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In a recent lawsuit, former tenants of an East Village building destroyed in a tragic 2015 gas explosion allege that they are being shortchanged by the new owner, who owes them approximately $2 million in housing stipends.
The developer, Yanic Cohen, purchased the distressed and vacant lots in 2017 for $9.15 million. He later constructed a 21-unit luxury condo on the Second Avenue site where the explosion, triggered by an illegal gas line, occurred over a decade ago. This catastrophic event claimed the lives of two individuals and led to the destruction of three buildings.
According to legal documents filed in Manhattan Supreme Court, Cohen, operating through an LLC known as Avenue Second Owner, has yet to distribute the $1.7 million he is legally required to pay to four rent-regulated tenants who were displaced by the explosion. The tenants describe the sum as “pathetic” in their lawsuit.
The disaster unfolded on March 26, 2015, when a devastating seven-alarm fire reduced the building to rubble. Among the victims were 23-year-old Nicholas Figueroa and restaurant worker Moises Locon Yac, both of whom lost their lives in the incident.
In 2020, the landlord, along with a contractor and an unlicensed plumber, was found guilty of manslaughter. They were sentenced to serve four to 12 years in prison for their role in the tragedy, which involved illegally siphoning gas from another building through a concealed basement setup.
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.