The Real Deal New York

Trump Soho developers skipping required audits: city report

By Mark Maurer | September 10, 2013 11:15AM

The developers of the Trump Soho are being accused by the city of failing to file annual audits that they agreed to as a condition for building on land not zoned residential.

The Bayrock Group and the Sapir Organization are in violation of a 2007 restrictive declaration that commits them to reporting the number and duration of stays each year at the tower at 246 Spring Street, according to a review by the Department of Buildings. The agreement calls for Bayrock and Sapir to hire an accounting firm to certify the information.

The Greenwich Village Society for Historic Preservation, a longtime opponent of the 391-unit condominium, requested the review and reported the findings in its newsletter as well as pointed out that the city has not filed penalties or monitored the absence of reports.

“At its best, this is a gross abdication of city officials’ responsibilities,” Andrew Berman, the society’s executive director, told The Real Deal, “and at its worst it’s a sham and a fraud.”

The Bayrock Group, through executive vice president Julius Schwarz, declined to comment.

The Trump Hotel Collection has turned the information over to auditors, said Jim Petrus, chief operating officer of the hotel management division.

Manhattan Borough President Scott Stringer learned last month about the possible violation, and his office then wrote a letter to DOB officials asking them to again investigate, a spokesperson said.

Under the city’s zoning rules, the construction of a residential building at the site is prohibited. In 2007, Stringer and City Council Speaker Christine Quinn struck a deal to let the 454-foot tower project proceed: Owners cannot stay in their units for more than 29 days in a 36-day stretch and cannot live there for more than 120 days per year, effectively making the building a hotel, rather than a residence. The agreement also involved the submission of annual audits.

“Our office was the first to find that they were illegally advertising residential uses and got them to desist,” Stringer spokesperson Megan Dougherty said. “We will continue to fight to ensure Trump Soho does not violate the zoning.”

Quinn could not be reached for comment.