Many people believe that it was used as a prison during the Revolutionary War. However, in Forgotten Patriots, Edwin G. Burrows says that this is incorrect, a story which arose in the19th century. A New York Times article from 1872 stated that the idea of the sugar house being a prison came from the research of a local historian named Charles I. Bushnell.
The neighborhood around Rose and Duane had become a slum by the early 19th century. The sugar house fell into disrepair and people said that there were ghosts occupying it. Passersby said they saw ghostly hands stretched out at the windows, and the pale faces of prisoner ghosts.In 1892, the warehouse was replaced with a new structure called the Rhinelander Building, which incorporated one of the original sugar house windows - and people continued, they said, to see specters at that window. They said that mist formed around the window, too. The Rhinelander Building was torn down in 1968, but the old window still survives near Van Cortlandt Park in the Bronx, as you can see here at Correction History.

Images of the sugar house and Rhinelander Building from NYPL Digital Gallery. Map of Lower Manhattan (1866) detail is from Brorson.com - and a bigger version is here.
SOURCES
Barefoot, Daniel W. Spirits of '76: Ghost Stories of the American Revolution (2009), p. 115.
Burrow, Edwin G. Forgotten Patriots: The Untold Story of American Prisoners During the Revolution (2008), p. 323.
"Old Houses," New York Times, Oct. 14, 1872, p. 5.

8 comments:
too cool that they saved the window!
I think Charles I. Bushnell has ties to Florida. I remember reading about him when I visited a sugar mill in Port Orange.
lovely post
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Oooh, spooky! Thanks for another titbit of forgotten history!
naci info.
I know that it's progress and cities change over time, but it sure is a shame to have lost so many of these original buildings.
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There is another window fragment directly behind the municipal building (around the corner from Police Plaza, which occupies the site of the old Rhinelander Sugar House). The plaque for that fragment says definitively that the sugar house was used as a prison!
http://www.correctionhistory.org/html/chronicl/patriotprisons/sugarjail.html
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