AG cracks down on CIM Group’s illegal Midtown hotel

Hotel will be closed by March 10 and the building's units will become rent-regulated

New York /
Feb.February 26, 2015 09:10 AM

The state’s attorney general’s office is closing a 36-story, illegal hotel owned by an affiliate of 432 Park co-developer CIM Group.

The property at 49 East 34th Street was supposed to be a condominium, but its owners — who received millions in tax breaks for the creation of affordable units — turned it into a hotel instead, charging $239 per night for a studio and $359 per night for a two-bedroom unit, according to the New York Times.

The owner will pay back $4.4 million that will go into a city fund geared toward creating affordable housing, according to the newspaper. The hotel is slated to close down on March 11 and the building’s 110 units will become rent-regulated apartments. In addition, CIM Group will have to pay $275,000 to cover the cost of the state’s investigation.

The attorney general’s office is looking into the abuse of the 421a tax abatement that offers tax breaks to developers. The investigation also focuses on other buildings that were turned into illegal hotels. Hotels are not eligible for tax breaks under 421a. [NYT] — Claire Moses


Related Articles

arrow_forward_ios
From left: Silverback Development managing principal Josh Schuster and Arch Companies managing partner Jeffrey Simpson (Google Maps, Arch Companies, Silverback Development, iStock)
Luxury lost: defect complaints rise in new residences
Luxury lost: defect complaints rise in new residences
CIM hits back at board’s allegations in 432 Park lawsuit
CIM hits back at board’s allegations in 432 Park lawsuit
CIM hits back at board’s allegations in 432 Park lawsuit
Joe Chetrit and a rendering of the Two Bridges project (SHoP Architects)
Joe Chetrit buying Two Bridges site
Joe Chetrit buying Two Bridges site
Ron Moelis, CFO and Founding Partner at L+M, and David Thompson, CFO and Principal at CIM, with the Two Bridges project (L+M, CIM, SHoP Architects)
CIM Group, L+M Development file plans for 1.3M sf Two Bridges tower
CIM Group, L+M Development file plans for 1.3M sf Two Bridges tower
A rendering of 85 Jay Street and RXR Realty CEO Scott Rechler (Winick, Getty)
RXR makes $220M apartment bet in Brooklyn
RXR makes $220M apartment bet in Brooklyn
CIM Group's Richard Ressler and HFZ's Ziel Feldman with 301 West 53rd Street, 235 West 75th Street and 90 Lexington Avenue (Getty, Google Maps)
CIM Group claims HFZ, Feldman owe money even after foreclosures
CIM Group claims HFZ, Feldman owe money even after foreclosures
Larry Silverstein and The Denizen in Brooklyn above; and Scott Rechler with 555TEN in Hudson Yards top right. (Getty)
The art of the (discounted) deal
The art of the (discounted) deal
LIVWRK’s Asher Abehsera and CIM's Shaul Kuba with an aerial of 85 Jay Street (LIVWRK, Getty, Google Maps)
CIM, LIVWRK look to sell Dumbo rentals for $235M
CIM, LIVWRK look to sell Dumbo rentals for $235M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...