Mahfar Alleges CB3 Conflict of Interest over Zoning Change Denial 

Posted on: December 19th, 2016 at 5:10 am by
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Three months ago, the City Council declined the five-years-in-the-making proposal to rezone the two-and-a-half block stretch of East Houston with a commercial overlay (i.e. “C2-5 commercial overlay in an existing R8A contextual district”). He’s still fighting for it.

Mahfar (aka SMA Equities) – hated around these parts – is betting on a technicality to somehow overturn said decision. The controversial landlord alleges conflict of interest within the ranks of Community Board 3, specifically with member Enrique Cruz, one of the most vocal opponents of his plan.

Cruz is allegedly financially linked to the adjacent development that destabilized 255 East Houston in 2010, led to the vacate order, and ultimately demolition for a new condo building. At nearly every CB3 land-use committee meeting, it was Cruz who attacked Mahfar, accusing him of shirking repairs in an effort to force deterioration of the building. This ultimately led to the departure of Action for Progress day care center.

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Real Estate Weekly had the story last week.

Cruz was one of the developers of 265 East Houston Street, which was the site of a construction accident that compromised the foundation of Mahfar’s building next door. In a 2010 report in the New York Times, Cruz said that construction workers were digging 130 holes on the 265 East Houston Street site when sensors picked up vibrations in the neighboring lot. Inspectors found cracks in 255 East Houston Street that “compromised the structural integrity” of the building.

The possible conflict of interest lies in the fact that during its public hearings, the community board depicted Mahfar as a “bad actor” in the neighborhood. To illustrate its point, the group blamed Mahfar for displacing the day care center.

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Enrique Cruz (L), Photo: Clayton Patterson

Mahfar claimed, however, that the failed commercial overlay was not a ploy to install a bar at 255 East Houston.

He also said that he volunteered to provide a binding agreement that would prevent him from taking a bar as a retail tenant. [Councilwoman Rosie] Mendez confirmed this claim. That offer addressed another point of opposition for the community board. The group was concerned that another bar was going to open in the neighborhood.

“I offered a binding agreement that I’m not going to put a bar before they even asked,” he said.

“I don’t want to put in a bar. Let’s be very clear.The value of my space is that everything needs to work together. So if I’m going to build affordable housing, I need to be financed to build affordable housing. The only way I’m going to get financed to build affordable housing is if the whole building is financially viable. The only way it’s financially viable is if I have retail on the ground paying retail rent and I have free-market tenants upstairs paying free-market rent. Then I can subsidize the 20 percent (affordable housing).”

When push comes to shove, though, both of these dudes are shady characters. Let’s not forget that Cruz was previously embroiled in a bid of his own to open a club-steraunt at 106 Rivington, which likewise ignited the ire of the community in 2013.

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Samy Mahfar and wife

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