Developer of East Village hotel blames a “grass roots campaign of fear and misinformation” for project holdup

The director of the neighboring Merchant's Museum has openly opposed the plan

Merchant’s House Museum at 29 East 4th Street (Credit: Google Maps)
Merchant’s House Museum at 29 East 4th Street (Credit: Google Maps)

The development firm trying to build a hotel in the East Village says its project was rejected over politics, not facts.

Kalodop II Park Corp., which has spent years working on a proposal for an eight-story hotel at 27 East 4th Street, is suing New York City, the City Council and Councilmember Carlina Rivera over the rejection of their ULURP application for the development.

A view of the parking garage at 27 East 4th Street (Credit: Google Maps)

The firm began seeking approvals to convert its one-story parking garage on East 4th Street into a hotel in 2011, and the process has been fraught with controversy in large part because of the project’s location next to the Merchant’s House Museum. Community members and the museum’s executive director Margaret Halsey Gardiner have strongly opposed the plan, arguing that construction on the hotel would damage the landmarked property.

This opposition culminated in September, when the City Council rejected Kalodop’s ULURP application for the project, putting a major roadblock in the way of its completion.

Kalodop’s lawsuit, filed on Tuesday, asks the court to reverse the City Council’s disapproval and enter a judgement approving its ULURP application. It argues that the Landmarks Preservation Commission and the City Planning Commission had already approved their project and attributes community anxiety to “a grass roots campaign of fear and misinformation” from the Merchant’s House Museum that “spurred local community members and representatives into action with a false narrative that any construction at the property would cause the Merchant’s House to be catastrophically damaged.”

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The museum’s fears are based on illegal demolition and construction work that took place nearby in 1988 and caused more than $1 million worth of damages to the property, according to the suit. Kalodop insists that the firm’s strategy for construction would feature a “robust monitoring and protection plan” that numerous city agencies would oversee.

Kalodop’s main concern during the demolition and construction process for the hotel would be making sure the Merchant’s House is not damaged, according to the suit.

The lawsuit also takes issue with the City Council’s reasons for rejecting the project, particularly its claim that the developers could just build the hotel at403 Lafayette Street instead, another neighborhood property that Kalodop owns. Rivera, the district’s council member, was particularly insistent that building on the Lafayette Street property would be better for the community, according to the suit.

“If that were made the standard,” the suit reads, “when rejecting an applicant, City Council or CPC or any other agency could simply say, ‘go buy the property for sale next door and try to build there, instead.’”

The New York City Law Department and representatives for Rivera and the Merchant’s House did not immediately respond to requests for comment.

Ray Hannigan, Kalodop’s attorney, said his client had worked extremely hard to make its project acceptable to the neighborhood.

“We bent over backwards in every way to address concerns of the community, concerns of the Merchant’s House,” he said. “We sought all city approvals and got green lights from Landmarks, got green lights from City Planning, only at the last minute to be tripped up by a political storm that Merchant’s House caused.”