Inside the deal to kill housing at Elizabeth Street Garden

A sense of calm has settled over the Elizabeth Street Garden. The once-endangered greenspace had been facing imminent eviction since March. Now, people lounge on benches sipping iced coffees as if the leafy foliage and cement sculptures will be there forever.

The privately run garden was supposed to make way for a 100% affordable housing development for low-income, LGBTQ seniors in one of the city’s richest neighborhoods. The plan had been in the works for more than a decade, and Mayor Eric Adams spent years defending it amid fierce opposition, including a campaign from A-list celebrities.

That all changed on Monday when Adams’ top Deputy Mayor Randy Mastro announced a deal with local City Councilmember Christopher Marte to axe the project and spare the garden.

Instead, Mastro said, the senior apartments, along with nearly 500 additional units for low- and middle-income renters, would be built on three other lots in Marte’s district, including two owned by the city.

Advocates for the garden cheered the about-face. Mastro called the agreement a “win-win.” But proponents of the senior housing project, including housing experts and several city officials, are furious. They warn that the replacement housing Adams and Mastro have promised may not even begin construction for several years because the new plan touches off a cascade of requirements, financial agreements and complicated planning procedures.

“What we’re actually talking about is starting over,” said Barika Williams, the executive director of the Association for Neighborhood & Housing Development, a trade group for nonprofit developers. “This was a 10-plus year process to get us to this point, and what we’ll do now is start over from scratch in three different locations and with three different processes.”

The new proposal faces a raft of hurdles: There is no developer in place for two of the locations, all of the sites require changes to current zoning rules and community leaders say the city had already pledged to preserve one of the sites for a new school.

The lengthy timeline means Adams and other officials who brokered the deal may not be around to steer it. Zohran Mamdani, a state assemblymember who appears likely to win the Democratic nomination for mayor and is challenging Adams, has said he supports replacing the privately run garden with the senior affordable housing project. So does his ally, city Comptroller Brad Lander, who could be up for a top role in the administration if Mamdani wins in November.

The development team behind the project said it hasn’t ruled out legal action to either restart the project or recoup the money it spent on planning and legal fees. Williams, from the Association for Neighborhood Housing and Development, said the costs likely reached millions of dollars.

“We have spent a lot of time and money and are reviewing our options,” said Matthew Dunbar, the senior vice president at Habitat for Humanity, one of the nonprofit developers involved in the scuttled project.

Shovel ready?

Mastro is bullish on the new deal. He said the plan he and Adams announced on Monday will create five times more affordable housing and — in a claim that many close observers found far-fetched — he told Gothamist he expects developers to break ground on at least one of the sites in about six months.

”There’s going to be shovels in the ground at the end of the year on that or certainly by early 2026,” he said.  ”These are all moving apace and some of them will move at a very quick pace.”

But four city officials in the Adams administration who were informed of Mastro’s comments said that was unlikely, even if the city used a rare land use maneuver to fast-track approval. All four asked to remain anonymous for fear of retaliation.

The planning process for each of the three new sites is still in a preliminary stage, which typically moves at a plodding pace through the city’s bureaucratic machinery. But the pace to kill the Elizabeth Street Garden housing plan moved quickly once Mastro was named deputy mayor on March 20. Less than a month later, he instructed the city’s housing agency to halt eviction proceedings at the garden after it had already served notice to the operators, the New York Times reported in April. Mastro said he wanted to review the project with fresh eyes.

In the meantime, Marte, the local councilmember and an ardent supporter of the garden, presented Mastro with an alternative plan, according to attorney Norman Siegel, an Adams ally who has represented the nonprofit that runs the garden site for the past seven years. It was one that had been previously rebuffed by city housing officials: to build the affordable apartments elsewhere.

Siegel said Marte and Joseph Reiver, the head of the nonprofit that runs the Elizabeth Street Garden, were negotiating with the owner of a large empty lot three blocks away on Bowery. The goal was to see if the company developing the property would include affordable housing in its new building, initially planned for eight stories, if the city approved zoning changes allowing it to build up to 23 stories tall.

By June, they had reached an agreement, according to a “proposal cover letter” formatted like a press release, dated June 2. The owner, Kinsmen Property Group, would add 123 units of affordable housing in a new 320-unit building on Bowery between Broome and Kenmare streets if the zoning changes were made.

Marte said he would support a similar plan for a city-owned lot at 22 Suffolk St. to “build a 100% affordable housing development of approximately 200 units,” according to a separate letter to Mastro dated June 6. Marte also said he would approve it being designated as an “Urban Development Action Area Project,” allowing it to skirt the typical land use process.

Leaders of Community Board 3, who represent the Suffolk Street site, say the city’s School Construction Authority already committed to reserving that lot for a new school as part of a major redevelopment project known as Essex Crossing. Though the agreement officially expired, Community Board 3 District Manager Susan Stetzer and Chair Andrea Gordillo said they had not heard from city officials regarding any concrete housing plans for the site.

Stetzer said city officials recently told her they were “still sympathetic to the use as a school” and that she was surprised to learn of the housing proposal through news reports Monday.

“It came to be behind closed doors without any of us involved,” Stetzer said.

Marte refused to discuss the plans with Gothamist despite 10 calls to his cellphone, spokesperson and chief of staff. He also agreed to withdraw his initial opposition to another housing project, according to the June 6 letter. Adams announced in January that the city plans to contract with a developer to build 1,000 apartments at 100 Gold St., where the existing building contains the offices of the city’s Department of Housing Preservation and Development.

Ari Zagdanski, the head of Kinsmen Property Group who signed the agreement with Marte, declined to comment on the company’s housing plan or the agreement with the councilmember.

Lack of trust going forward

Williams, from the Association of Neighborhood & Housing Development, said she expects the projects to take three to five years to complete in a “best case scenario.” She said it’s not as easy as swapping one site for another because each individual project requires multiple reviews, layers of community input, city approvals and complicated financing. By contrast, the garden site project would have broken ground in a matter of months.

In a letter to Adams late last month, Williams and the leaders of other affordable housing groups, warned the mayor that killing the planned housing development at the garden site would set an “alarming precedent” about how the city treats obligations under “apparent political pressure.”

“It is imperative for us to have confidence that the administration honors its commitments for affordable housing development on publicly owned sites,” the group wrote. “A sudden reversal would have reverberations for the affordable housing development industry and its confidence in the city as a reliable development partner.”

Williams and other signees said they never received a response.

Mastro said the city would raze the garden if the new housing doesn’t get built, though there is no clear timeline for completion, and he bristled at the suggestion that the city is breaking a deal.

“This is not a question of anyone doing anything other than honoring the higher commitments to produce even more affordable housing than others even thought possible or contemplated when they focused on the garden site alone,” he said.

Adams, for his part, has stood by the decision and touted his housing bona fides, especially his support for new citywide zoning rules that could make way for up to 80,000 homes.

“I’m baffled that people are missing the mission,” he told reporters Tuesday. “The mission is to build housing. And so whatever you can leverage to build housing is a win.”