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Real Estate Mogul Chetrit Takes Heat from Quinn & Tenants Over Hotel Violations

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Real estate magnate Joseph Chetrit is making renovations to transform the legendary Hotel Chelsea into a King and Grove branded hotel.

Real estate magnate Joseph Chetrit is making renovations to transform the legendary Hotel Chelsea into a King and Grove branded hotel.

Real estate magnate Joseph Chetrit is making renovations to transform the legendary Hotel Chelsea into a King and Grove branded hotel.

Real estate mogul Joseph Chetrit has become the target of both City Council President Christine Quinn and a group of tenants over alleged violations at Manhattan’s Hotel Chelsea, which he bought for $80 million in 2011.

Chetrit – who runs the real estate group that owns Chicago’s famed Willis (formerly Sears) Tower – was already embroiled in an ongoing dispute with the hotel’s tenants over renovations he has been making in order to transform the legendary building into a King and Grove branded hotel. As the Hotel Chelsea stopped taking reservations upon the commencement of the renovations, its primarily rent-stabilized residents began to feel that the landlord was seeking their departure.

When a construction incident two weeks ago apparently triggered the cutoff of heat, gas and hot water, City Council President and leading mayoral candidate Christine Quinn stepped into the fray by issuing a letter wherein she forcefully stated to Chetrit, “You must stop this blatant harassment” of the building’s tenants. Her comment was in reference to an outstanding violation from the New York City Environmental Control Board that had been issued after construction workers broke through a tenant’s ceiling.

In her letter to Chetrit, Quinn called for an immediate halt to the construction. “Since you have taken over the building, the services have quickly diminished and are at a troubling level,” Quinn wrote. “You have demonstrated a total lack of regard for residents by having the contractors lock the meter and shut down gas service” to the building.

The sudden cessation of basic services also prompted a swift response from a number of city agencies – including the Department of Buildings, the Department of Housing Preservation and Development, the Mayor’s Office of Special Enforcement, Con Edison and the Fire Department – all of which sent inspectors and officials to investigate the situation at the hotel, located at 222 West 23rd Street. The DOB then put out a Stop Work Order on the hotel’s renovations, and an attorney for the tenants threatened to sue Chetrit. “HPD will be issuing violations for no heat and hot water and no gas as these conditions have not yet been addressed by ownership,” an unidentified city official told The Real Deal.

Con Edison stated that plumbers accidentally disabled the building’s gas service while doing repair work without prior authorization from the utility. A Con Ed representative told The Real Deal that gas would not be restored until the owners take several additional steps to improve conditions.

On the other side of the dispute, a spokesperson for King and Grove claimed that the inspections were “in the ordinary course of construction activities ongoing at the hotel.” Separately, a spokeswoman for Chetrit said that the gas outage stemmed from the restaurant on the building’s first floor. She further explained that heat had been restored to the building’s tenants after a two-day outage and claimed that the building’s faulty electrical system was in the process of being repaired.

Chetrit has his own bone to pick in relation to his fairly recent takeover of the Hotel Chelsea. Earlier in March he filed his own $4.15 million lawsuit in New York State Supreme Court against the property’s former ownership group. In the suit, the real estate honcho alleged that the group “deliberately lied” about the status of tenants and falsely led him to believe that high-priced artwork – and a “closet” – on the premises was included as part of his purchase of the property.

“Had plaintiff known of defendants’ fraud regarding the artwork and apartment units, plaintiff never would have paid $78.5 million for the purchase of the Chelsea Hotel,” the lawsuit states, terming the ownership group’s actions “outrageous, fraudulent, shocking.”

A lawyer representing the tenants in a lawsuit over the building’s troublesome conditions was planning to file a contempt motion in court against the owners. A number of tenants told The Real Deal they plan to continue battling against the perceived harassment to force them out of the building. “This is not a joke and this is not a game for us,” said Zoey Pappas, leader of the building’s tenants association, which represents more than half of the property’s rent-stabilized residents.

A native of Morocco, Joseph Chetrit speaks four languages—Arabic, Hebrew, French and English; he is married to Nancy Chetrit, and the couple has four children. An Orthodox Jew, the real estate magnate is described by his former rabbi as “an extremely generous and warm person.” Chetrit recently moved from a mansion in Englewood, New Jersey, to Manhattan.

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