The suit against Bozzuto came as a particular surprise. The ERC had actually acted as a compliance consultant for several years to help keep the company’s portfolio of 71 properties on the accessibility straight and narrow.
“We hired the ERC to come in and make sure that things are done right,” explains Mike Skojec, a partner with Baltimore, Md.-based Gallagher Evelius & Jones, which counseled Archstone during its settlement proceedings and also acts as counsel for Bozzuto. “Because of the complexity of the legal requirements, some things were not done right, and so, in 2005, the ERC comes along and sues them without notice. The first thing we did was sit down with the ERC lawyers and remind them of our history. We asked for something reasonable. They said, ‘No. We want everything corrected.’”
Tom Bozzuto, the firm’s CEO and one of the industry’s most respected leaders, was floored when he got wind of the suit. “After Archstone and the settlement, if they would have approached us one on one with a telephone call, that would have worked just as well,” he says. “Yes, I believe that Rabbi Kahn is absolutely committed to the cause of accessibility. Do I think he’s going about it the way I would? No. But I do believe he’s committed to it.”
Others say they’ve seen similar strong-arm tactics from the ERC. With no warning, Fitch says he was just presented with a suit. Kitay says that’s what happened with her clients. And Hanback has seen it go both ways. “I’m aware of instances where they contacted developers in advance of suits; I’m also aware where they just dropped lawsuits on people,” he says.
For its part, the ERC says it would much rather approach companies and work out a settlement before it sues. “Often, we will really bend over backwards not to take legal action,” Kahn says. “We are typically ignored.” People who’ve dealt with the ERC have a different take on the organization’s spirit of compromise. They say much like a hard-headed child, the nonprofit holds it ground until it gets everything it wants—every single thing. “Their idea of negotiation is ‘We won’t sue you if you concede we’re right on every point,’” Hanback says.
Not so, Kahn says. The ERC simply doesn’t want to risk losing any unit to the darkness of inaccessibility. “They’re permitting the crisis to linger instead of getting it done,” says Donald L. Kahl, then-chief operating officer of the ERC and one of its lead litigators, who took over for Kahn as executive director on Aug. 30. “Unfortunately, there are some who think money is better spent fighting issues through litigation process than remedying the accessibility issue.”
Jeanne McGlynn Delgado vehemently disagrees. The vice president of business and risk management policy for the National Multi Housing Council, a Washington, D.C.-based association representing the apartment industry, believes that to say firms would rather litigate than remedy accessibility issues is absurd. “We are unaware of any of the companies targeted by the ERC that have pursued litigation instead of trying to negotiate reasonable remedies,” she says. “The apartment industry is committed to meeting the needs of the disabled, but for several years after the law took effect, there was no reliable safe harbor standard for developers. This resulted in inadvertent noncompliance.”
The counterarguments don’t matter to Kahn. “They have this cost/benefit analysis where it’s not a question of where can I do the most good, but where can I spend the least money?” he says. “By doing that, they’re driving me crazy with all of the obstacles they’re putting up to doing the right thing.”
And he seems legitimately puzzled as to why apartment owners won’t retrofit their own properties. “It would be a badge of honor they could wear for generations,” he says. “They would be the ones to face [the lack of accessibility] and get rid of it. They should be jumping through hoops to get that accomplished—not doing some of the things they’re doing.”
PASSING THE REINS While no one in the industry noticed when Kahn took over the ERC, the industry is bound to take note as he steps down. After all, he certainly made his mark, suing 10 major companies in less than four years. And a quick tally of the results are impressive, however questionable the tactics. When Bozzuto, for instance, settled with the ERC in July 2007, the firm agreed to retrofit 2,000 units. In an unexpected move, Tom Bozzuto also went out on speaking engagements with Kahn. Between Bozzuto and the Archstone settlement, Kahn’s ERC has turned 14,000 units accessible. And a September 2007 settlement with Trammell Crow Co. (not Trammell Crow Residential, which currently has an ongoing suit with the ERC) will ensure that future apartments are also.
Still, Kahn, who plans to continue his work by serving on various committees for the ERC board of directors, doesn’t believe he’s been successful. In fact, he says his biggest failure is the seven apartment firms that have dug in their heels against the ERC. “The greatest disappointment I’ve had is the failure to convince the industry to work together with us,” he says.
Today, it’s up to Kahn’s successor to see those cases through to conclusion. And from the looks of things, Kahl will follow the same approach. In fact, he wants more settlements to follow the Archstone model. “If there are people like Archstone who will step forward upon being confronted with issues, those issues go away quickly,” Kahl says.
