22 CPS Owner LLC v. Carter

457 Order, Supreme Court, New York County (Carol R. Edmead, J.), entered June 22, 2010, which, insofar as appealed from, granted plaintiffs motion for partial summary judgment on its second, third, and sixth causes of action, unanimously affirmed, with costs. Plaintiff seeks a declaration that the penthouse apartment (the penthouse) in the subject building located at 22 Central Park West, New York, New York (the building) is exempt from rent stabilization coverage. Supreme Court properly granted plaintiff summary judgment. The penthouse has not been subject to rent stabilization since its creation, when the building was converted from a purely commercial space to an almost exclusively residential space (except as to the ground floor which remained commercial). Because the purpose of the exemption from rent stabilization based on the substantial rehabilitation of a building is to encourage landlords to renovate buildings and add new residential units to the housing stock (see Matter of Eastern Pork Prods. Co. v New York State Div. of Hous. & Community Renewal, 187 AD2d 320, 324 [1992]; Wilson v One Ten Duane St. Realty Co., 123 AD2d 198, 201 [1987]), the conversion of a purely commercial space into an almost purely residential space, creating 23 residential units when none existed, is a substantial rehabilitation so as to exempt the building from rent stabilization (cf. Wilson, 123 AD2d at 201; see Jordan Mfg. Corp. v Lledos, 153 Misc 2d 296, 301 [1992]). That the building was subject to rent stabilization during the period it received J-51 tax benefits, which ended in 1992, does not change the status of the penthouse because it was owner occupied during the entire J-51 period (see Rent Stabilization Code [9 NYCRR] § 2520.6 [i]; § 2520.11 [i]). We have considered defendants-appellants’ other arguments and find them unavailing. Concur — Andrias, J.E, Friedman, Catterson, Renwick and DeGrasse, JJ. [Prior Case History: 2010 NY Slip Op 31508(U).]