A condemned, dilapidated building off Water street in Vineyard Haven will be the next project for the Island Housing Trust, thanks to Steve Bernier, the owner of Cronig’s Market, who announced Friday he had donated the house to the trust.

The move is both an act of community philanthropy and a strategic business maneuver for Mr. Bernier, the longtime owner of the Cronig’s grocery franchise in Vineyard Haven and West Tisbury. This spring the Stop & Shop supermarket corporation paid $950,000 for an adjacent building that housed the Golden Dragon restaurant as part of an expansion plan for the Water street store that sits at the gateway to downtown Vineyard Haven.

Following the purchase by Stop & Shop, Mr. Bernier paid $700,000 for the house at 6 Water street between the Golden Dragon and AA Island Auto Rental.

“I just spent a bunch of money on [down-Island Cronig’s] to have a store for the next 30 to 40 years for the Island, and there are only so many apples in a bushel basket,” he told the Gazette in a tour of the site on Friday afternoon. “I have no use for the property, so if I’m going to spend this money the best use I could think for it is to donate it to the Island Housing trust. They’re still pinching themselves.”

Housing trust executive director Philippe Jordi and board member Richard Leonard were also at the site.

Mr. Jordi said the building will be torn down.

“The building is condemned,” he said. “It’s completely caved in and has to come down.”

“We don’t know what will replace it just yet. It’s in a central location, it’s walking distance from everything. It’s really what they call smart growth.”

Mr. Jordi said the building’s location in the business district also provided an opportunity for office space.

“It would have to be consistent with our mission as far as serving a nonprofit organization,” he said in a phone interview this week.

He and Mr. Leonard praised and thanked Mr. Bernier for the donation.

“It’s one of the single largest donations to affordable housing on the Island,” Mr. Jordi said. “We’re incredibly grateful to Steve.”

The trust is currently undertaking a number of other projects as well, including the second phase of the three-duplex Lake Street project in Vineyard Haven, which will be completed this fall, as well as looking to build two single-family houses off of Edgartown-Vineyard Haven Road and three rental units on a property owned by the Dukes County Regional Housing Authority in West Tisbury. Mr. Jordi said the once-foundering organization is on firm financial footing.

“We’ve started to develop a solid base of support from individual donors and foundations,” he said. “We’ve secured CPA money for projects from a number of towns and we’re looking for donors to match that.”

In 2005 the trust commissioned a housing needs assessment for the Vineyard that identified a need for 1,000 affordable units on the Island. Mr. Jordi said that as of last week the trust has sold 47 affordable properties.

A public affairs spokesman for Stop & Shop was unable to comment on the Water street purchase or on real estate strategy in general.

Jane Wilbur of Vineyard Haven was passing by last Friday afternoon as the three men posed for pictures on the front steps of the crumbling house.

“Are they buying this?” she asked. “Yay! That’s great.”