Inside operator mum on a lucrative Brooklyn shelter deal, no matter who's asking
Hess protested that he could not answer many questions about property renovations, maintenance, or his lease arrangements, claiming that he had to defer on these issues to the landlord—who was not present. Why, one citizen asked, did it appear that the property owner had collected an affordable-housing tax abatement on the building for many years, while it stood vacant? How, many asked, could a 10-unit condo building be converted into a group home for 170 men without any substantial renovations—and thus buildings permits? Hess shrugged and said he couldn't speak for the property's owners.
Working from the tentative $102-per-night estimate provided by D.H.S.—around the same cost as the rate at the Super 8 Hotel in Park Slope, when I checked last night—you can extrapolate that the city will be paying, at an absolute minimum, more than $6 million a year for the facility in Carroll Gardens. The cost for comparable Housing Solutions facilities, however, suggests the value of the contract will actually be much higher, and much of it will be paid to the owners of the building as rent. A flier handed out to the audience on their way in the door—which drew heavily on my previous reporting for Capital—detailed Lapes' and Podolsky's dubious histories: the "Hell Hotel" (as the Daily News called it) that Lapes ran near Times Square; Podolsky's 1980s conviction for unleashing a "routine of terror" on rent-controlled tenants of a building he owned on the Upper West Side.
"Why would you do business with someone like Alan Lapes?" one questioner asked Hess, as the evening drew to a close. "Why would you do business with someone like Stuart Podolsky?"
"There's been a lot said, I would suspect some true, some untrue," Hess replied. "We take, and I personally take, the issue of potential conflict-of-interest very, very seriously. We are conducting a complete internal investigation, so we can get to the bottom of what has happened, and what has not happened, what is true and what is not true, and get it resolved to the extent that there is anything to resolve. We don't believe that anything that's been done within the organization has been inappropriate. But we're going to find out."
Of course, Hess is presumably aware of who his landlord is, who his board members are, and who he ultimately answers to, even if the public can only speculate.
Critics say the nonprofit's numerous apparent connections to Podolsky raise serious questions of conflict of interest and self-dealing, questions that are unlikely to be examined until well after the emergency contract is awarded, if at all. When the conflict of interest issues were raised, Zablocki deflected the issue.
"We will take those concerns back to the commissioner," he said.
And with that, the contentious meeting adjourned.
"If anything happens to the kids of this community," one man shouted at Hess as he stood to leave, "I'm going to come to your house!"
Immediately afterward, I approached Hess—who has consistently declined my interview requests—at the front of the room, introduced myself, and asked about the ethical issues surrounding the deal, and about the nature of the investigation he says his organization is conducting.
"I don't have any comment for you," Hess said, stressing the word "you."
"How is this investigation being conducted," I went on, "if your own board members ..."
Before I could finish, the former commissioner of D.H.S. turned on his heel and ducked behind a police officer, who politely blocked any further questions as Hess ducked out a rear exit.