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SOUTHERN    DISTRICT OF  NEW YORK      

BLEECKER CHARLES COMPANY

SUMMONS IN A CIVIL CASE

CASE NUMBER: 00CIV. 7827 (JUDGE LYNCH)

          V.

YOU ARE HEREBY SUMMONED and required to serve upon PLAINTIFF'S ATTORNEY (name and address)

an answer to the complaint which is herewith served upon you, within   20    days after service of this summons upon you, exclusive of the day of service. If you fail to do so, judgment by default will be taken against you for the relief demanded in the complaint. You must also file your answer with the Clerk of this Court within a reasonable period of time after service.

JAMES M. PARKISON                    DATE: OCT 13 2000               
CLERK

/s/ Marilyn Ong     
(BY) DEPUTY CLERK

JUDGE LYNCH          CIVIL COVER SHEET          00CIV. 7827

Has this or a similar case been previously filed in SDNY at any time? No

          1.     The Sponsor brings this an action for, among other things, a declaratory judgment declaring that the Co-op's notice dated July 19, 2000 ("the Notice") to the Sponsor does not legally or properly terminate that portion ("the Garage Portion") of the Agreement of Lease dated July 31, 1985 ("the Master Lease") between the Co-op, as landlord, and the Sponsor, as tenant, covering a public parking garage ("the Garage"), at the building known as 350 Bleecker Street in the City, County and State of New York, pursuant to the Federal Conversion Protection and Abuse Relief Act, 15 U.S.C. §§3601-3616 ("the Federal Act"). In aid of such declaratory relief, the Sponsor also seeks injunctive and other equitable relief enjoining and restraining the Co-op from taking any action to terminate the Master Lease or the Garage Portion or from interfering with the Sponsor's and its independent subtenant's possession of the Garage, and granting such other remedies including damages and attorneys' fees as may be available to the Sponsor under the Federal Act.

          2.     This Court has subject matter jurisdiction over this action under 28 U.S.C. §1331 and 15 U.S.C. §3611(a).

          3.     Venue is proper in this District under to 28 U.S.C. §1391(b) and (c) in that the defendant is a corporation resident in this District and further in that all of the events giving rise to this claims in this action have occurred and will continue to occur and the real property that is at issue in this action is also located within this District.

          4.     At all relevant times, the Sponsor, plaintiff Bleecker Charles Company, has been and still is a limited partnership organized under the laws of the State of New York with its principal place of business at 488 Madison Avenue, New York, NY 10022.

          5.     At all relevant times, the Co-op, 350 Bleecker Street Apartment Corporation, has been and still is a corporation organized under the laws of the State of New York with its principal place of business at 350 Bleecker Street, New York, NY 10014 in the heart of Greenwich Village.

          6.     The Sponsor formed the Co-op for the purpose of converting the land and improvements located at 350 Bleecker Street, in the City, County and State of New York, consisting of a seven-story residential apartment building, two ground floor commercial spaces, and a public parking garage, ("the Building") to cooperative ownership under a non-eviction plan. The residential apartments in the Building were then subject to rent stabilization. Under the non-eviction plan, existing residential tenants were offered the choice of acquiring both a propriety lease covering their apartment and the number of shares of the stock of the Co-op appurtenant to such proprietary lease, all at the offering price for each such unit, or continuing to occupy their apartments under leases subject to rent stabilization.

          7.     The conversion was governed by an offering plan dated December 31, 1984, which, as amended, was declared effective on or about April 5, 1985 and title was closed on July 31, 1985 ("the Plan"). On the effective date of the Plan and the closing, the Building consisted of 138 residential apartment units. One of the units, LG, was reserved for the use by the Building's superintendent and therefore was not included in the Plan. The remaining 137 units were offered pursuant to the Plan.

          8.     At the closing, the fee interest in the Building was transferred to the Co-op for cash and a purchase money mortgage and several units were sold to their residential occupants and others. At the closing and in accordance with the Plan, the Co-op executed and delivered the Master Lease to the Sponsor covering the two ground floor commercial spaces and the Garage. The term of the Master Lease was 75 years. The Master Lease also provided for a base rent of $86,000 per year payable monthly and certain additional rent based upon increases in real estate taxes affecting the Building and certain increases in the Building's operating expenses.

          9.     Since 1985, Sponsor has subleased the two commercial spaces and the Garage pursuant to separate subleases. The current sublease for the Garage ("the Garage Sublease") expires on April 31, 2012.

          10.     Under the Plan, the residents of the Building were entitled to elect the Board of Directors of the Co-op at a meeting of its shareholders to be held approximately 30 days after the closing on the cooperative conversion.

          11.     At the first meeting of the shareholders of the Co-op, which was held in 1985, the shareholders other than the Sponsor elected a Board of Directors comprised of seven members, only two of whom were representatives of the Sponsor.

          12.     Since that first meeting, the Board of Directors of the Co-op has consisted usually of seven members, no more than two of which were representatives of the Sponsor from 1986 through 1987, no more than one of which was a representative of the Sponsor from 1987 through 1999, and no one which was a representative of the Sponsor from 1999 to date.

          13.     Upon the cooperative conversion, the Sponsor sold 33 of the residential units in the Building subject to the Plan, leaving with Sponsor with 104 unsold units under the Plan. From time to time thereafter, the Sponsor sold additional unsold units. Since the date of the cooperative conversion, the Sponsor has sold 107 units and presently owns 30 units.

          14.     The Sponsor sold unit number LA on October 16, 1997. When this sale was consummated, the Sponsor's ownership of units was reduced to 34 representing 24.8% of the total units offered under the Plan.

          15.     The Garage is located in the subcellar area of the Building. The Garage's street entrance faces West 10th Street, a busy public street. Upon information and belief, the Garage services traffic from shoppers at nearby businesses and residents of nearby apartment complexes and is used predominantly by non-residents of the Building.

          16.     The Garage presently accommodates well over 100 cars. Upon information and belief, currently fewer than 15% of the currently available spaces are being utilized by tenants of the Building, some of whom are not unit owners. Moreover, upon information and belief, the Garage derives substantially less than 50% of its revenues from the Co-op's residents, whether unit owners or tenants.

          17.     On June 1, 1999, the then constituted Board of Directors of the Co-op purported to call a meeting of the shareholders of the Co-op for the purpose of voting in favor of a resolution for the Co-op to terminate the Garage Portion of the Master Lease pursuant to the Federal Act. Prior to the vote, both members of the Board and the Sponsor provided the shareholders with written presentations setting forth their respective views on both the legality of any such attempted termination and the advisability of seeking such a termination if it were legally feasible to do so. The vote was held on June 24, 1999 and the shareholders failed to approve the termination resolution.

          18.     On June 6, 2000, a differently constituted Board of Directors of the Co-op caused a newsletter to be circulated to certain shareholders of the Co-op, stating that a shareholder's meeting to approve a resolution purporting to terminate the Garage Portion of the Master Lease under the Federal Act would be held on June 27, 2000. The Sponsor never received written or oral notice from the Board of such a shareholders meeting and, upon information and belief, the Board never gave the Sponsor notice of such meeting. Shortly before June 27, 2000 but less than ten days before such date, the Sponsor became aware of the impending meeting and proposed vote.

          19.     On June 27, 2000, but prior to the holding of the vote, the Sponsor sent a letter to the Board setting forth the Sponsor's objection to the calling of the meeting and the holding of the vote without providing timely notice to the Sponsor who was the single largest shareholder of the Co-op.

          20.     At the meeting of the shareholders held on June 27, 2000, a representative of the Sponsor attended with counsel, publicly objected to the failure of the Board to provide timely notice of the meeting, requested that no vote be taken, and requested copies of the proxies that the Board of Directors had obtained from shareholders reflecting their vote on the proposed resolution purporting to terminate the Garage Portion of the Master Lease under the Federal Act. All requests were denied by the Board, which was advised by the Co-op's counsel who was present at the meeting. Before the conclusion of the meeting, the presiding members of the Board announced that the resolution had passed by shareholders owning 87 of the 107 units eligible to vote on the termination resolution.

          21.     On July 9, 2000, the Board sent to the Sponsor a notice stating that the Co-op was terminating the Garage Portion of a lease between Bleecker Street Apartment Corp. and the Sponsor pursuant to Section 3607 of the Federal Act. This notice further stated that termination would be effective ninety days from the date of its hand delivery or mailing to the Sponsor. The Sponsor received this notice on July 10, 2000.

          22.     Apparently recognizing that it had incorrectly identified the relevant lease in its notice dated July 9, 2000 and that such notice was legally ineffective, the Board sent a revised and superseding notice to the Sponsor dated July 19, 2000 (earlier defined as "the Notice"). This notice is substantially similar to the notice dated July 9, 2000, except that it identifies the relevant lease as one between 350 Bleecker Street Apartment Corp. and the Sponsor. The Sponsor received this notice on July 20, 2000 delivered by an overnight courier service.

          23.     The Sponsor incorporates by reference into this claim for relief the allegations of paragraphs 1 through 22 of this complaint.

          24.     Section 3607(a) of the Federal Act permits a termination of certain leases between a sponsor of a cooperative and the cooperative itself covering cooperative property serving the units of the cooperative owners if the termination is effective within the two-year period provided by Section 3607(c) of the Federal Act. In turn, Section 3607(c) provides that the two-year period (called the "window period") is triggered by the earlier of (a) the date on which the Sponsor's ownership interest was reduced to 25% or less of the total units in the conversion project or (b) the date on which the Sponsor ceased to maintain "special developer control" as that term is defined in Section 3603(22) of the Federal Act.

          25.     Under Section 3607(c) of the Federal Act, the termination of such a lease by the cooperative can be effected only by an affirmative "vote" of the owners of at least two-thirds of the units in the conversion project other than those owned by the sponsor or any affiliate of the sponsor. Following an affirmative vote for termination by the requisite portion of the eligible owners of units, the cooperative can effect a termination under the Section 3607(a) of the Federal Act only by delivering by hand or by mailing a written notice of the cooperative's termination action to the sponsor and under Section 3607(d) of the Federal Act the termination is effective only ninety days after the hand delivery or mailing of such notice to the sponsor.

          26.     The Notice is legally ineffective to terminate the Garage Portion of the Master Lease under the Federal Act, for any or all of the following reasons:

          (a)     If the Notice was legally effective, it was not legally effective until October 18, 2000 under Section 3607(d) of the Federal Act. Such effective date is more than two years after the earlier of (a) the date upon which the Sponsor ceased to have "special developer control" over the Co-op or (b) the date upon which the Sponsor ceased to own more than 25% of the units subject to the Plan, in either case within the meaning of Section 3607(c) of the Federal Act.

          (b)     The Garage was not, at the time that the Plan was declared effective, at the time the Notice was sent or is stated to be legally effective, or at any other legally relevant time, property that served the unit owners of the Building within the meaning of Section 3607(a) of the Federal Act, since the Garage was primarily a public facility.

          (c)     The vote taken of shareholders of the Co-op on June 27, 2000 purporting to authorize the Notice was not taken at a duly called meeting of the such shareholders and therefore was legally ineffective under Section 605(a) of the New York Business Corporation Law and the Co-op's By-Law §1(2), both of which regulate the governance of the Co-op, as well as Section 3607(c) of the Federal Act.

          27.     In light of the foregoing, there exists a genuine controversy between the Sponsor and the Co-op as to the legal effect of the Notice upon their respective rights and duties under Section 3607 of the Federal Act, which is ripe for determination by this Court.

          28.     Accordingly, the Sponsor is entitled to a declaratory judgment declaring that (a) the Notice is legally ineffective and null and void under the Federal Act, (b) the Master Lease including the Garage Portion remains in full force and effect, and (c) the Sponsor is entitled to continue in possession of the Garage in accordance with the Master Lease including the Garage Portion.

          29.     The Sponsor is also entitled to preliminary and permanent injunctive relief enjoining and restraining the Co-op, its directors, officers, employees, agents, attorneys, and other representatives, and any other persons acting in concert with any of them and with notice of such injunction, from terminating or attempting to terminate the Master Lease including but not limited to the Garage Portion or interfering or attempting to interfere with the possession of the Garage by the Sponsor or any subtenant of the Sponsor including the Garage Subtenant.

          30.     The Sponsor is also entitled to recover damages sustained by reason of the giving of, or any attempt to enforce, the Notice under Section 3611 (b) of the Federal Act, together with its costs, attorneys' fees and other expenses incurred in connection with this action under Section 361 l(d) of the Federal Act.

          WHEREFORE, the Sponsor prays for judgment requested above and for such other and further relief as this Court may deem just and proper.

Dated: New York, NY
October 13, 2000

Dated:          October 13, 2000