Will Mayor de Blasio do the Right Thing and Reverse or Will His Haredi Donors Prove Too Value and de Blasio too Arrogant?
May 19, 2016
The Allure deal was is and will always be another of many likely criminal endeavors involving dozens of people over several years, all culminating in millions of dollars in profit and a displaced AIDS/Rehabilitation-Nursing Facility. The Mayor’s office claimed not to have known about the deal, but emails, meetings and perhaps campaign contributions tell a different story as early as 20014.
Now Mayor de Blasio is “reviewing changes” which only means he is paying lip-service to his non ultra-Orthodox constituents. Or, alternatively, he is trying to appease U.S. Attorney Preet Bharara who has said that he is is looking into the matter.
Mayor Bill de Blasio said on Wednesday that he will now make the final decision regarding all changes to deed restrictions on buildings currently or formerly owned by the city.
The change comes in response to the scandal surrounding the removal of deed restrictions at Rivington House on the Lower East Side of Manhattan, which allowed a nursing home to be sold to a luxury condo developer in February.
The circumstances surrounding that case are the subject of probes by the state attorney general, the city Department of Investigation and the city comptroller. In addition, the office of U.S. Attorney Preet Bharara is looking into the matter.
“I think it is essential since these are rare actions, it’s essential that they be personally agreed upon by the mayor,” de Blasio said during a City Hall press conference. “This has not been the habit in the past. The decisions stopped short of requiring a signature from the mayor himself. Given the importance of these matters, I’m going to make very clear in our new policy that there will be no action on any deed restriction without my personal sign off.”
For some background:
In a May 5, 2014 email to First Deputy Mayor Tony Shorris’ chief of staff, Dom Williams, the nonprofit VillageCare raised the possibility of removing the two deed restrictions tied to the AIDS residence it ran on Rivington Street, known as Rivington House. One restriction called for the site, formerly a city-owned building, to be used as a nonprofit; the other required it to be for residential health care.
Emma DeVito, president of VillageCare, wrote that her organization wanted to sell the property and had received estimates from a city agency about removing the deed restrictions. She expressed concern to City Hall about the fees she would have to pay.
VillageCare eventually sold the building for $28 million to a for-profit nursing home provider, which paid the fee, got the deed restrictions removed and sold it three months later to a luxury condo developer for $116 million.
DCAS — which lifted the deed restrictions in November of 2015 — had provided two options to DeVito, she wrote at the time. VillageCare could get one restriction removed for a $4.25 million fee to the city. To remove both restrictions, the company would have to pay an $8.25 million fee.
“Both scenarios do not account for the millions of dollars we have invested in the property and will direct up to $8.25 million away from much-needed healthcare programming for the community,” she wrote. “The timing of these discussion are important to the completion of the sale and reinvestments.”
She then requested a meeting with Williams “as soon as possible to discuss the scenarios outlined by DCAS and to see if Mayor de Blasio can find an alternative that would allow Rivington House to expand its mission-critical health care services that support our community.”
While she said she wanted to maintain health care services in the neighborhood, DeVito made no mention of the future use of the site.
In another letter dated Jan. 9, 2015, Randal Fong, an assistant commissioner at DCAS, wrote to DeVito the seven steps VillageCare would have to take to get the deed restrictions removed.
This letter came one month before the property was sold to Allure.
In it, Fong cited the $16.1 million fee, which was based on an appraisal DCAS conducted a month prior. The Wall Street Journal reported that the appraisal was for $65 million, though the property was sold for nearly twice that amount in February of 2016 to Slate Property Group.
The first step to be taken, Fong wrote, was “a land use analysis to support removal of the use and development restrictions.” He added, “This analysis is complete.”
Other steps included a public hearing conducted by the Mayor’s Office of Contract Services, which took place on June 24, 2015. As POLITICO previously reported, no one spoke at that hearing.
The matter was scrutinized by City Councilwoman Margaret Chin and the local community board in late 2015, when Allure began emptying out its beds and rumors started to swirl that a developer was eying the land. The Lo-Down, a newspaper covering the Lower East Side, first reported the possibility of the sale in December of 2015 and Chin said she informed City Hall of her concerns at that point.
The sale took place the following February, and the city then put a hold on all deed restriction removals. At that point, Shorris, the first deputy mayor, became aware of the matter, City Hall has said.