CB3 Panel Supports Plan For 179 Ludlow “Eyesore”

When it comes to stalled construction site 179 Ludlow, we’d believe just about anything. After all, this would-be luxury apartment building, with heated balconies, was (allegedly) being eyed by Madonna back in 2007 as a possible location for her New York Kabbalah Center. It was once owned by feuding and litigious brothers Steven and Peter Salvesen, otherwise known as “Two Funny Guys, LLC.”  In later years it became one of the neighborhood’s most exclusive “rat castles.”

Earlier this year, the Post reported that current owner Michael Goldberg intended to finish 179 Ludlow by the end of the summer, turning it into a rental building. Tonight, he appeared before Community Board 3 with a different idea — going back to the original plan — selling condos on the top five floors and leasing the two lower levels to commercial tenants. There’s only one problem. The project, if completed, would be in violation of the Lower East Side’s 2008 rezoning regulations.

Goldberg’s attorney, Jessica Loeser, explained to members of CB3’s land use committee that the 7-story structure would exceed the maximum square footage limits on the lot in question, a sliver located between Katz’s Deli and the Earth Matters’ natural foods store.  In order to comply with the zoning requirements, the developer would have to lop off the top one and -one-half floors of the building. It would be cheaper to demo the entire building and start from scratch, she said. Goldberg has applied to the Board of Standards and Appeals for a variance. This evening he sought the community board’s blessing.

CB3 members have grown weary of these sorts of pleas. In the last couple of years, several developers have paraded before the board, seeking to complete projects approved before the rezoning took effect — but that were then frozen in time after the real estate market cratered three years ago.

Loeser said this case is different in that there was no “effort to beat the clock.” Goldberg, the original lender, took the property back after two developers stepped into financial quick sand. His only objective now is to finish the project and to recoup as much of his investment (in excess of $8 million) as possible. The plan is to create a single apartment on each of the top five floors (1100 sq. ft. each).  The commercial spaces would be rented to businesses, Goldberg said, who would not disturb the residential owners (meaning no bars or clubs). He mentioned a yoga studio or “Soul Cycle,” an indoor cycling center.

Loeser told committee members the BSA will be looking at three factors in the 179 Ludlow application: (1) whether a substantial portion of the building has been completed; (2) whether complying with zoning laws would cause financial harship; and (3) and the amount of money already spent.

David McWater, the committee chair, has argued in the past and made the case again tonight that the community board can best exercise what little influence it has with the Board of Standards and Appeals by basing its decisions on the BSA’s own criteria.  Other members contend that they have an obligation to consider more broadly what’s best for the community and should not be overly concerned with the “letter of the law.”

Tonight at least one committee member suggested that 179 Ludlow is an example of the kind of project the zoning changes, which CB3 initiated, were meant to curtail. Val Orselli, an affordable housing advocate, said “the rezoning was specifically designed to reduce (real estate) speculation.”   Orselli added that Goldberg bears some responsibility for a deal gone bad.. “These are the people who financed the project and were part of the speculative venture,” he asserted.

Other committee members asked whether Goldberg would be willing to make accommodations for the community. For example, they asked, would he provide assurances that the commercial space would not be rented to a bar?  Damaris Reyes, executive director of GOLES,  wanted to know whether he would consider providing discounted space to a community-based organization.  Goldberg said he was willing to work with CB3 but that it was too early to make commitments.

There were members of the panel who said completing the stalled project should be a high priority. Bob Zuckerman of the LES Business Improvement District and committee Vice Chair Linda Jones called the site an “eyesore” that hurts the neighborhood.  This particular block is the home of two other notorious stalled sites — 180 Ludlow (which has reportedly been “unstalled”) and 163 Ludlow (which runs all the way through to Orchard Street).

In the end the committee passed a resolution approving the variance. It also called on the developer to look into providing a “community facility” in the building and to avoid renting commercial space to any business with a liquor license. The vote was 15-2, with one abstention and one member not voting (Loeser, a committee member, recused herself). The full board will vote on the resolution later this month. We’ll keep an eye on the deliberations before the Board of Standards and Appeals.