Mystery group sues to stop de Blasio from restricting hotel development

Complaint claims hotel special permits only serve union’s interest

Mayor Bill de Blasio (Getty, iStock)
Mayor Bill de Blasio (Getty, iStock)

Bill de Blasio says his new policy will make hotel development more orderly and cut down on conflicts with neighbors.

But a lawsuit calls that bunk. The complaint, filed Monday by an unknown business group, says the mayor is just trying to appease the city’s powerful hotel union.

The suit asks the court to void a proposal that would require special permits for all new hotel construction, alleging the rule is “arbitrary” and unconstitutional. The City Planning Commission is expected to vote on the proposal Wednesday, after which it will head to the City Council for final approval.

The challenge was brought by New Yorkers for Tourism, which incorporated in August, according to state records. An attorney for the group would not provide more information.

The lawsuit claims that the proposal gives the Hotel Trades Council the ability to “exert political pressure to either block new limited-use hotels or require all new hotels to utilize a union workforce.” Critics have made that point for years, but it has fallen on deaf ears in the City Council, whose power would be enhanced by the rule and where the Hotel Trades Council has substantial influence.

Projects seeking special permits must go through the city’s lengthy Uniform Land Use Review Procedure, which ultimately requires a City Council sign-off. At that stage, the lawsuit contends, the hotel workers union could “strong-arm any new entrant into a collective bargaining agreement.”

“Its result will not be to address any legitimate or demonstrable zoning problem, but rather to erect massive barriers to entry to the hotel industry through a standardless process,” the lawsuit states.

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It is, in effect, an uncompensated “taking” from owners of properties that could no longer be turned into hotels without running a political gauntlet.

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A representative for the Hotel Trades Council could not immediately comment on the lawsuit. The city’s Law Department indicated that it is reviewing the case.

An attorney for New Yorkers for Tourism, Jennifer Recine, a partner at Kasowitz Benson Torres, said the city failed to consider alternatives to requiring special permits citywide.

The environmental impact statement for the proposal considers a few modifications to mitigate the action’s “significant adverse impacts to socioeconomic conditions.” The potential changes include making the special permit requirement temporary, exempting small projects or hotel districts such as Midtown, or delaying it by up to six years.

By 2035, the zoning text amendment would result in an estimated 47,070 fewer hotel rooms than would otherwise exist, according to the Department of City Planning. Hotel industry leaders say adding more hurdles to hotel development in the city would harm an industry already devastated by the pandemic. By some projections, 20 percent of the city’s hotel rooms will not reopen.

Early this month, a trade group for New York City hotel owners sued to block a de Blasio-backed law recently passed by the City Council that would force hotels to pay up to $15,000 in severance to each laid-off worker.