The state’s attorney general’s office is closing a 36-story, illegal hotel owned by an affiliate of 432 Park co-developer CIM Group.
The property at 49 East 34th Street was supposed to be a condominium, but its owners — who received millions in tax breaks for the creation of affordable units — turned it into a hotel instead, charging $239 per night for a studio and $359 per night for a two-bedroom unit, according to the New York Times.
The owner will pay back $4.4 million that will go into a city fund geared toward creating affordable housing, according to the newspaper. The hotel is slated to close down on March 11 and the building’s 110 units will become rent-regulated apartments. In addition, CIM Group will have to pay $275,000 to cover the cost of the state’s investigation.
The attorney general’s office is looking into the abuse of the 421a tax abatement that offers tax breaks to developers. The investigation also focuses on other buildings that were turned into illegal hotels. Hotels are not eligible for tax breaks under 421a. [NYT] — Claire Moses