Breaking Ground is repositioning a former Jehovah’s Witnesses residential hotel into 491 affordable and supportive housing units in New York City.
Launched in 1990, the nonprofit has a history of transforming old hotels in Manhattan into supportive housing to give individuals struggling with homelessness a place to call home. It’s a concept that is still critical today.
“For 30 years, Breaking Ground has been redefining the meaning of home for vulnerable New Yorkers,” says Brenda Rosen, president and CEO of the organization. “We started out in Manhattan in the 1990s rehabbing old hotels that had fallen into disrepair and later moved on to designing and developing our own ground-up supportive housing projects throughout New York. At 90 Sands, we return to our roots and further our mission to enable people to forever escape the trauma of homelessness. With the construction closing for 90 Sands, we are on our way to bringing 491 much-needed affordable units to DUMBO, one of the most expensive neighborhoods in the city.”
90 Sands Street was previously a residential hotel operated by the Watchtower Bible and Tract Society until August 2017. Breaking Ground purchased the hotel in August 2018 for $170 million. For the acquisition of 90 Sands, the organization received $2 million from the New York City Council, a $155 million loan from the New York City Department of Housing Preservation and Development (HPD), and a $10 million grant from Enterprise Community Partners.
Breaking Ground provided a $6.7 million sponsor loan to finance acquisition and pre-construction costs. The Leviticus Fund also provided $1.5 million in pre-construction financing. In April, Breaking Ground obtained a zoning change for the project after an approval pursuant to the city’s land-use review procedure.
Of the 491 apartments at 90 Sands, 185 will be affordable to a wide range of New Yorkers, from extremely low-income to moderate-income households, and 305 units will be home to formerly homeless individuals. One unit will be for an on-site building superintendent. Half of the units (246) will be permanently affordable, and the balance will be affordable under a 60-year regulatory agreement. The 30-story building will feature a 24-hour attended lobby, a security camera system throughout, a multipurpose room for community events and meetings, a digital library, a fitness room, and a reimagined plaza space for public use at the corner of Sands and Jay streets. Breaking Ground seeks to bring in community-serving uses to occupy more than 28,000 square feet of community facility and commercial space on the ground floor and two lower levels.
The building was constructed similar to a hotel with common kitchens and other amenities, and a hotel developer had purchased it with plans to make it into a luxury hotel. However, when those plans didn’t work out, the property was purchased by Breaking Ground, according to Joseph Lynch, a partner at the Nixon Peabody firm, which provided counsel on the acquisition and construction financings.
The scale of the project and the funding behind the development are unique.
First, it’s unusual to have 305 supportive housing units in one development, says Lynch, estimating that these developments are typically in the neighborhood of 100 or fewer units.
“Every city and every area needs homeless or supportive housing right now,” Lynch says. “Just to get 300 units all in one swoop is incredible.”
The financing is also notable because 90 Sands is supported almost entirely by city financing. There are no low-income housing tax credits involved in the deal, according to Lynch.
The renovation and repositioning of the building as supportive and affordable housing will be financed by 501(c)(3) and taxable bonds totaling more than $70.4 million issued by the New York City Housing Development Corp. (HDC). HDC provided an additional $6 million in capital subsidy. JPMorgan Chase is providing a construction letter of credit. Bryan Cave Leighton Paisner and Holland & Knight provided counsel on land-use matters. Monadnock Construction is the general contractor, and Beyer Blinder Belle is the project architect. Construction completion is expected in the first quarter of 2022.
The Center for Urban Community Services (CUCS) will provide on-site social services to residents of 90 Sands. Breaking Ground and CUCS have a longstanding partnership, and 90 Sands marks their 10th building together to provide housing and on-site support for formerly homeless individuals and families. Services provided at 90 Sands will be available to all tenants and will include: case management, primary medical care, mental health services, employment readiness, and benefits counseling, among others.
