From NYC to the West Bank, the Boom is Over For Builder Shaya Boymelgreen
New York, circa 2005 -- the building boom is transforming neighborhoods like Williamsburg, DUMBO, and the Financial District.
During that period, Shaya Boymelgreen and his partner, diamond magnate Lev Leviev, built condos faster than just about anyone. Their developments had names like the NOVO Park Slope or the Beacon Tower, a 23-story skyscraper in DUMBO. They had tenants like Gwyneth Paltrow, and boasted ballet studios and movie theaters as a few of their amenities. One museum-like building on Wall Street is called "Downtown by Starck," after the French interior designer, Philippe Starck (Who designed every room and who, for an undisclosed amount, will also custom design an apartment's furniture). When Boymelgreen threw a party for colleagues, the musician John Legend was the guest act. In Brooklyn alone, he added more than 1,500 apartments.
What a difference a recession makes. Buildings are suddenly harder to fill, especially when it gets around that their construction has been rushed and is shoddy.
Boymelgreen today is facing so many lawsuits for construction and other problems in his projects that he's been forced to going into hiding -- first in Jerusalem, though sources say he may be as close as Crown Heights.
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In one of these condos -- 402 Main Street, in DUMBO -- the plumbing system was so poorly put together that sewage was flowing directly into the street (It cost the condo owners a quarter of a million dollars to fix). In another, the Newswalk building, a former Daily News plant located on the Atlantic Yards site, the waterproofing system allowed rainwater to erode and deteriorate the concrete beams that hold up ceilings. More than half of the lofts -- which cost between $600,000 and a million dollars -- leak when it rains. In one apartment with serious leakage, a ten-foot wall is thoroughly covered in mold. In a top-floor apartment, a well-known musician saw his pricey instruments get drowned in rainwater. Now the building's condo board is suing Boymelgreen for $10 million dollars, arguing that the poor construction is endangering people's lives. "He didn't seem to fully understand how to build a condominium," condo board president Michael Rogers tells the Voice. Rogers said that the engineering company the board hired to evaluate the property found it to be one of the poorest construction jobs they had ever seen. "The construction techniques are so primitive and ill-advised," he said. "They couldn't possibly have known what they were doing." An evaluation of the Department of Buildings registry shows that Boymelgreen frequently used construction companies owned by his relatives -- including his daughter Alisa -- to orchestrate technically-complex condo conversions of old buildings.
Boymelgreen, 58, is a member of the charismatic Chabad-Lubavitch branch of Judaism. He was a small-time developer who once ran a giant Jewish bookstore called Eichlers and had made his money in asbestos removal. He sat on the board of the Crown Heights Jewish Communities Council and built local yeshivas. His fortunes changed in 2001, however, when he struck up a partnership with Leviev. Press reports say a rabbi introduced the two on a kosher cruise. Leviev is the richest man in Israel and is said to be worth around half a billion dollars. Later the two men traveled to St. Petersburg together, as part of a large group of benefactors of poor Russian Jews.
Using Leviev's funds, the men built condos built cookie-cutter condos all over the world: from India to Las Vegas to Jerusalem. The spree provoked a local union to undertake some stunts of its own -- in 2006, union members who were upset about Boymelgreen's use of non-union labor took to cruising around Brooklyn in a truck with a four foot banner plastered on each side of it. The black banner had the slogan "Brooklyn Beware!" printed in bold letters and directed people to a website, "Shayaiscoming.org."
In their building spree, the men became controversial internationally as well, known for building Jewish settlements in the West Bank and in Palestinian villages in Israel.
The most controversial of such settlements is called Mattityahu East -- located on the land of a Palestinian village called Bil'in, where the Israeli government's notorious security wall cut villagers off from agricultural fields that had been their source of livelihood for generations. (In 2007, the Israeli Supreme Court ruled that the wall had to be rerouted because it was built on private Palestinian lands.) In 2008, the United Nations Children's Fund severed its ties with Leviev over concern that he was building settlements on occupied territory, which the U.N. considers illegal.
When the Voice called Boymelgreen's New York headquarters to ask about the settlements, we were told no one would be able to answer questions until after January.
Visit Boymelgreen's website today and you'll find text praising the developer's "spirit and vision" and celebrating his meteoric rise through the gilded halls of New York's real estate world. The site boasts an eight billion dollar portfolio, announces the company's intention to rezone the polluted Gowanus canal area to build more condos, and targets Eastern Europe as the next fast emerging condo market.
Boymelgreen is actually battling a bankruptcy filing by a business partner, the foreclosure of a movie theater he owns in Queens, and is being evicted from his Brooklyn company headquarters. Regulators are on the verge of shutting down a bank that he owns because it's having trouble raising cash. A spokeswoman has confirmed that he's cut his staff from 200 to 15. "Sometimes when you rush," said Steve Sladkus, an attorney representing the plaintiffs in three Boymelgreen Buildings, "you cut corners."
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