Two years after a massive police raid on Chinatown’s so-called “Counterfeit Triangle” closed 32 stalls in the neighborhood’s knock-off market, city officials announced Tuesday that the tiny shops can reopen. But they say the block's days as the nucleus of trade in counterfeit designer goods are over.

The Mayor’s Office of Special Enforcement, which conducted the raid in February 2008 along with city police, announced that it had reached a settlement with the owners of the seven-story building at 224 Canal Street that houses the stalls—one they hope will keep the spaces from falling back into the hands of counterfeit merchants.

“We will continue to go after the street-level counterfeiters, the wholesalers, and the property owners that look the other way,” Mayor Michael Bloomberg said in a statement Tuesday afternoon.

The city sued the owners of 224 Canal Street—listed in court documents as Robert Becht, Edward T. Borg, George Terranova and Carl Terranova—under the Nuisance Abatement Law following the raid. The terms of the settlement require the owners to pay $800,000 in fines, and agree to use the stalls only for “legitimate purposes.”

“Owners should know that if they play host to illegal vendors, we will...shut down the buildings and exact a serious financial penalty,” said OSE director Shari Hyman.

The building’s owners declined to comment when reached through a representative.

The February 2008 raid was just one of a series of crackdowns on counterfeit merchants the Mayor’s Office has conducted along Canal Street since its creation in 2006. In that one campaign, OSE said it recovered more than $1 million in allegedly counterfeit trademarked handbags, wallets, jewelry, perfume and other items purported to be genuine products of high-end designers like Gucci, Coach and Prada. Undercover investigators made 42 separate purchases of counterfeit products in 32 of the building’s storefronts.

All told, the OSE has conducted more than 20 raids on alleged counterfeit merchants in the Canal Street area in less than four years. In December 2008, the city raided 34 retail stalls east of Broadway, half of them along one block of Canal between Centre and Lafayette Streets. A year later, 29 ground-floor retail shops were ordered shut down after a similar sweep of 10 buildings on the south side of Canal Street, west of Broadway.