Okolie v. Paikoff
| Decision Date | 11 December 2008 |
| Docket Number | No. 1:98-cv-06737-ENV-CLP.,1:98-cv-06737-ENV-CLP. |
| Citation | 589 F.Supp.2d 204 |
| Parties | Cyril OKOLIE, Plaintiff, v. Barry PAIKOFF (individually, and in his official capacity), The City of New York, and The Department of Housing Preservation and Development, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Cyril Okolie, Queens, NY, pro se.
Robert J. Howard, New York City Law Department, c/o Chadbourne & Parke, LLP, New York, NY, for Defendants.
Plaintiff Cyril Okolie brings this civil rights action against defendants Barry Paikoff, the City of New York, and the Department of Housing Preservation and Development ("HPD") (collectively, the "City" or "defendants")1 under 42 U.S.C. §§ 1981, 1982, and 1983, Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq. ("Title VI"), the Fair Housing Act, 42 U.S.C. § 3601 et seq. (the "FHA"), and the New York State Human Rights Law, N.Y. Exec. Law § 290 et seq. ("NYSHRL"). Okolie is a former commercial tenant in what was a mixed-use City-owned building at 109 Wilson Avenue in Brooklyn, New York (the "Wilson Avenue property" or the "building"). Okolie alleges that defendants deprived him of his interest in this building without due process and further alleges that, given he is a Black born in Africa, defendants discriminated against him by refusing to sell the Wilson Avenue property to him because of his race.
Defendants move, pursuant to Federal Rule of Civil Procedure 56, for summary judgment as to all of plaintiff's claims. Okolie opposes defendants' motion and cross-moves for summary judgment. For the reasons set forth below, defendants' motion for summary judgment is granted as to all of plaintiffs claims and Okolie's cross-motion is denied in its entirety.2
The "Neighborhood Entrepreneurs Program" ("NEP") is an initiative administered by HPD's Division of Alternative Management Programs ("DAMP") with the goal of facilitating the return of qualifying City-owned multiple-dwelling properties to the private sector while maintaining rents at affordable levels. Under NEP, a City-owned building (or a cluster of buildings) is redeveloped, with significant public investment, by a neighborhood-based property manager and developer, known as a "Neighborhood Entrepreneur". City-owned buildings considered for NEP are those identified by HPD through its planning offices as in need of extensive renovation. Once HPD identifies a suitable building and determines that it is not already enrolled in a separate HPD-run program, the building is net leased to the Neighborhood Partnership Housing Development Fund Company, Inc. ("NPHDFC"), a not-for-profit corporation. NPHDFC holds the lease to the building while the Neighborhood Entrepreneur manages and renovates it pursuant to a management and development agreement with NPHDFC. Both HPD and NPHDFC provide the Neighborhood Entrepreneurs with aid in technical matters, as well as assistance in obtaining financing for the rehabilitation and for subsequent permanent ownership of the building. Once rehabilitation is complete, and if HPD determines that the Neighborhood Entrepreneur has responsibly managed the building, ownership is conveyed to the Neighborhood Entrepreneur, subject to conditions designed to maintain affordability for the building's tenants.
Residential tenants of a building that HPD is considering for placement in NEP first are sent a notice of preliminary selection informing them that their building is being considered and inviting them to attend a meeting to learn about the program. Thirty days after it sends this preliminary notice, HPD delivers residential tenants a notice of final selection, which offers them the option of applying for a NEP opt-out program called the Tenant Interim Lease program ("TIL"). TIL gives tenants the opportunity to lease and manage the building themselves through their tenants association. Public financing is available for TIL buildings that require rehabilitation, and such work, if needed, takes place while the building remains in City ownership. Upon completion of the renovation, if HPD determines the tenants association has successfully managed the building, the City will convey the building to the association.
Tenants of commercial buildings under NEP consideration are not eligible to participate in TIL. Once HPD places a building in NEP, the building's commercial tenants, if any, receive, within two weeks of the notice of final selection, a notice of eligibility for permanent relocation assistance. Prior to the lease of a building to NPHDFC, commercial tenants are given notice that they will be required to vacate.
Separate and apart from NEP, HPD offers other initiatives designed to facilitate the return of certain City-owned properties to the private sector, among them the Tenant Ownership Program ("TOP"). TOP permits a residential or commercial tenant to purchase a City-owned building of one to five family units, if "the building has not been placed in any other HPD disposition program" and rehabilitation of the building, if needed, is "technically and financially feasible." (Defs.' Ex. H at 2; Pl.'s Ex. B at 2.) Unlike TIL, both residential and commercial tenants may qualify to purchase their building under TOP. However, a commercial tenant may purchase only if there is no residential tenant who is interested (and qualified) to make the purchase. Whether they are commercial or residential tenants, TOP applicants must demonstrate a present ability to purchase the building at market price. (Defs.' Ex. H at 1; Pl.'s Ex. B at 1.) Public financing is unavailable to assist TOP applicants in purchasing or rehabilitating their buildings.
With respect to the "feasible" rehabilitation requirement, Wendell Walters, an HPD assistant commissioner and, between April 1998 and August 2004, the Director of NEP, offered the following explanation, which plaintiff accepts as true and treats as an admission:
the City will not sell to tenants buildings ... which are dilapidated and in need of substantial structural renovation. Tenant owners under TOP do not have access to the extensive public funding required for extensive renovations and thus, would be unable to cure the very conditions which led [the City to take possession through foreclosure in the first place] and could easily do so again. Thus, ownership under TOP remains limited to buildings requiring minimal renovation and with no need for the extensive public money, rent subsidies and technical assistance available under NEP.
In contrast to the process for placing a building in NEP, which is initiated by HPD, a building will not be considered for TOP unless a tenant submits the required application. If a commercial tenant submits a TOP application, HPD provides all residential tenants of the subject building with notice of the application and informs them that they may be eligible to participate in the program.
If a tenant submits a TOP application for a building that has not already been placed in another HPD program and, in the City's determination, the condition of the building renders it suitable for TOP, the application will be processed in a multi-step procedure that includes a determination that the applicant is qualified as a purchaser; that is, whether the applicant has been a tenant in the building for at least a year, is current on rent, and can demonstrate his ability to purchase the building with private financing, among other things. An HPD appraisal of the building is also required. Should an application remain viable at this point, the process continues to unfold with the issuance of a writing advising the applicant of the City's disposition sale price, a meeting between the applicant and TOP staff to discuss terms and conditions and the execution of a sales commitment letter, and the processing by HPD of legal and programmatic documents for submission to the City Council and Mayor for approval. If the process completes and the necessary approvals are obtained, HPD then notifies the applicant and a closing date is selected. (See Defs.' Ex. H; Pl.'s Ex. B.)
The City obtained title to the Wilson Avenue property in May 1983 pursuant to an in rem tax foreclosure proceeding. It was at the time a mixed-use building with four residential and two commercial units.
On February 20, 1996, Cyril Okolie entered into an 11-month commercial lease, renewable month-to-month, for one of the two ground floor commercial spaces, where he was to and did operate a laundromat. The parties agree that, at least as late as February 1996, the building was in a dilapidated condition and, by June 1997, was in need of structural and other substantial physical repairs. (See Pl.'s Ex. F.)
Okolie asserts that he became interested in purchasing the Wilson Avenue property soon after signing his commercial lease with the City. Okolie claims that, during the spring or early summer of 1997, he spoke on several occasions with defendant Barry Paikoff, then an HPD employee and a supervisor for TOP, and offered to purchase the building for $20,000. Okolie says that, in the course of one of their conversations, Paikoff asked him several questions about his ability to purchase the building, to which Okolie responded that he had access to sufficient capital. Okolie also says that Paikoff advised him that he had a right under TOP to purchase the building, so long as the residential tenants were not interested in buying it. Okolie claims Paikoff told him to put his offer in writing, which he subsequently did on June 2, 1997 (the "June 1997 letter"). (See Pl.'s Ex. F.) Okolie apparently never asked for nor, he claims, was offered, a TOP application at this time.4
Three months later, because of its dilapidated condition, the City alleges HPD initiated plans to place the...
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