Double Whammy: Stalled Sites Mean City Stiffed on Taxes

Ashamed? The Drake site in 2007.

As if the hundreds of stalled construction sites scattered across the city weren’t bad enough, it turns out many of their owners are not paying taxes, either. The Post‘s Lois Weiss crunched the numbers on 40 of Manhattan’s 129 stalled projects and found that more than half owed back taxes with a combined value in excess of $10 million.

The list of alleged scofflaws, according to The Post, includes Howard Lorber (part-owner of Prudential Douglas Elliman and recession savior); the Drake site’s own Harry Macklowe; Alexander Gurewitch and the United Arab Emirates; the D.A.B Group and Maverick Real Estate; our old pal Ziel Feldman; even the government of Senegal. Steven Elghanayan, who spent two years assembling a First Avenue site now controlled by Messrs. Lorber and Macklowe, left them with $1,353,487 in back taxes.

Many more of these tax cheats have disappeared, and the mess they left behind has made reviving their stalled sites all the more difficult:

Many of the Buildings Department’s stalled development site list owners no longer have working phone numbers or addresses and could not be reached.

It is no wonder neither the city nor their lenders can collect a dime. The amount of overdue property taxes is also a problem for the lenders and brokers who are selling the notes, and for the buyers who hope to move along construction, one such broker advised.

The math is inexact, and the properties don’t scale—a prime development site in Manhattan is going to owe a lot more in taxes than a small multi-family plot in Sheepshead Bay—but if 40 properties owe $10 million, think of how much all 650 sites citywide must owe. While $100 million seems high, half that could be possible, more than enough to reopen some fire stations or pay some teachers’ salaries.

mchaban [at] | @MC_NYC

Double Whammy: Stalled Sites Mean City Stiffed on Taxes