Nonprofit to Convert Former Brooklyn Hotel to Apartments

Breaking Ground, New York’s largest supportive housing developer, will begin construction later this month on converting a former Jehovah Witnesses’ hotel at 90 Sands St. in Brooklyn’s DUMBO neighborhood into 491 units of affordable and supportive housing. Construction at the 30-story building is slated for completion in the first quarter of 2022.

Brenda Rosen, president & CEO of Breaking Ground, said in a prepared statement the closing of the building’s construction loan meant the project, which has been in the planning stages for more than two years, can move forward. The project will have 491 apartments including one for a building superintendent. Of those, 185 will be affordable to a wide range of New Yorkers, from extremely low-income to moderate-income households, and 305 units will be used to house formerly homeless individuals.

Half of the units (246) will be permanently affordable and the balance will be affordable under a 60-year regulatory agreement. The property will have a 24-hour attended lobby, security camera system throughout, multipurpose room for community events and meetings, digital library, fitness room and plaza space for public use at the corner of Sands and Jay streets. Breaking Ground is also planning to bring in community uses to occupy more than 28,000 square feet of space on the ground floor and two lower levels.

Financing Details

90 Sands was previously a hotel operated as the Watchtower Society Residences until August 2017. Breaking Ground acquired the hotel a year later. For the acquisition, the nonprofit received $2 million from the New York City Council, a $155 million loan from the New York City Department of Housing Preservation and Development and a $10 million grant from Enterprise Community Partners Inc. Breaking Ground also provided a $6.7 million sponsor loan to help finance the purchase and pre-construction costs. The Leviticus Fund provided $1.5 million in pre-construction financing. 

The renovation and repositioning of the building will be financing by 501c3 and taxable bonds totaling more than $70.4 million issued by the New York City Housing Development Corp. HDC provided an additional $6 million in capital subsidy. Robin Hood Foundation, Deutsche Bank’s DB SHARE program and National Grid provided grants to help Breaking Ground with the project.

JPMorgan Chase is providing a construction letter of credit. Nixon Peabody provided counsel on acquisition and construction financings. Bryan Cave Leighton Paisner and Holland & Knight provided counsel on land use matters. Monadnock Construction Inc. is the general contractor and Beyer Blinder Belle is the project architect.

 In late April, while New York City was in the midst of the first fight against the COVID-19 pandemic, the City Council approved the nonprofit’s plan. City Council Member Stephen Levin said in prepared remarks the pandemic has made New York City’s long problem with homelessness even more pronounced. He noted it was more important than ever that individuals and families can leave shelters for secure, stable and affordable housing in good neighborhoods. The Center for Urban Community Services will provide onsite services to the residents of 90 Sand including case management, primary medical care, mental health services, employment readiness and benefits counseling. Breaking Ground and CUCS have worked together on 10 buildings to provide housing and onsite support for formerly homeless individuals and families.

Breaking Ground has experience transforming former hotels into affordable and supportive housing. The nonprofit was formed in the early 1990s, when it converted two large historic Manhattan hotels—the Prince George with 415 units and the Times Square Residence with 650 units. The nonprofit has 24 transitional and permanent housing residences under management, primarily in New York City. More recently, in October Breaking Ground and its partner Comunilife Inc., a community-based health and housing services provider, opened the first 161 residential units of La Central. The large-scale, mixed-use project in the Bronx will eventually have nearly 1,000 mixed-income apartments.