9:42 am Oct. 25, 201217
For weeks, as controversy has built over a highly expedited and ethically problematic city deal to award a contract to operate a homeless shelter in Carroll Gardens, two questions have loomed over the project.
What parties profit? And how much do they stand to profit?
The answer to the first question is now relatively clear. The man who built the building, which has a reported history of structural problems, is Stuart Podolsky, a convicted felon with a history of abusing the poor. And the landlord—as identified by the nonprofit provider making the bid to run the shelter—is Alan Lapes, a longtime associate of Podolsky's company, Amsterdam Hospitality, which appears to operate shelters all over the city. Lapes has his own history of reported tenant abuse.
The answer to the question of how much Podolsky and his associates will make from the no-bid contract was revealed by the Department of Homeless Services at a public meeting last night, held to address concerns from the community about the dimensions of the facility, which will house 170 homeless men in a 10-unit, 25,000 square foot condominium building.
At the meeting, Alex Zablocki, the director of community relations for the D.H.S., said he could not reveal exact figures, but gave a rough estimate of $102 per night, per bed, including services such as security.
All told, that works out to more than $3000 per month, per tenant. Or, in renter's terms, a monthly rent of $520,000, or $52,000 a month for each of the building's 10 units.
Robert Hess, the Bloomberg administration's recently departed D.H.S. commissioner who is now chief executive of Housing Solutions USA, pointed out that a sizable amount of the building's 10,000 square feet of commercial office space is being converted into bedrooms. Nonetheless, even if you figure in the unexploited office rent—perhaps $20-25,000 a month for that amount of space in this zip code, according to the listing service Costar—the city is paying far above the market rate, for a reportedly problematic building, to a landlord with a checkered professional past.
If the community was expecting the city to address these issues head-on at the meeting last night, it was disappointed, at least to the extent that "community" reaction can be characterized at all.
Over the last few few weeks, as people became aware of the suspiciously opaque "emergency" shelter contract, the liberal, gentrifying neighborhood of Carroll Gardens has revealed a split. One group of small-business people and creative-class members—the gentrifying element in the neighborhood—plastered the neighborhood with attractive signs depicting a tower of beds, and the stark phrase: "170 People into a 10-unit building." But that reaction produced a counterreaction: Within a week, an adapted version of the sign began appearing around the neighborhood, with the "170" figure whited-out, and a scrawled, plaintive: "Welcome Them With An Open Heart."
So the dynamic, at the moment, is a slightly complicated one. People who flat-out don't want a homeless shelter in their neighborhood are in an uneasy alliance with liberals, like the area's elected officials, who say they simply don't want that shelter. And on the other side, people who see the plight of the homeless as paramount are pushing back against what they see as the neighborhood's unreconstructed NIMBYism, and find themselves, at least for now, on the same side as the city and its favored landlord.
At the meeting, held in a packed, sweltering elementary school auditorium, a few opponents of the shelter—such as City Councilman Brad Lander and State Senator Daniel Squadron, a neighborhood resident—spoke up for the ideals of compassion and compromise. They expressed their support for the idea of some kind of shelter while stating their opposition to the sketchy proposal, and questionable business arrangements, involved in this particular inside deal.
But they were largely drowned out by a cacophony of angry, uncompromising voices of opposition to any shelter.
"This is a numbskull of an idea," shouted Salvatore "Buddy" Scotto, the Court Street funeral director and self-appointed neighborhood padrone, during a contentious question-and-no-answer session. He shook his cane in the direction of Hess, to riotous applause. "Don't you dare come in and tell us what our obligation is for social services. We have a few things to teach you!"
If anything, the meeting got less civilized from there. Zablocki, who looked like he was a third of Scotto's age, grimaced and bore the abuse, refusing to offer anything more than very vague parameters and even vaguer reassurances about the facilities, services, and security plans proposed at the shelter.
"From my experience at the agency for over two years ..." Zablocki tentatively began one answer.
I didn't hear the rest, because the auditorium erupted in derisive laughter.
Along with the rest of a DHS delegation—which notably did not include commissioner Seth Diamond, Hess' successor as the man in charge of the city's shelter siting decisions—Zablocki claimed he was unable to describe anything substantial about the proposal until after it was approved. Under questioning from Lander, the city officials admitted this nondisclosure was simply a matter of their policy, not the law. Zablocki did mention that under state guidelines, the facility was only required to have one bathroom for each ten men, and one shower for each 15. Each man is entitled to just 60 square feet of individual living space.
In the face of vehemently confrontational questions about crime and security, the delegation said they would monitor the men inside the shelter, but said they could take no responsibility for their actions outside it. (At one point, the man behind me whispered to his female companion that they would never again venture past Buttermilk Channel.)
Zablocki said the facility would have a 10 p.m. curfew, but then acknowledged that the curfew was not actually a mandatory condition of residence. Hess disclosed that seven staff members would be on hand at all times, though only three of them would handle security.
Inevitably, one young mother asked about "molesters." Hess said the facility would house men deemed "employable"—that is, not drug abusers or the mentally unstable—but otherwise offered little comfort.
"I know it's hard sitting here tonight, because we don't have a track record in this community," he said, on behalf of his 15-month old organization, which administers more than two dozen shelters under contracts with the city agency he headed until recently. "We will work each and every day to be good neighbors to this community. ... Will some people have other issues? You know, they may well in some cases."
Lisa Black, director of external relations of D.H.S., explained to the audience that under New York's "right to shelter" law, the city is obligated to provide a bed to every person in need of one, regardless of criminal history.
"Sex offenders are to be served in the city of New York like any other homeless person in the city of New York," Black said, over loud jeers. "We live in a very dignified city—you should be proud."
Nearly lost in the emotional back-and-forth were the larger issues of policy and ethics. Why is the city rapidly expanding its shelter system? Lander and Squadron attacked what they described as the policy failures of the Bloomberg administration that increased the ranks of the homeless in the first place. And why this shelter, in this location, with this landlord?
Hess, in his introduction, said that after it was formed last year, Housing Solutions USA had begun to "scour the city" for suitable properties in which to meet the crisis, and as fate would have it, found one.
"In this particular case," he said, "a landlord, Alan Lapes, showed us the facility on West 9th Street."
He did not mention that Lapes was also the landlord of the building that houses his company's headquarters, which is ultimately owned by Podolsky's family. Nor that Housing Solutions USA has shelter contracts at many other buildings that trace back to Podolsky, his family, or his company. Nor did he discuss the fact that Lapes and Podolsky have close business relationships with all three members of his nonprofit's outside board, who oversee—among other things—his employment.
(Hess' salary, like many other details pertaining to Housing Solutions USA, is supposed to be disclosed in the agency's annual I.R.S. filings, which he has refused to release, as is required by federal law, claiming that the nonprofit has not been in existence long enough to have filed them.)
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.
Read Andrew Rice's previous reporting on the Carroll Gardens shelter deal here, here and here.
Mr. Rice has done a great service to our City and the Carroll Gardens neighborhood that is dear to me in exposing and persisting in highlighting the inadequacies of the shelter system and the people who are profiteering off of it. I would quibble with his attempt to paint a community at odds. Each of our public officials said virtually the same things about serious questions concerning this shelter at this place, but all clearly stated their sincere concerns for the well being of the homeless. In any distribution there will be some hard heads and some soft heads but the community was clearly united. The community board committee that hosted the "non-information" meeting unanimously voted numerous expressions of concern. Many board members who are not on the committee were present, I am one of them. All those I spoke with were in accord with the general tenor of the room and with the sentiments of the public officials and the committee. Again many thanks to Mr. Rice for his investigative work.
I was at the meeting last night and felt myself to be one of the only supporters (of a shelter in general; we all see the issues with the building owner) in the room, though perhaps I was joined in spirit by the person who altered the poster above.
In short, I was saddened and ashamed of my neighbors and their heartlessness.
Again and again, the men who would be utilizing the services at the shelter (employable single men) were welcomed not as neighbors, but as criminals and child molesters, whose only goal would be to decrease the value of your condo, rather than to improve their lives and move into permanent housing.
Again and again, DHS did a great job reminding folks in the crowd that clients at the shelter are there willingly and are trying to better their lives, but as usual this was drowned out by comments such as "will they be roaming the streets" and "I'll be locked in my house at night." I have rarely been so angered or saddened in my entire life as by the comments I heard last night. Would you ever make these comments to a homeless person's face?
Before this shelter opens, I hope you all will consider volunteering in another shelter so that you can see for yourselves that these are people, just like you, and not criminals out to get you. In the meantime, you should all be ashamed of yourselves.
On another note: It's really, incredibly unfair to keep pushing this nonsense about how much the city is paying per room (this $3000/month number). As was explained, and clearly, by Alex Zablocki last night, this number includes rent for the building but also the social services and administrative costs homeless services providers incur for running these sorts of programs. It's no shocker that mental health counseling, case workers, food and administration of such a program is expensive. This is not specific to this shelter and does not imply anything wonky is happening. Please stop making an issue of it.
But echoing above what was said, a really nice job by Andrew Rice investigating this story.
One might note that the amended flyer welcoming the homeless depicts 31 beds, not 170 beds.
Thirty is actually the number of unrelated individuals that can legally occupy a building with a certificate of occupancy for 10 apartment units.
Hess said in response to questioning that the beds were placed throughout the facility, and not just in the apartments; this is not a legal use for medical office space.
Furthermore, the criticism of Hess from coming from DHS to work for a private sector homeless services provider is ridiculous. Where else should an expert in these matters be employed once they leave government work? Would you prefer they become a highly paid consultant? Right, anyone with any expertise on a matter should not be allowed to then work in that field. Absolutely crazy.
And to these folks: "At one point, the man behind me whispered to his female companion that they would never again venture past Buttermilk Channel." That part of the neighborhood doesn't want you. Grow up.
I wonder how many of this project's inadequacies would be getting pointed out if it was being built in East New York rather than tony Carroll Gardens.
Absolutely.
These guys are crooks and getting away with murder in a few neighborhoods, so why are we letting it happen here in Carroll Gardens ??? Put a stop to it now , before our neighborhood goes back to the 50s, 60s, and 70s, None of us liked it then and I'm sure we wouldn't like it now, As I've said before, something stinks , and it's NOT the Canal !!!!!
I agree that the portrayal of the potential inhabitants at the meeting was pretty horrible. But it's also understandable that people are worried about having a project like this dropped on them out of nowhere. A shelter like this is a crappy solution for everyone involved, except the landlord. There are proven better and cheaper ways to help people in need, like housing subsidies etc. And Robert Hess is really just a figurehead serving some high powered real estate interests.
Is a shelter a crappy solution for the currently homeless folks who will have a place to sleep? I agree that dorm style shelters sound less than luxurious, but they've been approved by the state and they exist because they have been deemed by folks, who I assume know more than we do, to be helpful.
Of course it's a larger issue, and lack of subsidies and decades of terrible public policy toward the poor have gotten us here. But I'd stop short of saying that having a crowded building is worse than leaving people out on the streets.
Hundreds, maybe thousands of homeless people make that decision every night, choosing to stay on the street rather than enter the shelter system. These are not places to feel good about and no matter what your politics are it's hard to be excited about one of them opening up near you.
And lots of them are severely mentally ill or have had traumatic brain injuries and all sorts of mitigating issues that contribute to them making the decision to stay outside. I've visited plenty of shelters in NYC that are places to feel good about, actually.
Keep going Mr. Rice! THis disgusting inside deal at the expense of our fine neighborhood must be stopped. I believe the neighborhood itself needs to come together to picket; to protest; to do whatever is necessary to stop this scandalous idea from becoming reality. I am trying to do my part to help however I can. Thank you for what you are doing!
I have heard that the group that redesigned the original poster (the original poster was by the NIMBY group that calls itself Coalition for Carroll Gardens, a group name with as much fabricated authority and integrity as the Citizens United legislation) - the redesigned poster had blacked out the beds on the original poster not to show 31 beds but to lessen the impact of a scare tactic like the design of that poster. 170 is too high, but I don't believe that 31 was anything other than an arbitrary number.
It is important to reiterate that people like John Heyer and Buddy Scotto and other pro-over-development people were there to scare people further into submission and into further docility; Scotto and Heyer were there strategically to make noise and make the family-style crowd even more NIMBY-like than many of the people there already were. John Heyer lost to Brad Lander in the last election and Buddy Scotto is his political patron - they work like a well-oiled machine and this issue is perfect for their shady dealings.
What we're dealing with is classism and racism and I don't think the Carroll Gardens residents understand any of what has happened in the low-income and homeless communities. Most people are out of touch with the homeless, as this meeting proved. This country has become more conservative in its values and less charitable. There is clearly a war on the lower-class and the wealthy are winning, the same way that the cultural battle between the "Squares" and the "Freaks" was won, for all means and purposes, by the Squares. Like it or not, we are living in an era of conformity and of doing what we're told by masters and bullies. How else would Mafiosos/connected "businessmen" like the Scottos and John Heyer be able to pose as "community activists"?
@Hotel California, you are correct - the hearing was an embarrassment and it has become customary for people like Craig Hammerman (from Community Board 6), Buddy Scotto (from Carroll Gardens Neighborhood Association and his funeral home), Brad Lander, Joan Millman, and Daniel Squadron to use these sorts of community issues to build POLITICAL CAPITAL and to posture as if they are champions of the community, when they are continually selling out the community to landowners and to corporate malfeasance and that sort of corruption.
You cannot rely on politicians anymore for quality of life or for "doing the right thing". CB6, Lander, Markowitz, Millman, Squadron - all have questions hanging over them and all have tentacles in the Vito Lopez-era Brooklyn. These questions surrounding their integrity and commitment to things other than dollar signs are crucial and must be understood. They are selling everyone out. It's a slow boil. And guess which side of the water you're on, Carroll Gardens?
@ JackChris Thanks for this and explanation of neighborhood politics I'm not privy to.
Of course, this is called "CREEPING CONSERVATISM". The residents are kept in the dark about so many of the players that they wind up doing the bidding of Bloomberg and others who have waged ferocious and one-sided war on the homeless for many years. The residents at this meeting were all filled to the brim with fear tactics handed out to them at the door by John Heyer and other shady parts of the Scotto clan and associates, fearmongerers, and so on. It is the same way the Republicans are comprised of low-income people who vote against their own interests, as you may know. And during the Reagan years we all know what happened - how many liberals and Democrats were fooled by false rhetoric? And historical moments like that wreak havoc on the country.
DO NOT be fooled by Craig Hammerman and his ilk on CB6 (Daniel Kumer; Debra Scotto, Buddy's daughter; etc.) and of course the developers and other people like Buddy (Scotto) or Maria Pagano, John Heyer, etc. - they are all just doing the work of the wealthy and posing as progressive representatives of the community. The improvement of Carroll Gardens for someone like Buddy Scotto is a mere financial bottom-line - as you can see from this homeless shelter, Scotto has no interest in philanthropy, generosity, or charity - or any kind of sharing. It is him Modus Operandi to use these wedge issues to further the illusion that he is what he is not. He is a wolf.
And Craig Hammerman and CB6 is full of lackeys and yes-men for Markowitz, Bloomberg, etc. They get fired from the board if they even suggest they are a "No" in critical votes.
We have a chance to get the truth out there. Clearly, shelters are not fun places for anyone - but getting rid of them is not a solution. Improving the shelters and expanding people's knowledge about them are essential. Class warfare and NIMBY cowardice are not good for any city or community.
Jack Chris and Hotel California display a woeful understanding of the facts presented. They in one hand acknowledge the great journalistic effort by Mr. Rice here and then stray in to personal convictions of community NIMBYism and "creeping conservatism."
Having lived here for a long time with three children and observed the families of Carroll Gardens, I will testify that this is a community with a greater sense of self and purpose. Individual barbs towards members of this community betrays you are indeed not of this community, because while I may not always agree with the opinions and objectives of the men you referred to, I have never thought democracy was compromised and that the community's voice dismissed.
This is the point.
You cannot on hand accept the articulate case made by Mr. Rice and at same time label a whole community that it is overrun by selfish, misguided fools.
If you attended the meeting last Wednesday, you would have heard extreme anger and frustration in corners of the hall. But what was overwhelmingly displayed was a clear recognition of the farce of this RFP process and not objections to the shelter itself. In fact, no one would disagree that the responses by DHS and Mr. Hess failed to satisfy the individual concerns of parents and neighbors.
NIMBYism? C'mon. Arguments made were launched against the adequacy of space to house 170 men and the cavalier attitude the City has about inserting this facility without regard to the complications created by methadone clinics and children nurseries. The insistence to amend the scope of this facility does not equate to the rejection of this shelter itself.
Finally, I for one appreciated the flyers provided by folks at the meeting to help inform its own community about the poor cast of characters involved in this effort. Incidentally, most of it appeared to have been extracted from the articles of Mr. Rice who you agree did a very capable job. Like others, I'm sure,I work a very long day to provide for my three children and pay the taxes that deliver resources to these programs, and I very much appreciate the effort made by others to help me better understand the facts about all of this. Why haven't you raised your concerns towards these men, for instance, instead of the community you pretend to be apart of? I think I understand.
The hard evidence is in. The facts do not lie. Don't muddy the waters with your emotional abstractions. Look at the evidence and you will see the truth for what it is. Housing Solutions USA has already failed these men, not this community.
Jack Chris and Hotel California display a woeful understanding of the facts presented. They in one hand acknowledge the great journalistic effort by Mr. Rice here and then stray in to personal convictions of community NIMBYism and "creeping conservatism."
Having lived here for a long time with three children and observed the families of Carroll Gardens, I will testify that this is a community with a greater sense of self and purpose. Individual barbs towards members of this community betrays you are indeed not of this community, because while I may not always agree with the opinions and objectives of the men you referred to, I have never thought democracy was compromised and that the community's voice dismissed.
This is the point.
You cannot on hand accept the articulate case made by Mr. Rice and at same time label a whole community that it is overrun by selfish, misguided fools.
If you attended the meeting last Wednesday, you would have heard extreme anger and frustration in corners of the hall. But what was overwhelmingly displayed was a clear recognition of the farce of this RFP process and not objections to the shelter itself. In fact, no one would disagree that the responses by DHS and Mr. Hess failed to satisfy the individual concerns of parents and neighbors.
NIMBYism? C'mon. Arguments made were launched against the adequacy of space to house 170 men and the cavalier attitude the City has about inserting this facility without regard to the complications created by methadone clinics and children nurseries. The insistence to amend the scope of this facility does not equate to the rejection of this shelter itself.
Finally, I for one appreciated the flyers provided by folks at the meeting to help inform its own community about the poor cast of characters involved in this effort. Incidentally, most of it appeared to have been extracted from the articles of Mr. Rice who you agree did a very capable job. Like others, I'm sure,I work a very long day to provide for my three children and pay the taxes that deliver resources to these programs, and I very much appreciate the effort made by others to help me better understand the facts about all of this. Why haven't you raised your concerns towards these men, for instance, instead of the community you pretend to be apart of? I think I understand.
The hard evidence is in. The facts do not lie. Don't muddy the waters with your emotional abstractions. Look at the evidence and you will see the truth for what it is. Housing Solutions USA has already failed these men, not this community.