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Plan to Turn Prison Into Movie Studio Blocked Amid De Blasio Donation Probe

By Nicholas Rizzi | February 10, 2017 1:06pm | Updated on February 13, 2017 9:49am
 The sale of the Arthur Kill Correctional Facility to Broadway Stages to be turned into a movie studio was blocked over the owner's links to the probes into the mayor's fundraising.
The sale of the Arthur Kill Correctional Facility to Broadway Stages to be turned into a movie studio was blocked over the owner's links to the probes into the mayor's fundraising.
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DNAinfo/Nicholas Rizzi

CHARLESTON — The transformation of a former Staten island prison into a movie studio has been blocked because the company's owners are part of an investigation into fundraising donations made to Mayor Bill de Blasio.

State Comptroller Tom DiNapoli halted the $7 million sale of the former Arthur Kill Correctional Facility, which is on state-owned land, to Broadway Stages because the buyers were contacted by investigators over their donations, according to documents obtained by DNAinfo.

"Broadway Stages and its owners and president, Gina Argento, appear to be involved parties in State and Federal investigation into campaign contributions to New York City Mayor Bill de Blasio," the comptroller's office wrote in a letter to state officials.

The letter was obtained through a Freedom of Information Law request filed by DNAinfo.

The letter also raised concerns that the sale price of the site is significantly lower than its $20 to $52 million appraised value and the property was transferred to Empire State Development without oversight.

"ESD and [Office of General Services] are reviewing OSC’s decision and remain committed to creating jobs and economic opportunity on Staten Island," said ESD spokeswoman Amy Varghese in a statement.

The blocked sale was first reported the Staten Island Advance.

A spokesman for Broadway Stages said many people had been contacted as part of the fundraising probe and Argento was not under investigation.

"The Argentos have kindly donated to both candidates on both sides of the aisle throughout the state," said Warren Cohn.

"They feel that part of civic engagement and community engagement is helping philanthropy in the areas and states they operate in as well as donating to elected officials and campaigns."

READ MORE: Here's What We Know About the Probe Into Mayor Bill de Blasio's Fundraising

Despite the set back, Cohn said the company plans to move forward with the $20 million studio at the former jail.

The letter about the sale being rejected was written by the Comptroller's director of contracts, Charlotte Davis, and sent to the state's Office of General Services, which owns the jail.

In it, Davis criticizes OGS for including contradictory information about Argento's involvement with the mayor's fundraising probes.

"The questionnaire states that neither the vendor nor Gina Argento have been contacted by the U.S. Attorney or any other government agency," Davis wrote in the letter.

"However, in a letter dated November 21, 2016, Ms. Argento states that she was asked to provide copies of donation checks to the U.S. Attorney's office."

The application for the sale can be resubmitted for approval with additional information that was requested by Davis.

The Arthur Kill Correctional Facility, on Arthur Kill Road, was shuttered in 2011 by Gov. Andrew Cuomo as part of his money saving effort to close prisons around the state.

In 2014 Broadway Stages, which owns sound stages in Queens and Brooklyn, announced it would transform the site into the borough's only film studio.

The site was appraised twice, once for between $20 and $52 million and the second time for between $40 and $48 million, but the ESD agreed to sell it to the company for only $7 million, according to the letter.

"The procurement record does not fully support the sale price and does not address the great disparity in appraisal values," Davis wrote.

Cohn said the company has already spent between $500,000 and $2 million on the site to replace piping stolen by looters and to hire security.

He added that the sale contract requires Broadway Stages to pump $20 million into the site within the first five years or it'll lose the deed.

Federal, state and city investigators have been looking into de Blasio's fundraising efforts to see if there were favors handed out by City Hall in exchange for donations.

They've also been looking to see if campaign finance and election laws were broken during de Blasio's failed bid in 2014 to get Democrats to take control of the state Senate or his nonprofit Campaign for One New York.

Argento and family members tied to Broadway Stages donated nearly $100,000 to de Blasio's election campaign in 2013 and $9,900 for his 2017 run, according to campaign finance records.

The company and Argento also donated $25,000 each to the Campaign for One New York.