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Affordable developer secures financing for Watchtower hotel conversion

Non-profit housing developer Breaking Ground has announced it is moving ahead with its plan to turn a former Jehovah’s Witnesses hotel in DUMBO into affordable and supportive housing.

90 Sands was previously a residential hotel operated by the Watchtower Bible and Tract Society until  August 2017.

90 Sands

Breaking Ground purchased the hotel in August 2018 for $170 million with a financing package that included $2 million from the New York City Council, a $155  million loan from the NYC Department of Housing Preservation and Development (HPD), and a $10  million grant from Enterprise Community Partners, Inc.

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 of this year Breaking Ground obtained a zoning change for the project after an approval pursuant to the City’s land use review procedure. 

The renovation and repositioning of the building as supportive and affordable housing will be financed by 501c3 and taxable bonds totaling more than $70.4 million issued by the New York City Housing  Development Corporation (HDC).

HDC provided an additional $6 million in capital subsidy. JPMorgan Chase is providing a construction letter of credit.

Nixon Peabody provided counsel on the 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. Construction completion is expected in the first quarter of 2022.

With the closing of the building’s construction loan, the renovation will break ground this month.

90 Sands is an important marker in Breaking Ground’s history. The nonprofit launched 30 years ago, in 1990, focused on transforming old hotels in Manhattan into supportive housing, giving the city’s homeless a way to get off the streets and have a place to call home.

Brenda Rosen, president and CEO of Breaking Ground, said, “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.”

The Center for Urban Community Services (CUCS) will provide onsite social services to residents of 90  Sands.

Of the 491 apartments, 185 will be affordable to a wide range of New Yorkers, from extremely low-income to moderate-income households. 305 units will be home to formerly homeless individuals. One unit will be for an onsite 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, security camera system throughout,  multipurpose room for community events and meetings, a digital library, a fitness room, and 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. 

In addition to public financing, philanthropic support included grants from Robin Hood Foundation, Deutsche Bank’s DB SHARE  program, and National Grid.

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