Mount Sinai Beth Israel may still be battling for the right to shut down its Gramercy campus, but the health system is shedding some nearby buildings all the same.
Mount Sinai has sold two sites on East 17th Street between First and Second avenues for about $34 million, according to deeds that appeared in the city register Monday.
The buyer of the properties, Nos. 317 and 321 E. 17th St., is officially a shell company, 317 East 17th Street LLC, both deeds show. But the company’s address, in Brooklyn’s Gowanus neighborhood, corresponds with that of developer Joyland Management, a Brooklyn-focused developer with about five-dozen residential projects under its belt.
Joyland went into contract on both sites July 25, the same day the state Department of Health gave Mount Sinai the required approvals to shut down Beth Israel, even though some local officials and neighborhood residents concerned about losing medical services continue to fight the closure plan in court. A state judge has temporarily blocked Mount Sinai from shutting down medical services within the main hospital until the lawsuit is resolved.
That the hospital was able to go into contract with Joyland on the very same day that state officials greenlighted the closure plan suggests Beth Israel had been courting Joyland in advance. But hospital spokesman Loren Riegelhaupt dismissed the timing as a coincidence.
Riegelhaupt added that the hospital, which began marketing the properties for development in 2023 in the latest push by a health care group to capitalize on its real estate, is legally permitted to sell the sites as they are separate from the hospital’s main campus and thus are not subject to the judge’s order.
“The two buildings on 17th Street have not been used for medical purposes for many years and have stood entirely vacant for more than three years,” Riegelhaupt said. “This sale will have no impact on the 16th Street hospital.”
Mount Sinai will use cash from the sale to offset financial losses it’s incurred from keeping Beth Israel open, which amount to up to $600,000 a day, the hospital said in legal filings.
Joyland, which closed on its purchases Dec. 16, appears to have wasted no time reinventing the pair of sites, which once functioned as housing for nursing students and staff members.
Indeed, permits filed in recent days with the city’s Department of Buildings show Joyland intends to merge the side-by-side properties into a single lot and redevelop the structures into a 13-story mixed-use project with 96 apartments.
It’s not clear from the permits if the homes would be condos or rentals, or would include any below-market-rate units, though local leaders had called for affordable housing at the sites when they first came to market. The redeveloped buildings, designed by Brooklyn-based Kao-Hwa Lee Architects, still require Department of Buildings approval.
The larger of the two sites, No. 317, is Fierman Hall, a 12-story, 71,000-square-foot structure that opened in 1966 to house up to 300 nursing students as well as classrooms, according to an official history of the hospital. Connected by a bridge over East 17th to the main facility, the building was a creation of Schuman & Lichtenstein, the precursor of today’s SLCE Architects. It sold in December for $27.6 million, a deed shows.
The other site, No. 321, a narrow, 19-foot-wide, 5-story, Italianate-style building described as a “staff facility” in city tax records, has been owned by the hospital since 1967, property records show. It went for $6 million, according to the register.
Two years ago Cushman and Wakefield began marketing the pair of sites, along with two other properties, 327 and 329 E. 17th St., which are both rowhouses, according to reporting in The Real Deal. It’s not clear if Joyland also purchased Nos. 327 and 329 as part of last month’s transaction, though there are no public records so far to indicate it.
In 2023 Assemblyman Harvey Epstein, who represents the neighborhood, called on Beth Israel to slap a deed restriction on the sites to ensure they provide affordable housing. The hospital did not apply that restriction, which might have limited the buildings’ redevelopment appeal, Riegelhaupt said.
Vincent Tammaro, chief financial officer of Mount Sinai Health System, signed the deeds on behalf of the hospital.
Joyland previously developed Copper Lofts in Williamsburg, a 66-unit rental project, and 10 Quincy St. in Clinton Hill, a 46-unit condo development. It’s also involved with 125 Third St., a 132-unit offering under construction in Gowanus, according to its website. Joyland CEO Judy Minster did not return a phone message by press time.
