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?”
