CIM Group, AG settle on illegal hotel operation

Developer will pay $4.4M for Murray Hill building that was receiving 421a benefits

New York /
Feb.February 26, 2016 05:20 PM

A year after shuttering the illegal hotel operating at 47 East 34th Street, the New York state Attorney General’s office and CIM Group reached a settlement.

The 36-story, 106,000-square-foot Murray Hill tower was supposed to be a condominium and was receiving 421a tax breaks. In exchange for affordable apartments, a building owner pays no property tax under the program. Hotels are not eligible for the abatement.

CIM Group bought the 110-unit building for $54 million in October 2011 in a foreclosure auction. CIM then leased the property for two years to BridgeStreet, a temporary housing provider, in March 2012, receiving $4.9 million.

Attorney General Eric Schneiderman investigated the building in the summer of 2014, the New York Observer reported. The building was being operated as a hotel, charging $239 a night for a studio. CIM agreed to pay $4.4 million — the value of the tax breaks — to a city fund geared toward affordable housing. It will also pay $275,000 for the cost of the state’s investigation.

“I am pleased that this company has agreed to do the right thing by paying the city back taxes and offering more than 100 rent-stabilized leases to New Yorkers,” Schneiderman said in a statement. “My office will continue to crack down on illegal development that exacerbates the city’s severe affordable housing shortage.”

The hotel was closed in March last year and turned into rent-regulated apartments. CIM terminated its lease with BridgeStreet in December 2014, which was effective March last year.

CIM is suing BridgeStreet for $5 million. [NYO]Dusica Sue Malesevic


Related Articles

arrow_forward_ios
From left: The Solaire in Battery Park City; Extell’s Brooklyn Point in downtown Brooklyn; the Skyline Tower in Long Island City; The Cortland NYC; Extell Development's Gary Barnett; Related Companies' Stephen Ross (Getty, Extell Development, Google Maps, Jim.henderson, CC BY-SA 4.0 - via Wikimedia Commons)
Brooklyn, Queens gain market share in wild year for new condo sales
Brooklyn, Queens gain market share in wild year for new condo sales
From left: CIM Group's Shaul Kuba, Avi Shemesh, and Richard Ressler (Photo Illustration by Steven Dilakian for The Real Deal with Getty, CIM Group, and LoopNet)
CIM’s favorite customer: CIM
CIM’s favorite customer: CIM
JPMorgan Chase's Jamie Dimon with 79 Fifth Ave, Apollo Commercial Real Estate Finance's Stuart Rothstein with 165 East 66th Street, and Bank of China's Liu Liange with 555 West End Avenue (Google Maps, Hanley New York, 555westendave, Getty)
Summer slump: Manhattan’s 10 biggest loans shrivel
Summer slump: Manhattan’s 10 biggest loans shrivel
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
arrow_forward_ios

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

Loading...