A new hotel that “towers” over a section of Queens may be stuck in limbo for the foreseeable future as it faces a construction nonpayment claim of over $3M — and a GC who seems to be permanently out of business.
After over two years of work, Long Island’s Charan Electrical Enterprises Inc. filed a $3.3 million claim on New Generation Development LLC’s Astoria Delancy Inn & Suites hotel located at 37-11 23rd Street on October 18, 2021.
General contractor Sunny Builders NY Corp was previously quite active in construction in Long Island City, with 455 building permits on file for a total of $292,800. The company was active with other hotel developments as well, filing a permit for the development of an eight-story hotel, the Comfort Inn and Suites Long Island, at 23-15 39th Avenue in 2018.
However, despite this prior activity, the problems faced by Sunny Builders NY may be one of the main catalysts for the lien claim: According to the company’s Google presence, it is permanently closed.
As per construction attorney Alex Benarroche, the closure of the business could have had a major impact on the circumstances surrounding Charan Electrical Enterprise’s claim, greatly reinforcing the importance of timely and correctly filing mechanics liens.
“The power of a mechanics lien is the ability to ‘legally leapfrog’ the non-paying client/contractor by perfecting a security interest in the property being improved,” Benarroche said.
“When a client/contractor goes bankrupt and the sub hasn’t filed a lien, their only recourse is against the bankrupt contractor, and since the sub would be considered an “unsecured creditor” the debt will likely be expunged,” Benarroche continued. “However, if a lien has been secured, the subs’ options are expanded to include both the bankrupt contractor and the property owner; greatly increasing the odds of getting paid.”
Charan Electrical’s claim on the 11-story, 93-room development totals $3,341,033, with the company citing nonpayment from general construction, electrical, plumbing, and HVAC work done for the property. According to the claim, the company’s work stemmed from April 1, 2019, to July 5, 2021.
Unfortunately, Sunny Builders NY had dealt with a few significant setbacks before, both of which were related to inadequate workmanship, and records also show the number of building permits acquired by the company declining significantly in the past few years, going from 37 projects in 2018 to 22 in 2019, and eventually only two in 2020.
In its work on the 23-15 39th Avenue hotel project, Sunny Builders NY was hit with $23,750 in fines related to its safety measures, with New York City Department of Buildings inspectors claiming that in January 2020 the company had failed to put adequate safety measures in place for construction workers and pedestrians walking by the site.
According to the release, the company was cited for “inadequate safety measures during hoisting operations, failure to provide flagmen for the site, failure to provide overhead protection measures for workers, providing a pedestrian walkway contrary to DOT specifications, and failure to install proper safety netting.”
The company appears to have, generally, simply struggled in the past number of years — a bizarre review of the company from 2016 claimed that the company hired “reckless irresponsible drivers” and further alleged that the company owner may have falsified signatures on documents.
Given the major work needed for projects such as this example of hotel construction, it’s worth it for contractors to consider how development might be growing in the Ravenswood and Dutch Kills areas going forward.
New York City’s transition to a new mayoral administration could have an impact on the ways that development will proceed in Queens, as well. Though the administration of outgoing Mayor Bill de Blasio looked to restrict hotel construction within the city’s industrial districts, requiring special permits for new construction in city manufacturing zones — such as those in Ravenswood and Dutch Kills — it also made a point to push for more significant and denser developments in what is officially Long Island City.
Eric Adams, the heavy favorite to win the New York City mayoral election in November 2021, has a complicated record on new construction in the city. Adams signed his support for the United for Housing plan, which focuses on a $4 billion capital investment in housing in New York City
In a move that could even completely change the focus of a property like the Astoria Delancy Inn & Suites hotel if it did indeed go into foreclosure, Adams has supported the idea of converting unused hotel spaces into affordable housing spaces.
“The combination of COVID-19, the economic downturn, and the problems we’re having with housing is presenting us with a once-in-a-lifetime opportunity,” Adams stated while outside a vacant hotel in Brooklyn. “We can use this moment and find one solution to solve a multitude of problems.”