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Compensate Lower East Side for Rivington House Sale, Local Pols Demand

By Allegra Hobbs | April 6, 2016 2:54pm | Updated on April 6, 2016 6:10pm
 Councilwoman Chin and other elected officials listed their demands outside the Rivington House on Wednesday.
Councilwoman Chin and other elected officials listed their demands outside the Rivington House on Wednesday.
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DNAinfo/Allegra Hobbs

LOWER EAST SIDE — Local politicians are demanding the city supply a community space to make up for losing the Rivington House to residential developers and must ensure deeper transparency for dealings surrounding properties with deed restrictions moving forward.

Borough President Gale Brewer, Councilwoman Margaret Chin and Community Board 3 Chair Gigi Li on Wednesday rallied at the site of the Rivington House — a nursing home for HIV/AIDS patients slated to become condos after the city scrapped a deed that would have protected its usage — demanding compensation for their neighborhood’s lost community space as well as legislation to prevent such a loss from happening again.

“The city needs to invest in this community to replace the vital resource that has been lost,” said Brewer. “The Lower East Side needs nursing home beds, hospice beds, it needs community facilities, it needs supportive housing and affordable housing.”

The facility since 1992 had been strapped with a deed that required its operator to run it as a nonprofit health care facility — but city agencies agreed to lift that deed last November at the request of the owner, Allure Group, which had promised to operate a for-profit nursing facility, the Wall Street Journal reported.

Months after the Department of Citywide Administrative Services lifted the deed, Allure sold the property to developers Slate Property Group, Adam American Real Estate Group, and China Vanke for a whopping $116 million, paving the way for a condo development in its place.

Mayor Bill de Blasio’s administration has since fallen under intense scrutiny from city watchdogs — most recently, Attorney General Eric Schneiderman served subpoenas to parties involved in the flip, including the Allure Group and lobbyist James Capalino, who has previously raised money for both the mayor and prior owners of Rivington House.

The attorney general’s actions follow a similar investigation launched by Comptroller Scott Stringer into the city’s decision to lift the deed and the transactions leading to the sale.

City officials say they welcome the investigation and claim they were in the dark about the shady dealings that led to the sale. The Allure hid the fact that it had already inked a deal with residential developers when it requested the deed flip, the city claims, effectively manipulating officials into granting the change, the Journal reported.

De Blasio has slammed the sale, claiming his administration was tricked by Allure, and pledged in an interview with NY1 that there will be legal “consequences” for the group as a result.

Brewer said she takes the mayor at his word that he was blindsided, but that his words are not enough. The administration needs to do everything within its power to reverse the deed change, she said, but if it is unable to do so, a replacement community facility must be created to compensate the Lower East Side for invaluable nursing home beds lost in the transaction.

“Admitting a mistake is only half of truly owning up to it,” she said. “Once you make a mistake, you have to make it up to the people in the community.”

The city made a roughly $16 million profit in exchange for lifting the deed, politicians said, and the administration should funnel that money into either affordable housing or senior housing.

Community members confirmed the Lower East Side is currently facing a severe shortage of such facilities, as luxury residences rapidly replace invaluable resources for those in need.

“The neighborhood needs affordable housing for its longtime residents,” said Aurora Guzman, a Lower East Side resident of 30 years. “There are enough luxury condos, bars, hotels, and boutiques.”

Additionally, the city must allow for greater transparency around such dealings in the future, officials said. Chin has introduced legislation that would require public notice be given to local administrative bodies whenever the city considers lifting a deed restriction, and would create a public database for properties with deed restrictions.

“This community deserves better,” the councilwoman said. “And they deserve to be made whole again.”

Karen Hinton, a spokeswoman for the mayor, said the administration is cooperating fully with all investigations and remains committed to unraveling the course of events that led to the sale. 

"The Mayor is committed to getting to the bottom of what happened, holding people accountable and determining the best path forward for helping the community," Hinton said. "We also are being as responsive as we can be to elected officials until the investigations are completed and we know the full story."