News analysis: If LICH closes, housing towers could rise

News analysis: If LICH closes, housing towers could rise
Photo by Stefano Giovannini

The State University of New York’s plan to shut down Long Island College Hospital would turn a swath of Cobble Hill into a real estate gold mine that would give developers everything they dream of: location, location, and location.

The ailing medical center is worth more dead than alive to buyers thanks to its primo spot and friendly zoning just outside the Cobble Hill and Brooklyn Heights historic districts, giving whoever snatches up the land the rare chance to erect the very kind of apartment housing that the landmark zones were designed to stop.

As such, the sale of the 155-year-old medical center could be the biggest of its kind in Brooklyn in almost a decade, said the legendary broker and realty expert Chris Havens, who called the possibility “momentous.”

“It’s just so rare that something this big gets converted,” Havens said of the Cobble Hill institution, which the State University voted to close last Friday.

The last sale of its caliber in Brownstone Brooklyn was the 2004 turnover of nearby 360 Furman St. in what is now Brooklyn Bridge Park, which developers snatched up for more than $200 million, Havens said.

The sale of Long Island College Hospital real estate could be even more valuable, possibly netting as much as $500 million for the state, as this newspaper reported last month.

If the land is sold to a developer, housing is a near certainty, Havens said.

“That’s by far the most valuable use, or as they say in the business, the highest and best use,” Havens said.

The hospital’s property is already zoned for residential use, and Cobble Hill isn’t a great neighborhood for retail, he said — there, landlords can charge twice as much for residential spaces as commercial spaces.

Because the main hospital building is right next to a landmarked district — but not in it — developers can get all the charm of historic Cobble Hill with none of the red tape, said Ward Dennis, a Williamsburg-based preservationist and land-use expert.

“With LICH in particular, you’re right next to Brooklyn Heights and in Cobble Hill, which are in demand in part because they are historic and have historic character,” Dennis said. “So you can certainly piggyback on some of that.”

And the deal keeps getting sweeter for developers: a buyer could erect a tall “tower in the park”-style development, thanks to the main building’s city-block-sized footprint and the current zoning.

Any hospital closure must first be approved by the state board of health, and neighbors are hoping Albany will deem the institution too important to shut down because of the added strain it would place on other borough medical centers. The second hope, as this paper reported last week, is that Long Island College Hospital doctors can secure a buyer who would take the troubled institution off the State University’s hands and keep it open — a bid that doctors say should be taken seriously, with at least two suitors in preliminary discussions.

“It’s highest and best use is as a health care institution,” said Roy Sloane, president of the Cobble Hill Association. “We are not entertaining conversations about a sale.”

Reach reporter Jaime Lutz at [email protected] or by calling (718) 260-8310. Follow her on Twitter @jaime_lutz.