Chanin Building on 42nd Street1974: Chanin buildings hit with real estate tax fraud
Prosecutors charged two real estate corporations affiliated with renowned Art Deco–style developer Irwin Chanin of fraud in obtaining property tax reductions, 38 years ago this month.
Prosecutors claimed the corporations failed to pay $138,549 in taxes over three years for the 1929 Chanin Building, a 56-story office tower at 122 East 42nd Street — kitty corner from the Chrysler Building — and the 30-story Century Apartments at 25 Central Park West. Both are now city landmarks.
A prolific architect and developer who died in 1988, Chanin built the Lincoln Hotel (now the Milford Plaza Hotel), as well as more than a half-dozen popular Broadway venues and the famed 6,200-seat Roxy Theater. His soaring twin-towered Majestic Apartments at 115 Central Park West is also a city landmark.
Manhattan District Attorney Richard Kuh, who brought the case, claimed the Chanin entities knowingly understated income to the city’s Tax Commission. In a separate case later that month, Kuh charged an affiliate of the Kaufman Organization with similar violations at its 500,000-square-foot Garment District office building at 450 Seventh Avenue.
The cases were brought as part of a yearlong investigation by the D.A.’s office into accusations that a large number of property owners were cheating the system to lower their taxes. There are no news reports indicating how the cases were resolved, but in 2002 the city accused 18 current and former city tax assessors of taking bribes to reduce real estate taxes, in a scheme that prosecutors said first began in 1967.
NYC during the Great Depression1933: U.S. bans banks from owning brokerages
The sweeping federal banking legislation known as the Glass-Steagall Act —which rewrote the nation’s banking rules and prohibited lenders from owning real estate brokerages — was signed into law 79 years ago this month.
The lawmakers, who were responding to stock market and property bubbles of the Great Depression, placed partial blame for the financial crash on the close relationship between banks and real estate brokerages.
Congress wanted separation between the two industries because of concerns over conflicts of interest. Specifically, legislators prevented banks from being involved in commercial activities like real estate brokerage.
In 1999, the federal Gramm-Leach-Bliley legislation loosened the banking laws — allowing banks to broker stocks and bonds, for example — but real estate brokerage remained out of bounds. While there has been some softening of the lines between financial firms owning brokerages, President Barack Obama signed legislation in 2009 more clearly declaring the ban on national banks owning real estate brokerages.
MetLife building1905: MetLife plans tallest tower in world
The rapidly growing Manhattan-based company Metropolitan Life Insurance announced plans 107 years ago this month to build the famed Manhattan office tower that was for a short time the tallest building on Earth.
When the project was announced, architect Napoleon Le Brun said the building — located at Madison Avenue and 24th Street — would not be more than 560 feet tall. But the Metropolitan Life Tower was redesigned to 50 stories and rose to 700 feet when it was completed in 1909. It was taller than any other building in the world until the Woolworth Building at 233 Broadway was finished in 1913.
The MetLife tower was the crowning jewel to a long development process for the insurance company, which already had its headquarters on the city block between Madison and Park avenues, and 23rd and 24th streets. By 1905, Met Life had constructed seven 11- and 12-story buildings on the block. The tower, modeled after the Piazza San Marco in Venice, was the final piece.
In January 2012, hotel owner Marriott International purchased the building, now known as the Clock Tower with an address of 5 Madison Avenue, from developer Africa Israel USA for $165 million. Marriott and partner Ian Schrager plan to convert it into a hotel.