Hotel claims city audit mothballed 18 rooms for a year

The five-story building at 765 8th Avenue has been a hotel since the 1920s.

But now its operator, City Rooms, says the city’s Department of Buildings forced the Hell’s Kitchen property to slog through red tape to prove it can, in fact, be used as a hotel. The year-long probe sliced into its profits.

City Rooms, in a lawsuit filed this week, is demanding that the agency — which eventually dropped its fight — cough up nearly $1.5 million to compensate the business.

“For over a year, DOB took [rooms] without legal justification or compensation,” its complaint says.

The department declined to comment, citing the pending litigation.

“The facts in the complaint speak for themselves and we look forward to presenting them in court,” said Marnie Kudon, an attorney at Cozen O’Connor who is representing the plaintiff.

Because the building was constructed before 1938, it does not need a certificate of occupancy if the use of the building doesn’t change. The 8th Avenue property instead has an I-card — a document issued by the city before certificates of occupancy.

The property was first used as tenement housing. Its I-card indicates that it can have one store and 43 rooms, and it has been used as such ever since what was then the Department of Housing and Buildings approved its conversion into a commercial building in 1924, the complaint says.

Over the years, the property has undergone a variety of alterations without the agency requiring certificates of occupancy, the complaint says. But in 2010 Buildings issued vacate orders on 18 rooms for alleged illegal hotel use. The building owner asked the agency to look over the property’s file, and the DOB confirmed the 43-room count, according to the case.

But the vacate orders remained.

City Rooms took over a 10-year lease at the building, owned by Sky Organization, in 2017. That March it filed an application for renovation work that the complaint says would have resolved the vacate orders without requiring a certificate of occupancy — particularly as the building’s I-card shows the 18 rooms in question were legal.

The DOB approved the permit. But a few months later, the agency’s Office of Special Enforcement audited the application and said it intended to revoke the permit. The department instead said City Rooms could operate the hotel without a certificate of occupancy, but with only 29 rooms, according to the lawsuit.

City Rooms disputed the number of rooms it could rent with several city departments over the next year, the complaint says. In October 2019, after the borough commissioner confirmed that the building complies with its I-card and safety requirements, the agency dropped the vacate orders on the extra 18 rooms.

“DOB’s actions constitute a taking of plaintiff’s property from October 10, 2017, through October 30, 2018, in violation of the New York Constitution,” the filing says.

Write to Mary Diduch at md@therealdeal.com