The Real Deal New York

Not just Kushner Companies: The city is owed $1.5B in fines

The city has struggled to collect fines for building code violations
September 04, 2018 05:30PM

The New York skyline with an overdue sky (Credit: iStock and Juan Di Nella via Unsplash)

Kushner Companies is hardly the only firm that owes the city money.

As of last October, the city is owed $1.5 billion in fines for building code violations, Crain’s reported. That’s a 6 percent drop from the 2016 amount.

In 2016, Mayor Bill de Blasio signed bills that sought to help the city collect outstanding fines. But the city has struggled with the issue, the report said. Landlords and developers, who often own property through limited liability companies, often treat the fines as a cost of doing business. And they can usually obtain permits despite the money they owe. Not to mention: the task becomes more difficult the longer the fines are uncollected.

Kushner Companies, for example, owes about $500,000 for violations, according to a report from the Associated Press on Monday. That total includes $210,000 in fines from the Department of Buildings for falsifying dozens of permit applications at 17 buildings in Manhattan and Brooklyn. A company spokesperson blamed misfiled paperwork on a third party.

Many of the fines relate to tenants illegally using Airbnb, a spokesperson for Kushner Companies said in a statement. Several are also for minor violations related to things like garbage pick-up, the statement said.

The Department of Finance doubled its collection from $50 million in fiscal year 2015 to $90 million in fiscal year 2018, Crain’s said. But that increase was largely due to an amnesty program — so collections are expected to slide back to 2015 levels.

The longer the city takes to collect the fines, the harder it becomes to do so: The city has deemed roughly half of the $1.5 billion figure uncollectible because the fines are too old or are tied to businesses that have since moved or shuttered. [Crain’s] — Meenal Vamburkar