The holding company that owns the land occupied by the Holiday Inn Express located at 59-40 55th Rd. has sued the hotel’s operator, Harshad Patel, and his company, New Ram Realty, for allegedly violating the terms of its lease, Crain’s New York reported on Tuesday.
Patel and New Ram Realty constructed the hotel in 2009 on land owned by the Brooklyn-based Kimcomatt Realty Corporation. Kimcomatt alleges in the lawsuit it filed in New York State Supreme Court that Patel and New Ram violated the terms of the lease — which allowed for the hotel’s use strictly for paid guests — when they allowed the city in October to rent hotel rooms in order to house 30 homeless men.
Kimcomatt is seeking to terminate its lease with Patel and New Ram, and if they are successful, the future of both the hotel and any plans to convert it into a homeless shelter — first proposed by the Department of Social Services in August — would be in doubt.
According to the lawsuit, the lease mandates that the property only be used as a hotel or for retail purposes. As early as Aug. 25, Kimcomatt informed Patel and New Ram Realty that using all or part of the hotel as a homeless shelter violated the terms of the agreement.
Soon after the shelter proposal was announced, the city received tremendous opposition to it from Maspeth residents and lawmakers including Councilwoman Elizabeth Crowley and state Senator Joseph Addabbo. The elected officials sued the city over the proposal, claiming that the hotel lacks the required amenities for a homeless shelter.
Since August, Maspeth residents worked hard to secure the proposal’s defeat. Nightly protests have been held outside the hotel’s main entrance; thousands of irate residents blasted public officials at local meetings on the matter; and protesters even picketed outside the Brooklyn home of Social Services Commissioner Steven Banks. All of these actions were aimed at convincing the de Blasio administration to abandon the Maspeth proposal and future efforts to house homeless individuals in large numbers at underused hotels.
Though Patel made public statements indicating he was withdrawing support of the shelter proposal due to the vehement opposition, the lawsuit alleges, the ability to obtain rent revenue from the city may have proved too lucrative to pass up.
“In light of KCM’s refusal to approve the unauthorized use of the premises and the significant community backlash, New Ram indicated that it was abandoning the plan to convert the hotel to a homeless shelter,” according to the lawsuit. “However, the potential profit to New Ram must have been too great to turn down because in blatant disregard of the terms of its lease and in contradiction to its representations to the community, New Ram has begun the conversion of the hotel to a homeless shelter, surreptitiously renting over a quarter of the hotel’s rooms to the DHS to house homeless adults.”