City Will Pay Over $261M For Two 4th Avenue Family Shelters

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PARK SLOPE – On Friday, June 14, the NYC Administrative Services released some details from the contracts between the Department of Homeless Services (DHS) and Women In Need (WIN) for the two homeless shelters coming to 535 and 555 4th Avenue. The total amount the city will pay WIN for the two facilities over approximately eight and a half years is $261,591,165.

535 4th Avenue & 555 4th Avenue (Photo: Pamela Wong/Bklyner)

The 148-unit facility at 535 4th Avenue will open first, with the city paying WIN a total of $147,413,525.00 top operate a shelter at the building. The contract will be valid from September 1, 2019 through June 30, 2028. At 106 months, this works out to $1.4M a month for the facility or $9,396.58 per unit/per month.

For the 105-unit site at 555 4th Avenue (which will include 26 units of affordable housing), NYC will pay $114,177,640.00. The term for this contract will be from December 1, 2019 to June 30, 2028. At 103 months, this would work out to $1.1M a month for the facility or $10,557.34 per unit/per month.

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The notice mentions no option to renew the leases. HHS ACCELERATOR Method has been selected as the contractor for both buildings. It is currently unclear what their work will entail.

A contract public hearing is scheduled for Thursday, June 27 at 10am (22 Reade Street, Manhattan) where the community can provide testimony on the proposed contracts for the facilities. Click here for the NYC Administrative Services info. 

A draft copy of each proposed contract will be available for the public review at the Human Resources Administration of the City of New York, Office of Contracts (150 Greenwich Street, 37th floor, Manhattan) from June 14 to June 27, 2019, Monday through Friday from 10am to 5pm.

The two 4th Avenue family shelters will be operated by WIN from a pair of buildings that were originally being developed as market-rate apartments by Adam American and Slate Property Group—developers with multiple DOB violations. It is unclear how much WIN will be paying in rent for the properties.

The siting of the two WIN facilities has been a polarizing topic for neighbors, with more than 1,000 locals signing a petition opposing the shelters while another 900 people have signed a second petition supporting the two facilities. The shelters are part of the mayor’s “Turning the Tide on Homelessness in New York City” initiative to close the cluster sites and commercial hotels currently housing the homeless and replacing them with 90 new facilities.

On May 28, Council Member Brad Lander’s office posted an FAQ on the 535 and 555 4th Avenue homeless shelters.

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16 COMMENTS

  1. Thank you for reporting the news and not simply posting bombastic click bait. These numbers appear to reflect the cash flow from DHS to WIN. Is WIN obliged to reveal what portion of the 2.5m/mo will be used to lease the buildings? What government official has the power to press for transparency?

  2. You literally spelled the word “to” wrong in the first sentence of the second paragraph. It says “top operate” instead of “to operate”. What ever happened to proofreading? Im not even trying to be the grammer police but come on!

  3. People recognize the need for shelters. What concerns us is having this many units within two blocks instead of smaller units spread throughout the city. That is an issue of concern. But, now to read the amount of taxpayer $ which will be paid to WIN (Women in Need) — $9,300+ and $10,000+ per unit per month — this is excessive and outrageous. This contract needs to be investigated. As far as a previous poster’s concern with typos, I think the $ involved are of considerably more importance.

  4. Just build transitional housing in those same spots, and house the homeless. 10 Grand per month per unit for shelters is crazy. The homeless crisis was created by these developers and landlords. Stop rewarding them with more payouts.

  5. This amount listed here is the entire contract. Not just rent. Out of curiosity, what amount is reasonable and not “excessive & outrageous”? And what makes you qualified to determine? Let’s break down the issue into 2 parts.

    On Rent…
    If we want shelters in better neighborhoods they are going to cost more. Landlords have the land and if the city wants a shelter they need to pay rent to the landlord. Why would a landlord take less from the city? The city can’t just snap their fingers and pay whatever they want. What is a reasonable amount to pay the landlord? If we want shelters built in better neighborhoods the city is going to have to pay landlords more rent. The city can pay less and have shelters all concentrated in the worst neighborhoods. Is this what we want? I admit it is a fair question, but I thought we all agreed we wanted better for fellow new yorkers who need a hand.

    On operating expenses …
    This money goes to pay for utilities, cleaning, security, day care and social services. I agree that this can probably be done for a lot less money, but is that the type of shelter you want in your neighborhood? Do you want an underfunded shelter? Do you want just a roof over their heads for the night or do you really want to help these folks get back on their feet with the services they need to get a break?

    This shelter is coming. If I were you I would be demanded it was well funded, because the alternative is not the shelter you want in your neighborhood. Would you drop your complaints about costs if the city dropped the costs and gave you a bare bones shelter with minimal security and no social services?

  6. It’s time to drop the canard that’s there no way to build shelters in CB6 for less money than these two brand new, luxury apartment buildings. These buildings were constructed by Adam America and Slate Property Group, two gigantic real estate investment companies with a record of political corruption and ties to City government (recall the De Blasio campaign finance scandal in which Adam America got City permission to convert Rivington House into luxury condos). This article ( therealdeal.com/issues_articles/homeless-housing-development-nyc/ ) explains how developers make more money leasing their buildings to the City for use as shelters than they do renting them on the open market. Instead of bailing out super-rich real estate investors, the City could hire a non-profit like HELP USA to renovate old buildings or construct buildings designed to be homeless shelters. Besides the excessive cost of these buildings, 535 was built on a brownfield that required a costly cleanup. There are less expensive plots of land available in CB6. Let’s get real: there’s a glut of luxury apartments and the market is softening, so what better way for Adam America and Slate to sell these units than to unload them onto the City, which seems to have unlimited funds for the purpose.

  7. City Comptroller Scott Stringer has put DHS on alert that it is spending too much on homeless shelters without corresponding results. This project is only one glaring example of the City’s inefficient and ineffective spending on homeless shelters. If Brad Lander wants to have any credibility as a candidate for City Comptroller, he needs to come up with a better plan to house the homeless than 535 and 555 4th Avenue.

  8. The conflating of issues by people on is really not arguing in good faith. You can be for homeless shelters AND have reasonable concerns about this project, from size to cost to development. And the fact that people in the community have these doubts is really the fault of the decision-makers who have not made this process transparent or have attempted to assuage legitimate concerns. So yes, these cost estimates are seem ridiculous.

    I have nothing to compare it to, so maybe I’m just ignorant, but having the city spend 10k per unit per month seems exorbitant to me. Comps in the area suggest rent should be half that amount (being generous). And I recognize there will be some semblance of security and social services, but I fail to see how that should double the amount.

    To the people saying the we want a well-funded shelter, my question would be: to what point? I mean, if the estimate was a billion dollars instead of $241 million, would you then have an issue with it? Because by the logic that says “the more funding the better”, then there is no limit to what the government can spend. The analogy is this: if you have a car that is serious need of repair, you don’t give the mechanic a blank check and tell him “do what you have to do”. No, you understand what things will cost, negotiate, and tackle what is affordable to the point where at least your car works.

  9. How about spend $10k per month on salaries for jobs, and enable these residents to create a longer-term and sustainable life for themselves and their families? Then let these developers take a chance on the open market, find they CAN’T get a guaranteed revenue stream / government bailout, and let the market determine what to pay for mediocre apartments? If DHS is paying 1/2 the amount for rent and balance is going to administrative services for WIN, even better….less money wasted on middlemen.

  10. There are a couple of problems with your mechanic analogy… It would be like you going to the mechanic for a blown transmission, she quotes $200 and you start jumping up and down about transparency in her costs and that she is ripping you off. You have no idea if this is a fair cost. You have no idea what the proposed services are either. I can easily see security costing $1MM+ per year…. quick math…. 5 guards per building, 10 total (hopefully more). 3 shifts a day= 30 hours per week. $15/hr (no fringe), 40hrs/week, 52 weeks= $936K. This is without any type of management, etc….
    How about social workers? 250 residents…. (15/1 ratio?) = 16 social workers…. at 75K a pop= $1.2MM….

    I just came up with $2MM without talking about building cleaning staff, management, day care! What about utilities? 250 units must cost $1MM a year for electricity, heating, etc…

    Transparency doesn’t mean ask everyone in the neighborhoods opinion about something before it happens. Nothing would ever get done that way.

  11. Somebody has their hand in the cookie jar. $10,000 per month for an apartment in Gowanus is obscene. That money should be going to house THREE families right here in CB6.

    You can be in favor of helping the homeless in our neighborhood (I am) and still hate that someone (Brad Lander? Slate? Adam America? Others? All of the above?) is diverting money into the wrong pockets.

    BTW: the attempt to blame security costs for the price tag is silly. $1mm in security costs is about $331 per month per apartment. Barely a drop in the $10,000 bucket.

  12. Shame on you mayor. I currently live in Staten Island New York. The rains here are ridiculous. With all this money that I feel is a waste instead of building shelters for homeless people why don’t you build them apartments in this unit. Long-term apartments affordable apartments. New York residence have to work two or three jobs to make ends meet. And that’s a shame. Most New Yorkers don’t have the luxury to buy their own homes. Most New York is a ranting now a days. Things are not like they used to be. Years ago everybody used to live in one home get along share the payments and save for your future. People are not lucky enough to do that these days. I feel these two units huge buildings should all turn into Apartments for low housing people and anyone who could afford to live in this beautiful c most New Yorkers don’t have the luxury to buy their own homes. Most New York is a renting nowadays. Things are not like they used to be. Years ago everybody used to live in one home get along share the payments and save for your future. People are not lucky enough to do that these days. I feel these two units huge buildings should all turn into apartments for low housing people and anyone who could afford to live in this beautiful city it’s of ours. I think you may or should rethink this and said I make it to Home Less units make a long-term apartments

  13. @Gowanus Resident you are 100% on the money with this – this is a total bailout for developers that executed a poor strategy. Shame on NYC politicians for abusing tax payer dollars. I will echo your thoughts during tomorrow’s hearing.

  14. Anyone read the latest on this on Bklyner??? Monthly rent estimated at $3,500. The balance goes to the non-profit provider to include security, childcare, education, maintenance, social services and utilities…. Yeah huge real estate bail out….lol. Any more conspiracy theories? At $200/night, which is what the city probably pays for a hotel room to provide shelter rooms, it would come out to $6K/month and they get no services!!!! This is a good deal for the city! They get 200+ families off the streets and into real apartments instead of overpriced hotel rooms. The majority of the funds go to a proven non-profit!

  15. That’s a balance of $6.5K/mo/unit. That’s $1M dollars per month (145*$6.5K).

    $12M a year for security, childcare, maintenance, social services and utilities for 148 units? Please build-up the $12M that you think is so realistic? Would love to see this math. This is a bailout for failed condos that know how to politic and line the right pockets.

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