Top de Blasio administration officials were in the loop about its approval to turn a Lower East Side nursing home into luxury condos — and some were even complicit in the shady deal, despite Mayor Bill de Blasio insisting he was in the dark, a city investigation has revealed.
“City Hall knew or should have known it would be possible to use the property for any purpose if the deed restriction was removed,” the Department of Investigation’s 157-page report says.
“Nevertheless, no city official raised any objection or took any step to ensure that Rivington continue to serve a public purpose to benefit the community.”
De Blasio has insisted he was kept in the dark about the city’s plan to lift a two-part deed restriction on 45 Rivington St. that required the long-protected property to be used as a nonprofit nursing home.
But a damning email included in the DOI report shows First Deputy Mayor Tony Shorris wrote to the mayor on Aug. 3, 2014, mentioning that the Rivington property had been discussed during a meeting.
When confronted with the email, Hizzoner told investigators that he “did not recall receiving” it, the report says.
“[He] stated that the request to lift the Rivington deed restriction was a decision that should have been brought to his attention but was not.”
The Allure Group, which bought the nursing home for $28 million from VillageCare, ultimately paid the city $16.1 million to have the deed restriction removed.
It then sold the property for $116 million to developers, including the Slate Property Group, which intends to build luxury condos there.
“DOI’s investigation further revealed a complete lack of accountability within city government regarding deed-restriction removals and significant communication failures between and within City Hall and DCAS [the Department of Citywide Administrative Services],” the report says.
The agency’s assessment includes ample evidence that high-ranking City Hall officials were aware of discussions surrounding the unusual maneuver and “failed to stop it.”
Shorris received multiple memos from former DCAS Commissioner Stacey Cumberbatch about the lifting of the deed restriction months in advance, but, like de Blasio, he claims he never saw them.
“FDM Shorris stated he did not read the memos that Commissioner Cumberbatch provided to him, and that no one flagged the issue for him,” the report says.
In 2014, Shorris was included on an email that discussed the different ways the site could be redeveloped, with one of the options being to sell it to a private developer.
Even more troubling, the DOI has accused de Blasio’s Law Department of hindering its investigation by refusing to hand over documents and barring the agency from accessing City Hall computers.
“Because DOI did not receive a full production of what it requested, it is unclear what Rivington-related information remains on the City Hall servers and computers, to which DOI was denied access,” the report says.
In one case, the DOI received 1,000 documents — with 990 of the pages blank except for the letters “NR,” for “not responsive.”
A DOI representative said the agency is “considering appropriate enforcement options.”
While the DOI conceded that the Allure Group and Slate Property Group were less than upfront with the city about their intentions for the property, several city employees were aware that it could be sold to a luxury housing developer, the report says.
Allure even informed the DCAS at a March 2015 meeting that if it was forced to pay the $16.1 million, it might convert the property to condos.
That statement was included in an initial report summarizing the meeting, but DCAS Assistant Commissioner Randal Fong left it out in a final version.
It also emerged that the DCAS cribbed language written by VillageCare lobbyist and big-time de Blasio donor James Capalino in the “justification memo” it prepared as part of the process for lifting the restriction.
“The justification provided was therefore taken from the perspective of the property owner,” the report says.
The DCAS patted itself on the back after the deed modification deal was done, with Cumberbatch blasting out an email to staff that said, “Congratulations!”
Investigations into the deed debacle are far from over. Manhattan US Attorney Preet Bharara is still probing the deal, along with the state attorney general and the city comptroller.
“The more that’s revealed about the Rivington House deal, the clearer it becomes that the administration failed on every level of oversight and operations,” Comptroller Scott Stringer said in a statement. “The city abdicated its responsibility to safeguard our communities and to protect our most vulnerable citizens.”
Speaking prior to a town hall meeting in East New York, Brooklyn, on Thursday, de Blasio said he didn’t feel he or anyone else in his administration was to blame for the Rivington deal.
“The report makes clear that we were working as an administration on the basis of policies from 25 years ago,” he said. “It was a mistake that shouldn’t have happened. If I had known about it, I would not have allowed it to happen.”