Hotel Sought For East Side Bellevue Site
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Despite a flagging economy, the city’s Economic Development Corp. and the New York City Health and Hospitals Corp. are seeking a private developer to transform the building that housed the Bellevue Psychiatric Hospital into a hotel and conference center.
The EDC sent out a request for proposals yesterday for a 400,000-square-foot hotel on First Avenue between 29th and 30th streets that would serve the medical and life sciences industries that are represented in the surrounding neighborhood. The revenue generated from the hotel would go back to Bellevue.
Critics are questioning the wisdom of releasing the RFP at a time when major development projects across the city — from the Atlantic Yards to the proposed remake of Penn Station — are either stalled or in jeopardy of falling apart.
“The timing is not ideal to maximize revenue for the hospital and the city especially for a location that is not conventional,” a real estate attorney with Greenberg Traurig, Robert Ivanhoe, said.
The nine-story building, built in 1931, is adjacent to the East River Science Park, a life-science and technology research and development campus that is scheduled to open in late 2009. The EDC and New York City Health and Hospitals Corp. are offering a long-term ground lease of 49 years with two renewal options of 25 years each.
Mr. Ivanhoe said the long-term prospects of a hotel on Manhattan’s East Side would be determined by the amount of commerce the development campus can generate.
For the past 10 years the site has served as a shelter for homeless men, but the Department of Homeless Services wants to close the site by the middle of next year and shift those activities to another facility. The EDC, which said it hopes to select a developer by fall, said the building’s H-shaped layout shaped makes it ideal as a hotel and conference center.
The director of the real estate research firm Real Capital Analytics, Daniel Fasulo, said the idea is a “no-brainer.”
“The property lays out much better for hotel use than the requirements of a modern medical institution,” he said.
