Brooklyn’s Prince Lefferts Hotel, shut down by police earlier this month due to prostitution charges, will be allowed to reopen on October 1 if landlord Moses Fried stops offering hourly rates, according to City Council Member Letitia James.

Ms. James, who said she was not familiar with all the specifics of the agreement signed on Saturday, said Mr. Fried will make renovations to the hotel before it is reopened. Once business resumes, police will monitor the area with video cameras.

The hotel was closed on July 7 under the Nuisance Abatement Law, but under the deal charges have been dropped.

Mr. Fried, a 77-year-old real estate mogul who recently added a $10.2 million residential complex in Palm Beach County to his stable of hotels, homeless shelters, and apartment buildings in Brooklyn, has denied all accusations that his Clinton Hill hotel has harbored prostitutes.

Undercover police agents, however, submitted affidavits to state Supreme Court stating that they had witnessed prostitutes soliciting men for sex in the lobby. At least one affidavit claimed that a hotel employee at the service desk had collected money and provided condoms.

Earlier this month, Mr. Fried told The New York Sun that no one at the hotel had ever taken money for sexual favors. “They never did any such thing,” Mr. Fried said. “I’m a Jewish religious man. I would never permit to run prostitution there.”

Mr. Fried said he’d warned his managers not to rent the rooms out by the hour, but on several occasions they had not complied. Area residents have told authorities that they saw prostitutes and drug deals there constantly before the hotel was closed.

According to Ms. James, Mr. Fried’s stipulation agreement with the police specifies that, in reforming the Prince Lefferts facilities, he is making no admission of guilt.

In a letter addressed to local officials, including the president of Brooklyn, Marty Markowitz, and Ms. James, some Clinton Hill residents expressed concern that Mr. Fried will not honor the terms of the agreement when the hotel reopens.

“Without illegal drug trafficking and prostitution, how will the hotel remain in business?” they wrote in the letter, posted online yesterday. “It can’t, so it’s only a matter of time before the hotel reverts back to its prior form as there is no economic justification for a legitimate hotel of this size and scope in this neighborhood.”

Mr. Fried could not be reached for comment yesterday.