With a liberal disposition, and $63,500 yearly tuition, the Calhoun School has been an Upper West Side fixture for more than a century. Its alumni include entertainment stars such as the actor Ben Stiller, the playwright Wendy Wasserstein, and the Oscar-winning comedian turned director Jordan Peele. The school’s main building is a curved-glass-and-travertine box nicknamed the “TV set.” Within, there are no walls dividing classrooms. This is in order to create a more open, relaxed environment.
Just a few blocks away is Calhoun’s more staid lower-school building. Nestled among brownstones on West 74th Street, the property is a wide red-brick, five-story building, with large windows and stately steps leading up to the entrance. Surrounding the school are local businesses, including the original location of the celebrated cookie shop Levain Bakery, where for 30 years schoolkids have procured their after-school treats.
In July 2023, Calhoun announced that changes were coming to the neighborhood. It was selling its West 74th Street building in order to merge with a progressive Montessori school closer to its high-school base. The building quickly sold for $14 million to the private-equity firm Bayrock Capital, which announced plans to develop it into luxury apartments.
But not everything was as it seemed. At a community-board meeting a few months later, it was revealed that rather than building high-end condominiums, Bayrock was opting to turn the former school building into a shelter for 146 women experiencing homelessness.
In a neighborhood where residents see no contradiction in proclaiming “Tax the rich” while living in multi-million-dollar apartments, the announcement of the shelter is testing liberal pieties to the utmost.
Deborah Sale, a former city-government official who has lived on West 74th Street for decades, was shocked to hear about Bayrock’s bait and switch. With other concerned neighbors, she came together to create a nonprofit, Friends of the UWS, which has written a slew of op-eds in local papers, launched a postcard-mailing campaign, and even hired a crisis-management P.R. firm in order to stop the shelter.
Of particular concern to the group is the shared plot of land behind the former Calhoun building. It had previously been used as a playground, but new plans show it slated to become a recreation area for the shelter’s residents where, among other things, they’ll likely be allowed to smoke.
“It’s a very homey neighborhood in the back where people are out there grilling and playing, and there are kids out there,” says Elliot Schildkrout, a 77-year-old retired physician and Friends of the UWS member. “I don’t think there’s any protection about what they’re going to do about smoking and fumes and cigarette butts and that kind of stuff.”
Friends of the UWS has pleaded for the city government to change course and convert the building into affordable housing or a public school. There have been dark allusions to the purchasers of the building. “A Private Equity Firm is making money on taxpayer-funded shelters, raising concerns about the transparency and ethics of such arrangements,” read one of Friends of the UWS’s postcards.
Mobilizing against Friends of the UWS is the Open Hearts Initiative, an advocacy organization of Upper West Siders that was formed in 2020 during the coronavirus crisis to support shelter residents whom they saw as being denigrated by their neighbors. Its motto proclaims, “Yes to compassion in our backyards.” When Friends of the UWS sent out its postcards, Open Hearts fought back with a poster campaign, plastering the neighborhood with printouts reading, Homeless Neighbors Are Welcomed Here.
“I don’t think there’s any protection about what they’re going to do about smoking and fumes and cigarette butts and that kind of stuff.”
Open Hearts member Barbara Okishoff, a longtime resident of the neighborhood, says she doesn’t understand why people are angry about the shelter. “If that’s the worst thing that happens to you in your whole life, that you occasionally smell smoke from somebody smoking next door? I think you’re pretty lucky.”
Open Hearts is not above hitting below the liberal belt. Okishoff points out that the postcards Friends of the UWS sent out were printed in Florida. “I wonder why they didn’t find a local printer,” she says. “If you’re so interested in supporting local businesses, that should be the first thing you should do.”
Certainly Bayrock Capital—which is based on Long Island—is being well supported by the New York City government. Teresa Alessandro, a real-estate agent with Compass who specializes in Upper West Side properties, says that homeless shelters are an appealing venture for private equity.
“It’s actually, per square footage, more profitable [to run a shelter] than if they were to convert them into five one-bedroom units and then rent them at market rates,” Alessandro says. “Multi-family housing is really being hit with a lot of different regulations. There’s a lot of upkeep. There’s a higher tax bracket. Shelters are usually taxed at a different bracket than free-market rental buildings.”
The facility’s day-to-day operations will be run by the nonprofit Volunteers of America (V.O.A.). The shelter’s lease is set for a minimum of five years and a maximum of nine, during which the city is contracted to pay V.O.A. $79 million. Each year, V.O.A. will pay Bayrock Capital $2,531,275 to rent the building, with a 3 percent increase every three years. By the end of the lease, Bayrock will have earned back $23,244,976—nearly $10 million more than the initial $14 million it invested.
This isn’t Bayrock’s first foray into the homeless-shelter business: the firm currently owns 19 buildings throughout the five boroughs that have either been or are currently being converted into homeless shelters. However, according to a real-estate broker who specializes in these transactions, and who wished to remain anonymous, this type of transaction can be concerning. In the case of the 74th Street shelter, the broker says, the city is likely overpaying in rent to make the shelter the most attractive option for Bayrock, in order to help deal with the burgeoning migrant crisis, in which 210,000 asylum seekers have arrived in the city in the last two years. (New York City has a legal obligation to provide shelter to anyone who asks for it.)
There have been issues with these sweetheart deals in the past. David Levitan, a real-estate mogul whose company was named one of the city’s worst landlords by the public advocate, owns more than a dozen shelters throughout the city. Under Levitan’s watch, his buildings accumulated a host of violations—rotting wooden floors, moldy ceilings, rat infestations. While Levitan neglected his buildings, the city continued paying him millions each year.
Now Bayrock is reportedly planning on selling one of its other properties to Levitan to have him run it as a shelter. V.O.A. has also faced controversies, with numerous lawsuits from former residents regarding poor conditions and mistreatment. Neha Sharma, the assistant deputy commissioner, press relations and press communications, for New York’s Department of Social Services (D.S.S.), says, “It’s disheartening to see attempts to misrepresent and/or try to hurt a critical resource for vulnerable New Yorkers.” Bayrock Capital and Volunteers of America did not respond to Air Mail’s requests for comment.
However, as construction clangs away at the former Calhoun School building, and the rancor between Friends of the UWS and the Open Hearts Initiative threatens to reach a boiling point, it’s easy to forget that for some in the neighborhood, life goes on uninterrupted. “This is the first I’m hearing about it,” says the manager of the neighboring Pro Image store with a shrug. “I’m not really aware of much of what goes on beyond the store.”
Sage Lattman is a writer based in New York City and Cambridge, Massachusetts
