Anyway, apparently all this has been resolved: The building hit the market yesterday for $6.85 million. Per the listing:
26' WIDE & VACANT - This incredibly large East Village townhouse was previously used as a hostel and now it is delivered vacant. There are many possibilities for this structurally sound and restored building. With its low taxes and zoning of R7-2, the building would be perfect to house a non-profit organization, but could also be converted to floor-through condos, a rental building or a spacious single-family home. This rare building presents an exciting opportunity for both users and investors.
Probably more exciting for investors, wouldn't you say...
Previously on EV Grieve:
The Village Inn hostel on Seventh Street closed by city