City sues East Village landlords over illegal smoke shops

Unlicensed marijuana retailers have proliferated across the city for months as retail landlords and their tenants cashed in on lax enforcement. Now, it seems, the district attorney has decided it’s high time for a crackdown.

The city filed lawsuits against four East Village smoke shops and their landlords Tuesday, asking a judge to shut down the businesses and levy fines on those who continue to flout the law after investigators observed them selling marijuana to an underage officer.

Landlords subject to the lawsuits include Great Neck’s Bahram Hakakian, who once landed on the public advocate’s “worst landlords” watchlist, and Alfred Sabetfard of Sabet Group, according to city records.

In addition to the lawsuits, letters warning of eviction over illegal marijuana sales were sent to more than 400 smoke shops in Manhattan as part of a coordinated government crackdown on unlicensed sellers. The city has been criticized for championing a licensing system that puts people with prior marijuana convictions and their relatives at the front of the line while failing to crack down on illegal competitors.

“It’s time for the operation of unlicensed cannabis dispensaries to end,” said Manhattan District Attorney Alvin Bragg in a statement. “Just as we don’t allow endless unlicensed bars and liquor stores to open on every new corner, we cannot allow that for cannabis.”

The four shops sued Tuesday were at 103 Saint Marks Place and 736 Broadway which are owned by Hakakian’s Allied Realty & Development, 24 Avenue A, owned by a limited liability company linked to Sabetfard, and Runtz Tobacco at 14 First Avenue which was promptly robbed after opening last summer. Jeong Hoon Kim and Son Dinh Tran were linked to LLCs that own two of the properties.

An employee at Allied Realty, who declined to share his full name when reached by phone, hung up abruptly after learning of the lawsuits. Saber Group did not respond to a request for comment. Hoon Kim and Dinh Tran could not be reached.

Some commercial landlords earned premiums by leasing to entrepreneurs who thought quick action might land them an untapped market of pot smokers as others waited for a state license. But evicting scofflaw smoke shops could put landlords back at square one.

Real estate experts warned landlords in October that property owners could be subject to litigation if they entered into leases with tenants that sold marijuana without a permit.

“I do think there is a risk of criminal exposure going forward,” Michael Robotti, an attorney who helped prosecute Mexican drug lord Joaquín “El Chapo” Guzmán Loera, told The Real Deal in October.

Elected officials and public appointees came out in favor Tuesday of legal action taken by the city, including City Council Member Shaun Abreu, who said in a statement that it’s “incumbent upon us to weed out the bad actors.”