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This month in real estate history

The Real Deal <i>looks back at some of New York's biggest real estate stories</i>

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1975: Buildings corruption scandal snares inspectors

Nearly two-thirds of the city’s Buildings Department inspectors assigned to Manhattan were indicted in a multi-year corruption investigation 33 years ago this month, in what may have been the largest mass-indictment within a single agency in the city’s history. The 40 inspectors were among 95 people charged with bribery, extortion and grand larceny.

“In anyone’s recollection, this is the largest number of employees indicted in a single department,” the city’s Commissioner of Investigation, Nicholas Scoppetta, told the New York Times. The charges alleged that contractors paid city workers as much as $5,000 to speed up inspections or avoid them entirely. In addition to the 40 city inspectors, 55 individuals associated with private contractors were charged.

By April 1976, the investigation had grown to 124 indictments, half of which were city inspectors. The inquiry led Mayor Abraham Beame to introduce department directives to reduce graft among investigators by allowing architects and engineers to certify that their plans for new construction or major alteration were in compliance with code.

The process, known as self-certification, was broadened under the Giuliani administration and is currently in use but has been criticized for permitting lax enforcement of the building code. In 2007, the Department of Buildings was allowed by state regulators to refuse plans from architects or engineers who abused the system.

1952: First major private slum clearance projects start

The city’s first significant private urban renewal projects began 56 years ago this month, with the signing of contracts for four sites in the Lower East Side and Harlem. The controversial program, first known as slum clearance and later as urban renewal, began with the Housing Act of 1949, which provided federal dollars to cities to buy land with poor living conditions and redevelop it with large housing projects. Although the program created thousands of housing units in the nation, critics faulted it for destroying neighborhoods.

The New York City projects were planned to develop housing for 6,500 middle-income families at a cost of $85 million. The plans included the East River Houses south of the Williamsburg Bridge — the first project in the city to qualify for Title I slum clearance dollars. The project opened to its first residents in 1955.

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The Harlem projects included Delano Village, located between Lenox and Fifth avenues and 139th and 142nd streets, which cost $16 million; Lenox Terrace, between Lenox and Fifth avenues and 132nd and 135th streets, built at a cost of $14 million; and Park West Village, originally known as Manhattantown, between Central Park West and Amsterdam avenues and 97th and 100th streets, which cost $37 million. The rents in the cooperative apartments were expected to range from about $20 to $30 per month, after an initial down payment.

Delano Village is now owned by TIAA-CREF and Vantage Properties and managed as rental apartments. Lenox Terrace was opened in 1958 and purchased by the Olnick Organization in 1968, which now offers the units as rentals. Park West Village was completed in 1961. It was converted to condos in 1989. U.S. Rep. Charles Rangel and Gov. David Paterson live in the six-building Lenox Terrace complex.

1921: World’s first skyscraper church opens

The world’s first church housed within a skyscraper was opened 87 years ago this month in a 21-story Midtown building. The Fifth Church of Christ Scientist moved into five floors of the Canadian Pacific Building at 9 East 43rd Street at Madison Avenue. The worship space rose the entire five floors, with opera-style seating holding an audience of 1,700.

The building’s owner, Madison Avenue Offices Inc., was originally formed by members of the church. The company purchased land from St. Bartholomew’s Church at Madison Avenue and 43rd Street for $1.5 million in 1920 as one of the parcels needed to build the office tower. The company gave the church a 99-year lease.

In 1938, the building was sold at auction for $5.25 million, and changed hands several times since then. Macklowe Properties bought the building around 2000 and in 2005 unveiled a $100 million rehabilitation, renamed 340 Madison Avenue. In 2006, Macklowe sold the refurbished building for $550 million to office property investment and management firm Broadway Partners. A Christian Scientist church and reading room still exists in the building.

Compiled by Adam Pincus

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