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Why Run a Slum If You Can Make More Money Housing the Homeless?


“It’s haunted them for the rest of their lives,” says David Satnick, attorney for Jay and Stuart, who claims his clients, then in their twenties, had little say in their father’s schemes. “They were children, and they were told, basically, ‘You either plead to the entire indictment or your father goes to jail.’ ” Dispirited, Zenek withdrew from management. “I thought these kind of tactics stopped when the Nazis were defeated,” he complained, according to a doctor’s report filed in court. He retired to Miami.

The Podolsky brothers continued to buy SROs: the Park View Hotel on 110th Street, another on Central Park West. At every turn, they did battle with enforcement agencies and tenant groups, who ­complained—in a prelude to today’s ­argument—that the landlords were allowing the city to use them as a dumping ground for the homeless. In the early nineties, outrage about filthy “welfare hotels” drove the city to shift emphasis to programs operated by nonprofits. But this policy change, along with the Giuliani administration’s hostility to tenant rights, opened a new marketplace for the Podolskys. Once emptied of the indigent, the welfare hotels could become “boutiques.”

The Podolskys, with a partner, signed a cheap long-term lease for a hotel near Times Square primarily occupied by Senegalese street merchants. They renovated and reopened for tourists as the Ameritania, run by a manager imported from the Catskills. The Ameritania was soon clearing millions in annual revenue, which financed further acquisitions, like the downtrodden Karachi Inn (rebranded the Amsterdam Court), a Gramercy SRO now called the Marcel, and the Empire Hotel next to Lincoln Center.

The boutique business was just one example of the brothers’ aptitude for speculating at the margins. “There has to be a huge payoff,” a former employee said. “That usually means going to the properties no one else will touch.” A decade ago, they snapped up tenements in Crown Heights and Bed-Stuy; right now, they are wrestling a developer in foreclosure for a Harlem condo project. The family’s holdings are now worth many hundreds of millions of dollars. A Goldman Sachs bond issue valued the Empire Hotel alone at nearly $400 million.

Amsterdam Hospitality remains a tight-knit firm, employing many Podolsky siblings, spouses, and children. Jay is in charge of strategy. (“Like, here’s a piece of crap,” said the former employee, “and how can I turn it into something profitable?”) His older brother “Stewie,” a bearded tough-talker with a taste for Italian sports cars, handles acquisitions. They are active in Jewish charities, and their children have branched into fashionable enterprises like nightclubs and handbag design. Stuart owns a condo on East 57th Street and has a house in the Hamptons next to a friend, billionaire John Catsimatidis. Jay’s family lives in a townhouse on West 64th Street. The extended clan often gathers at Jay’s summer place in Westhampton Beach, a Charles Gwathmey–designed mansion. I was told it was a bargain, that the previous owner sold it cheap after it was damaged in a fire.

The Podolskys take pains to keep a deniable arm’s length from the shelter business. It operates behind a firewall of arcane lease arrangements and interrelated holding companies, many of which have been placed in the maiden names of the brothers’ wives, Shirley and Sharon. “It may appear that it’s all in the family,” Satnick says, but he claims the structures reflect both the brothers’ status as “passive owners” and the wives’ interests as independent investors. “Stuart and Jay have much bigger fish to fry than what their wives are doing in their business.” (During a legal dispute over a hotel purchase in 1999, a court-appointed referee found it “credible” that Jay and Stuart were “the real players” in the disputed transaction and that their use of their wives’ maiden names in that instance “was to avoid state/city scrutiny” owing to their felony convictions.)

The Podolskys don’t deal with the city; they lease the shelter buildings to companies run by Alan Lapes, a building contractor who has long worked with them. “These buildings are not owned by Mr. Lapes,” Satnick says. “They are owned by the Podolsky family in one way or another.” But Lapes, a blustery guy, serves as a manager and a lightning rod. Over the years, his facilities have been investigated by the police (over criminal activity by a manager and tenants in a Times Square location the Daily News dubbed the “Hell Hotel”) and cited by the city comptroller’s office for safety violations and bookkeeping irregularities. In a recent e-mail, Lapes called those allegations “old [stories] that are on google and for the most part are not true” and said journalists should “look for the good in all of the hard work that I do to help homeless New Yorkers.”


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