MANHATTAN — The City Council will hold an oversight hearing on City Hall's controversial decision to lift deed restrictions on an AIDS nursing home on the Lower East Side — which paved the way for the building to be sold to developers planning luxury condos for a $72 million profit.
The joint hearing with the Oversight and Investigations and Governmental Operations committees on Sept. 29 will examine the circumstances of the lifting of the deed restriction at Rivington House.
"New Yorkers have a right to know what happened," said Council Speaker Melissa Mark-Viverito who added that the council takes its "oversight responsibility very seriously."
The hearings will also examine Council legislation that would require a database of properties with deed restrictions and notification to local officials before any deed restriction was lifted or modified.
A City Council hearing was previously scheduled but was postponed due to ongoing probes from the city's Department of Investigation and Comptroller Scott Stringer — as well as investigations by federal and state authorities.
De Blasio has said he was unaware that his own team had approved the lifting of the deed restriction, and has also professed ignorance that the Allure Group, which was able to get the restriction lifted before selling the building to the Slate Property Group for $116 million, misled the city.
A report from the city's Department of Investigation found that the city knew of the plan to turn the building into luxury condos and that First Deputy Mayor Anthony Shorris, in charge of the city's day-to day operations, was aware that deed restrictions allowing the property to be sold as a potential site for condos were being lifted.
Investigators found that while Allure did mislead the city, there was a "complete lack of accountability" from the city on handling deed restrictions, according to the report.
A justification memo from the Department of Citywide Administrative Services was lifted from a memo written by the city's top lobbyist and de Blasio fundraiser James Capalino — who originally penned the language while trying to have a deed restriction lifted for VillageCare, the operator of the nursing home.
The city's Law Department also sought to hide evidence from DOI investigators and only agreed to turn over thousands of pages of documents when they were threatened with a lawsuit.
De Blasio has since suspended the lifting of all deed restrictions and changed the process so that he must now sign off on the lifting or modification of all deed restrictions.
The move comes amid concerns about the lifting of other deed restrictions, such as one in Harlem which allowed the Dance Theater of Harlem to sell a plot of land that remained undeveloped for decades.
The eventual purchaser of that property, BRP Companies, donated $10,000 to the Putnam County Democratic Committee in 2014, the same year de Blasio was leading an effort to win back Democratic control of the senate.
The mayor's fundraising practices, including the use of a non-profit to accomplish his political goals, are being investigated by federal, state and city authorities.
The mayor also said on Tuesday that he has ceased direct contact with Capalino in light of the multiple probes.
Email records show that Capalino began lobbying de Blasio administration officials on lifting the deed restriction soon after the mayor took office in January 2014. Capalino represented the eventual purchaser of Rivington House on other matters.
Councilman Ben Kallos, chair the Committee on Governmental Operations, which has oversight of the Department of Citywide Administrative Services, said the council will be "asking unanswered questions in order to learn what happened."
Councilman Vincent Gentile, chair of the Oversight and Investigations Committee, said the goal of the hearing was to "clarify what obviously went wrong and explore whether this was isolated or endemic to administrative matters in the city."
