The Real Deal New York

City claims UWS hotel owner illegally converted rental buildings into a hotel

Mayor’s office filed lawsuit against Impulsive Group CEO Hank Freid
July 03, 2017 08:58AM

230 West 101 Street and Hank Freid (Credit: Getty Images)

The city is suing a property owner on the Upper West Side for allegedly breaking the law by converting 250 affordable rentals into a hotel. But the owner claims he’s within his rights to operate the building for short-term stays.

The mayor’s Office of Special Enforcement filed the lawsuit in New York State Supreme Court Wednesday against Impulsive Group CEO Hank Freid, the Commercial Observer reported. The lawsuit claims that three of Freid’s buildings – the Marrakech Hotel at 2688 Broadway, the Royal Park Hotel at 258 West 97th Street and The Broadway Hotel at 230 West 101st Street – were illegally converted from residences to hotel rooms.

The city has issued more than $1 million worth of violations and summonses against the properties since December 2011, and is seeking an injunction against Freid’s use of the buildings.

But Freid’s lawyer said the properties have been used as single-room occupancy hotels since the 1940s, and claims that in February Freid proved to the city’s Environmental Control Board that the property is allowed to be used for transient uses.

Fried’s lawyer, Ronald Rosenberg, said the state’s 2011 amendment to the multiple dwelling law – meant to curb short-term rentals like those promoted by Airbnb – unconstitutionally made SROs that rent rooms for 30 days or less unlawful without giving owners enough time to adjust their business model.

“This is their attempt to stifle a property owner,” said Rosenberg, who filed a $50 million lawsuit in April. “It takes away a property owner’s right. They… are trying to take him out of business.”

The city, meanwhile, contends that the SRO designation simply means that Freid can rent the rooms out on a long-term basis.

“The city maintains that these units cannot be legally used for transient use,” said a spokesperson for the OSE. ”The [certificate of occupancy] reflects that they are Class-A permanent residential dwellings.” [CO]Rich Bockmann