Stalled 179 Ludlow “Rat Castle” Approved for Completion

Posted on: November 8th, 2011 at 6:09 am by

For the second time in as many weeks, another notoriously stalled Lower East Side development is getting the proverbial new lease on life. Last month, it was Hotel Ludlow that was scooped up by BD Hotels (Maritime, Jane Hotels); today it’s the infamous “Rat Castle” across the street at 179 Ludlow.

Yesterday evening, the Community Board 3 Land-Use Subcommittee met to discuss the fate of this five-year-old neighborhood eyesore. But before we jump in, a quick history recap.  179 Ludlow was initially started by 2 Funny Guys in March 2006; bankruptcy followed three months later; first-timer Michelangelo Russo then took the reigns for $5.2 million but quickly followed in the footsteps of failure.  Turns out, Russo entered the fray with capital funded by Michael Goldberg who makes a career of bailing out busted projects and turning them.  Foreclosure followed in March 2010, and as we all know, shit rolls downhill. Now the lender is stuck holding the hot potato, so to speak.

Goldberg appeared before the board to gain approval to finally complete 179 Ludlow Street. His goal is two floors of commercial use totaling 2,880 square-feet, and five 2-BR condo units up above.  The argument was pretty much a slam-dunk case considering the entity, ER Holdings LLC, met three necessary criteria set forth by the Board of Standards and Appeals:

  • A significant amount of work done on the building – 70% of the project was complete before the 2008 rezoning from C-61 to C44A was passed.
  • A significant amount of money invested – $7.5 million was put into the development
  • Investors face financial loss if the application is not approved – it would cost more money to enforce zoning compliance and dismantle the seventh floor ($2 million).

Members were a bit weary, concerned about a possible bait-and-switch with the ground and first level commercial space. There were worries about having a monster club moving in here. And that the real estate should be considered for “community use.” Goldberg insisted that he would only want higher-end gym tenants like SoulCycle to move in here (he’s meeting with them next week to discuss).

Despite the wee bit of static, the issue sailed through the approval process. The board supported the measure to complete 179 Ludlow (15 Yes, 2 No, 1 abstain, 1 present no vote).

Recent Stories

Con Artist entrance, May 2011
The Con Artist Collective Celebrates 5 Years on Ludlow Street

Con Artist is one of the few businesses on Ludlow Street in Hell Square that still caters to creativity. Something other than nightlife. What began as an ambitious basement workshop and thrift boutique in 2010 (formerly home to The Cast), is now a fully-fledged artist collective with storefront workspace and a membership counting in the […]

citizenm-water
CitizenM and the Curious Case of Water Waste on the Bowery

With Earth Day having just passed this week, the time seemed ripe to call attention to water waste down at the CitizenM project site on the Bowery. Ever since the towering permiter of plywood was erected at the corner of Delancey, the developers have been piping in water from the nearby fire hydrant for earth-moving efforts. […]

tenement-museum-2015
The Tenement Museum is Crowdfunding to Help Preserve 97 Orchard Street

Apparently the Lower East Side Tenement Museum is in desperate need of care. The institution is deteriorating from the inside out, and requires a boatload of cash to keep the facility in workable shape. So, the museum is currently in crowdfund mode, soliciting funding to help preserve its prized mid-block building at 97 Orchard Street. […]

Photo: Hester Street Fair
Hester Street Fair Kicks Off 6th Season Tomorrow

Now in its sixth iteration, the Hester Street Fair is welcoming the neighborhood back, with the promise of “New food! New vendors! New look! Same awesome vibe…” Once again, the corner of Hester and Essex Streets will corral local biz into a fancy farmer’s market, but it’s not setting up shop for the whole weekend. This […]

Photo: GVSHP
Report: CB3 Member Who Accused Gigi Li of ‘Racial Insensitivity’ is Booted

It appears Community Board 3 doesn’t want members to vocalize concerns about its controversial policies and actions. Ayo Harrington, whose whistleblowing crusade against Chair Gigi Li last year netted headlines, is no longer part of the advisory board. Appointments to Community Board 3 were announced earlier this week by Borough President Gale Brewer and her […]