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Developers Want More Time to Complete Allen St Hotel (Updated)

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138 Allen St./138 Orchard St.
138 Allen St./139 Orchard St.

Not so long ago, the Lower East Side was littered with stalled hotel projects.  In the last year or two, most of them have been re-started, but this eyesore on Allen/Orchard streets is still lagging behind. Next month, Community Board 3’s land use committee will be asked to give developers more time to finish the 16-story hotel.

The out-of-scale project was approved in the days before the 111 block Lower East Side rezoning was enacted at the end of 2008.  But the developer, D.A.B. Group, allegedly defaulted on a loan in 2011, triggering legal and foreclosure proceedings.  Documents filed with CB3 by Maverick Real Estate Partners, which acquired D.A.B. Group’s mortgage, asks the NYC Board of Standards and Appeals (BSA) for an “extension of time” to complete the project.  CB3 does not have the authority to approve or deny the application but it’s opinion is one factor the BSA will consider.

The BSA has already granted one two-year extension.  That approval expired on March 15 of this month.  Maverick Real Estate Partners  asserts that “it anticipates completion of the hotel in 2014.”   The company is in the midst of a foreclosure action against D.A.B. Group, but legal proceedings are ongoing, and the court has not yet determined the rightful owner of the property.  Ben Zhavian of D.A.B. Group told us he supports the application for an extension of time because whomever ends up owning the property will require permission from the city to get the job done.  At the same time, he said, the Maverick filing is misleading, since the case hasn’t gone to trial and will not be resolved anytime soon, meaning that completion in 2014 is an impossibility.  Zhavian added that Maverick is in no position to lay out a construction timetable when he continues to have possession of the site.

CB3’s land use panel will take up the matter on April 17, 6:30 p.m., at the Seward Park Extension, 56 Essex St.

 Editor’s note: This story has been edited to reflect the fact that ownership of the property is in dispute and that the site is the subject of an ongoing legal case.

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  1. Since the developer did not live up to their end of the
    agreement and failed to deliver the finished building as promised, then the
    price for their failure should be to have to follow the new zoning guidelines. It would not be difficult to remove several floors. The Barack Capital hotel mess 180 Orchard has proven that it is possible to remove floors.

    Right from the beginning the 180 Orchard Hotel construction has been a total nightmare for the community. Since this property has changed hands, and has been stalled for so long, they too should have to follow the new zoning guidelines. Why not?

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