State Orders Owner of 128 Hester to Pay Tenants $1 Million

Affordable housing advocates believe a recent ruling from the State of New York ordering a Chinatown building owner to pay more than a million dollars to the former residents of 128 Hester Street has broad implications.

On Friday, State Assembly Speaker Sheldon Silver, State Senator Daniel Squadron, the advocacy organization, Asian Americans for Equality (AAFE) and Community Board 3 heralded the decision requiring hotel developer William H. Su to compensate nine families displaced when the tenement building was declared unsafe and demolished last year.

The Department of Buildings found 128 Hester was destabilized by the construction of an 18 story hotel going up next door. Su owns both properties. AAFE’s Chris Kui said the ruling sends a strong message to other  Chinatown landlords that neglecting buildings as a way of forcing tenants out won’t be tolerated.

The decision from the State Division of Housing and Community Renewal stated:

…The unsafe condition of the building was a direct result of the owner’s construction activities adjacent to the property and the total neglect of the structure caused the building to deteriorate… (The Department of Buildings) stated the owner of 128 Hester did little to comply with the DOB’s directions to stabilize/repair the damage to the building, resulting in the continued degradation of 128 Hester Street… (The DOB) stated the owner had effectively stopped maintaining the building…

The demolition order was particularly controversial, since 128 Hester was a rent stabilized building. The ruling requires Su to pay each family somewhere between $80,000-$150,000, to compensate them for the loss of their affordable apartments.

Silver indicated be believed Su would not appeal the decision. Yesterday, we tried contacting Stuart Klein, Su’s attorney.  6/16/2010 UPDATE: See Klein’s response here.

Last August, Su called a news conference, claiming he was being unfairly portrayed (Downtown Express):

In halting English, he read a lengthy statement describing himself and his partners as hardworking businessmen who wanted to build the Bowery hotel to create new jobs and help the neighborhood. Su said he realized that 128 Hester St. was in poor condition and that the hotel work could further harm the building, so several years ago he urged the building’s owner to make improvements. When the owner refused, Su said he bought 128 Hester St. in 2007 so he could do the repairs himself. Su added that, during the past two years, he spent more than $100,000 to brace and stabilize 128 Hester. He also redesigned the foundation of the Bowery hotel to move it away from the foundation of 128 Hester.

The saga over 128 Hester became a political issue last summer. Calling the situation “dirty and wrong” Manhattan Borough President Scott Stringer, strongly criticized the Department of Buildings for issuing dozens of citations against Su, but failing to prevent the building from becoming so unsafe that demolition was the only option.

But Community Board 3 District Manager Susan Stetzer, who who helped advocate for tenants of 128 Hester, had a different perspective. She believes the DOB has made a concerted effort in the last couple of years to address concerns about rent controlled buildings. She singled out the agency’s CB3 liaison, Steve Figueiredo, for working tirelessly to resolve problems.

Jake Itzkowitz, an aide to Councilmember Margaret Chin, thinks the main problem is that the DOB is severely understaffed, lacking the resources to stay on top of the city’s many problematic buildings. At Friday’s news conference, Senator Squadron made reference to legislation he’s introduced that would protect tenants against unscrupulous landlords. Specifically, the bill would require building owners who “willfully neglect” their properties to compensate tenants (or find them new apartments at the same rent).

Chris Kui, AAFE’s executive director, has been working with Squadron on the legislation. He said tougher laws will help city and state agencies go after bad landlords. But he believes the ruling from the state on 128 Hester, could also be an important step forward in tenant rights. The decision, he said, is a warning to landlords that tenants cannot be intimidated.

It’s unclear what will become of the empty lot where 128 Hester once stood. Su has contended he wouldn’t be allowed to expand the hotel onto the vacant parcel or build apartments there.  Some observers have speculated a commercial building will go up there.

SEE AN UPDATE TO THIS STORY HERE.