Harlem Shuffle

How a pal of a top state official landed a profitable development deal

Rookie developer Michael Caridi couldn't have asked for better press play when he first announced in 2003 that he would build a soaring new tower containing a Marriott hotel cum office complex in Harlem. Billed as the neighborhood's first major tourist lodging since the legendary Hotel Theresa closed its doors to guests in 1966, the project played big on TV and in the dailies. "Great Stay in Harlem," crowed the Amsterdam News.

Caridi, 42, told reporters how he had just been driving through the neighborhood when he spotted the big parking lot at the corner of 125th Street and Park Avenue and decided it was the perfect spot for new first-class hotel and office space.

Last February, Caridi held an elaborate groundbreaking ceremony for Harlem Park, as he dubbed his project. Present were the governor and mayor, as well as Caridi's friend, state economic development chief Charles Gargano. The 42-story, $200 million project was a turning point in Harlem's revitalization, the pols said, and as a gospel chorus sang and cameras flashed, they posed with their ceremonial shovels.

The project: "Harlem Park"
photo: Kate Englund
The project: "Harlem Park"

But there's a reason such groundbreakings are called symbolic. Since then, aside from some test borings to see if the soil was contaminated (it was), the ground for Harlem Park remains undented. Instead there's just the same big sign that was planted in the parking lot back in 2003, tilted toward the Metro-North commuters rushing by on the train tracks above Park Avenue. Alongside a picture of a shimmering glass tower, in the best Trump style, Caridi placed his own name, writ large.

But that was wishful thinking, Caridi acknowledged last week. Right now, the developer is fighting a felony indictment for having allegedly defrauded the U.S. Department of Housing and Urban Development by failing to pay prevailing wages to workers on a $2.3 million subsidized housing project in Rockland County.

"That will all be resolved," Caridi told the Voice. "I have done nothing wrong there. Life throws you curveballs. It is tough to always keep your eye on the ball."

But at the same time, the developer said he will soon sell his interest in Harlem Park—for an undisclosed amount—to a new combine led by real estate giant Vornado Realty Trust, which plans an even larger development. For a man who lost out on his Trump moment, Caridi was remarkably sanguine. "I'm going to come out OK," he said. But the sale comes as grumblings about Caridi's role in the project have grown.

Several current and former members of the board of trustees of the New York College of Podiatric Medicine on East 124th Street, which leased its parking lot to the builder in an effort to raise money for the fiscally ailing institution, told the Voice that they were troubled about how Caridi, who had never tackled such an ambitious project, became the developer in the first place.

The project had shortchanged the school, they said, while enriching Caridi, who stands to make millions on the sale of his interest even though, they claimed, he had lacked the requisite finances and experience to handle it.

"One time I appear at a meeting and he's there. He said he wanted to build a hotel," said Alfred Gerosa, a construction industry executive who stepped down from his post as chairman of the college's board after six years amid disputes with college president Louis Levine, a former state labor commissioner.

Several trustees said Caridi had quickly let them know that he was good friends with Gargano, the chairman of the Empire State Development Corporation and Pataki's key economic development adviser.

"His claim was he was friendly with Gargano," said one former trustee who also quit the board and asked not to be identified. "You are going to build a hotel, you don't pick a guy who has never built one. Why tie up property that way? Tie it up with Related, or Trump, or Ratner," he said, invoking three major development firms.

Bill Perkins, the former city councilman representing Harlem, said that Caridi had also raised Gargano's name when he came to seek council support for a rezoning of the site. "He said, 'Charlie will help me here.' He was very proud of that," recalled Perkins, who opposed the height of the project as out of scale with the community.

A former Pataki aide said the friendship was no secret: "He's good friends with Charlie."

But a spokesman for Gargano said that while Harlem Park had received preliminary approval for $5 million in low-interest state loans, that was purely business. "They are professional acquaintances," said spokesman Mark Weinberg. "Mr. Caridi is one of hundreds of businesspeople the chairman has known over the past 11 years."

Still, the two men were close enough that Caridi's wife invited the chairman to a surprise birthday party at Caridi's Greenwich, Connecticut, home in December 2003, a few weeks after the first Harlem Park announcement. That same month, the builder asked Gargano to another party at a midtown restaurant, La Maganette, owned by Caridi's family.

Caridi said Gargano didn't attend either party. The builder said he had long admired Gargano, a former ambassador in the Reagan administration and a major Republican fundraiser. "He's a top-notch guy," said Caridi. "We have gotten closer the last couple of years."

Caridi insisted that he brought plenty of experience to the table, including the renovation of the 600-room Holiday Inn on West 57th Street and the construction of a 200-unit condo in New Jersey. He said he'd won the necessary zoning changes for Harlem Park and completed a design with an acclaimed architect in a relatively short period of time. His problems were the fault of bureaucratic snags and environmental woes, he said. "In a large-scale development there are a lot of different things that occur. This was a complicated job."

Caridi also insisted that there is no merit to another concern raised by one of the trustees—his family's past brushes with organized crime. In 1998, Caridi's sister Michele, and her husband, Edward "Biff" Halloran, an alleged Genovese crime family associate, were charged in a securities swindle (Michele pleaded guilty; her husband fled). An uncle, Stephen Caridi, went to prison in 2001 after admitting to bribing labor officials who held lavish retreats at the family-owned Friar Tuck Inn in the Catskills.

"I think our conversation is over," Caridi said when first asked about the issue. But he later got back on the phone to say those problems had nothing to do with him. "I have 10 brothers and sisters. There are doctors and lawyers in my family. Problems happen in life and you figure it out and move on."

But the builder acknowledged that he had thrown his own curveball when he told reporters the story about his lucky drive-by discovery of the site. While he had often driven past the corner, it wasn't until he was sitting in Levine's college office that the subject of a possible development came up.

Caridi said he was there to try and sell a new medical device for wound dressings to the school when Levine raised the topic. "He said, 'What else do you do?' I said, 'I do some real estate development.' He said, 'Do you have any ideas for my parking lot?' I said I'd give it some thought."

Medical equipment is only one of Caridi's many sidelines. "I am an entrepreneur," he said. He also runs an import- export firm seeking to sell bottled water from an Alaskan lake, a firm that packages tours for casino high rollers, and a security guard company. In the 1990s he won a Pentagon contract to dismantle a World War II navy carrier, one of the ships later cited as an environmental danger in India, where it was salvaged for scrap. "That wasn't us. We got accolades from the navy," said Caridi.

He also got accolades from Levine, who awarded him an honorary degree of podiatric medicine at a ceremony where Pataki and Gargano were present. "I get a lot of awards," said Caridi.

Levine, who served in the administrations of governors Rockefeller and Carey, declined to talk about his school or its real estate deal. According to Caridi and others, the current plan calls for selling and moving the school's entire campus. "He doesn't feel he's in a position to discuss it," said a spokesman. "It's at a sensitive point."

Located on East 124th Street since 1927, the school runs a clinic that serves many Harlem residents suffering from diabetes ailments. But it's had a rough time of it in recent years. Its student body has shrunk to less than 300, and in 2004 it agreed to pay $4 million to settle charges brought by Attorney General Eliot Spitzer's office that it had improperly allocated costs in seeking Medicaid reimbursements for its clinic.

Those financial troubles had spurred the interest in leasing the parking lot, trustees said. But they added that Levine had communicated little about his plans until Caridi suddenly appeared at board meetings.

Board members said they grew more disturbed as details of the project filtered out. In a submission seeking city economic development aid, Caridi indicated he intended to raise a whopping 90 percent of his project costs from government loans and bonds—an unusually large amount. Trustees were also alarmed about the lease Levine signed with Caridi. While the main document, dated January 2003, was a detailed 60 pages allotting the builder a 48-year term on the property, one month later the pair signed a hurriedly hand-scrawled, one-sentence agreement that gave Caridi 51 more years on the deal—with a break in rent.

"It was a last-minute negotiation," explained Caridi, who said he needed the extra term to make the project more attractive for bank financing.

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