The Real Deal New York

Hotel Chelsea’s tenant problem

New ownership hit with a partial work-stop order at historic property

October 28, 2016 03:50PM
By Kathryn Brenzel

From left: Hotel Chelsea and Richard Born

From left: Hotel Chelsea and Richard Born

The rotating cast of owners of the Hotel Chelsea have been renovating the New York City icon for the better part of five years. Now, the newest owners are again clashing with tenants as they work to convert the building into a boutique hotel.

The Department of Buildings issued a partial work-stop order at the landmarked hotel earlier this month for failing to have an accurate “tenant protection plan” in place.The city requires that such plans specify what units will be occupied during construction and what safety measures are being taken to protect the tenants. The current plan for the Hotel Chelsea, in this case, didn’t have an accurate layout of three apartments on the eighth floor, where the owner BD Hotels plans to combine two of the three units and create 22 hotel rooms, according to the DOB. The agency halted work after receiving a complaint that demolition work on the floor was endangering tenants.

The DOB issued a similar work-stop order in July for an inadequate tenant protection plan on the 12th floor. The building also has 16 open violations before the Environmental Control Board and BD Hotels owes the city $14,400 in fines, according to the DOB.

BD Hotels didn’t respond to multiple requests seeking comment. The company, which is headed by Ira Drukier and Richard Born, is buying a stake in the hotel, located at 222 West 23rd Street. Property records indicate the deal has not yet closed, but BD has been leading renovations since the summer. The company expects the building will reopen with 120-plus hotel rooms by the second quarter of 2018 (it’s unclear how many apartments will remain).

Just before renovations began, Born told The Real Deal that the company was working with the hotel’s remaining 51 tenants to assure that plans are “tailored to [their] individual needs.” In July, one tenant of the hotel cut a deal with the owners to preserve portions of his apartment, where poet Dylan Thomas went into a coma four days before his death in 1953. The room’s footprint will be preserved and a plaque will hang outside the apartment.

The tenants of the building and the hotel’s various owners have historically had a contentious relationship. The Chelsea Tenants Association sued former owner Joseph Chetrit TRData LogoTINY in 2011, claiming he failed to fix problems — like the lack of heat and hot water — at the hotel in order to drive them out.

In March, Ed Scheetz parted ways with the other owners — investor Bill Ackman, Leucadia National Corp. chairman Joseph Steinberg and real estate investment firm Wheelock Street Capital — who began talks with BD Hotels. Born confirmed in July that the company would be taking over renovations and would manage the hotel.

The Chelsea — once home to the likes of Arthur Miller, Patti Smith and Bob Dylan — closed to guests in 2011.

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