City Council Grills Deputy Mayor Over Rivington House Debacle, but Lawmakers Leave Hungry
First Deputy Mayor Anthony Shorris testified at a grueling City Council hearing about his involvement in the removal of deed restrictions at a Lower East Side nursing home that led to the building's sale to luxury condo developers.
Official NYC Council Photo by William Alatriste
For two-and-a-half hours on Thursday morning, City Councilmembers grilled First Deputy Mayor Anthony Shorris about his involvement in the the city’s botched handling of the deed removal and eventual sale of the Rivington House nursing home to luxury condo developers. Yet the pointed questioning and grandstanding from the lawmakers yielded few answers, as the de Blasio administration insisted that the debacle was the result of bad policy, not bad management.
"What happened here was clearly the wrong outcome for the administration, the community and the city," said Shorris, in his opening statement. "When the process of government does not deliver the results we want, I am accountable for that."
Councilman David Greenfield sternly asked Shorris why nobody had been fired or disciplined, even suggesting that a loss of vacation days might have been sufficient punishment for the oversight that allowed a developer to manipulate the city into lifting the restriction. "I'm asking you a simple question. Who screwed up on your team and how are they being held accountable?" said Greenfield.
Shorris said there were many people involved in the decision and no single person is to blame. "The system was flawed and it didn't yield the result that I wanted," he said. No disciplinary actions have been taken on any city employee involved to date.
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Rivington House was bound by longstanding, city-issued deed restrictions that required it be used explicitly for non-profit health care services. Its operator, Village Care, sold the building to for-profit health care company Allure in early 2015. Allure turned around and paid the city $16 million to lift the deed restrictions and flipped the property to condo developers earlier this year, a deceptive transaction Shorris called "nearly conspiratorial."
Mayor de Blasio repeatedly claimed that no one in his administration knew about Allure’s plans to convert the property to luxury housing, but several investigations proved otherwise.
According to the findings of reports from the Department of Investigation and city comptroller Scott Stringer, several City Hall employees were well aware that luxury housing (in a rapidly gentrifying neighborhood) was one of a few potential outcomes for the building, and Shorris himself was sent a memo on the matter that went unread. The mayor has blamed the mistake on major, but not malicious, lapses in communication between his administration and the Department for Citywide Administrative Services, the agency that handles deed removals; DCAS assistant commissioner Randal Fong was found to have removed a mention of luxury housing from a bi-weekly report that was eventually sent to Shorris — not that it mattered, because Shorris didn’t read it.
The case is also under state and federal investigation.
Earlier this year, the city announced policy changes that will modify how deeds are removed in the hopes of preventing this from happening again. Shorris plugged those regulations repeatedly today, labeling the problem as a structural one that the new regulations will fix.
Just before the hearing, the city announced that they’d replace a large chunk of the beds lost at Rivington House at a new facility located less than a mile away at 30 Pike Street, and paid for with the $16 million the city earned from lifting the deed. The property is zoned for commercial use, and must still go through the city's lengthy Uniform Land Use Review Procedure before the conversion can happen. But community members still want Rivington House returned to its original use, a point council member Margaret Chin reiterated.
Councilmembers Ben Kallos, chair of the committee of governmental operations, and Vincent Gentile, the chair of the oversight and investigations committee, sparred with a soft-spoken Shorris, who spoke in exhausting detail of his involvement in the deed removal beginning two years ago.
Shorris testified that he directed his staff to recommend that the building remain as a health care facility after weighing several options, including a conversion to proposed affordable housing and the potential for the city to earn revenue by accepting a fee to lift the two restrictions. He said that no one from the DCAS indicated to him that in granting the removal of the deeds, he’d clear the way for a secretive plan to sell the building to developers.
"My job is to weigh competing objectives," said Shorris. "It’s common when we have complicated decisions that there are multiple ‘goods’ or sometimes multiple evils that I have to weigh in making a decision. This was one that had multiple options associated with it, each having different virtues. Those are not invalid, they’re just different."
Kallos asked Shorris if his prior relationship with James Capalino, the lobbyist who pushed to have the deeds removed while working for Village Care, influenced his decision. Shorris, who worked for Capalino from 1978 until 1981, offered a firm no; their relationship today amounts to small talk at a yearly cocktail party, he said.
Kallos pushed him further, attempting to prod Shorris into admitting that he is inefficiently managing the at least thirty city agencies that fall under his jurisdiction, the result of a consolidation of the deputy mayor of operations into his role. Shorris didn’t take the bait, referring Kallos' questions regarding the structure of city government to the mayor.
Nearly two and a half hours and many interruptions later, councilmember Margaret Chin was the first to reassert the community’s chief demand: that Rivington House be returned to its original use, potentially through eminent domain. Both Shorris and the city's corporation counsel Zachary Carter said that all legal routes that might allow the city to take back the building are currently being explored.
But for now, the jobs have been lost and the beds at Rivington House remain empty.
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