Officials demand affordable housing at Beth Israel buildings

Hospital is selling properties on East 17th Street

Assembly member Harvey Epstein, Senator Kristen Gonzalez and City Council member Carlina River with 313-319, 321, 327 and 329 East 17th Street
Assembly member Harvey Epstein, Senator Kristen Gonzalez and City Council member Carlina River with 313-319, 321, 327 and 329 East 17th Street (Harvey for NY, Carlina Rivera, Kristen Gonzalez for State Senate, Google Maps, Getty)

Four buildings on East 17th Street are up grabs — and a reimagining. 

The buyer of a 12-story medical building offered by Mount Sinai Beth Israel could convert the property to luxury condos, just as the nearby former Cabrini Medical Center was transformed into a 223-unit high-end complex, now called Gramercy Square.

But a trio of elected officials have a different vision: They want the owner of the property to require the future buyer to set aside a chunk of housing as permanently affordable under the city’s Mandatory Inclusionary Housing program. And they want this requirement to also apply to three other buildings the owner is looking to sell. 

In a letter sent to the hospital’s CEO Kenneth Davis, Assembly member Harvey Epstein, Sen. Kristen Gonzalez and City Council member Carlina Rivera call on the hospital to apply a deed restriction to the four properties that would — assuming the buildings are demolished or gut renovated to make way for new housing — require the next owner to include affordable housing under the city’s MIH rules.  

“We want to ensure that if these properties are being sold, we are minimizing the harm and do not further destabilize our neighborhood,” the letter states. “These properties must accommodate more affordable housing, which the city deeply needs.”

A representative for the hospital declined to comment. 

The hospital has tapped Cushman & Wakefield to sell the buildings, which all sit on East 17th Street between First and Second avenues and were previously used as offices and medical residences. One is at 321 East 17th Street, a vacant five-story townhouse listed for $4.3 million. The property includes three offices and three residential units, two of which are rent-stabilized and one that is rent-controlled. 

Another is 327 East 17th Street, a six-story building that is currently being used as a homeless shelter, but whose lease could be terminated with a 90-day notice. That 15-unit property is asking $6.95 million.  

The hospital has also listed 329 East 17th Street, a vacant six-unit residential building with a $3.7 million ask. The three buildings can be purchased together or separately, according to marketing materials.

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Mount Sinai is seeking bids for the vacant 12-story residential and commercial building at 313-319 East 17th Street. Marketing materials for the property suggest that the next owner could convert the property into luxury condos, rental units or housing for students or seniors.  

Messages sent to one of the brokers handling the listings were not returned.

In an interview this week, Epstein called the potential sale of the buildings a “critical moment to think about the community they are trying to serve.”

“It allows them to be a good neighbor,” he said. “This is one easy way to give back to the community.”

The hospital is under no obligation to require the future owners of the buildings to include affordable housing on the properties. In fact, such a requirement would likely make the properties less attractive, especially because the property tax break 421a is no longer available

Epstein pushed back on the idea that developers need 421a in addition to the zoning bonus provided under MIH, even though the city’s program was designed to work in tandem with the tax incentive. 

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The hospital has faced community pushback in recent years, including for its plans to downsize and relocate its East Village operations. Mount Sinai ditched those plans after the pandemic, a decision that was praised by local politicians, Crain’s reported

The hospital is also trying to merge with the New York Eye & Ear Infirmary of Mount Sinai after failing to secure state approval in February. The stalled merger is holding up the sale of the infirmary’s building at 218 Second Avenue, which would likely be demolished to make way for a new building, the New York Post reported. The facility was featured in a key rescue scene in the movie “The Godfather.”