Hi RobNYC03,
I know a little about it. Not sure how much is true and fiction. There was an old hotel that was demolished years ago.....the concrete was dumped into a part of Manhatten beach creating "the Manhatten Beach Reef". I believe it is by Dover St. I too heard tales of this place for a while, but dounted it's existence. From what I hear, since the area is not on the beach, but where the houses are, Divers were frowned upon by residence. I am not sure but there may have been a path thatis not there any more.
Last week a friend took me diving there by boat. It does exist! It is about 20ft deep in the morning. The area is flat and sandy until you come across the reef. While there, we saw a solo diver connected via a Jersy reel to a float. He was spear fishing there and stated he goes there a lot. Not sure where he enters from. But it was pretty cool....easy dive (we did it in the slack tide to avoid a strong current).