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Misrahi: Buildings Department Paralyzed By Fear

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Lower East Side real estate developer Sion Misrahi says the scandal-plagued NYC Buildings Department is “scared to death,” and that their paralysis is making it “impossible to do business in this city.” It’s the real reason, he told me, there are now More than 540 stalled construction sites in New York. During a conversation Friday in his office on Rivington Street, Misrahi said he did not believe the market has yet “hit the bottom,” but he said it’s only a minor factor in the citywide construction standstill.

Perhaps more than any other person, Misrahi is responsible for the transformation of the neighborhood in the past 15 years. As a deal maker and founder of the LES Business Improvement District, he has constantly clashed with preservationists and affordable housing advocates. He was a fierce opponent of the rezoning of the Lower East Side, implemented last year. He was cast as the villain in the recent documentary, “The Lower East Side: An Endangered Place.” During our interview, he spoke out on the rezoning issue, the effort to restrict the number of bars and clubs on the LES and on the reasons behind the many stalled construction sites across the city.

Just today the Daily News reported 37 Buildings Department employees have been indicted since 2002 on various corruption charges. Earlier this month, investigators linked six inspectors to the Luchese crime family. Misrahi said, “everyone in the Building Department is scared of their own shadow. You can’t get an opinion letter out of the Buildings Department. You can’t get anyone to sign anything in the Buildings Department because everybody’s afraid.”

Misrahi argued that, since there’s no new construction, the city will be “looking at the buildings that are already up, to hit them with fines and penalties in order to support their bureaucracy. So what you’re going to have is an impossible situation in the city. The bureaucracy at the Buildings Department has to be fed. They have to get their fees. If no one’s building, either they’re going to have to lay people off, or attack the buildings that are already there for some sort of minor nuisance problems. And that’s what’s happening.”

As an example of the situation he faces, Misrahi described a building he owns with 17 rent stabilized apartments and two small stores. The property taxes are over $100-thousand/year, or around $5,500 for each apartment. “So,” Misrahi said, “no development, no new tax structure…See where this is going? Now each apartment’s going to pay $8,000 a year in tax? $10,000 a year in tax?” Saying the money has to come from somewhere, he complained, “this anti-development bit – “I want my neighborhood to stay the same” – just doesn’t cut it.”

Misrahi, whose first job was working in his father’s clothing store on Orchard Street when he was 14, is clearly frustrated by the new zoning restrictions. “That effectively killed all development in this neighborhood,” he said. During the rezoning battle, there was a consensus that the neighborhood had become overwhelmed with tall towers inconsistent with the LES’s “low-scale” character. But Misrahi argued there are consequences to restricting development: “That means no new tax base. So now everyone in this neighborhood wants government housing, they want government jobs. You know, they want, they want, they want. It’s a horror show.”

Over the years, Misrahi has not only encouraged residential development but he helped turn the LES into a “hipster playground,” lined with trendy restaurants and bars. What does he say to residents who believe those nightlife destinations have made the neighborhood unlivable? “We are in a supposedly capitalistic society,” he said, “The best thing to do is turn on the spigot. In other words, if you want al the bars go away, have every bar that applies for a liquor license be approved. Let everybody go bust and no one will open bars anymore. Restrict the number of licenses, then those bars that are there will prosper, whether they’re good or bad, and you’re making those bar owners rich. That’s what you’re really doing.”

It’s apparent, the man who remade the neighborhood once, is not feeling so optimistic these days. But he still has ideas about the future of the Lower East Side. “We need to create a spot where we can have high rise development,” he told me. “We need a downtown for the Lower East Side. We should pick an area, in the center of the hub, near all the train stations Let them go up 30 stories… Create some commercial structures, where architects can open offices, accountants can have offices, dentists can have offices – Have a core downtown.”

 

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9 COMMENTS

  1. What does he mean by this: “We should pick an area, in the center of the hub, near all the train stations Let them go up 30 stories… Create some commercial structures, where architects can open offices, accountants can have offices, dentists can have offices – Have a core downtown.”
    This guy is a hack master builder with no real vision that works for the future of New York City. As Jane Jacobs pointed out, an area with concentration in one area will just kill off everything else in the periphery.

  2. You can see why Mr. Misrahi is a success. He speaks 100% truth to power. Sadly, the Obamatron Bolsheviks who populate the Republic of The LES destroyed it when they rezoned it as a socialist utopia…………..Now, Let them eat cake!

  3. “The best thing to do is turn on the spigot. In other words, if you want all the bars go away, have every bar that applies for a liquor license be approved. Let everybody go bust and no one will open bars anymore. Restrict the number of licenses, then those bars that are there will prosper, whether they’re good or bad, and you’re making those bar owners rich. That’s what you’re really doing.”
    Um, No. This is an incredibly stupid thing to say. If people are allowed to open as many bars as they want, then they will all fail at once and the LES will become a ghost town? People will flee in droves? Like Yogi Berra said, it will become so popular that nobody will go there anymore? I mean… um… what?

  4. The real villains at 11 Essex Street were AAFE who were representing the 5 Tenants left in the building. There was no way to repair the building without endangering the Tenants lives. There were 24 units with 5 Tenants left and AAFE refused to move them for 4 years, while bleeding the Owner of the building and at the same time offering to buy the Property from him. True Racketeering at its finest. What nobody mentions is that when the building Dept. finally vacated the property Mr. Misrahi moved all the tenants (which he did not have to do) to other apartments at his own expense immediately. They will continue to pay the same rent they were paying and were not sent to homeless shelters or dumped on family members. In the end a new building will be erected on that site with 22 apartments and 2 stores, thus enhancing the city’s housing stock.

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