The day has finally come. On September 4th Hoboken’s city council unanimously approved a final ordinance that authorizes the city to use eminent domain as part of their efforts to turn the property into a park. If you have been following our blog, you know that we have been keeping a close eye on this story.
By way of a recap, NY Waterway had purchased the Union Dry Dock in November of 2017 for $11.5 million. Over the past few years, the area has gone through a lot of drama. (Which is why we like to blog about it!)
In December, NY Waterway gained approvals from the Army Corp of Engineers to build a refueling, maintenance, and repair facility at the site based on the Hudson River being a federal waterway. Sounds simple, right? Wrong. The company did not submit an application, nor did they get approval from Hoboken’s planning board to move forward with the project. Of course, it caused the city to put a halt on all activity.
This is Hoboken after all, and no one is one completely surprised with what happened next…A brawl between city officials and NY Waterway that lasted for months.
Even without local approvals, NY Waterway sued Hoboken. The company said that they wanted to restart the project, and that they had “the necessary state and federal permits and the site has the proper zoning.” Subsequently, Hudson County Superior Court Judge Jeffery Jablonski disagreed with NY Waterway and threw the lawsuit out.
Happy with the victory, Hoboken city officials have been taking steps to acquire the land. Integra Realty Resources appraised the Union Dry Dock property on July 1 for $13.1 million and the ordinance authorizing eminent domain reserves funds from the city’s bonds and notes toward purchasing the land.
“Today, Hoboken is one critical step closer to achieving our decades long dream of a public, waterfront park at Union Dry Dock,” said Mayor Bhalla in a statement following the vote. “We cannot and will not give up this opportunity to create a contiguous waterfront our children can enjoy for generations to come. I look forward to beginning good faith negotiations with New York Waterway to acquire Union Dry Dock in a process that is fair to both parties.”
That is not stopping NY Waterway. The company is looking to relocate from their existing Weehawken refueling facility.
Then there is an outside chance that New Jersey Transit might acquire the Union Dry Dock property on behalf of NY Waterway. Nothing like going over the city’s head with state authority. NY Waterway has no plans to back-off and they still want to keep fighting.
We love a good drama, and this one seems to be one to keep watching!
Photo: The Culture Trip
As regular New Yorkers, we thought that we were the only ones fed up with New York. But that is not the case at all! A group of major landlords have the same sentiments, but it’s probably for different reasons.
Actually, we know that their reasons are different. Several longtime New York developers and owners are mulling over plans to leave New York because of tough regulation, tax hikes, and general public sentiment against the real estate industry.
Examples that stand out include Gary Barnett, considered to be one of the city’s most prolific builders, who has focused on other markets within the USA including Vail, Colorado; Park City, Utah; and Dallas, Texas.
Then there is Michael Stern, whose firm JDS raised the tallest spire 1,421 feet, according to city records at 111 W. 57th St. (for those keeping track). That will make the spire about 25 feet taller than 432 Park, and the tallest residential building in the Western Hemisphere. Stern moved to Florida last year and plans to focus on Miami and Fort Lauderdale, however official plans are to complete his sizable slate of New York projects.
Yet another example is Steve Witkoff, a prominent Manhattan landlord. He recently relocated his residency to Florida and is building and investing in other cities including a large hotel and casino in Las Vegas, Nevada.
There’s also Gatsby Enterprises, a private, family-controlled real estate firm that owns several Manhattan apartment buildings and commercial properties. They recently purchased an office building in Miami, where one of its principals suggested it will now focus its investments. “Definitely the environment is making it much tougher to do business in New York,” Isaac Shalom, who operates Gatsby with his father, Nader, said. “Our outlook now has turned negative in New York.”
What brought the change on? A variety of factors with the most visible being the NYC reforms for rent regulation that happened in June. The changes make it almost impossible for owners of the city’s roughly 900,000 regulated apartments to significantly raise rents and convert apartments to market-rate. (We blogged about that too a few months ago.) Landlords complained the new law discourages investment and will push the city’s affordable housing stock into disrepair.
Changes are also happening at the state level. A few months prior, Albany passed a law to raise the transfer tax on multi-million-dollar home sales. This came on the verge of imposing an annual pied-a-terre tax that many residential sales experts said would have dealt a severe blow to an already-slow luxury apartment market. Just the buzz from this type of tax caused concern among landlords that legislators will seek even more regulations and levies on the industry.
“The changes and the proposals have been draconian,” said Frank Ricci, the director of government affairs at the Rent Stabilization Association, an industry group that represents owners of rent-regulated buildings. “I think that the faith that a lot of owners have in the city and the state’s political system has been shaken.”
“There’s life outside of the city,” one prominent developer said. “At some point, you prefer to go where you’re wanted, where you don’t get bad surprises and where politicians aren’t eager to gang up on you.”
Not sure where that leaves the rest of us New Yorkers in terms of housing, but it sounds like the big real estate players are heading south and west.
The heat is on in Hell’s Kitchen, NYC. The city has filed a lawsuit in Manhattan Supreme Court against three Hell’s Kitchen building owners for operating illegal short-term rentals in rent-stabilized apartments. If you’re walking around the Penn Station area and happen to pass the buildings at 410 and 412 West 46th Street and 452 West 36th Street, you will be passing buildings owned by some underhanded owners (Several of which are on the Public Advocate’s worse landlords list. You’ll have to read on for those juicy tidbits.)
The owners have neglected the buildings, harassed tenants to get them to move out, deregulated units and kept units vacant to rent out on a short-term basis. One building in particular had no gas and no roof for six-months in 2015 due to a fire. Other buildings have a long list of code violations.
When city inspectors went to take a look, they found 11 of the 50 apartments that should have been used as rent-stabilized units not rentals at all -- but being used to host Airbnb. (If you ask us, it sounds like they probably didn’t get great reviews under those conditions!) Nine of the apartments were found by The Mayor’s Office of Special Enforcement (OSE), which enforces the city’s nuisance abatement law including illegal hotel activity.
Airbnb rentals are big money. According to the suit, the apartments hosted over 700 guests–and raked in $300,000 over three years. Rent-regulated units have been on the decline since 2011, and that’s about when the OSE began getting calls about the illegal hotel activity. In the case of these units, only five units out of 50 are still on the books as rent-stabilized according to DHCR records.
The city is looking to show that this crime doesn’t pay and is seeking over $1 million in punitive damages. There is a movement to stop the short-term rental of apartments for less than 30 days at a time. Mayor Bill de Blasio has been fightingagainst building owners who defy the state’s short-term rental law.
The buildings have an impressive 100 violations for illegal transient occupancy and 250 outstanding violations for hazardous conditions from the New York City Department of Housing Preservation and Development. All three buildings have been deemed unsafe, which is also tenant harassment.
A spokesman for the mayor’s office said, “Short-term illegal rental platforms like Airbnb make it all too easy for landlords to harass and displace rent stabilized tenants. We will continue to use our enforcement tools to hold these landlords accountable as part of large effort to preserve and protect affordable housing.”
This is a story that will probably keep unfolding as more buildings and apartments with illegal Airbnb rentals come to light. We will keep you posted, as always!