Former tenants of an East Village building destroyed in a fatal 2015 gas explosion claim the new owner is stiffing them out of roughly $2 million in housing stipends, according to a new lawsuit.
Developer Yanic Cohen shelled out $9.15 million in 2017 for the distressed, vacant lots and built a 21-unit “boutique” luxury condo on the Second Avenue site where an explosion, caused by an illegal gas line, killed two people and destroyed three buildings over a decade ago.
But Cohen — through an LLC, Avenue Second Owner — has yet to pay the “pathetic” $1.7 million he legally owes four rent-regulated tenants displaced by the blast, according to their suit filed in Manhattan Supreme Court.
Their building was reduced to rubble on March 26, 2015, in a massive seven-alarm conflagration that claimed the lives of 23-year-old Nicholas Figueroa and restaurant worker Moises Locon Yac.
The landlord, a contractor and an unlicensed plumber in 2020 were convicted of manslaughter and sentenced to four to 12 years behind bars for rigging a hidden basement to illegally siphon gas from a separate building.
When a rent-regulated tenant’s building is destroyed, the owner must either re-house the tenant — or buy out their leases, according to state regulations.
Darryl Vernon, the tenants’ attorney, said his clients wanted to be re-housed, “but [they] built a multi-million dollar condominium, and refused to put [my clients] back in.”
“It’s a little pathetic relative to what you’re giving up,” Vernon said, noting that regular buyouts can reach into the millions.
The $1.7 million owed to the tenants was calculated by the state housing agency, and has already been affirmed in a state appellate court, according to the suit.
The owner also notched a major victory in 2023 when the state Division of Housing and Community Renewal ruled that he didn’t have to offer new apartments to the former tenants, but was still on the hook for stipend payments.
“So we didn’t get apartments, but we got these stipends — which aren’t a lot — and [they] won’t even pay those,” said Vernon.
That’s despite selling over $40 million worth of condos at the new corner building at 45 East 7th St., with one penthouse unit going for nearly $8 million, according to property records.
“The defendant has not paid the amounts due, or any amount at all,” the suit filed Friday alleges.
The owner has fought the stipends through years of agency appeals and their own lawsuit, but each effort failed, according to the tenants’ filing.
An attorney for Avenue Second Owner LLC did not respond to a request for comment.
The tenants say they are currently owed a total of $1,709,087, plus interest.
