Huang out to dry

Thomas “Tommy” Huang pleaded guilty to charges of felony securities fraud

Tommy Huang and Broadway Tower Condominium
Tommy Huang and Broadway Tower Condominium

For a while, it seemed like developer Thomas “Tommy” Huang was living the American dream. The immigrant businessman came to New York nearly 40 years ago and parlayed a Queens College education into a multimillion-dollar real estate empire.

But it all came crashing down in June, when Huang and his wife, Alice, pleaded guilty in Queens Supreme Court to charges of felony securities fraud. The couple agreed to a deal that prevents them from working for at least five years in New York construction and real estate. The ban, in combination with a fatal 2011 accident at one of Huang’s Queens development sites, could put the final nail in the coffin of Huang’s storied 35-year career.

“Mr. Huang’s misconduct stretches back decades, and includes unsafe construction sites, environmental crimes, building code violations and fraudulent securities transactions,” state Attorney General Eric Schneiderman said in a June statement. “This egregious and unscrupulous greed on the part of the Huangs, and their blatant disregard for the law and safety of others, must stop.”

Huang, 59, and Alice Huang admitted to developing and selling units at the Broadway Tower Condominium at 85-23 Broadway in Elmhurst, Queens, despite a 1999 ban by the AG’s office barring them from selling condos, co-ops and other so-called “real estate securities” in New York. That original ban, which was more limited in scope, stemmed from the duo’s failure to pay more than $325,000 in common charges at two of their condo developments, and a notorious oil spill at the landmark RKO Keith’s Theater in Flushing.

Under the new plea agreement, the Huangs must turn over all profits from sales at Broadway Tower, estimated at $3.3 million, and pay another $1.5 million in penalties and fees. Besides being banned from condos and co-ops, the couple will no longer be allowed to work in any aspect of the real estate or construction business — a more extensive ban than the 1999 penalty. Their 35-year-old son, Henry, is now also banned from real estate securities.

The court named Kew Gardens attorney Gary Darche as receiver of the commercial units at the Broadway Tower condo, which will be sold at auction. At a sentencing hearing scheduled for Sept. 18, Huang is expected to make the $4.8 million payment.

Attorney Marvin Kornberg, who represented Huang, told The Real Deal that his client had committed only a “technical violation” and been the victim of bad advice from a previous lawyer. “Nobody lost a dime” as a result of Huang’s actions at Broadway Tower, Kornberg said.

The Huangs may now be out of the real estate game, but litigation and problems linked to their projects continue, industry insiders said.

Huang is “the poster child for illegal and unsafe construction,” State Senator Tony Avella, a former council member from northeast Queens and a longtime critic of Huang, told TRD.

Building an empire

Huang left his native Taiwan in 1974 at age 20 and settled in Flushing, Queens. A few years later, he married Alice Liu, heiress to Taiwan’s Haw Di-I Foods and Bull Head Barbecue Sauce fortunes and cousin to City Comptroller John Liu, a Democrat who is running for mayor.

While studying business at Queens College, Huang saw opportunity in Flushing’s many vacant properties and decided to go into the real estate business.

“I could not believe it,’’ Huang told the New York Times in 1997 of the empty land he saw around him. “How come nobody wants to buy it?’’

With the help of his wealthy father-in-law, Huang built seven high-rises and hundreds of houses. By the late 1980s, he had been credited with helping to revive downtown Flushing with projects such as the Golden Shopping Mall and Main Street Tower, a nine-story office building. In 1986, Huang paid $3.4 million for the dilapidated RKO Keith’s movie theater on Northern Boulevard in Flushing. Huang closed the landmark and began work on the site, with plans to develop it into a major shopping center.

Huang had a natural affinity for real estate, said Thomas Donovan, a partner at Massey Knakal who has done several deals involving Huang over the years.

“He’s like one of the old-school geniuses,” Donovan said. “He can look at [a site] without penciling it out, and be right. If he liked something, he moved on it, and moved on it quickly.”

Soon, Huang caught the eye of the Democratic political machine, which at the time was led by then-Queens Borough President Donald Manes. Working with Manes to encourage business development, Huang solidified his ties with the Queens political establishment, which helped him evolve into one of the most powerful real estate developers in the borough.

“They were grooming Tommy to be the fair-haired boy,” said Jerry Rotondi, a member of the Committee to Save the RKO Keith’s and a long-time critic of Huang.

“He was the symbol of the revitalization,” State Senator Leonard Stavisky told the New York Times in 1997. “But it was wrong to entrust so much of it to Tommy Huang.’’

A violent act

Trouble was on the horizon early on. In a highly publicized 1982 incident, a Molotov cocktail was thrown into a Flushing building where Huang wanted to build a condominium. The bank that owned the site had refused to sell it to a group of investors headed by Huang. After the fire, Huang upped his bid, and the bank sold. But local politicians cried foul in the press, demanding an investigation of what was called an “arson for profit’’ ring. No one was ever charged, and Huang said he knew nothing about the blaze.

Then as the booming market of the 1980s came to an end, Huang fell on hard times, declaring bankruptcy in 1993.

A year later, the attorney general’s office sued the Huangs for failing to pay more than $325,000 in common charges at two buildings they had developed: Flushing Towers, at 33-70 Prince Street, and the Main Street Plaza condominium, at 133-36 41st Road. At the time, more than half of the apartments in the two buildings remained unsold; under state law, condo developers are required to pay common charges on all unsold units.

Problems also arose at RKO Keith’s. Huang bulldozed a landmarked staircase inside the building, and allowed thousands of gallons of heating oil to spill into the basement from an adjacent alleyway, officials said. They claimed he then attempted to cover up the spill by submitting a false letter of compliance to inspectors.

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In 1997, Huang was arrested on charges related to the theater and indicted on one count of endangering the public health in the third degree. He eventually pleaded guilty, was placed on probation and ordered to clean up the site, which he later sold to developer Shaya Boymelgreen for $15 million. Today, developer Patrick Thompson has the site and hopes to move forward with a retail and residential project there.

That same year, Huang and his wife pleaded guilty in the Flushing Towers/ Main Street Plaza case, prompting then-State Attorney General Eliot Spitzer to ban them from selling real estate securities, including condos and co-ops, though they were still allowed to engage in commercial real estate.

But the Huangs purposefully flouted the ban, according to the June lawsuit filed by the AG’s office, which had launched a probe of the building after receiving multiple complaints about Huang’s development sites, according to officials familiar with the case.

Henry Huang, who in recent years has emerged as the public face of the family business, in 2008 started selling condos at the eight-story Broadway Tower project. He secretly let his parents serve as vice president and secretary of the condo board, the AG’s complaint alleged, despite giving a sworn statement that he was the sole principal of the sponsor group. According to the lawsuit, his father executed several brokerage contracts, sales contracts and corporate resolutions on behalf of the sponsor entity, while his mother executed deeds to purchasers.

Under the terms of the plea deal, the Huangs admitted to developing and selling six commercial and 27 residential units at Broadway Tower, and agreed to surrender their remaining ownership interests at the project.

Kornberg argued that his client had a right to be reinstated into the real estate business but received bad advice from his previous counsel.

“The lawyer that he had did not advise him that he had a right to go into court to lift the ban,” Kornberg said.

A worker’s death

The Broadway Tower case may now be resolved, but it’s far from the only project linked to Huang where problems have arisen. Over the years, Huang’s projects have repeatedly been cited for lack of proper documentation and safety protocols.

Most notably, in 2011 a construction worker died at a development site owned by Huang at 84-18 Queens Boulevard in East Elmhurst. The worker, Hedilberto Sanchez, 26, was killed when a concrete wall collapsed at the site, where Huang was building a five-story residential building. Three other workers were injured. In the wake of the accident, the U.S. Labor Department’s Occupational Safety and Health Administration fined three companies, one of which was H Rock Corp., chaired by Huang’s son, Henry. H Rock agreed to pay $26,470 in a settlement with the agency, according to OSHA.

The project has been idle since a stop-work order in 2012, and city records show Huang sold the property in June for $3.3 million to an entity called Wing Fung.

Nonetheless, litigation involving the site continues. The owners of several adjacent properties claim improper construction practices have damaged the structural integrity of their buildings.

D&D Glass is suing Huang, alleging that improper shoring and bracing at the construction site caused cracks in the walls of its building. The Huangs repeatedly promised to fix the damage but never followed through, said Vincent Pallaci, an attorney for D&D, adding his client repeatedly complained to the Buildings Department about construction problems at 84-18 Queens Boulevard.

That’s a constant theme among many of Huang’s critics, who claim government regulators have been slow or unresponsive to complaints about his practices.

“For some reason, he’s been protected,” said Rotondi.

It’s been suggested that Huang’s political ties with the city comptroller and others could partially explain the city’s inaction.

The comptroller’s office did not respond to TRD’s request for comment.

When it comes to lawsuits, Huang has used his family’s vast wealth to overwhelm opponents in court, Avella said.

“What he relies upon is the weak response of the Department of Buildings,” said Avella. “He also relies on the fact that the neighboring property owners just give up on him [in court].”

Another controversial Huang-owned site is at 223rd Street and Mia Drive in Bayside, where Huang has been in the process of developing four new houses on what had previously been a single-family lot.

Local homeowners and the community board have fought the project, which Avella said was built without proper foundations; as a result, the homes are under constant threat of sliding into the nearby Cross Island Parkway. In 2004, a retaining wall collapsed at the site. The project is the subject of an ongoing lawsuit in State Supreme Court, and has 11 open violations from the Department of Buildings, according to the city’s website.

Henry Huang told officials earlier this year that he planned to take over the project from his parents, but it’s unclear what will become of the property in the wake of the family’s plea deal.

“We’re sitting with four abandoned homes that are a mess, and we’re afraid they [will] be vandalized,” said Susan Seinfeld, district manager of Community Board 11, which includes Bayside. “No one seems to know at this point what’s going to happen.”