Stalled 179 Ludlow “Rat Castle” Approved for Completion
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).