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Spin City: De Blasio Administration’s Bungling of Rivington House Sale

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45 Rivington St.,
45 Rivington St.,

On Tuesday, New York City Comptroller Scott Stringer announced his office is trying to find out how the former Rivington House community facility on the Lower East Side slipped into the control of luxury developers. It’s a story The Lo-Down has been reporting for the past four months. Following a Wall Street Journal report on Wednesday, there are now followups today in the New York Times, the New York Post and Politico New York.

Even after this week’s revelations, the Times noted, city bureaucrats were still slow to hand over information requested by the comptroller on March 7:

The de Blasio administration has turned over documents in response to a subpoena by the New York City comptroller, Scott M. Stringer, over the lifting of deed restrictions and the sale of a building on the Lower East Side of Manhattan that made a $72 million profit for a private nursing home operator. The city had initially delayed responding to a request by Mr. Stringer to provide information about two sales in close succession of a building at 45 Rivington Street. It had been under a restrictive New York City covenant that required it to be used as a nonprofit residential health care center. After not receiving a response by Wednesday, Mr. Stringer filed the subpoena — a rarity, his office said. The city produced documents hours later. They are currently under review.

The former nursing home for AIDS patients was shuttered by VillageCare in 2014 and sold to a for-profit nursing provider called the The Allure Group for $28 million. “Before the sale,” the Times reported, “Allure lobbied the city to have the covenant lifted and, in an email in October 2014, promised to maintain the center as a for-profit nursing home.” Last month, it was revealed that three firms — China Vanke Co., Slate Property Group and Adam America Real Estate — purchased the former school building for $116 million. They’re converting the building to luxury apartments. Now bureaucrats are struggling to explain how they bungled the deed application:

City officials said on Thursday that the decision to lift the covenant was a mistake and that Mayor Bill de Blasio, a Democrat, had been angered after learning of it this month. The city has halted all applications to change deed restrictions as the process is re-evaluated, Austin Finan, a spokesman for the mayor, said.

Mayor de Blasio at Seward Park in 2014. Photo by Melissa Shiffman.
Mayor de Blasio at Seward Park in 2014. Photo by Melissa Shiffman.

Politico New York reported that:

The new DCAS commissioner, Lisette Camillo, discovered the issue during communication with a community board on March 1, before Stringer’s inquiry. She ceased lifting all deed restrictions and called for a review, mayoral press secretary Karen Hinton said.

Meanwhile, we’ve received a letter sent by Manhattan Borough President Gale Brewer and City Council member Margaret Chin to Deputy Mayor Alicia Glen. It was dated yesterday, March 24.  In the letter, Brewer and Chin said they had been working through Glen’s office to set up a meeting with representatives of The Allure Group before last month’s sale became public knowledge. “We understand that a brief meeting eventually did occur at which the former owner stated that he no longer had an interest in the property,” they wrote.

“It appears we have lost the chance,” the elected officials added, “to push for this property to be sold to a developer who would commit to creating a community resource on the site. It is our sincere hope that the administration will work with our offices and Community Board 3 to ensure that the neighborhood’s residents are duly compensated for this disheartening loss.”

They went one step further, telling Glen:

…The community deserves to be made whole. The decision to lift these deed restrictions was a mistake that must be corrected, and the local community is rightfully distraught over the outcome. We therefore request that the city use the $16,150,000 it made from the deal to create a community resource facility, affordable housing or both in Community District 3 as near the Rivington House site as possible. The city should also push the new owner to develop a community facility and/or affordable housing on the site. Finally, the city must work to replace the number of medical beds (215) lost at Rivington House in the community.

On Tuesday, mayoral spokesman Austin Finan asserted, “The city was as disappointed as local residents to later learn not only that the property would no longer provide needed health services but that the valuation of the deed restriction did not reflect current market values that could have generated affordable housing or other uses for the public’s benefit.” Local activists were more than a little taken aback by the statement, since they and elected officials have been trying to get the administration’s attention on the Rivington House snafu for at least 14 weeks.

A review of The Lo-Down’s archives and notes illustrates their point:

–Based on a tip from a former employee of the nursing facility, we reported on Dec. 2 that the center would be closing and the building sold.  Records showed that The Allure Group had paid $16,150,000 to acquire the deed from the city and that the deed restriction had been lifted.

–The previous evening, Dec. 1, local activist K Webster made contact with Tommy Lin, a community liaison in the mayor’s office, asking for his help in investigating the Rivington House situation. After Webster followed up on Dec. 9, Lin responded that he was “looking into this matter” and would “get back to (Webster) shortly.” Lin said he had also been speaking with CB3 District Manager Susan Stetzer.

On Dec. 18, a spokesperson from the Department of Citywide Administrative Services (DCAS) responded to a request for information from The Lo-Down. Cathy Hansen, the spokesperson said, “The deed restrictions were lifted after a request by the owner to allow the property to be run by for-profit and/or non-profit operators. The deed modifications were approved following a public hearing on June 24, 2015.”  Asked whether any steps had been taken to make sure the building remained a community facility, Hansen said there were no stipulations with the property owner other than those contained in the deed transfer agreement.

Also on Dec. 18, a spokesperson for Council member Chin said, “We’re disappointed by the recent closure of Rivington House, which for years has served a community with few other nursing home options. We’re currently looking into the status of the limitations on Rivington House’s deed, and will continue to monitor the situation closely.” At the same time, the Sara D. Roosevelt Park Coalition, a local advocacy group, launched a letter writing campaign, pleading with the mayor’s office for help.

–At a community board meeting in January, representatives from the offices of Chin and Brewer said they had been trying, unsuccessfully, to learn more from DCAS about the lifting of the deed restriction. At the end of January, CB3 approved a strongly worded resolution and forwarded it to DCAS. The resolution read, in part, “CB3 calls on the City to disclose information as to what transpired with respect to this transaction, and CB3 calls on the City to explore options to reverse this decision immediately.”

According to Department of Buildings records, the owners filed on Feb. 16 for, “interior demolition of existing community facility.” The permit application was “disapproved” on Feb. 22. The “managing agent is listed as Michael Zampetti of the Slate Property Group. The architect is John Cetra of CetraRuddy Architecture.

41 Rivington St. Deed by The Lo-Down

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