To some, Fitos Neophytou is a bully. When a social worker visited a Neophytou tenant recently, the landlord threw the social worker out of the building and threatened the tenant with eviction. Tenant advocates accuse him of locking residents out of their apartments, threatening to call immigration agents, and shutting off the gas. But it’s the ostensible purpose of Neophytou’s management of several West Side SRO buildings that particularly outrages advocates. He is seen as a pioneer in a new real estate conversion scheme: turning SROs into hotels and hostels. And in the process, he’s pushing poor New Yorkers out of rooming houses that have been homes to them for years and refilling these run-down residences with tourists and international travelers. A Times story in January noted that hundreds of units of permanent housing in dozens of buildings “are being used by short-term visitors.”
The problem for Neophytou and others who’ve joined this gold rush is that it’s illegal. SRO tenants are protected by layers of state law and city regulations. That’s why Department of Buildings attorneys have two court dates with Neophytou set for July and August. They’re charging that one of his SROs was “illegally converted to a hotel and is being advertised,” and he’s accused of renovating another building without work permits. Three of his buildings have 119 pending housing- and building-code violations. Many of the violations involve questions of safety that affect both residents and tourists, such as a lack of smoke alarms and inadequate emergency escape routes. Inspectors have also written him up not only for doing work without permits but also making illegal alterations and failing to comply with regulations designed to protect children. The city had to make emergency repairs to the gas lines and the boiler in one building, and he was fined $10,000 in 1998 for doing illegal construction at another.
“It’s greed, sheer greed—nothing else,” says Harold Dixon, a tenant at one of Neophytou’s SROs, the Pennington Hotel, 316 West 95th Street. Dixon is one of the few tenants at the Pennington—where rooms are a mere 120 square feet—with his own small kitchenette and bathroom. The communal kitchens are unusable—Dixon says Neophytou shut off the gas. The glass in the elevator window has been shattered, cigarette butts are strewn around the lobby, and dark and foreboding hallways fill the space between tenants’ rooms.
Dixon reported Neophytou to the U.S. Postal Service for refusing to accept mail for him, marking it “return to sender” and claiming that Dixon doesn’t live at the Pennington. Dixon has actually lived there since 1999, but two years ago, he says, Neophytou stopped accepting the $448 Dixon paid in monthly rent and then tried to evict him for not paying. Dixon got the eviction case against him dismissed without prejudice, on a technicality. That was 13 months ago. If there was any merit to the original case, Neophytou’s lawyers just needed to file for eviction under a different company name, according to the judge’s ruling. The fact that they have not done so effectively affirms Dixon’s right to the apartment—but Dixon’s lawyer says he’s still relying on a post office box and that he’s been depositing his still refused rent in an escrow account for 27 months. In the same time period that Neophytou moved against Dixon, he also stopped taking new tenants at the Pennington, Dixon says. Instead, the building is bustling with international tourists eager to save a buck on their hotel bills.
“I do recognize tourists, especially seeing a lot of luggage coming and going,” says Dixon. There’s now a steady stream of globe-trotters, according to Dixon, passing through the Pennington and another Neophytou-managed SRO, the Montroyal, located directly behind the Pennington at 315 West 94th Street and connected to it by a covered walkway. The seven-story Montroyal, with 210 rooms, has been emptied of its SRO residents and is apparently operating solely as a tourist hotel called the “Mount Royal.” The visibility of a sizable housekeeping staff is one tip-off. Another is the multitude of Internet listings that generate a constant flow of world travelers. Outside the hotel, a range of accents can be heard from tourists toting luggage, maps, and museum brochures. One website reads: “The Mount Royal does not accept NYC residents. Valid passport required to check in. NO exception!” Incredibly, a building classified under city regulations as an SRO, which is supposed to provide housing for poor New Yorkers, instead bans them in bold letters.
According to hostelz.com, the Mount Royal Hotel charges $25 for shared bunk beds, while private rooms begin at $29.50 per person per night, not including the 13.4 percent occupancy tax. On sidestep.com, listed prices start at just over $60 per night, although customer reviews on that site indicate that the hotel actually wants more than $100 a night. At the higher rate, the Montroyal has an earning potential of approximately $630,000 per month—not including the occupancy tax. The hotel boasts of being newly renovated and clean, with rich wood furnishings, cable TV, wake-up service, and discount phone cards. But one online review recounted a far different guest experience: “The shared toilets smelt of urine, and the shower was filthy. We were greeted by blood in the elevator one morning. Cockroaches were not an uncommon sight, both in our room and in the communal bathrooms.”
Buckets of sealing compound, drywall, and boards line the front hallway of a third Neophytou SRO, the Continental, located at 330 West 95th, next door to the Pennington. It’s been home to Jose Cruz for 23 years. He echoes Dixon’s characterization of their landlord. “I know for a fact that they don’t take monthly tenants anymore,” says Cruz. “They are leaving the rooms open for tourists only.” Justnewyorkhotels.com lists the Continental as having 100 rooms, with rates starting at $53.04 per person.
In the building itself, construction dust rankles Cruz’s asthma, and illegal partitions, gutted bathrooms, plaster-splattered floors, and locks that prevent tenants from accessing fire escapes and emergency exits are common. The shared bathroom has been inoperable for months. Walkways leading to the fire escapes are pitch-black. Kitchen use has been halted. Cruz’s radiator has been broken for eight years and he’s been forced to warm himself by the tiny glow of a portable heater.
Cruz invited West Side SRO Law Project social worker Jerry Castro to take snapshots of the living conditions, but Neophytou accused Castro of trespassing and kicked him out of the building. According to Cruz, Neophytou then called him into his office and declared: “Mr. Cruz, I was your friend, I was going to fix your bathroom. Now I am never going to fix it. If you are one day late with your rent, you are out!”
That wasn’t the first time, Cruz says, that Neophytou has used threats to intimidate him.
The conditions forced the West Side SRO Law Project to file a suit against the Continental earlier this month. At one court hearing, Neophytou claimed that he didn’t own the Pennington. HPD lists Neophytou as the chief officer of the ownership entities for all three properties, and he’s the man up front who deals with tenants like Cruz and Dixon. But the ownership documents are a maze, and all three were recently sold on the same day, May 12, 2005. Title went from one limited-liability corporation to another; Neophytou had connections to partners in the companies that bought and sold the buildings. When landlords are allowed to hide under the anonymity of LLCs in what were $6 million worth of deals, fixing accountability for the conditions in the buildings becomes almost impossible.