New York Daily News: Owner of Upper West Side homeless hotel sought access to Mayor de Blasio through corrupt donors: documents
By Michael Gartland and Stephen Rex Brown
September 27, 2020
The owner of an Upper West Side hotel sought access to City Hall through a pair of notorious government insiders six years before inking a deal with Mayor de Blasio to house homeless people during the pandemic, infuriating Upper West Side residents, documents obtained by the Daily News show.
Sam Domb, the owner of the Lucerne Hotel, cut a $50,000 check for corrupt city government insider Jeremy Reichberg in 2014 to block a neighboring development through the Department of Buildings, according to the documents. Domb also allegedly planned to present de Blasio with a copy of his biography at a banquet, but City Hall demurred amid concerns about the mayor associating publicly with “a slumlord.”
The allegations are contained in notes by FBI agents and Manhattan federal prosecutors during interviews with Jona Rechnitz, their star cooperating witness in probes of City Hall and the NYPD. A source familiar with the investigation provided the documents to the Daily News. Two sources familiar with the Rechnitz saga confirmed the episodes described in the notes.
Sources involved in the Lucerne controversy speculated that Domb’s association with Rechnitz and Reichberg might help explain de Blasio’s ham-handed approach to the hotel.
“It’s a new wrinkle,” said a source with knowledge of the politics surrounding the hotel. “Did the mayor not want it to come out that he had this relationship?”
City Hall said it had no role selecting the Lucerne for the homeless hotels contract.
“Our decisions are guided by health and safety. Any speculation otherwise is pure conjecture and outright false,” mayoral spokesman Bill Neidhardt said.
In 2014, Domb was concerned that a neighboring development would obscure the Lucerne’s windows, Rechnitz told the FBI. Domb cut a $50,000 check to Reichberg to address the issue and Rechnitz said he received a referral fee, according to the notes.
Around that time Reichberg marketed himself as a fixer who could expedite permits with the Department of Buildings and resolve disputed water bills, according to testimony at Reichberg’s trial.
In keeping with a familiar pattern, Reichberg was apparently all talk. By the time Domb wrote the check, the building permit had already been approved, according to Rechnitz. The neighboring 13-story building was completed in 2015, according to city records. A source said Reichberg only received $25,000 up front and never received the second half of the payment because he didn’t get the job done.
Rechnitz also tried to arrange for de Blasio to accept a copy of Domb’s biography about surviving the Holocaust, “He Hath Not Let Me Die,” at an event at Lincoln Square Synagogue in April 2014, according to the notes.
City Hall backed out at the last minute, according to Rechnitz.
“Domb’s past as a ‘slum lord’ was an issue with de Blasio’s team,” Rechnitz told the FBI, according to the notes.
“Domb could not understand the reason de Blasio would not accept the book onstage.”
The hotel owner built his fortune in part through ownership of SROs.
Emails obtained by The News between Rechnitz and an associate of Domb’s, Michael Landau, show they scrambled to arrange for Domb to give the book to de Blasio in a private meeting at City Hall.
“Need big damage control,” Landau wrote Rechnitz.
A defense attorney familiar with Rechnitz’s testimony said that the de Blasio administration had done a “180” on Domb, declining to publicly associate with the hotelier in 2014 and then awarding him the contract during the pandemic.
Domb, a prominent philanthropist and multimillionaire hotelier, reportedly has close relationships with former Mayor Rudy Giuliani. He donated the maximum $2,800 in his own name and another $2,800 through his Regent Hotel LLC to de Blasio’s failed 2020 presidential campaign.
The city now pays roughly $130 nightly per room at Domb’s Lucerne Hotel to house the homeless, according to Hotel Association of New York City President Vijay Dandapani. That amount is slightly higher than the average cost to taxpayers of $120 per room at more than 60 hotels to house the homeless during the pandemic, according to Department of Homeless Services figures.
Revenue from housing the homeless is a vital lifeline for many hotel owners whose buildings have been vacant during the pandemic, Dandapani said.
“Owners are desperate,” Dandapani said.
The new details about Domb’s alleged ties to the City Hall insiders adds a new wrinkle to the ongoing furor in the Upper West Side. Well-heeled residents complain that the contract with the Lucerne and two other hotels has resulted in the neighborhood being overwhelmed by mentally ill people abusing drugs and causing mayhem.
De Blasio’s response has been perplexing. He ordered the residents at the Lucerne be moved by the end of the month. That decision resulted in homeless families at other shelters being forced to move to other facilities, causing more outrage. De Blasio then put the transfers on pause. The Department of Homeless Services announced new transfer plans for the Lucerne residents on Friday.
“It is a shame that these families had to suffer such an extraordinarily stressful exercise during a pandemic as a result of Mayor de Blasio’s flippant indecisiveness. We hope the Mayor will learn from this self-made crisis to avert more suffering for homeless families and individuals,” the Legal Aid Society said in a press release.
Reichberg was sentenced to four years in prison last year for bribing cops. Rechnitz is appealing a sentence of five months behind bars and five months of home confinement.
Reached by phone, Domb insisted he no longer owned the Lucerne, though his name appears on recent public records for the building. A call to Domb’s son, who also runs the hotel, was not returned.