New York City Sues Joseph, Meyer Chetrit Over 'Hazardous' Times Square Hotel
Joseph and Meyer Chetrit have been slapped with a lawsuit over a hotel that the New York City government asserts is an “imminent threat to the health and safety of the public.”
The brothers and co-principals of the Chetrit Group have been issued more than 150 violations, multiple emergency work orders and two actions in criminal court over their failed maintenance of the Hotel Carter in Times Square, lawyers for the city claim in a complaint filed Thursday.
“Despite profitable careers in real estate, investing in and selling billions of dollars of real property around the globe, Defendants have refused to maintain the buildings they already own, failing to comply with multiple laws meant to protect the public and keep buildings in New York City safe,” the complaint, filed in Manhattan Supreme Court, said.
Meyer Chetrit and representatives for City Hall did not immediately respond to Bisnow’s request for comment. Eight other members of the Chetrit family, including Joseph and Meyer's brother, Juda, were named as defendants because they hold ownership stakes in the property.
“We’ll be working with the city to resolve these violations,” a spokesperson for the family told The Real Deal, which first reported the lawsuit.
The 25-story hotel at 250 W. 43rd St. was built in 1930 and operated under a variety of names before shuttering in 2014. The Chetrits in January 2015 bought the property with plans to renovate it, but have only intermittently held permits to do so, according to the city.
Instead, the city alleges that the developers have failed to even maintain the building. Among the violations are broken windows, a cracked facade, flooding, exposed electrical wiring and demolished yet unsealed floors. Outside, the sidewalk shed is missing panels and lighting and was even hit by a car but not repaired, according to Department of Buildings violations submitted as evidence by city lawyers.
In a few cases, the Chetrits did proceed with work on the building but were missing the required permits to do so, the complaint said. That includes installing scaffolding and a construction fence.
City attorneys cited criminal complaints they've brought against the landlords, which have resulted in default judgments that were nonetheless ignored.
“Defendants have refused to make necessary repairs, showing complete disregard for the law, the orders of the agency tasked with enforcing those laws, and indeed, the courts,” the lawsuit states.
The city alleges that the developers have abandoned the property following a foreclosure lawsuit. In January, Mack Real Estate Credit Strategies claimed that the Chetrits defaulted on three mezzanine loans totaling $223M and asked a judge to force a sale of the hotel.
Even before the Chetrits acquired the property, the hotel was notorious for pest infestations as well as criminal activity, including a series of deaths. In 2014, the Observer reported that Hotel Carter was a three-time winner of TripAdvisor’s dirtiest hotel in America survey.
Now, the city is seeking the court to declare the site a public nuisance and force the family to correct the outstanding violations and pay civil penalties.
The Hotel Carter is far from the only property causing a headache for the Chetrit family, which owns a massive portfolio that is being threatened by distress. It lost the historic Hotel Bossert in Brooklyn to foreclosure in February, has been hit with lawsuits at several prominent office and hotel properties, and defaulted on a $481M mortgage tied to an 8,000-unit apartment portfolio that led to Wells Fargo suing JPMorgan Chase over allegedly inflated and fabricated rents.
The family of the late Jacob Chetrit, who ran the Chetrit Organization with Juda before his death in January, sued Meyer Chetrit, accusing him of failing to repay a $10M loan intended for the renovation of the Hotel Carter, Crain's New York Business reported. Meyer signed a judgment of confession last month, admitting to owing more than $21.7M tied to the loan.
