Tenants at the American Copper Buildings in Murray Hill filed a class action lawsuit on Tuesday accusing landlord Black Spruce Management of systematically overcharging renters in apartments that are supposed to be rent-stabilized, a scheme they say could touch roughly 3,500 residents. The suit, lodged in Manhattan, seeks the return of more than $20 million in alleged rent overcharges from the 761-unit riverside complex at 626 First Avenue.
According to amNewYork, the case centers on tenant David Cohen, who signed a two-year lease in 2022 that set his net effective rent at $3,737.69 a month while the same apartment was registered with the state at $4,485.19 — a gap created by a four-month rent concession built into the deal. When Cohen renewed in 2024, the paper reports, his concession shrank to two months, pushing his out-of-pocket effective rent up roughly 19.5% even as his registered legal rent rose 12.4%.
A Pattern Regulators Say Was Widespread
That 12.4% jump towers over what tenants elsewhere in stabilized apartments were legally owed — the city's Rent Guidelines Board capped renewal increases at just 2.75% during the relevant period, per the same report. Housing Rights Initiative, the tenant watchdog group that helped investigate the case, found that the alleged pattern of shrinking or dropping concessions at renewal was pervasive across the property, not confined to Cohen's unit. The lawsuit asks a judge to order an independent audit of rents building-wide and to have existing leases reformed to comply with rent-stabilization law.
Why Rent Concessions Became a Legal Flashpoint
Tenant law firm Newman Ferrara LLP filed the suit, leaning on the precedent set in *Chernett v. Spruce 1209, LLC*, where courts found that temporary rent concessions in 421-a tax-abated buildings can't be used to inflate the legal rent registered with the state, as detailed by The Real Deal. The 421-a program requires that all designated units remain properly rent-stabilized in exchange for the tax breaks landlords receive, and under the state's 2019 Housing Stability and Tenant Protection Act, landlords must maintain preferential rents for the full length of a tenancy rather than yanking them back at renewal, according to the Avenue Law Firm.
Not every concession dispute favors tenants, though. In March 2025, the New York Court of Appeals ruled in *Burrows v. 75-25 153rd St., LLC* that a rent-overcharge claim built on a two-month concession failed once documents showed it was a legitimate, non-precedential discount. The American Copper plaintiffs argue their situation is different — that the concession scheme wasn't an isolated discount but a systematic practice repeated across hundreds of units.
Black Spruce's Big Bet on the Riverside Towers
Black Spruce Management bought the American Copper Buildings from original developer JDS Development Group in March 2022 for $837 million, backed by a $611.5 million acquisition loan from JPMorgan Chase, according to PincusCo. The twin copper-clad towers, designed by SHoP Architects, are linked 300 feet in the air by a three-story skybridge holding a 75-foot indoor lap pool, hot tub and lounge, as Dezeen reported when the complex opened in 2017. Of the building's 761 apartments, 160 were set aside for lower- and middle-income tenants through an affordable housing lottery tied to the 421-a abatement, per StreetEasy.
The purchase was just the start of a broader expansion — Black Spruce, co-founded by Josh Gotlib, followed it with a $1.75 billion acquisition of a 1,700-unit Manhattan portfolio later in 2022, according to Bisnow. Black Spruce has separately drawn scrutiny over JDS's history at the site: the original developer settled a federal Fair Housing Act lawsuit over accessibility violations at the towers for $2.9 million in 2021 and paid an additional $800,000 penalty in 2023, The Real Deal reported. Brad Hoylman-Sigal said the landlord allegedly violated tenant-protection laws while receiving tens of millions of dollars in taxpayer-funded public benefits through the 421-a program, per the lawsuit's account relayed by amNewYork.
Part of a Citywide Pattern of Suits
The American Copper case isn't an isolated filing. Newman Ferrara sued another major landlord, The Dermot Company, in August 2025 over similar allegations that short-term concessions were used to register artificially high legal rents at a 421-a building in Long Island City. Housing Rights Initiative has coordinated dozens of such class actions against landlords benefiting from the program, which costs the city roughly $1.7 billion a year in foregone tax revenue, according to City Limits. Hoodline previously reported on a similar Crown Heights tenant lawsuit backed by the same watchdog group.
Michael Shank said profitable real estate companies use tax benefits to enrich themselves while failing to keep rents stabilized, amNewYork reported. Black Spruce Management did not respond to amNewYork's request for comment before publication. For now, the roughly 3,500 tenants named in the suit are waiting to see whether a judge orders the audit and lease reformation they're seeking.
