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Sunday morning. With us today is Randy Mastro. And one
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of the, well, one of the premier attorneys in New
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York City, a former first deputy mayor. And he knows
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where all the bodies are buried. Well, Randy Mastro, I mean,
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you're defending the landlords. You're defending the people that they're
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trying to, I guess, I would say the word rip
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off on Pierre, the tear taxes. Where do we start
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on a Sunday morning?
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Well, John, we are now challenging the constitutionality of that
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pied-a-terre tax, trying to get rid of it altogether. We
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won a case that the Mondani administration had botched the
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rollout and had to do a do-over. That case is
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on appeal. Now we are challenging the legality, the constitutionality
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of that pied-a-terre tax. because it violates the federal and
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state constitutions. That case was brought out in Suffolk County,
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and it's going to proceed on an expedited schedule. So
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by December, we should be in a position to get
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a ruling whether or not that pied-à-terre tax is wiped
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out as unconstitutional and illegal.
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I understand that. And does this go under state law
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or federal law? Both.
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Under the federal constitution, the governor, state legislators, the mayor
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admitted at the time this was passed that they were
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doing this to target out-of-state billionaires who had second homes
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in New York City. And that is blatantly illegal under
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the federal constitution, both the Privileges and Immunities Clause, which
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makes it unconstitutional to discriminate against out-of-staters, and the Dormant
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Commerce Clause, which bars states from interfering with interstate commerce. Also,
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under the state constitution, because, John, they called this a surcharge,
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even though a tax by any other name would cost
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people as much. Obviously, a tax on top of your
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real estate taxes. But they did that to try and
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get around Article 8 of the state constitution, which places
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a cap on how much of revenue can be raised
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through real estate taxes. So they attempted to exempt this
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pied-a-terre tax from that cap. It's obviously a tax. So
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that makes this tax illegal because it was exempted. improperly
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from the cap on real estate taxes. So for under
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either the federal or the state constitutions, we believe this
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is going to be found to be unconstitutional and illegal,
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and the periodical tax will be voided in its entirety.
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Wow. Well, that's certainly, you know, because... Right now, New
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York City's at a standstill. People don't know that they
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should buy or they should sell or just do, you know,
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or wind their watch. I mean... Well, that's.
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One of the great ironies here, John, right? This tax
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supposedly raising more revenue is having an adverse effect on
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property values and the ability to resell and who you
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can sell to and who you can't sell to and
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depressing property values. In the long term... A gimmick like
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this is going to cost the city money. But hopefully, John,
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just like the case against the botched rollout, which we
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won already, the courts will also find the pied-à-terre tax
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itself to be unconstitutional and therefore void it altogether.
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How about the other lawsuit that you have where you're
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fighting the fact that they're freezing the rents and expenses
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are going up and some of the people that own
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buildings could go out of business?
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John, another crazy thing that the Mondani administration has done.
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For the first time in city history, It put some
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on the scale with what's supposed to be an independent board,
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the Rent Guidelines Board, to have them produce a result,
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unprecedented in its 60-year history, a zero-zero across-the-board rent freeze.
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And it did this in a year where landlords' costs
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are going through the roof, higher than the rate of inflation,
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where their income is down. where their net operating income
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is less than it was last year. And last year,
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John,
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that rent guidelines board increased landlords' rents, allowed them to
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charge up to 3% more for one-year lease, 4.5% more
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for two-year leases. And John, Their costs were going up
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roughly the same. Their net operating income was higher last year,
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yet they were allowed to raise rents. What's different this
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year than last year? That Mondani packed the board with acolytes, supermajority,
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six of the nine members, and put thumb on the
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scale throughout the process for them to deliver rents. a
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preordained outcome. It was a sham process. The data doesn't
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support it. The statutory mandate of what factors that board
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was supposed to consider, it simply ignored them, considering only,
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you know, tenant affordability. That's not the way this process
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was supposed to work. It was supposed to be balanced
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decisions based on data.
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Now, this is a state case, so it goes up
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as high as the Court of Appeals, if necessary. Is
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that correct? Yes.
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Yes, John. We are in Manhattan State Supreme Court. We
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expect a ruling imminently. The judge did something special in
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this case. He ordered the city to have to produce
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documents of communications between City Hall and the Rent Guidelines Board,
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supposedly independent Rent Guidelines Board. John, there were nearly a
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thousand communications between City Hall and and the supposedly independent
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Rent Guidelines Board, after the city stood up in court
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and represented that they thought there would be virtually nothing.
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And those documents were a revelation. Now the city is
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trying to cut off that discovery. And when I say
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a revelation, John, the 40-page explanatory statement, that's the decision
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document that supposedly explains the rationale of the Rent Guidelines
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Board for its unprecedented... across-the-board rent freeze for the first
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time in city history, that 40-page document was delivered to
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City Hall to review before the public comment period had
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even expired and nine days before the board even voted.
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That is shocking.
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Randy Mastro, please keep fighting for all New Yorkers. Thank
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you so much for coming on this Sunday morning, and
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God bless you and God bless America.
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My pleasure, John. Thank you for having me. Thank you.