Professional Tenants Benefited from Elevator Upgrade

Landlord applied for MCI rent hikes based on an elevator upgrade. The DRA ruled for landlord, although the amount of rent increase sought was reduced by apportioning some of the cost to the building's professional tenants. Landlord appealed, claiming that none of the building's 10 professional tenants used the upgraded elevators. Therefore, no portion of the MCI cost should be allocated to those tenants. Four of the professional tenants had private entrances into the building other than the lobby entrance. Three of them, located on the second floor, used a separate elevator. And the other three professional tenants were located in the building lobby.
The DHCR ruled against landlord. Landlord didn't raise this issue before the DRA. So the DHCR couldn't consider it for the first time on appeal. In addition, the DRA properly ruled that the elevator upgrade benefited all lobby floor tenants, including the professional tenants, because the work affected the building where they were located.

36 East 36th Street: DHCR Adm. Rev. Docket No. VD410057RO (7/3/08) [2-pg. doc.]