Alloy Development pays $15M to Boys & Girls Club in Downtown Brooklyn following club’s bankruptcy

Alloy Development through the entity 240 Nassau Street Owner, LLC paid $15 million to Madison Square Boys & Girls Club through the entity Madison Square Boys & Girls Club, Inc. for the specialty building (P5) at 240 Nassau Street in the Navy Yard in Downtown Brooklyn, Brooklyn.
The deal closed on November 16, 2023 and was recorded on November 29, 2023. The property has 24,180 square feet of built space and 35,151 square feet of additional air rights for a total buildable of 59,318 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $620 and the price per buildable square foot is $252 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for Madison Square Boys & Girls Club was Jeffrey Dold. The signatory for Alloy Development was Jared Della Valle. The contract date was August 3, 2023.

Alloy Development plans to improve the existing center while it opens a “dialog” with the community about development at the site.

The Madison Square Boys & Girls Club filed for bankruptcy in 2022 as it fought 140 sexual abuse claims, most tied to a doctor who worked at the center as a volunteer for decades.

In July 2023 the bankruptcy court approved a $22 settlement which included the $15 million sale of the building. Nearly all the abuse cases accused a doctor, Reginald Archibald, who from the 1940s to the 1980s was a volunteer at the youth club. He died in 2007.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Alloy Development had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Madison Square Boys & Girls Club had not purchased any other properties and had not sold any properties over the same time period.

The property

The specialty building in Downtown Brooklyn has 24,180 square feet of built space and 35,151 square feet of additional air rights for a total buildable of 59,318 square feet according to a PincusCo analysis of city data. The parcel has frontage of 217 feet and is 112 feet deep with a total lot size of 24,411 square feet. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $4.9 million. The most recent loan totaled $11 million and was provided by Carver Federal Savings Bank on August 21, 2023.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received five DOB violations in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Downtown Brooklyn, The bulk, or 40 percent of the 22.4 million square feet of commercial built space are office buildings, with elevator buildings next occupying 24 percent of the space. In sales, Downtown Brooklyn has 3.6 times the average sales volume among other neighborhoods with $1.3 billion in sales volume in the last two years and is the 2nd highest in Brooklyn. For development, Downtown Brooklyn has 2.8 times the average amount of major developments relative to other neighborhoods and is the 5th highest in Brooklyn. It had 2.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space.

The block

There are no active new building construction projects on this tax block.

The seller

The PincusCo database currently indicates that Madison Square Boys & Girls Club owned at least five commercial properties in New York City with 115,676 square feet and a city-determined market value of $27.9 million. (Market value is typically about 50% of actual value.) The portfolio has $11 million in debt, borrowed from Carver Federal Savings Bank. Within the portfolio, the bulk, or 53 percent of the 115,676 square feet of built space are P3 properties, with P5 properties next occupying 47 percent of the space. The bulk, or 53 percent of the built space, is in Bronx, with Brooklyn next at 47 percent of the space.

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