A Department of Investigation report released yesterday found that senior City Hall staffers knew about a plan to turn a Lower East Side health facility for AIDS patients into luxury condos, despite Mayor Bill de Blasio’s assurances that no one within his administration was aware of the deal.
The report details a “complete lack of accountability within City government regarding deed restriction removals and significant communication failures between and within City Hall and DCAS,” the agency charged with lifting the usage restrictions on Rivington House.
Village Care sold Rivington House to the Allure Group for $28 million in February of 2015. Allure subsequently paid the city $16.1 million to lift the two deed restrictions from the building, which mandated that it be used solely for nonprofit, residential health services. Allure flipped the property to the Slate Group, luxury condo developers, for a $116 million in February after the restrictions were lifted.
In April, when asked what would have happened if city officials had informed him of the impending deal, Mayor de Blasio said that “Someone should’ve said ‘no’ farther down the food chain and if they didn’t know how, they should’ve come to me and I would’ve said no very quickly.”
While the report does not specifically implicate Mayor de Blasio, it does include an email containing notes from a meeting that Rivington was on the agenda for, forwarded directly to him by Shorris on August 3, 2014. “Here is the after-meeting report my staff does (the one I showed you),” reads the email.
Yesterday the mayor told reporters he doesn’t recall receiving the message. “It’s clear that the right hand and the left hand were not coordinated,” he said. “There wasn’t a good flow of information, and people were adhering to an old and mistaken policy. But that’s the extent of it.”
Yet the DOI found that several City Hall staff members knew the deed restrictions were being lifted prior to the building’s sale, and that “several City employees knew the property owner was considering selling the property for conversion to luxury housing.”
According to the report, in December 2014, months before Rivington House’s initial sale to Allure, numerous emails sent between First Deputy Mayor Anthony Shorris, Deputy Mayor Alicia Glen, and Shorris’s chief of staff, Dominic Williams, contained discussions about whether Rivington House would remain a nursing home or be converted into housing.
In one message sent to Glen, Shorris, and Williams, the sender, whose name is redacted, writes: “If the plans have changed to sell to a developer for housing then City Hall approval is needed for DCAS to lift the deed restrictions that current [sic] limit use of the building to residential healthcare provided by a non-profit operator.”
In March 2015, one month after Village Care sold Rivington House to Allure, the group met with officials from the Department of Citywide Administrative Services (DCAS) officials and informed them that if they paid to lift the deed, they might be forced to “develop housing or flip the property, all of which the community does not want.”
The statement appears in DCAS notes sent by email dated March 19, 2015 for inclusion in a bi-weekly report. In the final version, DCAS Assistant Commissioner Randal Fong removed the reference to housing altogether, according to the DOI report. The report provides no explanation for the removal.
In May 2015, prospective buyer Slate sent emails to staff advising them not to discuss the deed restrictions, because the seller was afraid it would impede their ability to lift them prior to sale.
The DOI report determines that there was significant misunderstanding between city agencies about their roles in deed removals, and includes a step-by-step list of the official DCAS deed removal process, followed by a breakdown of DCAS, MOCS, and Allure’s roles in the Rivington deed removal.
Moreover, the DOI says the city Law Department was uncooperative with their investigation, and denied investigators access to City Hall computers, and heavily redacted documents despite executive orders that permit DOI unrestricted access to all city records and documents. The mayor’s office said in a statement that “the Administration fully cooperated with the DOI, provided every single document and every single interview requested by the DOI – including a voluntary interview with the Mayor.”
City Council Speaker Melissa Mark-Viverito’s office declined to comment, and the Mayor’s Office said in a statement that the report found no government official guilty of illegal or unethical behavior and “confirms that Allure took steps to hide from City Hall its true intentions to flip Rivington House into luxury housing.”
The statement went on to say that “the lessons of Rivington have been tough, but they will result in a better process for the people of New York City – one that will put community benefits and the needs of a neighborhood ahead of a developer’s bottom line.”
The de Blasio administration has pledged to invest $16 million back into the community and significantly tighten the process of lifting deed restrictions.
Melissa Aase of University Settlement said that she was still looking for the City to reinstate Rivington House.
“Nothing has changed about the demands from the neighborhood,” Aase told the Voice. “If anything, this [the DOI report] gives us more fuel to feel justified in fighting to get back 150,000 square feet and skilled nursing. We’re going to continue to fight for that.”