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Councilman Revives Bill to Deny Building Permits to 'Bad Actors'

By Danielle Tcholakian | April 15, 2016 5:16pm | Updated on April 18, 2016 8:41am
 City Councilman James Vacca wants the city to deny building permits to people with outstanding debts to the city.
City Councilman James Vacca wants the city to deny building permits to people with outstanding debts to the city.
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DNAinfo/Jill Colvin

CITY HALL — A bill proposed by Bronx councilman James Vacca could force greater transparency in the notoriously opaque world of New York City developers and property owners.

The bill, known colloquially as the "bad actors bill," seeks to deny building permits to developers and property owners who owe $25,000 or more in unpaid fines and fees assessed by the city.

"If you have significant fines in the city, mainly with the Buildings department, we should not be giving you further permits to go build again until you pay the fines," Vacca said.

The law would not apply to permits needed to correct dangerous conditions.

At a time when law enforcement agencies from the Department of Investigation to the Manhattan District Attorney's Office are cracking down on the dangerous conditions caused by the city's "development boom," Vacca believes his bill provide "incentive for people to maintain safe construction sites" because it "creates accountability."

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The bill would also force transparency in an area where there currently is very little: building ownership.

Every permit application will have to include the identity of each owner of the property, including a full name and business address, a list of properties where the person owes money to the city and how much is owed at each site.

It can be hard to trace the origins of building ownership because developers and property owners use limited liability corporations, or LLCs, "to prevent the financial deterioration of one building from affecting another," as Angela Sung of the Real Estate Board of New York, the city's powerful developer lobby, said at a hearing on the bill after Vacca introduced it for the first time in 2010.

The bill was forcefully opposed by the city's real estate lobbyist groups, from REBNY to the Building Owners and Managers Association of Greater New York (BOMA/NY), Building Industry Association of New York City (BIANYC), Queens and Bronx Building Association (QBBA), and New York State Builders Association (NYSBA), as well as one of the most powerful land use law firms in the city, Stroock & Stroock & Lavan. 

"We need more transparency when it comes to LLCs," Vacca said in a recent interview.

DOB spokesman Vincent Grippo said his agency didn't have the legal authority to withhold permits for properties that owe the agency money, but that if they did, "it would be fairly easy." But, he added, data was an issue.

Grippo proposed a system that would take that information from the Department of Finance's data system and "dump it into" DOB's system.

DOF spokesman Andrew Salkin said his agency could create a system that collected debt information and then "work[ed] backwards" to track owners through DOB for $2 million to $3 million to set it up, and $1 million to maintain it.

Williams, in 2010, said the funding was likely worth it due to "the money that's owed throughout the city."

Today, fines issued by DOB, with accrued interest, make up nearly half of the $1.6 billion owed to the city, according to a report in Crain's New York.

Vacca said he believes the current political climate will be more conducive to passing a law like his, unlike the circumstances in 2010.

"I think in this administration, I'm hoping there would be a new interest in this bill," Vacca said.

He said it could provide "the transparency that we may need even more now," and that his filing shortly after the passage of the mayor's sweeping zoning changes last month was not a coincidence.

The zoning changes, which loosen some building restrictions to make it easier for developers to construct affordable and senior housing, are "all the more reason" to pass his bill, he said.

And while there were complaints last time that "it's hard to trace the corporate entities that file at the Buildings Department," Vacca also hopes that "there’s a willingness to tackle this issue with all the technology that we have that we didn’t have before."

Back then, Councilman Brad Lander referenced Vendex, a system that all companies that want to do business with the city have to register with, which also tracks if they have any liens, warrants or outstanding debts.

"They're confronting some of these same problems and it seems like it would make sense" for Department of Buildings to have something similar, Lander said.

Vacca suggested at the time working with ACRIS, the Finance database that tracks properties by block and lot, "and other means of knowing who owes taxes."

The bill will need to be scheduled for a hearing by the appropriate committee chair, which happens to be Williams. A rep for Williams said that no date has been set as yet.