BEN SHAOUL doesn’t understand why people hate him.
But hate him they do. It gets under his skin.
“I’m a regular guy, I have feelings,” the young real estate developer complained over lunch in late April. “Is it hurtful when people write things that are bad? Yeah, it’s hurtful.”
He was sitting with his publicist at the Norwood Club, the members-only establishment he owns on West 14th Street, discussing his work over grilled chicken and greens. His phone vibrated intermittently by his elbow.
While the city isn’t lacking in controversial landlords, Mr. Shaoul, 35, who is president of Magnum Real Estate Group, has distinguished himself as “the face of the hyper-luxurification of the East Village,” as the writer behind the local blog E V Grieve said. A cursory look at Mr. Shaoul’s track record over the last year or so might shed some light on why he has attracted such attention.
Last September, he booted the much-loved Bean coffee shop from its First Avenue home to rent the space to Starbucks.
Two months later, he bought the Cabrini Center for Nursing and Rehabilitation, a residence for low-income seniors on East Fifth Street, for $25.5 million with the stated intention of converting it to market-rate apartments.
In December, he purchased the former Educational Alliance building on East 10th Street and, hours before the Landmarks Preservation Commission voted to landmark the building and its block, secured permits to build a rooftop addition that incensed critics already unhappy about his other rooftop additions in the neighborhood.
And in April, the Fire Department had to use a cherry-picker to rescue a tenant from one of Mr. Shaoul’s buildings after a construction crew removed part of the staircase during renovations.
“He’s front and center in all of these things,” said the writer who calls himself E V Grieve, who has pseudonymously chronicled development in the neighborhood since 2007. “Ben is the latest to get in on the East Village gold rush. He didn’t cause it, but he’s taking advantage of it.”
When Mr. Shaoul started buying real estate a little over a decade ago, the gentrification of the East Village had arguably already passed the point of no return. Tensions simmered there as early as 1988, when a riot in Tompkins Square Park spilled over to the Christodora House, a former immigrant settlement newly converted into luxury condominiums. Rioters smashed windows and yelled, “Die, yuppie scum” — possibly coining the phrase.
But even as restaurants and boutiques flourished and rising rents elbowed artists and musicians to Brooklyn, the neighborhood’s physical landscape remained relatively unaltered by the wave of money washing over it. It was not until the mid-2000s that swaths of the Bowery were rendered unrecognizable by developments like the massive Avalon Chrystie apartment complex, which opened in 2005 and brought in Whole Foods in 2007.
Mr. Shaoul made his inauspicious East Village debut in 2006, the same year the 21-story Cooper Square Hotel broke ground and the legendary rock club CBGB closed.
In March of that year, he bought out members of an artists’ squat on St. Marks Place in order to turn the building into rental apartments. A neighborhood photographer snapped Mr. Shaoul, accompanied by sledgehammer- and crowbar-wielding construction workers, as he confronted some of the squatters. At some point the police were called in; the photographs soon circulated around the neighborhood.
The episode led the real estate blog Curbed to dub Mr. Shaoul “Sledgehammer Shaoul” and — although he was not actually holding a sledgehammer in any of the photos — the name and image have stuck. His reputation was reinforced as he renovated more buildings: rent-stabilized tenants in his buildings reported threats of eviction, and he racked up Department of Housing Preservation and Development complaints and violations for the interruption of heat and hot water, blocked fire escapes, broken locks and other issues related to construction and maintenance.
Mr. Shaoul characterized such problems as inevitable results of old buildings requiring renovation. “No court has ever found we harassed or wrongfully evicted a tenant,” he said in an e-mail, adding, “No court or city agency has ever found us guilty of any unsafe construction practices.”
Also in 2006, Mr. Shaoul received more unflattering attention for renovations he was doing to buildings at 515 East Fifth Street and 514-516 East Sixth Street. Mr. Shaoul put rooftop additions on both buildings, provoking an outcry from tenants and local politicians who said the construction violated the Multiple Dwelling Law. In 2010, the Board of Standards and Appeals ruled that the East Sixth Street building’s seventh story must be torn down. (Mr. Shaoul said that both buildings’ additions had been approved by the Department of Buildings, and that the seventh-story addition on East Sixth Street was being removed.)
In his short but impressive career, Mr. Shaoul has fixed up dozens of crumbling tenements and built new developments from Chelsea to the South Street Seaport, including the A Building on East 13th Street, a 97-unit development that brought rooftop pool parties and private cabanas to the East Village: one-bedroom apartments there are priced in the neighborhood of $1 million and rent for around $4,000 a month. One result is that Mr. Shaoul’s name has become a byword for aggressive development in the East Village. A few months ago, posters bearing his photo were pasted up around the neighborhood. They read, in part, “I pledge to rape the East Village of every last vestige of creativity,” and concluded: “You gotta problem wit dat?”
BORN in Queens and raised in a tight-knit Persian Jewish community in Great Neck, N.Y., Mr. Shaoul dropped out of community college at the age of 19 to get into the real estate business.
After a summer internship with the Ohebshalom family, a Persian Jewish real estate dynasty from Great Neck, Mr. Shaoul renovated and began managing apartments in a building owned by his father, who had an antiques business.
“I liked doing it,” he said. “I’d go to open houses and see other landlords’ products and thought: This isn’t all that great, and they’re charging all this money for rent. We should make this a bit nicer.”
Using his father’s savings and a mortgage on the property he had renovated, Mr. Shaoul bought his first building in 1999, a tenement at 219 Mott Street.
Almost from the beginning of his career, conflicts with his tenants caught the public’s eye. Mr. Shaoul’s name first hit the papers in 2001, after he bought a nearby Elizabeth Street tenement. While renovating the building, he sued several of its rent-regulated Latino and Chinese tenants, accusing them of running rooming houses out of their apartments. Other tenants said that he had harassed them in an effort to make them leave and that he turned off the building’s gas for four months. Mr. Shaoul also sued the Committee Against Anti-Asian Violence for $20 million for “severe emotional distress” after it organized protests against him, and in turn, a dozen tenants brought three suits of their own against him in housing court. The suits were eventually settled after Mr. Shaoul made repairs and restored the gas.
“I was very, very young,” Mr. Shaoul said recently. “I wish we had not filed a lawsuit against them. I wish we had handled things differently. The tenants were in the wrong for the situation they created for themselves. That being said, they were living there.”
Mr. Shaoul declined to reveal how many properties he owns throughout the city, but an East Village tenant’s association estimated he has some 40 in that neighborhood alone, scattered from East Second to East 13th Street and Second Avenue to Avenue C. The buildings include a portfolio of 17 buildings that he purchased as part of a group of investors in 2007. His signature condominium development is in Chelsea, the glossy, glass-skinned Yves on West 18th Street. He also owns properties in TriBeCa, the West Village, Harlem, the Financial District and on the Upper East Side — neighborhoods, he said, “where I would want to be.”
Rental properties provide financing for many of his projects, he said. “You basically take buildings that haven’t been touched in a long time and you revamp them and you hope to get higher rents,” Mr. Shaoul added, describing his modus operandi.
“He’s doing what all the other ones do,” said Brandon Kielbasa, an organizer at the Cooper Square Committee, an organization that advocates for tenants, who has worked with some of Mr. Shaoul’s renters. The goal, Mr. Kielbasa explained, was to turn rent-regulated units into market-rate units. Mr. Shaoul, he added, is “clearly an aggressive player: a landlord with the agenda he seems to have doesn’t want anybody telling him what he can charge for these units.”
For his part, Mr. Shaoul insists that he is “just moving with the market” and has “no problem” with rent-stabilized tenants. “We don’t harass people,” he said. “I don’t benefit from harassing somebody.”
It is true that judgments against Mr. Shaoul tend to focus on construction problems. In 2004, for example, the Department of Buildings issued a vacate order for 638 East 11th Street when construction caused a foundation wall to crack and separate from an exterior wall. In 2006, Mr. Shaoul was issued a stop-work order for construction at 120 St. Marks Place, where excavation was being done without permits. In 2011, residents of the A Building brought a lawsuit, still in litigation, against Mr. Shaoul and a business partner for numerous construction defects. And following the staircase episode at 435 East 12th Street, the Buildings Department discovered no permits had been filed for the job and issued a stop-work order.
But there has been no shortage of complaints that have not led to such formal actions. “I’ve been dealing with these issues and this developer my whole term in office,” said Rosie Mendez, a City Council member who has represented the East Village and Lower East Side since 2006. “He is, for lack of a better word, a chronic bad actor.” One memorable complaint, she recalled, came from a long-term tenant in one of Mr. Shaoul’s properties who reported that the Fire Department was using the building for evacuation exercises because they had been told it was vacant.
EIGHT rent-stabilized tenants from 120 and 118 East Fourth Street gathered at the Bowery Whole Foods one evening in May to discuss their experiences with the developer, who purchased their buildings in late 2010. The tenants, several of whom requested anonymity because they feared reprisals, portrayed Mr. Shaoul as an aggressive and unresponsive landlord. They recalled not learning who owned their buildings for months, lost rent checks, eviction notices, heat and hot water turned off with little notice, scant communication from the management company, a menacing property manager and intense construction that lasted well over a year. “It’s not personal,” one tenant said. “We don’t exist. We’re like bugs.”
“Even after our attempts to communicate with Ben, he is oblivious to what we’ve been going through,” said Anthony Donovan, a tenant at 120 East Fourth Street for 22 years. “We understand construction when needed. We don’t understand the discourteous communication, the lies, the unsafe conditions for workers and tenants.”
“I can’t begin to express how awful of an experience this has been,” said a tenant in another building, who has lived in his apartment for 20 years, in a separate interview. At one point, he said, the management company listed his apartment for rent. “I’m a civilized person and have a real professional job, so I can’t go out and pop Ben Shaoul one.”
Market-rate and commercial tenants tend to speak more highly of Mr. Shaoul. “I like Ben,” said one commercial tenant, who asked not to be identified lest he alienate his customers. “He’s a good guy.” But, he later added, “he’s definitely a businessman first.”
AS he took a reporter on a tour of four of his luxury properties at the end of May, Mr. Shaoul grew agitated at the mention of his tenants’ complaints. “It’s not fair, it’s absolutely not fair at all,” he said in the back of a black Range Rover headed down the West Side Highway. “If I was building buildings that were falling down, I’d say, ‘You know what, you’re right.’ And if I was making improvements that were only specific to certain tenants. But I’m not. I’m improving the building for everybody.”
“Why are my tenants complaining about my improvements?” he added. “Like, how about a pat on the back for doing that work? Instead, we get resistance the whole way through.” He said that, despite the numerous complaints — over noise, dust, permitting, the hours of construction — from renters in 118 and 120 East Fourth Street, he had never received a Department of Buildings violation for either building. “Logically, what does that tell you?” he said, adding, “They don’t like change.”
Mr. Shaoul’s brashness is, some of his associates said, one of his defining characteristics. “He’s very, very strong; very, very knowledgeable; very, very smart; and can sometimes be impatient,” said Leonard Steinberg, a managing director of Douglas Elliman and the agent marketing the Arman, Mr. Shaoul’s eight-story, eight-unit condominium under construction on far west Canal Street.
He and other business partners spoke of Mr. Shaoul’s attention to detail. And walking through 254 Front Street, Mr. Shaoul’s newest development, his pride in his work was obvious. The newly completed 40-unit luxury rental building is located in the South Street Seaport’s historic district. Mr. Shaoul pointed out the mahogany windows, white oak floors, subway-tiled bathrooms and well-appointed gym. Standing on the balcony of the $20,000-a-month penthouse (units start at $2,500 a month), he admired the view of the Brooklyn Bridge. “I would live here in a second,” he said.
Like other real estate developers, Mr. Shaoul both suffered and benefited from the financial crisis. He admitted that he had overleveraged some properties. He lost control of a Chelsea development site after he defaulted on loans and Brooklyn Federal Savings Bank won a $27.98 million judgment. But at the bottom of the market, Mr. Shaoul was also able to buy 254 Front Street, a development originally slated to be a condominium, and build a rental property instead.
Mr. Shaoul’s excitement about his luxury buildings throughout the city, as well as his love of new construction, is palpable. “I’d like to prove people wrong with my developments,” he said. That people accuse him of mismanaging the more humble tenements that build the foundation for these projects vexes him. “Why is everyone so hung up on the East Village?” he asked during the tour. Later, he added: “How about saying to me, ‘Ben, wow, your building is really beautiful, let’s focus on how well-built it is?’ ”
Mr. Shaoul is quick to say that he and other landlords are themselves casualties in the battles over gentrification. Standing across Canal Street from the Arman, where apartments are priced from $4 million to $9 million, he explained that landlords get a chronic bad rap “because it’s somebody’s home, and a landlord wants to make a profit so runs it as if it’s a business.” Rent stabilization, he added, results in “a tenant who feels like he has rights above and beyond anyone else.”
As Mr. Shaoul walked back to his car, he stopped to wave at his almost-2-year-old twins, who stood behind the vast window of the apartment Mr. Shaoul and his family are occupying while he renovates their West Village townhouse; their view is of the Arman, which he visits daily.
Later, as the Range Rover bounced along the South Street Seaport’s cobbled streets, Mr. Shaoul paused again to reflect on his circumstances. “When you’re working hard at something and you’re giving your all and someone comes along and essentially calls you a liar, you’re going to feel hurt over that,” he said. “I’m not saying I’m perfect or my staff is perfect. We’ve made mistakes in the past. No one’s perfect.”
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