Court Blocks Plan for Homeless Shelter Adjacent to Public School
A State Supreme Court judge has blocked a controversial plan by the administration of Mayor Eric Adams to open a new homeless shelter at 320 Pearl Street in the Seaport District, next to the Peck Slip School. When City officials first gave notice of this plan, in June 2024 (and said they intended to open the facility by that autumn), it ignited a firestorm of protest. The outcry came from parents at the school who were made aware of the proposal with six days remaining in the academic year, local residents, and members of Community Board 1 (CB1), who do not meet in August.
In September, a group of parents and local activists calling themselves “Peck Slip Advocates for School Safety” filed suit in New York State Supreme Court, arguing that the City had failed to comply with several legal requirements, such as producing a Statement of Needs, providing a Fair Share analysis and producing a Fair Share Statement (a process that aims to ensure such facilities are equitably distributed across all communities), furnishing adequate notice to the community, and holding informational meetings.
A central point of contention was the nature of the proposed shelter, which was planned to be a “safe haven” facility. As a former board member for Breaking Ground (the non-profit that was slated to operate the shelter at 320 Pearl) explained in a deposition, such facilities “place minimal requirements upon residents,” adding, “100 percent of the inhabitants of safe haven shelters suffer from mental illness and/or substance use issues.”
The Peck Slip Advocates for School Safety argued in court filings, “the determination to place an adult safe haven homeless shelter with the riskiest homeless population of any shelter in New York City, consisting of residents with mental health issues, substance abuse issues, criminal issues, including sex offender convictions, directly next to a school with children between the ages of three and 11 is prima facie arbitrary, capricious, and an abuse of discretion.”
Lawyers for the City responded that the plan was formulated in a manner compliant with all applicable law, that officials repeatedly modified their proposal to address community concerns (for example, promising to cover a shared courtyard and offering to position shelter staff near school entrances), and that the lawsuit’s allegations were “speculative and based on stigma.”
The Peck Slip Advocates countered, “all the boilerplate language in the Fair Share Analysis noted was that there were ‘public facilities and institutions’ in the vicinity. That language could refer to municipal parking lots…. It definitely did not provide… anyone reviewing the Fair Share Analysis with notice that there was a pre-kindergarten and elementary school directly next to the proposed Safe Haven Shelter.”
In an August 25 ruling, State Supreme Court Justice Arthur Engoron wrote, “in the final analysis, 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. Rightly or wrongly, this has alarmed some of the school parents and other members of the community. Nevertheless, that is a decision entrusted to the City, and the City has decided in favor of the siting.”
He continued, “the second eight-hundred pound gorilla is the City’s cavalier attitude towards fulfilling its obligation to demonstrate that it seriously considered the siting criteria. One criterion… is, ‘compatibility of the facility with existing facilities and programs in the immediate vicinity of the site.’”
Ultimately, Justice Engoron found the City’s claim that “they demonstrated they considered the juxtaposition of the shelter and the school by stating that they reviewed ‘public facilities and institutions’ within a 400-foot radius is whistling past the graveyard at best and disingenuous at worst. Why require a meaningful statement when mere boilerplate will do?”
While acknowledging, ‘the children and parents of [the Peck Slip School] are not entitled to dictate who their neighbors are,” the judge found, “they are entitled to know that the City seriously considered the particulars and the advisability, or lack thereof, of the subject proposal.”
Justice Engoron also took a skeptical view of the City’s argument about the concerns of the Peck Slip Advocates being “speculative and based on stigma.” In response, he wrote, “in light of [safe haven shelters’] lack of rules ‘against residents using drugs, alcohol or weapons,’” the parents’ “contention that the shelter will likely bring crime, sex offenders, drugs and paraphernalia such as syringes, ‘around the corner on Peck Slip street, which is the open-air playground for [Peck Slip School] during the school day’ is more than merely speculative.”
He concluded, “regardless of whether the siting is a good or bad idea, the approval process was significantly and fatally flawed,” and ruled, “the Court hereby enjoins the City of New York… from opening or operating a proposed homeless shelter at 320 Pearl Street, absent the filing of a new Fair Share Statement that complies with the law.”
The financial details underpinning the proposed shelter at 320 Pearl provide an intriguing glimpse into the business model behind homeless facilities. According to court documents filed in the case, the building (a former Hampton Inn hotel that closed during the Covid pandemic) was purchased for $24.1 million by developer Slate Property Group (a prodigious contributor to the Eric Adams’ various campaigns for elective office) on December 14, 2023. Within 24 hours, Slate had construction plans ready for review by City regulators.
Slate intended to be the for-profit landlord at 320 Pearl, which would rent the space to the non-profit Breaking Ground, as the operator of the planned shelter. Two weeks after Slate closed on the purchase, Breaking Ground (to which Slate had donated $10,000) was designated by the City for a contract worth $50.6 million, over four and one-half years, to operate a homeless shelter at 320 Pearl. This translates into payments of approximately $939,000 per month.
According to the Independent Budget Office (IBO), a publicly funded agency that provides nonpartisan information on critical issues confronting New York City, the cost to taxpayers of housing a homeless individual averages $138 per day. Based on this metric, the cost of operating the proposed 320 Pearl shelter (with its planned 106 beds) would be approximately $5.3 million per year, rather than the $11.2 million per year envisioned by the City’s contract with Breaking Ground. This gap may be accounted for by a passage in court documents that alleges, “upon information and belief, most of the money will be used to pay rent to Slate Property Group, and Slate Property Group will be able to pay off the entire purchase price of 320 Pearl Street within 4½ years.”
Slate began buying shelters and sites on which to develop new homeless facilities in 2020, ultimately spending more than $300 million on these acquisitions. The firm now operates ten homeless shelters across Manhattan, Brooklyn, the Bronx, and Queens. It recently refinanced the debt underpinning this portfolio with a $210 million loan from JP Morgan Chase.
City Council member Christopher Marte, who led political opposition to the plan for a shelter at 320 Pearl, said, “this ruling makes clear what parents, neighbors, and elected officials have been saying from the start: 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.”
Peggy Bliss, a parent at Peck Slip School and one of the leaders of the group that brought the suit, said, “we’re pleased with the judge’s ruling, which confirms the City failed to consider the impact a low-barrier safe haven shelter would have on hundreds of young school children at Peck Slip. Our goal was never to oppose needed services for vulnerable populations, but to ensure that the City considered the effects on the Peck Slip School community. We trust that the City, the Department of Homeless Services, and our elected officials will work to find an alternative location that better serves the neighborhood and the broader community.”
Joe Sullivan, an attorney based in the Financial District who represented the Peck Slip Advocates group, said, “we agree with the judge’s decision that the City’s failure to consider whether placing a low-barrier safe haven adult homeless shelter catering to 106 single men, the riskiest population of homeless residents suffering from mental illness and substance abuse issues and likely having criminal convictions, including sex offender convictions, directly next to a school with students two through 11 years of age was arbitrary and capricious. As the court noted in its decision, the City’s failure even to consider the appropriateness of a safe haven shelter with a shared wall adjoining a pre-Kindergarten and elementary school, along with unanimous opposition from parents and Community Board 1 was ‘insufficient as a matter of law.’ We are hopeful that the City will respect the wishes of the community and site its shelter in a more appropriate location that the community can support, rather than next to a school for our youngest children.”
A spokesperson for the City’s Law Department (which represented the Adams administration in the court proceedings), said, “we are disappointed in the judge’s ruling, but remain committed to meeting the City’s obligations to homeless New Yorkers, and following all legally required procedures in doing so.”