The Real Deal New York

EDC delays bidding process on Covenant House’s 780K sf Hell’s Kitchen project

City investigating claims youth shelter inflated the number of people it helps
May 19, 2016 12:53PM

The Covenant House at 460 West 41st Street in Midtown

The Covenant House at 460 West 41st Street in Midtown

A city investigation into alleged fraud by the proprietors of Covenant House New York, a shelter for youth homeless people, is throwing a wrench into the city’s Economic Development Corporation’s effort to find a developer for a major Hell’s Kitchen project.

Covenant House was accused by a tipster to an anonymous hotline of severely inflating the number of people it serves as part of an effort to secure city funding for a new facility for the group.

The EDC put out a request for proposals (RFP) in January for a two-site, 780,000-square-foot mixed-use project on 10th Avenue at 40th Street, including 700 apartments, retail space, and a new 150,000-square-foot facility for the shelter.

Now, the agency – which has been fielding proposals for months, according to the New York  Times – is tapping the brakes.

“We have learned that certain allegations have been made against Covenant House,” EDC spokesperson Anthony Hogrebe told the Times, “and we do not plan to make a developer selection until the facts are more fully known.”

A spokesperson for Covenant House said the shelter would press on regardless.

“Even if the redevelopment project does not proceed — and that is a very big if,” Marcia Horowitz told the Times, “Covenant House is moving forward with the development of a new site, and Mr. Drury is leading that effort.” [NYT] – Ariel Stulberg