Touting it as “a wake-up call to developers,” New York City's buildings department announced a $200,000 whistleblower settlement over unpaid permit fees that it reached with the owners and developers of a Manhattan hotel renovation project.

“The city will pursue claims against those who misrepresent project costs,” said Department of Buildings Commissioner Rick Chandler in a statement. “We expect everyone involved in the permit application process to follow the rules and accurately report cost information.”

The settlement came after a whistleblower in 2011 filed a sealed qui tam complaint in Manhattan Supreme Court that alleged violations of the New York False Claims Act in connection with a 2005 renovation of the Maritime Hotel at 88 Ninth Avenue, according to a news release from Zachary Carter, the city's corporation counsel, and a copy of an amended complaint in the case that is not sealed.

The parties associated with the hotel renovation who were part of the settlement included owner/developers Market Corner Realty, Richard Born, Chelsea Park LLC and Sean MacPherson, along with design professionals Matt Markowitz Architecture and Matt Markowitz, Carter said in the release.

The action, in which the city intervened pursuant to New York state Finance Law Section 189, claimed that Market Corner Realty knowingly made and used, or caused to be made or used, false statements and records that went to the city in connection with permit fee payments, according to the settlement agreement.

Under the city Administrative Code, the buildings department assesses a fee connected to filing and issuing permit applications, Carter said in the release.

For construction renovations or alterations to existing properties, the department calculates the fee amount based on the estimated construction cost reported by the owner and design-applicant professional at the time of the permit application, the release added. The buildings department requires that estimated costs be updated if there are changes to the project's scope, and that the owner submit a cost affidavit with the final actual cost after the work's completion. Additional fees are owed if the cost turns out to be higher than the estimated costs, the release said.

“The False Claims Act is a powerful civil enforcement tool that allows the city to take action against companies and individuals that defraud the city or violate obligations to honestly report and pay what they owe,” Carter said.

James Spitzer, a Holland & Knight partner in Manhattan, represented the owner/developers and design professionals who settled with the city. He declined to comment on Tuesday.

Touting it as “a wake-up call to developers,” New York City's buildings department announced a $200,000 whistleblower settlement over unpaid permit fees that it reached with the owners and developers of a Manhattan hotel renovation project.

“The city will pursue claims against those who misrepresent project costs,” said Department of Buildings Commissioner Rick Chandler in a statement. “We expect everyone involved in the permit application process to follow the rules and accurately report cost information.”

The settlement came after a whistleblower in 2011 filed a sealed qui tam complaint in Manhattan Supreme Court that alleged violations of the New York False Claims Act in connection with a 2005 renovation of the Maritime Hotel at 88 Ninth Avenue, according to a news release from Zachary Carter, the city's corporation counsel, and a copy of an amended complaint in the case that is not sealed.

The parties associated with the hotel renovation who were part of the settlement included owner/developers Market Corner Realty, Richard Born, Chelsea Park LLC and Sean MacPherson, along with design professionals Matt Markowitz Architecture and Matt Markowitz, Carter said in the release.

The action, in which the city intervened pursuant to New York state Finance Law Section 189, claimed that Market Corner Realty knowingly made and used, or caused to be made or used, false statements and records that went to the city in connection with permit fee payments, according to the settlement agreement.

Under the city Administrative Code, the buildings department assesses a fee connected to filing and issuing permit applications, Carter said in the release.

For construction renovations or alterations to existing properties, the department calculates the fee amount based on the estimated construction cost reported by the owner and design-applicant professional at the time of the permit application, the release added. The buildings department requires that estimated costs be updated if there are changes to the project's scope, and that the owner submit a cost affidavit with the final actual cost after the work's completion. Additional fees are owed if the cost turns out to be higher than the estimated costs, the release said.

“The False Claims Act is a powerful civil enforcement tool that allows the city to take action against companies and individuals that defraud the city or violate obligations to honestly report and pay what they owe,” Carter said.

James Spitzer, a Holland & Knight partner in Manhattan, represented the owner/developers and design professionals who settled with the city. He declined to comment on Tuesday.