The following article appeared in the June edition of The Real Deal.
—
If you build, own or operate property in NYC, sooner or later you’re going to get a violation.
From something as small as a ticket over improper waste disposal to liens reaching into the mid-six figures, violations are a part of life in the NYC real estate game. Mark Hertz Group has built its reputation on not only expediting violations once they’ve been written, but keeping you in compliance from the very beginning of your project.
When you get a violation, Mark Hertz Group’s professional expeditors are there to help you get out from under it. Hertz and his close-knit team have lived and breathed NYC codes and laws for decades, and, in a post-pandemic environment where the cost of violations is climbing, having them on your side will save money and time. TRD sat down with President and CEO Mark Hertz, VP of Administration Zeli Wiedermann, and VP of Operations Abe Sicker to get a look behind the bureaucratic veil to learn what makes the DOB tick.
NYC: The King of Bureaucracy
Hertz was born into the NYC real estate world, and never left.
“My grandfather and father were in the real estate business,” he says, “and my brother Dov Hertz, who Bob Knakal called ‘The Assembly King,’ is from the largest developer of last mile warehousing in the New York Metro Area.”
Hertz spent the ‘80s working as a property manager in NYC, first for his father and then on his own, and it was during this time that he had an epiphany about his hometown. While walking through the city, he noticed that every building had some kind of problem that could lead to a violation, whether it be “an elevator out of service here or garbage strewn over there.”
Thanks to working in the property management world and having a curious mind (“I used to go to a city agency with 75 questions, and after a while they said to me, ‘Mark, give me your five best today’”), Hertz was familiar with how city agencies functioned, and he realized that he could expedite violations on behalf of builders, managers and owners.
“It’s a very unique niche in the real estate industry,” says Wiedermann, who Hertz hired when the Mark Hertz Company was still being run out of his basement. Wiedermann, who was just a year out of high school when he began working with Hertz, learned the expediting business directly from the master himself. “A lot of the stuff is gibberish to begin with, and the city does not operate on logic,” he says. “It’s not the type of business you’re going to learn going to school.”
When working with Mark Hertz Group, clients quickly learn that they’re in good hands. “They get to the point, they give clear instructions, their recommendations always pan out,” says Brandon Baron, Principal Partner at BFC, whose firm has worked with Mark Hertz Group for over twenty years. “We have never once even considered going anywhere else.”
Violations Big and Small
It takes a certain kind of patience, or mania, to become an expert in the world of NYC violations; for Hertz, it’s a passion.
“I love the challenge,” he says. “Someone gets an Airbnb or illegal occupancy violation and we’re able to get them dismissed on a technicality? I get excited, my blood rushes.”
After almost 40 years in the expediting business, Hertz has seen it all. Generally, violations fall into one of two categories: day to day violations and those pertaining to titles. Hertz gave us an example of a day to day violation written by the Parks Department that he handled years ago.
“The Parks Department is very strict when it comes to touching trees,” he explains. “There was a case we had where some workers were on a scaffold, and they tied a rope around the branch of a tree so that the pail they were using for paint would be closer to them.” The Parks Department bill? $18,000. “That’s the most expensive rope and pail I ever met in my life.”
The other major type of work that Mark Hertz Company does is clearing violations so that a property has a clean title to allow for a sale. Wiedermann told us about a particularly egregious case of a building with violations that were uncovered when it went up for sale and how he was able to help his client fix the issues.
“A bank took ownership of a property in foreclosure and they owned it for a year and a half,” he recalls, “and in that year and a half, the bank managed to rack up violations and penalties of almost half a million dollars.”
Wiedermann’s client was in contract to purchase the property from the bank, but couldn’t secure a mortgage due to the outstanding violations. So Wiedermann went to work investigating the violations, many of which had been ignored by the bank’s legal team and thus had accrued maximum penalties, and realized that he could get many of them reduced. Through an artful negotiation, Weidermann was able to work out an agreement where the bank paid his client $300,000 to avoid a lawsuit and close the deal, and then Wiedermann turned around and got the penalties reduced to around $10,000.
“So here was somebody who, when he first came to me, was ready to walk away from the deal,” says Wiedermann, “and not only did he not have to make those payments, he ended up making a nice profit off the whole thing.”
The City That Never Sleeps
Hertz has watched the NYC regulatory landscape evolve during his career, and he marks a few major turning points over the decades. The first and most important change was the introduction of new technology, from smartphones to ubiquitous security cameras.
“In today’s day and age, an inspector is walking down the block for a scheduled inspection on a new construction and let’s say he sees some work going on,” explains Hertz. “He can go on his phone and know if they have a permit on that.”
Another major turning point for NYC regulations was the COVID-19 pandemic. Hertz refers to the current era as AC, or “After Corona,” a time defined by NYC losing out on billions of dollars in transfer taxes and being forced to cut employees, which has led to a reduction in the number of violations being written.
“In 2023, the city issued 37-38% less violations, and keep in mind that from 2021 to 2022, the city took a hit of over a billion dollars in profit and transfer tax,” he explains. “The City Council is raising penalties against landlords, and I think part of that is to make up what they’re missing on the transfer taxes.”
Add to this a host of new regulations coming into effect regarding everything from lead testing to facade inspections to greenhouse gas emission reductions, and you can begin to understand why many builders and managers turn to Mark Hertz Group to help them navigate an increasingly-complex regulatory environment.
Building A One Stop Shop
After decades spent working on every kind of violation, Hertz and his team began to slowly expand their business to give clients help not only clearing existing violations but also bringing their properties up to code to prevent future violations from being written. That’s how Mark Hertz Associates was born, giving owners the ability to hire one entity to handle the process from start to finish.
“We take it from the beginning,” explains Sicker. “We do the hearing, we do the correction, we do the file and the plans, we do the sign off. We give you back a clean building.”
To help clients get permits for their projects, Mark Hertz partnered with BILD Architecture, and the Group recently started Mark Hertz Enviro as a way to help clients comply with new lead testing requirements put in place by Local Law 31.
Each of the companies under the Mark Hertz Group umbrella is run with the same attention to detail and ethical clarity that Hertz embodies. Every client’s situation is unique, and the Mark Hertz Group team brings a personal touch to each case, leveraging their wealth of knowledge and experience working within the NYC bureaucratic maze to achieve the best possible result.
“There is no B-team there,” says BFC’s Baron of the Mark Hertz Group, who calls the team “great, friendly people who never fall short on a commitment.”
Ultimately, Hertz sees his Group’s job as freeing building owners from having to focus on violations so they can pay attention to “purchasing buildings, refinancing buildings, and dealing with tenants.” So let them handle the bureaucracy for you. They’re going to love the challenge.
Already Thought of a Building in Need of Assistance? We’re Listening.