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UWS Hotelier Facing Fines in City's Airbnb Crackdown Threatens $10.3M Suit

By Gwynne Hogan | May 22, 2017 10:09am
 Helms Realty Corp, owners of Broadway Hotel & Hostel, filed a notice of claim against the city.
Helms Realty Corp, owners of Broadway Hotel & Hostel, filed a notice of claim against the city.
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DNAinfo/Janon Fisher

UPPER WEST SIDE — The landlord the city claims is the biggest illegal hotel scofflaw — now facing a quarter of a million dollars in fines — is planning a $10 million lawsuit, charging the government with harassing what he says is a legal hospitality business.

Hank Fried of Helms Realty Corp,​ the owner of Broadway Hotel & Hostel at 230 West 101 St., argued in a notice of claim filed last week that the city's repeated fines against his hotel under a four-month-old state law making advertising short-term rentals illegal is part of a campaign to drive him out of business.

"The city's actions were motivated by its intent to harass and inflict economic injury on [Helms Realty], for the collateral purposes of forcing claimant to cease its lawful operations... and by forcing [Helms Realty] to rent the building to only permanent occupants in order to help the city achieve it's goal of creating affordable housing," the notice of claim reads.

The notice of claim, filed in a advance of a lawsuit seeking $10.3 million damages and attorney fees, cites a February decision by an administrative law judge dismissing earlier Department of Buildings violations at Broadway Hotel & Hostel for transient use.

An appeals judge found that short-term rentals were allowed at the Single Room Occupancy (SRO) building because the owners had proven it had been a hotel for at least 70 years and was thus grandfathered in.

Twice after the Feb. 8 decision, the Mayor's Office of Special Enforcement returned to Broadway Hotel & Hostel and slapped it with summonses for advertising illegal transient usage — issuing a total of 27 summonses amounting to $67,000 in fines, records show.

"The City's harassment of [Helms] with multiple, baseless, summonses and notices of violations, intended to drive [the hotelier] out of the lawful hotel business," the notice of claim reads.

Fried, who also owns the Royal Park Hotel & Hostel on West 97th Street and Marrakech Hotel at Broadway at West 103rd Street, has been the main target of the city's crackdown on illegal short-term rentals under a new law that went into effect at the end of January, making it illegal to advertise on sites like Airbnb.

Fried's three hotels are facing a combined $234,000 in fines, a majority of the $284,000 in fines the city has issued to short-term rentals citywide, some of which were listed on the apartment-swap website Airbnb, who earlier mounted a legal challenge against the law. Fried's rooms, however, were not listed on Airbnb.

Ronald Rosenberg, an attorney for Fried, didn't return a request for comment.

Judges at the City's Office of Administrative Trials and Hearings will ultimately decide whether or not Fried has to pay up.

Melissa Grace, a spokeswoman for the Mayor's Office of Special Enforcement, deferred comment to the city's Law Department. Nicholas Paolucci, a spokesman for the city's Law Department, said the city would review the notice of claim.

The $10.3 million notice of claim comes on the heels one of the most aggressive moves yet by the city to combat illegal short-term rentals.

On May 12, the city sued property owners Rose King and Lung Chan for renting out rooms through Airbnb at apartments buildings at 123 Ludlow St., 27 Rivington St. and 536 E. 14th St., saying the landlords failed to fix pressing safety and fire code violations while continuing to rent out rooms to tourists despite repeated fines from the city.

Here's the notice of claim: