In her quest to return free-market apartments in 31 buildings to rent stabilization, New York Attorney General Letitia James is trying to gag a whistleblower and the real estate industry.
The whistleblower, former state housing official Woody Pascal, had made a sworn statement that was temporarily sealed by a judge in July on James’ request. Peak Capital Advisors, which rehabilitated and deregulated the 31 buildings, sees Pascal’s statement as crucial to saving the $150 million investment. It could also help protect other firms’ projects from huge rent rollbacks.
To get it unsealed, Peak’s lawyers removed every sentence to which James objected. But when they moved to resubmit it, her office didn’t budge, telling a judge that Peak had “no legitimate reason” to file it.
The reason couldn’t be more obvious: Pascal detailed how his former agency began rejecting substantial rehabilitations in response to pressure from tenant activists and politicians, reversing longstanding policy. Peak and other firms had relied on that 1995 policy to rehab buildings with rent-stabilized units and re-rent them at market rates.
James also asked the court to stop the Real Estate Board of New York from intervening in support of Peak, but Judge Kathy King gave REBNY the green light.
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