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'Passive and Unquestioning' City Officials Led to Rivington Sale: Stringer

By Allegra Hobbs | August 1, 2016 6:08pm
 Comptroller Scott Stringer has released the results of his office's investigation into the city's lifting of the deed restrictions on Rivington House.
Comptroller Scott Stringer has released the results of his office's investigation into the city's lifting of the deed restrictions on Rivington House.
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DNAinfo/Allegra Hobbs

MANHATTAN — The city’s “passive and unquestioning” approach to dealing with deed restrictions allowed a developer to scrap Rivington House’s nursing home status and sell the building for a luxury condo conversion, according to Comptroller Scott Stringer, who on Monday released the results of his office’s investigation into the deed restriction flip. 

The comptroller’s findings run contrary to Mayor Bill de Blasio’s insistence that an outdated and haphazard protocol is to blame for the loss of the nursing home — in fact, the process that is currently in place would have preserved Rivington House as a health care facility if officials had heeded a host of red flags and more effectively communicated among city agencies and the public, said Stringer.

“This is not about the process that was in place,” said Stringer at a press conference at City Hall on Monday afternoon. “We do think the process should be improved, but in this particular case, it wasn’t the process — it was the mismanagement of City Hall and the Department of Citywide Administrative Services that allowed the deed restriction to be lifted.”

The comptroller’s report echoes an earlier report released by the Department of Investigation, which found negligence in both City Hall and DCAS in the handling of the deed restriction process. DOI last week stated it was thwarted by the Law Department, which reportedly withheld documents on the matter.

Throughout the process of evaluating the Allure Group’s bids to lift two deed restrictions keeping Rivington House a nonprofit health care facility, officials within DCAS consistently failed to question the property owner’s intentions — despite blatantly being told by Allure principal Joel Landau a condo conversion was on the table — and failed to clearly communicate with City Hall regarding the request, Stringer said.

Meanwhile, those within City Hall — namely, First Deputy Mayor Anthony Shorris — failed to tell DCAS, the agency responsible for overseeing deed restrictions, that Rivington House should be kept as a health care facility, even after learning the agency was preparing to scrap the deed restrictions, Stringer said.

City Hall officials were told by lobbyist James Capolino as early as January 2014 that DCAS was poised to flip the restrictions, then told DCAS to hold off on the request as officials went about evaluating the possible uses for the home. But once City Hall concluded Rivington House should be preserved as a health care facility after weighing the pros of cons of alternate use — a process that excluded any involvement from DCAS — it then failed to communicate this decision to DCAS.

“Each one of these steps…could have served as a check upon the process and caused City officials to re-evaluate the larger direction of the project,” reads Stringer's report. “But because of poor communication — and the passive and unquestioning execution of established protocols designed to protect the public interest — Mr. Landau’s plan to lift all restrictions on Rivington House moved closer to reality.”

And although Shorris was later informed via email that DCAS was still lifting the deed restrictions, he chose to ignore these memos, stating they usually did not contain important information, Stringer said.

Additionally, no community outreach was conducted leading up to the flip — a notice of a public hearing on the matter was posted in the City Record for just one day, which was attended only by Landau.

The city once again missed opportunities to save Rivington House after DCAS had signed off on the lifting of the deed restrictions — concerned community members began reaching out to city officials in December of 2015, months before Allure sold the property to a residential developer for $72 million, but City Hall did not reach out to Landau until after the sale, according to the comptroller.

In response, the mayor’s office once again pointed to the process for handling deed restrictions and reiterated the mayor’s plans to reform the existing protocol. 

“The report proves once again that the Mayor was unaware of this transaction, that the First Deputy Mayor was not consulted about the conversion to luxury condos, that the developer hid his intentions from City Hall, and that this decades-old process needed reform,” said press secretary Eric Phillips. “The Mayor has announced an overhaul of the entire process to ensure that community benefit always comes first.”

The Comptroller’s entire report on Rivington House can be read here.