Former Tenants of East Village Building Claim Nearly $2 Million Loss
Former residents of a building in the East Village, which was ruined by a 2015 gas explosion, allege they’re being cheated out of nearly $2 million in housing costs by the building’s new owner, according to a recent lawsuit.
Developer Yannick Cohen purchased the vacant lot for $9.15 million in 2017, planning to construct 21 luxury condominiums on the site where an illegal gas line explosion caused two fatalities and leveled three buildings over a decade ago.
However, Mr. Cohen—operating under Avenue’s Second Owner LLC—has yet to compensate four rent-regulated tenants evicted due to the explosion, despite a legal obligation to pay them a “pathetic” sum of $1.7 million, as stated in the Manhattan Supreme Court filing.
A devastating seven-alarm fire on March 26, 2015, resulted in the building’s demolition and the deaths of 23-year-old Nicolas Figueroa and restaurant worker Moises Locon Yak.
In 2020, a homeowner, a contractor, and an unlicensed plumber received sentences of four to 12 years in prison for constructing a hidden basement to illegally divert gas from another property.
State regulations require that if a rent-regulated tenant’s building is destroyed, the owner must either relocate the tenant or buy out their lease.
Darryl Vernon, representing the tenants, expressed that his clients are seeking rehousing. “They constructed a multi-million dollar apartment complex but won’t allow the previous occupants to return,” he pointed out. “It’s a bit sad considering the realty market.” He noted that regular acquisitions often total in the millions.
The $1.7 million owed to former tenants has been determined by the state Housing Authority and upheld by a state appellate court, as highlighted in the lawsuit.
Despite a 2023 ruling from the state Department of Housing and Community Renewal favoring the owners—indicating they were not mandated to provide new apartments for former tenants—they remain responsible for stipend payments.
“We didn’t receive an apartment, but we got these meager stipends. They don’t even cover our needs,” Vernon remarked.
Tenants are currently facing a total claim of $1,709,087, including interest, which the new owner has yet to acknowledge.
Interestingly, condos in the newly built corner property at 45 East 7th Street have sold for over $40 million, with a penthouse fetching nearly $8 million, according to real estate records.
The lawsuit filed last Friday asserts that the defendants have neither paid the owed amounts nor made any payments at all.
Efforts to claim the stipends have been ongoing for several years, with the owners pursuing various appeals and lawsuits, though these attempts have generally yielded no success, based on the tenants’ filings.
No comment has been received from the attorney representing Avenue Second Owner LLC.
As it stands, the tenants maintain an unpaid balance of $1,709,087, which includes the interest accrued.
