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Controversial Podolsky brothers ink more city business

Landlords leasing three hotels for homeless shelters

Jay and Stuart Podolsky with the Marcel in Gramercy at 201 East 24th Street (Getty, Google Maps)
Jay and Stuart Podolsky with the Marcel in Gramercy at 201 East 24th Street (Getty, Google Maps)

Years after the controversial sale of a cluster site, the Podolsky brothers are turning fresh business with New York City.

The controversial landlords have leased three hotels to the city to be used as homeless shelters, City Limits reported. It’s not clear how much the Podolskys are reaping from the arrangement.

The sites being leased to homeless families include the Marcel in Gramercy, the Apollo in Harlem and the Ellington in Morningside Heights. The deals are the latest in the city’s’ history of leasing with the brothers, who pleaded guilty in the 1980s to harassing low-income renters and accused of cheating on taxes for apartments rented to the city.

There have long been concerns regarding ethics between the city’s relationship with the brothers, stemming from their 2017 hiring of Frank Carone to represent them in cluster site sales negotiations with the Bill de Blasio administration. The brothers ultimately made a $173 million deal with the city for 17 buildings, $30 million more than how they were valued by an independent appraiser.

A spokesperson for City Hall said Carone, who is now chief of staff for Mayor Eric Adams, played no part in the latest leases for the Podolskys.

“He was not a part of the decision-making process of choosing this site as a shelter,” the spokesperson told City Limits.

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In addition to criticism over a potential conflict of interest, some aired concerns over leasing from landlords that have been at the center of significant disputes with tenants.

“They seem to be not very good landlords or to be not very good vendors,” Reinvent Albany Executive Director John Kaehny told the outlet. “This far into being a social welfare state, we don’t have better options?”

As of mid-July, there are 9,400 families in the city’s shelter system, up by about 1,000 families since the start of the year. The total population in the shelter system has jumped past 50,000 people.

But the city has struggled to find more shelter space for the homeless population as local communities have rallied against facilities. In May, the city canceled plans for two shelters in Chinatown due to local pushback and a union dispute. Prior to that, the city also canceled plans for a proposed shelter in Morris Park.

Meanwhile, the Podolsky brothers are causing issues for others in the city. The landlords have forced a creative workaround for Gary Barnett’s Extell Development, holding out at the site of an assemblage Barnett has been piecing together in the Upper East Side.

— Holden Walter-Warner

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Commercial Real EstateHomelessnessHotelsPolitics