Mt. Sinai Sells Two Properties Near Beth Israel For Combined $34 Million

Mt. Sinai–which is trying to lift a restraining order preventing it from closing Beth Israel Hospital on E. 16th St.–has now sold two nearby properties to a LLC based out of Brooklyn for a combined $34 million, Our Town Downtown confirmed.

Crain’s New York Business first reported on the sale. They noted that the shell company buyer shares an address with Joyland Management, a Brooklyn-based developer with dozens of residential properties in its portfolio. The group reportedly plans to build a mixed-use building with 96 apartment units on the site of both properties.

While the two buildings at 317 and 321 E. 17th St. were owned by the hospital network, they were not technically on the Beth Israel medical campus proper, meaning that they could be sold separate from court proceedings.

The deal went through on Dec. 16. The smaller 321 E. 17th St. fetched about $6 million, while 317 E. 17th St.–historically known as Fierman Hall–pulled in over $27 million. The former property was once used as a “staff building” by hospital administrators, Crain’s reports, while the latter was first opened in 1966 to house and educate hundreds of nurses. The buildings have reportedly been vacant for three years.

Mt. Sinai said that the proceeds will offset losses incurred from being legally forced to keep Beth Israel itself open, due to the aforementioned restraining order. The hospital network finally earned conditional state approval to close the hospital in July 2024, in the midst of being sued by a group of patient advocates who believe that the shutdown is financially spurious and violates health laws. A judge then dismissed the case against Mt. Sinai “without prejudice,” allowing community plaintiffs to refile a lawsuit with a new judge. They did so by August 2024, earning a fresh order blocking the closure.

In recent legal filings, a lawyer defending Mt. Sinai–Joshua Hill of the white-shoe firm Paul, Weiss–has claimed that the hospital network is losing $600,000 a day due to the restraining order. On Dec. 16, the day of the E. 17th St. sales, Hill submitted a letter to the judge that claimed Mt. Sinai had lost “between $6.5 and $7.8 million” since the temporary restraining order was issued. It has also claimed that it lost $1 billion overall on Beth Israel in a decade.

“We respectfully reiterate our urgent request that the Court decide the Mount Sinai Defendants’ motion to dismiss the case and vacate the TRO as promptly as possible, either so that the Hospital can be closed in accordance with the closure plan already approved by DOH or so that the Mount Sinai Defendants can pursue an expedited appeal or other appellate relief,” Hill wrote.

In a letter of his own, plaintiff’s attorney Stuart A. Schwartz called Mt. Sinai’s request “wholly improper.” He added that “Beth Israel continues to be a vibrant, busy hospital. For the fourth time this year I had the unfortunate occasion to accompany my 102-year-old mother to Beth Israel just last week.” Patient advocates fear that if the hospital closes, there would only be one major hospital outpost for 400,000 people living below E. 16th St., a smaller branch of NewYork-Presbyterian.

In a separate filing on Jan. 2 of this year, Schwartz also argued that Mt. Sinai was only losing money on Beth Israel due to shuttering revenue-generating services, which he deemed “illegal.” Community groups have repeatedly indicated that they believe Mt. Sinai is only shuttering the hospital to capitalize on prime real-estate.

In an interesting twist, he further indicated that the plaintiffs would be open to a settlement discussion with Mt. Sinai, which would involve them building a smaller hospital. By Jan. 6, Hill appeared to shoot such a settlement down, calling it a “clearly inappropriate” and “financially impossible.”