A developer that conspired to dupe city officials about plans for a former nursing home should not be handed the reins on a massive residential project on city-owned land, outraged community groups say.
A month after the de Blasio administration lifted the now-famous deed restriction at the former Rivington House nursing home on the Lower East Side, which led to the sale of the building to Slate Property Group for use as luxury condos, the city awarded a large and lucrative city-backed housing deal in Crown Heights to the developer.
While vying for the job of redeveloping the 500,000-square-foot Bedford-Union Armory, Slate was simultaneously trying to keep its May 2015 agreement to buy Rivington House a secret from city officials out of concern they would halt the deal, according to a Department of Investigation report released last month.
Local groups now argue that Slate should not be allowed to go forward with the city-backed Brooklyn project. New York Communities for Change, the Crown Heights Tenant Union, affordable-housing nonprofit the Urban Homesteading Assistance Board, residents’ group the Crown Heights Community Council and unions DC-9 and Local 79 plan to protest the plans Wednesday outside the sprawling former military complex, which will be converted into an apartment building, townhouses and a recreational facility. Slate has partnered with developer Donald Capoccia, who is a donor to Mayor Bill de Blasio, and nonprofit group CAMBA on the redevelopment project.
“It’s clear that they cannot be trusted,” said NYCC spokeswoman Renata Pumarol of Slate principals David Schwartz and Martin Nussbaum. “I think the city already knows this because of the Rivington deal. We should not trust Slate with the Armory or any developments moving forward because it’s clear they don’t have the best interests of the residents of New York City.”
Pumarol cited another instance where Slate agreed to build affordable apartments in Ridgewood, Queens, in exchange for a zoning change and then flipped the building, which sold for $18.5 million. Her group released a report detailing their objections to Slate, part of a “Real Gentrifiers” campaign against for-profit affordable housing developers.
Slate did not respond to a request for comment.
Slate and Capoccia’s BFC won a 99-year lease on the city-owned property between Union Street and President Street along Bedford Avenue. Half of the 330 apartments in a planned rental building will have set affordable rents, according to EDC, and half market-rate. The city also sold the developers part of the land along President Street upon which they plan to build market-rate townhouse condos. Much of the space will be devoted to a sports facility funded by basketball star Carmelo Anthony.
The project proposal has yet to go through the city’s land-use approval process.
The city’s Economic Development Corp. stood by the project plans in a statement. “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,” spokesman Anthony Hogrebe said. “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.”
The project has garnered support from local elected officials and community leaders, EDC said.
A spokesman for the mayor’s office said senior City Hall officials knew nothing of Slate’s involvement in the Rivington House deal until February 2016, when the deal was made public and two months after the EDC announced it had selected the company for the Armory project.
Deputy Mayor Alicia Glen, who oversees the EDC, had pushed to try and use Rivington House for affordable housing as early as 2014, Politico reported, but was told the site would remain a nursing home.
In May 2015, Slate signed a contract with Allure to buy Rivington House, city investigations found. Allure’s principal Joel Landau encouraged Slate to keep mum on the deed change and sale, according to an investigative report from comptroller Scott Stringer.
“After striking a deal to sell Rivington House, Mr. Landau urged the buyers not to discuss the transaction in public so as not to tip off the stakeholders to his plans,” Stringer wrote in the report. “One of Mr. Landau’s attorneys went so far as to advise that the buyers should ‘KEEP THEIR MOUTHS SHUT. The deal is all over the street from their investors and it could F!@# up the deed restriction being lifted [and] union if they know sales price.'”
And Slate in turn directed its employees to keep the sale a secret, the DOI found in its report on the deal.
“On May 14, 2015, a Slate representative told its employees: ‘[D]o not discuss this deal … the seller [Allure] is very concerned that the city and union will find out that he 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,'” the DOI report said.
Slate managed to keep the secret from city officials, according to the mayor’s office, and the deed restriction lift went off without a hitch in November 2015. Starting on Dec. 1, Lower East Side residents expressed concern to City Hall’s Community Affairs Unit about Allure Group’s plans to sell the nursing home to City Hall, according to Stringer, and informed them that a construction firm working with the buyer expected the property to be converted to market-rate housing. The information was shared with senior officials throughout City Hall, according to Stringer’s report.Local residents had spotted Slate architects walking around Rivington, DOI found.
But a spokesman for the mayor’s office maintained that senior City Hall officials were not aware “of even any sort of rumblings about a flip” until 2016. It was not until February that Glen’s staff scrambled to try and undo Allure’s Rivington House sale, to no avail, and even then they did not know Slate was involved, he said.
The groups protesting the Crown Heights project also argue that Slate is not planning enough affordable housing for the armory site. Of the 330 apartments it will build, 66 will be reserved for those making 40% and 50% below the area median income, while 164 will be market-rate. The rest, 99 units, will be for those earning 110% of the area median income—which is not the median income for Crown Heights but for the entire city and some suburban counties.
The 66 low-income affordable apartments are on par with the median income of Crown Heights, a spokesman for BFC noted.
But most of the units are not “in sync with the neighborhood AMI,” said Pumarol, who argued that the project’s current breakdown will exacerbate gentrification in the neighborhood instead of helping to mitigate the displacement of local residents.