Queens org. to build affordable housing at site of illegal hotel
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The site of the former Royal Park Hotel, an illegal hotel, will be converted to affordable housing by the Fortune Society, a Queens-based nonprofit. Photo via Google Maps
By Jacob Kaye
A Queens nonprofit has been tapped to lead an affordable housing project in the Upper West Side after the city shut down an illegal hotel operator in the neighborhood earlier this week.
The Mayor’s Office of Special Enforcement reached a $1.1 million settlement with Hank Freid and his company, which operated multiple illegal hotels, including one at 258 West 97th Street. The settlement marks the end of a decade-long legal battle and will pave the way for 82 affordable homes for low-income and formerly homeless New Yorkers, according to Mayor Eric Adams.
The move is part of Adams’ approach to bringing more affordable housing to the city.
“The old approaches to the affordable housing crisis are no longer enough — which is why my administration is pursuing bold, innovative strategies like this one to create housing New Yorkers can actually afford,” Adams said. “We need a response with the urgency to match the crisis, and we will explore every opportunity, in every corner of the city, to create the affordable housing New Yorkers need and deserve.”
The Royal Park Hotel was one of several of Fried’s hotels to be deemed illegal by the city, after they alleged he had rented out short-term stays in units designated for residential use.
Following the settlement, the Fortune Society, a Queens-based nonprofit, purchased the building and will now work with the Department of Housing Preservation and Development and the Department of Social Services to turn it into 100 percent affordable housing.
Fifty-eight of the units will be designated for formerly homeless New Yorkers, nine will be filled through the city’s affordable housing lottery and 15 will be kept for existing tenants. The one remaining unit will be given to the building’s super.
“The Office of Special Enforcement and its sister city agencies deserve extraordinary accolades for closing this illegal hotel,” said JoAnne Page, the president and CEO of the Fortune Society.
“As the new building owner and a nonprofit with decades of experience serving people impacted by the justice system and developing award-winning housing, the Fortune Society is deeply gratified and proud to be part of an effort that will lead to the creation of desperately needed safe, affordable permanent housing in a neighborhood of opportunity,” Page added.
The sum of cash and the building weren’t the only things the city received in the settlement – there was also a permanent injunction issued against illegally using or advertising the property for short-term rentals.
A judge also ordered Fried to pay the city $622,550 in penalties for the activity and $477,450 for violations issued by Office of Special Enforcement inspectors, a bulk of which were issued for safety violations.
The city also reached settlement with Freid for two of his other properties – the Broadway Hotel and Hostel and the Marrakech Hotel, both in Manhattan.
Freid previously filed a lawsuit against the city in an effort to challenge the enforcement of a 2016 barring him from advertising his units as hotels. The lawsuit was dismissed under the settlement.
“I am proud of the work the Law Department has done to defeat these baseless lawsuits the operator brought against the city and to support the efforts to shut down this illegal hotel,” said Corporation Counsel Georgia M. Pestana. “Along with our agency partners, we helped pave the way for this deal, which will improve the quality of life for many New Yorkers. We will remain vigilant and take appropriate legal action against any owner who thinks they are above the law.”
