Proposed Pearl Street Homeless Shelter Put on Ice by Judge

Back in June, we called it the Battle of Peck Slip and Pearl Street, or the People versus Big Homeless.

On Monday August 25, Manhattan Supreme Court Justice Arthur Engoron issued a decision in which, for now, the people have won with the Judge explaining in detail how the city betrayed its public duties when it secretly issued a $42.3 million homeless contract to the non-profit homeless services provider, Breaking Ground, back in January 2024.

The outcry has been ferocious pitting South Street Seaport area residents and Peck Slip School families against the combined forces the Department of Homeless Services— and their partners in both the “non-profit” homeless shelter industry, and the more profit-minded world of commercial real estate.

The homeless shelter at 320 Pearl Street was formerly a nine-story Hampton Inn. It is adjacent to the Peck Slip School, PS 343, which has 400 kids, from pre-K to fifth grade.

In January 2024, the hotel at 320 Pearl Street was bought by David Schwartz of Slate Property Group for $24.1 million from the seller, Ashish Parikh of the Pennsylvania-based hospitality group Hersha Hotels and Resorts.

By March, the Hampton Inn was closed and locals, especially the thousands of people living in the 1,650 apartments of the Southbridge Towers cooperative complex across the street, wondered what is next?

The answer came that June, just days before the school year ended: 320 Pearl St. was to become a homeless shelter, operated by Breaking Ground, a non-profit organization serving homeless New Yorkers

But that was only part of the story.

Friends in High Places

As it happens, the proposal to turn 320 Pearl St. into a homeless shelter had been presented to the Department of Homeless Services back in January, with no public notice in the interim.

This timeline was only discovered when a local parent made a Freedom of Information Law (FOIL) request on the subject.

Subsequently, a parents group called Peck Slip Advocates for School Safety (PASS) was formed to challenge the project legally. That they raised over $20,000 is impressive—but pales in comparison with the tens of millions of dollars Slate Property is believed to make by leasing its properties as homeless shelters.

How do to they do it? Not to simplify the complex world of real estate investment, but in in 2018, Slate Property Group co-founder David Schwartz hosted a $20,000 fundraiser for then Brooklyn Borough President Eric Adams—after which Adams endorsed a zoning variance for a Slate residential tower project in Brooklyn.

On the “non-profit” side, according to 2023 filings, Breaking Ground President and CEO Brenda Rosen’s salary was $629,604, with $13,827 in other compensation. Vice President David Beer made $336,867, with $47,222 in other compensation.

Interestingly, Breaking Ground’s headquarters at 505 Eighth Ave., at West 35th Street (which is also home to Straus News’s Manhattan office), is modest, while the surrounding blocks are an epicenter of Midtown homelessness and drug addiction.

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On the afternoon of Wednesday, June 11, Southbridge Towers resident Eric Yu—who is also a member of Community Board 1 and, at the time, a longshot candidate for City Council—took a day off from his MTA job to protest the planned Pearl Street proposal generally and to propose greater regulation concerning the siting of such shelters generally.

Standing with Yu on Peck Slip were dozens of multi-ethnic supporters holding signs reading “School Safety Is a Priority”; “Safe Distance From Schools”; and “Schools Must Be a Safe Place.” Affixed to music stand from which Yu read his speech, a sign read “500-ft Minimum Separation From Schools!”—which is also the proposed regulation Yu and CB1 back for all future shelter locations.

“It is irresponsible and negligent by the mayor and Department of Homeless Services to site this men’s shelter literally next door to . . . elementary school children,” Yu said. “This shelter will accept mentally ill, substance abusers, and registered sex offenders without a background check. What are they thinking?”

Wrote Judge Engoron in his Aug. 25, ruling, “There are two, eight-hundred pound gorillas in the room. The first is the fact that the proposal would place a shelter for troubled adults adjacent to a school for three-to-eleven-year-olds. . . . The second . . . is the City’s cavalier attitude towards fulfilling its obligation to demonstrate that it seriously considered the siting criteria.”

What the Department of Homeless Services will do next is unclear. Similarly, Breaking Ground has not issued any response to the court’s decision.

Council Member Christopher Marte, who politely but firmly smacked down Yu’s implied challenge to him on the 320 Pearl Street issue before trouncing him at the ballot box, was more forthcoming.

“Today’s ruling makes clear what parents, neighbors, and elected officials have been saying from the start,” the solon explained. “This was never about opposing services, it was about location,—and the City did not do an adequate job studying the feasibility of this site.”

“The court agrees that the analysis was insufficient. Safe havens are necessary, and we support them. We’re ready to work with the community and the administration to identify a more suitable location that meets our shared goals of compassion, safety, and effective services.”