By Joy Bergmann
After more than two years of legal battles, the City of New York reached a settlement this week with Hank Freid, ending tourist occupancy at his Marrakech Hotel property located at 2686, 2688 and 2690 Broadway [103rd Street].
The City had sought an injunction to stop Freid from renting rooms to tourists – transient occupancy of under 30 days – believing such occupancy violated the 2010 Multiple Dwelling Law requiring buildings with Class ‘A’ SRO [Single Room Occupancy] Certificates of Occupancy to be used for permanent housing. The Marrakech buildings have an SRO designation, but Freid contested that he was forbidden from tourist use.
In court appearances and documents, City attorneys had emphasized the need to preserve permanent housing units – especially affordable housing like SROs – for low and middle-income New Yorkers.
In the settlement, Freid does not admit to any wrongdoing, but does agree to end all transient occupancy at the Marrakech. He also agreed to pay the City $274,400.
The City declared victory. “This resolution ends the nuisance of the Marrakech Hotel once and for all, and paves the way to ensure the site is restored to permanent residential units used as homes for New Yorkers,” said Christian Klossner, Executive Director for the Office of Special Enforcement.
What Klossner did not say was the type of permanent housing apparently coming to replace the Marrakech Hotel’s 100+ rooms: luxury condos.
According to the court settlement documents, the buildings are in contract to be sold to “a property developer” who “plans to demolish the [Marrakech Hotel] buildings…and thereafter build in their place luxury condominiums and has no intention of ever operating…as a transient hotel or for short-term rentals.”
Freid’s attorney Ronald J. Rosenberg told WSR in a statement that the hotel owner “made the strategic decision that coupling the end of litigation with the sale of the properties resulted in a terrific opportunity for the company to achieve a great return on its long term investment.” He added, “This is a great outcome for [Freid] and for the future use of the property at a time when the market is demanding luxury condos in the heart of Manhattan.”
Rosenberg would not comment on the identity of the purchaser or the sale price. He did confirm that the sale includes ground-floor retail spaces currently occupied by a Starbucks and a dollar store in addition to the Marrakech Hotel.
The settlement received mixed reviews from affordable housing advocates at Goddard Riverside.
“We applaud the City’s effort to ensure landlords operate properties in a manner consistent with their lawful use,” said Rod Jones, Goddard Riverside’s Executive Director, in a statement to WSR. “It’s also important to preserve desperately needed affordable housing. Not for profit organizations would be a good option to serve as an operator of these properties as Supportive Housing. Preservation of affordable housing is a key issue beyond operating the property outside of code.”
Meanwhile, the City’s “illegal occupancy” lawsuits against two other Freid SRO properties continue. But tourists looking to stay this summer at his Royal Court Hotel & Hostel at 258 W. 97th Street or the Broadway Hotel & Hostel at 230 W. 101st Street need look no further than Booking.com to snag a bed on the Upper West Side.