75 Orchard St.
It looks like Orchard Street is getting a little rock and roll.
According to the property owner at 75 Orchard St., a lease has been signed for a retail outlet called, “I Need More Rock & Roll.” The space, formerly occupied by The Dressing Room, is managed by SMA Equities. The Dressing Room closed after a decade on the Lower East Side earlier this year.
We’re told that Jimmy Webb, the longtime manager and merchandiser of Trash & Vaudeville, the legendary punk emporium on St. Mark’s Place (the store moved to East 7th Street last year), is behind the new venture.
In a statement, Samy Mahfar of SMA Equities said, “This lease is an important millstone for this asset as we continue to redevelop underperforming properties.” The lease was handled by Chris Guzzello and Tarik Bouzourene of Real New York, Mahfar’s real estate brokerage firm.
The store is expected to open in the fall, although it could happen sooner. The buildout of the space, located next door to Cafe Katja, is taking place now.
113 Stanton St. is one of Mahfar’s Lower East Side buildings.
State Attorney General Eric Schneiderman announced this morning a $250,000 settlement agreement with several companies controlled by Lower East Side property owner Samy Mahfar.
According to a press release from the AG’s office, the properties in question include: 22 Spring St., 102 Norfolk St., 113 Stanton St. and 210 Rivington St.:
These companies employed several illegal methods to harass rent-regulated tenants, including engaging in construction work that put dangerous amounts of lead into the air, failing to provide essential services such as heat and hot water, and hiring a “relocator” company that used illegal tactics in seeking buyouts from tenants. A number of the affected tenants were Chinese or Spanish-speaking families who had lived in the buildings for many years… Between 2013 and 2016, the Mahfars’ companies… undertook a deliberate campaign to coerce their rent-stabilized tenants to move out of their apartments. The companies engaged in widespread demolition and construction work in the buildings, which failed to comply with federal, state, and local requirements for protecting the health and safety of residents. Repeated inspections found areas under construction containing unsafe lead concentrations, requiring repeated stop-work orders and immediate remediation measures. At 102 Norfolk St., for instance, inspectors found lead levels as high as 40,000 and 110,000 micrograms per square foot. Under the New York City Health Code, the limit for lead concentration on floors is 40 micrograms per square foot… Further, the companies failed to make certain required filings with city and state housing agencies and made false filings with the New York City Department of Buildings, including misrepresenting on permit applications for construction that the buildings were not occupied by residential tenants entitled to protections of the rent regulation laws. Tenants complained that, while undertaking extensive renovations of vacant apartments, the companies failed to correct pending building code violations, including loss of electricity, lack of heat and hot water, and lack of janitorial services, or make needed repairs in rent-regulated apartments.
The agreement requires Mahfar to pay $175,000 to the NYC Department of Housing Preservation and Development (HPD) for lead remediation and/or enforcement and $50,000 in penalties, fees, and costs to the state. The city plans to use the money to purchase new x-ray equipment to detect lead based paint. Mahfar also must hire an independent management company approved by the Attorney General’s office to manage the buildings he still owns.
In a statement, Schneiderman said, “Landlords must not use harassment or subject tenants to unsafe construction to drive rent-stabilized tenants out of their homes. Unfortunately, across the city, unscrupulous landlords look to take advantage of New York’s real estate market at the expense of their rent-regulated tenants – and we won’t hesitate to fight back using all tools at our disposal… But landlords who harass and force their tenants to endure unsafe conditions should also face criminal charges – and I call on the legislature to act on my new bill, which would criminalize this type of activity.”
We received the following statement today from Samy Mahfar:
SMA Equities and its related entities (‘SMA’ or ‘we’) are very pleased that after the Attorney General reviewed a substantial amount of evidence, the Attorney General’s office worked with us to resolve this matter by a mutually acceptable agreement that avoids the need for expensive and protracted litigation and contains no admission of guilt. Allegations of deliberate misconduct have been completely denied and contradicted by substantial evidence and have never been proven in a court. The settlement is a very positive development, since the settlement, which both the Attorney General and SMA entered into, enables our client to concentrate on new real estate opportunities and further grow their business. When these buildings were acquired, they were very old, had multiple violations and were generating relatively low taxes. Of course, when you improve old buildings and remove violations, there will be some inconvenience and issues relating to the construction. Although some tenants complained, other tenants have praised SMA for substantially improving the quality of life in their buildings. Millions of dollars were invested in these buildings. Building systems were replaced, repaired or upgraded, including installation of a video intercom and security systems. The tenants of one of the buildings, never had leases. We were the first landlord in over 50 years to offer regulated tenants leases assuring them of their regulated status. In one instance, because of improvements and proper reporting of rental income, the building now generates about five times estate taxes for the City. Thus, we significantly improved the buildings and removed violations. They now are in excellent condition and contribute more taxes to the City. The Attorney General acknowledged the removal of a “vast” number of violations. The settlement reaffirms our commitment to the neighborhood and to our long standing policy of fair housing to local residents, improving aging buildings, and to our continued investment in New York City. We believe that our interests, the interests of the tenants and the public officials are aligned. We all want excellent housing. This also reflects our dedication to an ongoing program of capital improvements in aging buildings in order to maintain our properties at the highest possible level.”
You can see the AG’s full news release here, including comments from local elected officials and the Cooper Square Committee, which has advocated on behalf of Mahfar tenants during the past several years.
Attorney Al Schein represented Samy Mahfar before Community Board 3.
It was another rough night for developer Samy Mahfar at Community Board 3. CB3’s land use committee voted to oppose his application for inclusionary housing at 255 East Houston St., a residential building on the site of a former daycare center.
Mahfar got approval for tax breaks under the 421a program before it expired last year. He also wants to utilize a floor area bonus available to developers who set aside a certain number of units in their projects for affordable housing. In a presentation before the committee last night, attorney Alvin Schein said there would be 88 residential units at 255 East Houston St. Eighteen of those apartments would be reserved for families earning 60% of Area Median Income (AMI).
At one time, Mahfar envisioned putting up a 10-story building on the site, which includes frontages on East Houston as well as Suffolk Street. By taking part in the city’s inclusionary housing program, he hopes to add four stories and eight apartments to the project. The taller building is made possible due to the mayor’s recently enacted zoning scheme (Zoning For Quality & Affordability).
Community board members would normally be enthused about new affordable housing. But as committee vice chair Linda Jones said last night, “there’s an elephant in the room.” She referred to Mahfar’s reputation throughout the Lower East Side for alleged tenant harassment and illegal construction in a handful of tenement buildings controlled by his family.
MyPhuong Chung, land use committee chairperson, said she believed Mahfar should add more affordable units to the building. She said an earlier 13-story version of the project was obviously “financially viable” and will be even more profitable if city agencies approve the enlargement.
Referring to concerns about Mahfar’s treatment of Lower East Side tenants, Schein said, “I don’t know how to respond to that. This is a new building.” He was asked about plans for a shared space at the top of the building. Community board members said they were concerned that it would become a rooftop recreational area. Schein said it wasn’t yet known exactly how the top floor would be used.
Mahfar had previously tried to change the zoning along a stretch of East Houston Street. That change would have allowed him to put a restaurant or retail business in the ground floor of 255 East Houston St. Right now, the 4500 square foot space can only be used for community facilities (schools, doctor offices, etc.) But in the face of opposition from the community board and City Council member Rosie Mendez, Mahfar withdrew the application. Last night Schein was asked whether his client would pledge not to resubmit the application in the future. He said, “No.”
Board member Enrique Cruz said he saw no reason to approve the inclusionary housing application when Mahfar is already receiving a 421a tax break. Cruz said Mahfar will include affordable housing in his project, with or without the the additional incentives. Schein disagreed, saying, “He will not utilize 421a without the inclusionary housing (bonus).”
The full board will vote on the committee recommendation later this month. The community board will forward an advisory opinion to city agencies.
255 East Houston St.
Lower East Side developer Samy Mahfar has withdrawn a controversial application to rezone a two-and-a-half block stretch of East Houston Street. The City Council’s subcommittee on zoning and franchises was scheduled to vote on the proposal today.
Mahfar is demolishing a former preschool building at 255 East Houston St. and putting up a 13-story residential complex on a parcel that borders both East Houston and Suffolk streets. The City Planning Commission approved an application July 13 that would have mapped a C2-5 commercial overlay in the residential (R8) district. The change would have allowed Mahfar to install a restaurant or bar in the new building’s ground floor commercial space. As it stands, zoning only permits community facilities in this area.
In a letter dated Sept. 6 (yesterday), Mahfar told City Planning Director Carl Weisbrod that he was withdrawing the application. He did not give a reason. We have contacted Mahfar for additional information and will update this story if we hear back.
During a public hearing earlier this month, City Council member Rosie Mendez opposed the application, saying that it contradicted the community-driven rezoning of the Lower East Side in 2008. Community Board 3 and Manhattan Borough President Gale Brewer also opposed the application.
You can read our earlier coverage coverage here and here.
UPDATE 1:30 p.m. Here’s a statement from Samy Mahfar:
Although City Planning approved our rezoning application, we were unable to reach an agreement with the Council Member despite best efforts on both sides. We will continue to work towards creating a space on the ground floor of the new development that benefits both the neighborhood and the project.
UPDATED 9/9/2016 Here’s a statement we received from City Council member Rosie Mendez:
The application to rezone Houston Street and add a commercial overlay in my district did not move forward at the City Council. While a vote was scheduled to take place on September 8th, I did not feel that moving forward with the proposed commercial overlay was in the best interests of the community and the applicant withdrew their application. In 2008, my office worked closely with Community Board 3, the Department of City Planning, advocacy groups, residents, and businesses to address out-of-scale development happening across the Lower East Side and East Village. The selection of residential contextual districts was done in a purposeful manner which would allow for new development but protected the residential character of the community. The planning efforts completed in 2008 was the community’s self-determination for its future. It was the result of a transparent process that involved comprehensive thinking about the entire area. Continuing that tradition, the community board, and my staff evaluated the change in zoning and felt that only community facility or residential uses are the most appropriate uses in this area. In addition, the significant interest of area community facility providers leads me to believe that there is a high demand for the community facility space that will be offered at 255 East Houston Street. I remain open to helping to place 4,000 square feet of a non-profit or community oriented community facility at the location.
255 East Houston St.
Following a victory at the City Planning Commission, developer Samy Mahfar took his battle to rezone a portion of East Houston Street to the City Council this morning. He was met with strong opposition from City Council member Rosie Mendez, Community Board 3 and community activists.
Mahfar has filed an application to map a C2-5 commercial overlay in a residential (R8) district, extending from Suffolk Street to the middle of the block between Clinton and Attorney streets. The change, impacting the south side of East Houston only, would allow him to establish a restaurant or retail store in the ground floor of a 13-story rental building he’s planning at 255 East Houston St. Under current zoning, only community facilities (such as a school or a medical office) are allowed in this area.
The planning commission approved the application over the objections of the community board and the Manhattan Borough President. At today’s hearing of the Council’s Subcommittee on Zoning and Franchises, Mendez said, “I am greatly concerned about this application.” While a vote has not yet been scheduled, Mendez’s opinion is likely to weigh heavily on her colleagues when the time comes to approve or deny the zoning change.
Mendez, right, with fellow Council members.
The District 2 council member said she participated for six years in a painstaking rezoning of 111 blocks of the Lower East Side, including the area now under review. Main goals of that process, she explained, were curtailing out-of-scale development, protecting neighborhood character and preserving community-based services. The new project will be replacing a building that housed low-income daycare centers for 40 years.
The developer argues that it makes little sense to restrict ground floor uses along a thoroughfare that already features many different kinds of shops and food/nightlife establishments. But Mendez said there’s no question the community wanted street-level spaces along this part of East Houston Street to be reserved for community facilities. “There is by no means,” said Mendez, “a shortage of places to eat and drink in my neighborhood. Yet facilities meant to provide services for people living in the area have become harder and harder to find.”
Mahfar is seated (foreground) with his attorney and architect.
Mahfar’s attorney, Nick Hockens, told committee members that his client respects the intent of the community board’s 2008 rezoning. But he disagreed that restricting commercial uses on the south side of East Houston Street was intentional. A zoning change, Hockens asserted, would allow property owners to earn more revenue from ground floor spaces and make both market rate and affordable housing development more feasible. [This project would create 88 residential units, including 18 affordable apartments].
He also repeated claims made before the Planning Commission, saying that repeated efforts to find a tenant for the community facility failed. “There is no demand for a community facility on East Houston Street,” Hockens said. The developer has no interest in leasing the new 5,000 square foot space to a rowdy bar, he added. One potential tenant is a Sherwin Williams paint store. Other options, he said, are a diner or a “simple restaurant.” Mendez asked Hockens whether Mahfar would give preference to a not-for-profit tenant. “We would like a market-rate tenant,” he responded.
Samy Mahfar also answered questions this morning. The property, he said, was listed with two brokers (Sinvin and Wexler Healthcare Properties). At different times, it looked like leases might be signed with the Blue Man Group and the Cooke Center. Those deals both fell through. Mendez was skeptical about Mahfar’s efforts. She asked to see documentation and inquired whether advertisements were taken out to market the space. When she asked whether there would be a willingness to talk with a not-for-profit organization interested in the space, Mahfar said he’d be happy to entertain the possibility.
At today’s hearing, Community Board 3 District Manager Susan Stetzer noted that the Lower East Side has lost three nursing homes in the past few years. She also said the board, “was never made aware that there was a problem in securing a community facility and never received a request for help.” CB3 submitted letters from the executive directors of Henry Street Settlement, University Settlement and Educational Alliance. They all expressed an interest in finding additional space on the Lower East Side and said no one contacted them about the availability on East Houston Street.
Enrique Cruz, a CB3 member testifying as head of ALBOR, said it’s clear to him what Mahfar is attempting to accomplish. He believes the developer is simply not satisfied accepting a lower rent that a community facility might bring. “What this gentleman is trying to do,” said Cruz, “is get $150/square foot. That’s the bottom line. He wants the community to pay for it by foregoing a community facility.”
There’s disagreement as to whether Mahfar is to blame for the permanent displacement of the daycare center. In its May resolution, Community Board 3 wrote, “the daycare (center) was forced to be vacated due to the open violations and the applicant’s failure to address them.” Cruz has said he knows what transpired because he was a former partner in the neighboring project at 265 East Houston St. Mahfar declined to make repairs, said Cruz, after the work next door caused the foundation to shift. [Mahfar did not address the issue this morning. But he told the planning commission that the neighboring developers were at fault for delaying repairs. He said the city, which controlled the daycare center space, chose to terminate the lease and consolidate daycare programs.]
Council members also heard testimony from Harry Bubbins of the Greenwich Village Society for Historic Preservation. “There is absolutely no benefit to the public in this rezoning,” he argued. “It is inconceivable that an applicant with such a checkered history would be so readily accommodated by the City Planning Commission.” [Tenant advocates and local residents have been at odds with Mahfar for many years, accusing the property owner of subjecting tenants to unsafe living conditions and harassment.] Bubbins highlighted Mahfar’s retention of Capalino+Company, the high-powered lobbyist. “Here a single developer… has hired a well-connected lobbying firm that is a strong fundraiser for and supporter of the mayor…,” said Bubbins.
The most colorful remarks of the day came from Paul Young, who co-owns a building just to the west of Mahfar’s development site. He told Council members that approval of the zoning change, “would only be seen as an emblem of sleazy New York politics.” Young added that he didn’t have the money to “pay off politicians,” not very subtly intimating that the vote was already decided. “If you’re stupid enough or naive enough to believe that what’s going into this space is not going to be a giant bar with screaming people all night long,” said Young, “you’re even dumber than I think you are.”
His comments prompted a strong response from Donovan Richards, the subcommittee chairman. “I just want to correct you,” he said. “It’s not a done deal. This is why we’re holding a public hearing. No one has been paid off in this room… We make the final decision and that decision has not been reached.”
255 East Houston St., March 2016.
City Council member Rosie Mendez is encouraging locals to show up next week at a City Council hearing on a proposed zoning change along a two-and-a-half block stretch of East Houston Street. Mendez, the Manhattan Borough President and Community Board 3 are all opposed the change, which is being pushed by property owner Samy Mahfar.
Mahfar is planning a 13-story residential building with ground floor commercial space at 255 East Houston St. (near Suffolk Street). He’s preparing to demolish a building that once housed a low-income daycare center, which was displaced in 2010 after construction on a neighboring lot damaged the property.
A community facility is the only use allowed under current zoning. But Mahfar says attempts to find a tenant have been unsuccessful. So he wants to map a C2-5 commercial overlay in the R8 district (the change would impact parcels he controls, plus 18 other lots on the south side of the street). This alteration would allow a restaurant to occupy the commercial space.
The community board approved a resolution in May opposing the change. It stated that Mahfar has, “a well- documented history of illegal construction and construction harassment” in other buildings throughout the Lower East Side. The board also told the City Planning Commission, “The daycare (center) was forced to be vacated due to the open violations and the applicant’s failure to address them.” Most significantly, CB3 argued that the neighborhood lacks adequate community facilities and has lost a number of daycare and nursing facilities in recent years (Rivington House, for example).
The planning commission, however, approved the application July 13 (see below). Here’s part of the city’s rationale as explained by the planning board:
There is an existing C2-5 commercial overlay on the north side of East Houston Street between First Avenue and Avenue B, and the proposed action will create consistency in the permitted commercial uses along each side of East Houston Street, which includes a wide range commercial uses from retail shopping, grocery stores, and restaurants. Together, these commercial amenities provide much needed services to Lower East Side residents. The Commission believes that the proposed C2-5 commercial overlay on the blocks and lots on the south side of East Houston Street between the east side of Norfolk Street and the centerline of the block between Clinton Street and Attorney Street is in context with the surrounding zoning and reflective of existing uses.
The matter will be taken up by the Council’s zoning and franchises committee next Tuesday morning at 9:30 (in the committee room at City Hall). In a newsletter published yesterday, Mendez’s office wrote, “Council Woman Mendez does not support zoning changes at this time and would like to encourage the Community Board and constituents to testify at the City Council’s hearing on the application.”
During an earlier public hearing, CB3’s chairperson and Mahfar were quizzed by planning commissioners about the application. Mahfar, of course, disagrees with the community board’s assertion that he was responsible for displacing the daycare. You can watch the videotape of the June 8 meeting here. [The East Houston Street discussion begins at approximately 15:45).
255 East Houston St.
Community Board 3 this evening is expected to vote against a proposal from developer Samy Mahfar to rezone a two-and-a-half block stretch of East Houston Street. CB3’s land use committee weighed in earlier this month on the application, which is winding its way through the city’s land use approval process. The full board will now have its say.
The panel drafted a resolution that cited Mahfar’s “well-documented history of illegal construction and construction harassment” in buildings throughout the Lower East Side. The developer wants to build a 13-story rental building with ground floor commercial space (likely a restaurant) at 255 East Houston St. Members of Community Board 3 said Mahfar bears responsibility for the permanent displacement of two daycare centers from the site.
The project would include 63 apartments. Under the city’s voluntary inclusionary housing program, 12 units would be affordable rental units. Current zoning would only allow a community facility (likely a doctors’ office) on the ground floor. Attorney Nick Hockens told land use committee members on March 9 that Mahfar and his partners are seeking to map a C2-5 commercial overlay on the parcels they own, as well as 18 other lots in the surrounding area. He acknowledged that his clients envision a restaurant in the commercial space.
The sites in question were part of the 2008 rezoning of the Lower East Side, an initiative meant to curtail overdevelopment. At the committee hearing, Chairperson MyPhuong Chung, told Hockens before he even began his presentation, “The rezoning that was enacted (eight years ago) did not allow for commercial, and I don’t think that was an oversight. It was because we wanted a community facility (at this location).”
In April of 2010, construction on a neighboring site caused cracks in the facade of 255 East Houston St. Action for Progress and another day care center were displaced as a result. Community Board member Lisa Kaplan recalled the events that transpired back then. “This was the site of two very well regarded and really important daycare centers in our neighborhood for decades,” said Kaplan. “They were ACS (Administration for Children’s Services) facilities that were affordable to low-income people. They were run by community organizations. Now we’re going to get another bar.”
Another board member, Enrique Cruz, spoke out against the application. As a former investor in the neighboring project, at 265 East Houston St., he was privy to the back-and-forth that followed the 2010 displacement of the day care centers. Action for Progress, he said, had 20 years left on its lease. While a full vacate order was slapped on the property, the city lifted it within 72 hours (it became a partial vacate order). Addressing Hockens, Cruz said, “Your client refused to repair (the building)… He got money from his insurance company to fix the building. He didn’t (fix it). He got money from the developer next door to fix the building. He didn’t. He used it as an excuse to get out of a 20-year lease for an affordable daycare center.”
Rendering: 255 East Houston St.
Hockens outlined the developers’ rationale for making the change. He noted that commercial zoning is prevalent across East Houston Street, and that the proposed commercial overlay would “fill a gap” that exists in relatively small area. There are four grandfathered businesses in the zoning district.
Hockens said the developers had no interest in bringing a rowdy bar to the building. “This is going to be a rental building,” he said, “so we’re not going want a use in there that is going to make a lot of noise or have odors and not really be compatible with the residential uses.”
Mahfar is a controversial figure on the Lower East Side. In the past several years, residents, advocacy organizations and local elected officials have taken him to task for allegedly illegal tactics against rent stabilized tenants. Earlier this month, tenants in four Lower East Side buildings settled lawsuits with Mahfar.
They received more than $200,000 in rent abatements. Some of those residents testified at the land use committee hearing. Among them was Seth Wandersman, who lived at 210 Rivington St. “Our experience there,” he said, “was difficult and hazardous to our health and Mahfar broke a lot of regulations all the time.”
Referencing high lead levels in the building, Wandersman argued, “This is not a company that follows regulations. If you’re thinking about giving them extra room, they’re going to take even more than that.” Mahfar did have his defenders. Three commercial tenants testified that they have experienced no problems with their landlord. Community board members asked if Mahfar had asked them to appear at the committee meeting. They all responded, “No.”
The full board will consider the land use committee’s recommendation tonight at 6:30. The meeting takes place at P.S. 20, 166 Essex St. The borough president and City Council will also way in on the application. City Council member Margaret Chin has not yet stated whether she will support Mahfar’s proposal. In the past, she has been publicly critical of the developer’s treatment of tenants.
Tenants and advocacy organizations held a protest outside 210 Rivington St. in December of 2014.
A lengthy battle between Lower East Side property owner Samy Mahfar and residents in four buildings is over, at least for now.
In the past year, they took Mahfar to housing court, accusing the local landlord of exposing them to toxic dust during building renovations, cutting off vital services and harassing them with the intention of forcing rent stabilized tenants out of their homes. Now the two sides have settled cases at 22 Spring St., 210 Rivington St., 102 Norfolk St. and 113 Stanton St. The tenants were represented by the Urban Justice Center. Two advocacy groups, Cooper Square Committee and CAAAV, have helped the residents organize against Mahfar.
In the four buildings, Mahfar agreed to pay 23 tenants who brought the lawsuits about $205,000 in rent abatements. According to the settlement documents, “the rent abatements are intended as reimbursement of past rent paid based on demolition and construction conditions (in the buildings) that allegedly deprived (the tenants) of full use and occupancy of their apartments…”
City Council member Margaret Chin speaks in support of tenants in Samy Mahfar’s buildings on April 20, 2015.
Council member Rosie Mendez confronts a Mahfar employee at 210 Rivington St. in December of 2014.
The agreements also require Mahfar’s firm, SMA Equities, to follow all city regulations, safe building practices and EPA procedures for handling lead-based paint. They compel the real estate management firm to clear all violations recorded by the city’s Department of Buildings and to submit buyout offers to tenants only in writing. In the past, tenants have complained about being harassed by outside “tenant relocation specialists.” The agreement requires tenants to provide access to their apartments by work and maintenance crews, as long as proper notice has been given.
In a statement, Mahfar said, “I am pleased we were able to reach amicable agreements, and appreciate the efforts made by the tenants, elected representatives and the court. This resolution allows us to continue improving the housing stock for working New Yorkers and allows the tenants to move forward with their lives.”
Mahfar sold 210 Rivington St. last spring for $12.5 million. He purchased it two years earlier for $7.6 million.