Hotel owner escalates fight with charity over homeless shelter

TRD New York /
Oct.October 17, 2013 09:23 AM

A Queens hotel owner has taken his fight with the Salvation Army over an alleged breach of contract to the state’s Highest Court. The New York State Court of Appeals heard oral arguments yesterday on whether the Salvation Army could be held liable for the claim, which alleges $200 million in damage to the Carlton House Hotel on North Conduit Avenue. The site was used by the charity as a homeless shelter.

The breach of contract allegation was brought against the Salvation Army despite the fact that the city – which negotiated the charity’s lease – has previously paid the owner a $10 million termination fee.

New York City’s First Department, a mid-level Appellate Court, had previously ruled that the owner, JFK Holdings, had a viable claim against the Salvation Army, Law360 reported. The charity “failed to take the most basic steps to maintain the facility in a safe and sanitary condition, as a result of which the property deteriorated precipitously,” that court said in July 2012.

The Salvation Army’s attorney Kathy Chin told the Appeals court on Wednesday that the $10 million sum was all the city had to pay under the services agreement, according to Law360, pointing out that there was a limitation of liability for the charity in the lease.

“Ironically, the Salvation Army now stands alone to defend against JFK’s claims arising out of the city’s determination to cease utilizing JFK’s property as a homeless shelter,” Chin said in her brief.

But JFK Holdings’ attorney Jennifer Recine told the court that the language of the lease didn’t exempt the charity from acting. The damage to the hotel was considerable, including structural problems, mold and code violations, Recine said.

“You don’t get to just sit on your hands,” she said. [Law360]  — Hiten Samtani

Related Articles

30 West 31st Street and 52 West 36th Street (Credit: Google Maps)

South Korean firm snaps up two Midtown hotels for $137M

Brookfield Property Group CEO Brian Kingston and 652 11th Avenue (Credit: Google Maps)

Brookfield drops $83M on Hell’s Kitchen hotel

Mensur Cekic, Hudson Yards’ director of residences

From private tutors to meditation sessions, inside NYC’s new amenities battle

Lightstone Group CEO David Lichtenstein and Moxy Chelsea at 105 W 28th Street (Credit: Lightstone and Facebook)

Lightstone gave its neighbors $7M to build a hotel. Then the neighbors secretly went to war, suit claims.

Gibson Dunn & Crutcher's Randy Mastro (Credit: Getty Images)

Billionaires’ Row NIMBYs lean on Cuomo to stop shelter

Here are the numbers behind Michael Dell’s record purchase of the Boca Raton Resort

Long Island’s hotel market could be headed for a downturn

This obscure Caribbean island is a favorite among the super wealthy