Stagg Group Scrutinized for Housing-to-Shelter Pivot

A developer in the Bronx is facing questions after taking a tax break from the city for a housing development, only to retool most of the project towards shelter beds.

The Stagg Group is turning more than 90 units of its 134-unit project at 739 East Gun Hill Road in the borough’s Williamsbridge neighborhood into units for the homeless, Gothamist reported. It’s unclear how much Stagg is financially benefiting from the shift, but the nonprofit running the shelter, Acacia Network, scored a $44 million contract from the city.

The complex opened earlier this year. Stagg scored a 35-year tax break from the city to help fund the property’s development, part of a state program geared towards the creation of permanent apartments as a means to ease the affordable housing crisis.

“You keep hammering us about affordable housing, but you build a building and turn it into a homeless shelter,” George Torres, district manager of Community Board 12, told the publication.

Stagg and the city both say the property meets the tax break eligibility requirements because at least 30 percent of the units are income-restricted. A spokesperson for the landlord added that it was the Department of Social Services that approached Stagg about potentially using the site for shelter beds.

“We feel like we’re tackling this on both fronts,” the spokesperson said. “We’re making living conditions better and making New York City a better place to live.”

The shift likely benefits the developer because of the volume and consistency of city payments. Shelter contracts have the potential to bring in more per unit than a rental would, and the landlord doesn’t have to fret too much about missed payments.

Stagg likely hasn’t done itself favors with the local community. Besides the shift in usage, the landlord has filed to evict tenants in about a quarter of the building’s units, citing missed rent payments. Stagg has appeared on the annual tenant-produced “worst evictors list”.

This is not the first time Stagg has faced questions over a project that turned towards a shelter at a late stage in its development. The same thing happened elsewhere in the Bronx in 2017.

Stagg also employed Adolfo Carrion, now the city housing commissioner. He was not involved in the East Gun Hill Road controversy, according to HPD.

— Holden Walter-Warner