Former Midtown hotel to become 579 affordable apartments
Photos courtesy of Slate Property Group unless otherwise noted.
A former Midtown hotel is slated to become a permanently affordable housing building with nearly 600 units. On Monday, Slate Property Group and Breaking Ground announced the acquisition of the Stewart Hotel at 371 Seventh Avenue, which will be converted into 579 affordable apartments for low-income households and formerly homeless individuals. The purchase underscores an emerging strategy to address the city’s housing crisis by converting underused hotels into affordable housing, following the opening last week of the city’s first such development at the former JFK Hilton in South Jamaica, Queens.
Located across from Penn Station, the 31-story, 611-room hotel first opened in 1929 as the Hotel Governor Clinton, named after New York state’s first governor, George Clinton, according to The Real Deal.
The building shuttered in 2022 and briefly served as a migrant center. The property includes a 100-space underground parking garage, 12,000 square feet of ground-floor retail, and 3,500 square feet of ballroom space, and sits within a few blocks of more than a dozen subway lines, multiple bus routes, the Long Island Rail Road, and NJ Transit.
Slate first revealed plans in July to acquire the vacant hotel and convert it into affordable housing. The developers purchased the building from Jack Yadidi’s Sioni Group and Isaac Chetrit’s Patriarch Equities, which bought the then four-star hotel in 2016 for $217.5 million.
“Permanently affordable housing on this scale just doesn’t happen in Midtown. This project combines extraordinary scale, rapid construction, and long-term stewardship by a respected non-profit,” David Schwartz, co-founder and principal of Slate, said.
“It is THE model for how NYC can break through and make a real dent in this affordability crisis.”
For the conversion, Slate will replace all major building and mechanical systems, upgrade LED lighting, and combine adjacent hotel rooms as needed to create comfortable living spaces. Rent prices for low-income units will range from $1,385 to $1,731/month.
New office space will be constructed to house on-site social services provided by Breaking Ground, with all formerly homeless tenants receiving support to maintain housing stability and improve overall health.
The organization will provide services to residents transitioning from homelessness to permanent affordable housing under a contract with the city’s Department of Health and Mental Hygiene. All tenants will also have access to Breaking Ground’s Tenant360 program, a suite of services offering socialization, recreation, and educational opportunities.
Older adults will have access to personalized, on-demand assistance, including unit safety and accessibility modifications, specialized healthcare referrals, and planning services such as wills, healthcare proxies, and powers of attorney. The building will also feature 24-hour security and on-site maintenance staff.
Total development costs, including site acquisition, are projected at $500 million. Of this, $86.85 million comes from the state’s Hotel and Commercial Conversions Program, created under the 2021 Housing Our Neighbors with Dignity Act (HONDA) to incentivize developers to convert vacant office buildings and hotels into affordable housing, as 6sqft previously reported.
Remaining funds will come from a mix of city, state, and private sources, including tax-exempt bonds from the city’s Housing Development Corporation and financing through the Department of Housing Preservation and Development’s Supportive Housing Loan Program.
Acquisition financing was provided by Wells Fargo and JPMorgan Chase, alongside the Low Income Investment Fund, LISC Fund Management, and the Corporation for Supportive Housing.
The project will also utilize historic tax credits and Low Income Housing Tax Credits through the state Department of Homes and Community Renewal, as well as transferable development rights controlled by Breaking Ground, which helped reduce acquisition financing needs.
On Thursday, Gov. Kathy Hochul announced the completion of the Baisley Pond Park Residences in Queens, which transformed the former JFK Hilton hotel into 318 affordable and supportive apartments. The $167 million project is the first hotel-to-residential conversion completed under HONDA.
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