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Before cashing in on the homeless, Freid catered to a clientele of thrifty tourists. Rooms at the Malibu, and the Broadway Studios, at 230 West 101st Street, were advertised in European countries. According to the tenant board, former guests sent complaints that accommodations were never as promised. And many tourists were charged twice. "I was instructed to take reservations on credit card and only to accept cash at checkout," Greg Warner, former Malibu front-desk clerk, told the Rent Guideline Board this summer. He also testified that Freid used two sets of books to handle the hotel's $12,000 daily intake, cash Freid used to pay workers, including a handyman named "Ziggy," who, without permits, performed the dangerous feat of driving a sledgehammer though the hotel's load-bearing brick walls.
After September 11, the tourist trade bombed. Only one month later, Freid approached HASA, which offered to pay him $70 a night for rooms in the Broadway. Shortly after, he teamed up with SRO owner Urs Jakobs to become HASA's "contact" at the Royal York, at 258 West 97th Street, fetching the same room rate. "Business was dead," Freid says. "I had no choice."
When HASA's clients moved in, the Royal York management cut the building's gas supply for stoves, according to HPD, which cites the hotel for 139 outstanding code violations, including defective toilets, non-working smoke alarms, and the absence of hot water.
Not only are city inspectors unsatisfied. The neighbors are screaming, too. In June, a four-year-old boy stepped on a hypodermic syringe that had fallen from a Royal York window. Sherm Partners, director of the next-door Lotus Garden, where the boy was barefoot, reports he underwent heavy HIV treatment to rid his body of possible toxins. She adds that empty crack baggies, sullied toilet paper, and hundreds of needles have fallen into the garden.
At a recent police meeting about the Malibu, Steve Millington, a resident who lives across the street, was aghast: "I looked up one day and saw two butt cheeks hanging out the windowI mean, the guy actually took a shit out the window!" A woman detailed a more horrifying incident in which a man fell from a Malibu window and cracked his skull.
Advocates frown on housing over 100 HIV-positive clients in buildings without on-site services, but Freid was tapped again, in April, to house over 100 more clients at the Malibu. HASA's mission includes assuring the Malibu's safety. "We inspect all buildings before placing clients," says HRA spokesman David Neustadt. Ilyse Fink, the city Department of Buildings' spokeswoman, says both the fire and building departments have found no reason the Malibu's north wing should be "deemed unsafe." HPD spokeswoman Carol Abrams reports that all the building's safety equipment is up to snuff, including sprinkler systems.
However, on a recent tour, the Voice found not one fire extinguisher (they're often stolen), pull station for fire alarms, or sprinkler head on all five floors of the Malibu's north wing.
"Hank had two fires! You'd think he'd take precautions," says Michael Ouellette, head of the two-member Malibu Tenant Board. (For more on Ouellette's legal travails with Freid and his mysterious dealings with Democratic District Leader Carmen Quinones, see sidebar.) Says Ouellette, "Hank takes cheap to a totally new level."
In August, Freid did apply to legalize 2690 Broadway as a hotel, but according to an internal city inspector's report, Freid and his architectural firm, Leder-Luis Building Design, may have submitted dubious data on the application. The building's existing documentation is for nine rent-stabilized apartments that burned in a string of fires years ago, which Freid then converted into 51 SRO rooms without permits or inspections. Leder-Luis declined to comment.
For at least the last five years, Branic has also submitted bogus applications for work permits, in an effort to preserve the building's residential status. One benefit is the ability to stiff the city on property taxes, experts say. Tax rolls for the Malibu's three buildings this summer show the city taxed Freid for only 55 rooms, estimating the hotel's value at a modest $656,000. The SRO has over 130 rooms. With HASA clients in place, brokers estimate its value at $30 million or more.
"Freid's taking advantage of a system that's ripe to be taken advantage of. Where's the oversight? There is none," says James Muessig, an SRO tenant advocate.
Freid feels persecuted. "Trust me, I was doing a better business before," he says. "I made three times as much with the tourists." Since complaints started about the Malibu, he says, HASA has pulled clients from the north wing. He plans to take bids on sprinklers. "I'm just a novice," he says. "I had no idea what I was getting myself into."
Housing HIV-positive homeless ain't easy, but Freid continues to invest big sums to house more HASA clients. In May, he signed for rooms at 315-325 West 30th Street, a series of rickety buildings littered with expired work permits. That same month, he also purchased the Major East, at 320 East 11th Street, from Vintage Real Associates, and registered the property under a fake name.
Debbie's been relocated to the Major East. The toilets don't work there either, she says, and her chilly room stinks of mold in the grimy carpet. "The problem is simple," she says. "If Hank wants city money, he should abide by city codes."
"More Maladies at the Malibu: Dem District Leader Secretly Tapes SRO Tenant" by Geoffrey Gray