City resorts to hotels and the Podolskys again to shelter the homeless

 City Limits

With the number of families in homeless shelters on the rise, New York City officials have once again turned to a pair of notorious landlords closely aligned with Mayor Eric Adams’ top aide to secure extra bed space.

Brothers Stuart and Jay Podolsky—known for profiting off of poorly-maintained housing, and recent clients of Adams’ Chief of Staff Frank Carone—are leasing at least three of their hotels to the city for use as shelters for homeless families. The sites include the Marcel in Gramercy, which reopened to homeless families earlier this month; the Apollo in Harlem, where staff said families began staying July 2; and the Ellington in Morningside Heights, where work crews began prepping for the return of homeless residents in June after the city moved families out a year earlier.

Despite the Podolskys’ sordid pasts, city officials have long leased hotels and tenement buildings from the brothers for use as temporary homeless shelters. In 2017, the property owners retained Carone, then a partner in the law firm Abrams Fensterman, to represent them in negotiations with the de Blasio administration that led to the sale two years later of 17 buildings housing homeless families in the city’s scandal-scarred “cluster site” program. Under that scheme, the Department of Homeless Services (DHS) placed families on a temporary basis in privately-owned apartments they leased at exorbitant prices. The Podolskys managed to extract $173 million from the city in the portfolio sale—$30 million more than the value assessed by an independent appraiser—after raking in millions from the cluster rentals.

Among advocates for the rights of homeless New Yorkers, the deal was seen as a key step toward finally eliminating the cluster site program that stuck families in miserable—at times fatal—conditions overseen by notoriously neglectful landlords. In the case of the Podolskys, the problems extended beyond neglect: the brothers have been convicted of harassing low-income renters in a campaign of “terror,” prosecutors said, and accused in 2019 of cheating on their taxes while renting apartments to the city.

Still, they managed to cash out with Carone—at the time, attorney for the Brooklyn Democratic Party and a key bundler for then-Mayor Bill de Blasio—at the center of the agreement.

In his first six months as Adams’ gatekeeper, Carone has faced several accusations of influence-peddling and scrutiny of his business ties. But City Hall spokesperson Fabien Levy said Carone had no hand in the latest Podolsky deals and that he sought to avoid conflicts of interest with the Department of Social Services (DSS) when he was appointed to the government post.

“He was not a part of the decision-making process of choosing this site as a shelter,” Levy said. “In fact, months ago, he proactively asked DSS’s general counsel to create a list of matters that he may have worked on or touched on in his capacity as an attorney prior to his joining this administration so that we could properly note and recuse himself from participation in any decision-making or discussion. As such, this matter was never even brought to Frank.”

City Limits submitted a Freedom of Information Law request for the shelter contracts to see how much the Podolskys are getting paid and how many Podolsky hotels are used to house homeless New Yorkers. City-contracted nonprofits rent rooms in at least two others, the Longacre and the ParkView, for homeless adults.

City Hall’s assurances have yet to assuage good government experts, who raised concerns about the latest deal with the Podolskys when contacted by City Limits. Reinvent Albany Executive Director John Kaehny said the agreements illustrate deeper problems with the way social service business gets done in New York City.

“It’s such a rich broth of conflicts of interest with all these powerful people in the city,” Kaehny said. He also criticized the Podolskys’ history of past criminal activity and allegations of tenant harassment.

“The Podolskys are a concern because of more than just their connection with Frank Carone. They seem to be not very good landlords or to be not very good vendors,” Kaehny said. “This far into being a social welfare state, we don’t have better options?”