Poor Little Rich Man’s Defiant Fortress


BY JACKSON CHEN | The owner of the Imperial Court Hotel, which has recently been hit with $65,000 in fines from the city for running the building as an illegal hotel, voiced confident defiance of attempts to hamper the controversial approach to his business.

On June 6, the city announced the steep fines for the building at 307 West 79th Street, made up largely of single-room occupancy (SRO) units, after evidence that owner Ron Edelstein, a self-described billionaire, was illegally renting units out for less than 30 days. The 30-day minimum came in an amendment made to New York State’s Multiple Dwelling Law in July 2010 as a way to restrict short-term rentals and promote permanent residencies in a city with dwindling available living space.

“What the tenant advocates would like is for us to rent these units for less that it costs us to operate the property,” Edelstein told Manhattan Express. “And my answer to that is they’re never going to see another rent-stabilized person in that property again.”

According to the city announcement, a May 10 inspection from the Mayor’s Office of Special Enforcement — which received 33 complaints through 311 about “eroding the quality of life and general sense of safety” — revealed that 99 of the 227 units were being offered for short-term rentals.

“Imperial Court is one of the most egregious illegal hotel operations in New York City,” said Mayor Bill de Blasio. “When building managers break the law — putting people in danger and destabilizing neighborhoods — the Office of Special Enforcement uses all tools necessary to shut them down.”

And for residents, who wished to remain anonymous, the revolving door of tourists has created a host of problems like leftover garbage, drinking, and smoking in hallways, along with overall security concerns.

“Before the building converted into a hotel, the tenants don’t even lock the door when they take a shower,” a longtime permanent resident said of the Imperial Court’s shared bathrooms. “Now you have to lock the door constantly, you don’t know who’s living here.”

However, Edelstein is contesting the fines and charges that he is running an illegal hotel in court and is confident he will easily win the case because the city levied fines before exercising all available options in trying to shut him and his building down.

“If the city feels there is such an eminent danger to the population, they have a right to vacate the building,” Edelstein explained.

The owner argued that if the city truly wanted to end the alleged illegal hotel practices at the Imperial Court Hotel, they would have issued a vacate order and halted the building’s operations. Instead, Edelstein said the fines issued in June — on top of the $53,000 the city charged him with for violations in March — were just a way for the city to use his building as a cash machine.

“If you have recourse and the ability to do something about it, then your giving me a violation or summons is a moot point,” Edelstein said of the city’s actions. “Shut me down, vacate the property.”

The owner added that he was allowed to rent apartments for as few as seven days because his building is covered by a grandfather clause in the 2010 state law amendment. The restriction on short-term rentals of less than 30 days does not apply to him, he asserted.

The mayor’s office did not respond to a request for additional comment as of press time.

The Imperial Court Hotel, at 307 West 97th Street, currently rents 99 of its 227 units for short-term occupancy, according to a city investigation. | JACKSON CHEN
The Imperial Court Hotel, at 307 West 79th Street, currently rents 99 of its 227 units for short-term occupancy, according to a city investigation. | JACKSON CHEN

But other elected officials who have been following Edelstein’s defiance said he simply has a misunderstanding of what he’s allowed to do with the property.

“It is by law supposed to rent to rent-controlled, rent-stabilized people,” said City Councilmember Helen Rosenthal, whose district includes the Imperial Court Hotel. “He’s taken those units off those rent stabilization rolls illegally and he needs to put them back on.”

Rosenthal –– who’s working on legislation to increase fines for illegal hotels to a range of $10,000 to $50,000, with additional $2,000 daily incremental penalties, from its current range of $1,600 to $25,000 –– said the city is not interested in the funds from the fines imposed on Edelstein, but rather is holding him accountable for seeing that the building is operated according to its zoned use for rent-regulated tenants.

The councilmember added the city would never issue a vacate order on the property because that would eliminate even more affordable housing units and sacrifice the opportunity for returning the other units, currently rented out for short-term occupancy, back to permanent affordable housing.

But Edelstein is staunch in opposing the city’s efforts to return the Imperial Court Hotel to permanent housing, explaining that there is no financial incentive for him to keep the SRO tenants.

“We’re billionaires and we can afford to keep this building empty for the rest of my grandchildren’s life,” Edelstein said. “And it will not affect our financial lifestyle one bit.”

The property owner said he is open to the idea of converting the entire building into a transitional homeless shelter to help get hundreds off the streets, but only on the condition that the mayor approaches him to discuss that option.

Upper West Side Assemblymember Linda Rosenthal, who has also been keeping a close eye on the property and on Edelstein, said his offer of a shelter conversion was an attempt to put himself in the good graces of elected officials, even as he threatens to remove the building’s current permanent tenants. The assemblymember said that her office gathered evidence and residential testimony that eventually led to the city inspections. She even personally called the Imperial Court on the pretext of booking a room for under 30 days.

Explaining that Edelstein is just one of many property owners who are contributing to the city’s affordable housing crisis, Rosenthal said she is working on Assembly legislation to crack down on illegal hotels.

“Commercial operators are taking these once-affordable units out of the market and taking thousands and thousands of affordable units off the market,” she said. “There are many downsides, and on top of it all it’s illegal.”

From Edelstein’s perspective, the city is forcing its mission to bolster affordable housing onto his property, making him bear the burden. The billionaire said elected officials would never see the Imperial Court Hotel become a completely affordable permanent housing building.

“I don’t have to rent the rooms and nobody can force me to rent these rooms, they’re going to be left vacant,” Edelstein said. “Nobody is going to have the benefit of low rents in that building ever again.”