Slate Property Group Feels Rivington House Fallout in Brooklyn
Rivington House co-owner, Slate Property Group, is facing new scrutiny this week. Mayor de Blasio yesterday said his administration is taking another look at a big real estate deal in Brooklyn involving Slate. There are major unanswered questions about the firm’s role in the acquisition of the former Lower East Side nursing home after the city lifted deed restrictions on the property.
In December of last year, Slate and BFC Partners were awarded a contract to redevelop the 500,000-square-foot Bedford-Union Armory, a city-owned property. Several groups in Crown Heights are now arguing that the deal should not go through, in light of Slate’s involvement in the Rivington House scandal. There was a protest at the Brooklyn development site yesterday.
According to a recent report by the Department of Investigation (DOI):
Prospective purchaser Slate sent an email to its staff (on May 14, 2015) saying “do not discuss this deal…the seller (The Allure Group) is very concerned that the city and union will find out that [the seller] is in contract to sell at the price that we are buying it which will directly impact his ability to have the deed restriction removed. Once he has it removed we can do whatever we want.”
Mayor de Blasio was asked about Slate’s armory deal during a media event yesterday. Here’s what he had to say:
We’re going to take a very hard look at that situation. That contract has not been finalized. And I think what they did was inappropriate. The DOI report makes it quite clear. And I think anyone who seeks to do business with the City of New York and misleads us needs to know that there will be consequences. So we’ll take a hard look at that situation.
So what do we know about the Slate Property Group? Here’s a thumbnail sketch of the relatively new but prolific real estate development firm, including details of its track record on the Lower East Side.
Martin Nussbaum and David Schwartz (pictured) founded the company in 2012. In an interview with the New York Times last year, Nussbaum said Slate is focused on building new projects in Brooklyn and in the “repositioning” of existing properties in Manhattan. Previously, Nussbaum and Schwartz founded Silverstone Properties. At the time of that December 2015 interview, Nussbaum said the firm had, “12 to 13 projects… under development and repositioning at various stages.”
There are only a couple of Lower East Side properties listed on Slate’s website. One is 157-159 Suffolk St., which Silverstone purchased for $8 million in 2011. In a press release at the time, the firm said it would be “renovating the building to create a high-end boutique residential rental property.” As EV Grieve noted back then, the renovations were highly disruptive and some tenants took buyouts. The firm sold the building in 2012 for $18 million. Silverstone also tangled with elderly tenants earlier this year in a building at 211 Madison St. (According to Nussbaum’s Linkedin profile, he’s still an owner at Silverstone, although reports suggest he’s not actively involved in the firm).
New York Communities for Change, an advocacy group, has published a report on Slate’s activities in Brooklyn. Here’s part of their August 5 posting on the blog, The Real Gentrifiers:
Little attention has been paid… to the condo developer who, working with The Allure Group, is at the center of the (Rivington House) scandal: Slate Property Group. Slate’s attempts to withhold its intentions to build housing on the site has been reported, but its broader portfolio and additional deals with the City have been less thoroughly scrutinized – despite the fact they often misled the public, used public benefits to drive gentrification across Brooklyn, and have partnered with Private Equity groups to harass tenants and maximize profits.
The armory project has yet to go through the city’s land use process. A spokesperson for the Economic Development Corp. told Crain’s:
The Bedford Courts development team was selected through an open and competitive process because they offered the highest quality proposal, and the one that best met the needs and priorities outlined by community leaders… EDC was not aware of any details of the Rivington sale prior to our selection. We look forward to bringing much needed affordable housing, community space, and good jobs to Crown Heights.
According to DNA Info, Slate’s David Schwartz defended the armory project yesterday, saying it would create “much-needed recreational facilities, affordable housing and affordable office space for the Crown Heights community.” He added, “These attacks are meritless and do not serve the interests of local residents.”
A stop work order remains in effect at Rivington House, preventing Slate and its partners (China Vanke and Adam America Real Estate) from beginning its condo conversion on the Lower East Side.