations. That gives the owner a legal right to evict or a way to induce to leave with a low buyout. They go to tenants with offers of relocation.
  
  And there is always the hope that the tenants will cave, perhaps fearful of a long, unpleasant fight.
  
  “Both sides play chicken,” Mr. Belkin said. “Who’s going to blink first? If they blink at the same time, you have a deal.”

For more, see New York Builders Paying Huge Buyouts to Tenants in Their Way.