Tough Questions For the Owner of 180 Ludlow

It was a tough afternoon for developer Serge Hoyda at the Board of Standards and Appeals. As we’ve reported in the past, he wants to convert 180 Ludlow, a stalled hotel project, into a 20-story residential rental building.  Commissioners were skeptical of the proposal, saying he should have anticipated construction problems on the site (above a subway tunnel) long ago. There was also testimony from some rather displeased neighbors, including the owners of “The Ludlow,” the luxury building next door. But Hoyda had his defenders. Among them: the LES Business Improvement District and business owners such as Josh Tupper of Russ & Daughters. In the end, the BSA asked for more information and tabled the issue until April.

You may recall Hoyda lost his financing for the hotel when the economy went south and construction costs mounted. The new plan, outlined for CB3 last October, is to convert the shell of a building to a “no-frills” market-rate apartment complex with ground floor retail. The application before the BSA asks for a “rear yard variance,” necessary to comply with New York residential construction regulations, the attorneys argued.

One of Hoyda’s lawyers, Marvin Mitzner, said the Community Board had offered its “overwhelming support” for finishing the project and removing an eyesore from the neighborhood. He also submitted letters of support from Assembly Speaker Sheldon Silver, Senator Daniel Squadron and former City Councilmember Alan Gerson. But commissioners took exception to his contention that the unexpected costs were all tied to the presence of the subway tunnel and problems with the existing foundation.  They suggested engineers should have known they would not be able to use the foundation – meant to support 100-year old tenement buildings – and that a new foundation would be required.

The reasons for the cost overruns are critical. If the BSA concludes the project failed, not due to “unique circumstances,” but because of the economic downturn or bad decision-making, they are unlikely to approve the variance. One commissioner said, “this kind of seems like a problem you created on your own” by not anticipating problems. Mitzner countered that in 2007 when the site was purchased, “the clock was ticking, air rights had been purchased, contracts were signed.”

During the hearing, an attorney for 176 Ludlow, the tenement building just to the south of the stalled hotel (and the home of Max Fish), spoke out against the project. Referencing a lawsuit involving the two buildings, she said 180 Ludlow’s architects want to put large exhaust units on the roof of the tenement building and install interior and exterior fans in 10 apartment units.  David Rosenberg, representing “The Ludlow,” said it was “nonsense” to build a 20-story hotel on an old stone foundation and he asserted this project “never made economic sense.”  Linda Bielik, an attorney speaking for “Ludlow Concerned Citizens” weighed in as well, saying 180 Ludlow is out of step with the character of the neighborhood. She noted new zoning regulations restrict building height on Orchard Street to 80 feet.

But the commissioners heard another point of view, as well. David Suarez of the LES Business Improvement District said it was in the neighborhood’s interest to finish the building. He said small businesses are anxious to have the kind of daytime foot traffic a new apartment building would provide. Josh Tupper of Russ and Daughters, Deb Weiner of “Sugar, Sweet, Sunshine” and a manager from American Apparel echoed his sentiments.They also said the hulking shell of a building is not appealing to either residents or visitors.

But commissioners made it clear they want more information before ruling, including additional engineering and financial reports. They also asked for clarification on the financial impact of a commitment Hoyda made to CB3 – to provide five units of affordable housing in the building. Hoyda’s team said they needed about three weeks to pull together the requested documents.

The application will be considered again by the BSA in April.