De Blasio administration blasted over building deed change

The New York City Council Thursday upbraided the de Blasio administration for allowing a nonprofit nursing home to be flipped by developers, who then made millions on a luxury condominium project there.

A report this summer by the city’s Department of Investigation blamed “a complete lack of accountability” under Mayor Bill de Blasio that allowed the Allure Group to acquire Rivington House — meant to forever remain a nonprofit health care facility under deed restrictions — and quietly sell it for luxury condos and a $72 million profit.

“Basically your office checked out,” Councilman Vincent Gentile (D-Brooklyn) told First Deputy Mayor Tony Shorris during a hearing Thursday.

In an effort to make amends for allowing the facility to fall out of health care use, the administration said it would spend more than $16 million to house more than 100 seniors in a mixed-use facility. It will be located nearby at 30 Pike St.

The hearing lasted longer than six hours, the bulk of which consisted of testimony from Shorris; de Blasio’s corporation counsel, Zachary Carter; and Lisette Camilo, whose agency, the Department of Citywide Administrative Services, oversaw the lifting of the deed restrictions.

Rivington House, located on Manhattan’s Lower East Side, was a former school building that had been limited by the restrictions to be a nonprofit health care facility. At the peak of the AIDS crisis, the property served dying people who had few other places to go.

The owner of the location at 45 Rivington St. sold the property to the Allure Group in 2015 for $28 million. Allure paid the city $16 million to get the restrictions lifted and then sold it to others for $116 million. Officials suspended the project following public outrage.

James Capalino, de Blasio’s top fundraiser — who then became one of the city’s top lobbyists — was involved in trying to get the deed restrictions lifted.

Shorris was contrite but declined to say who specifically was to blame for the mistake.

“I recognize that what happened here was not the right outcome for the community and taxpayers, nor was it consistent with the policy goals and values of the de Blasio administration,” said Shorris, who said no one had been disciplined for the mistake.

Councilman Ben Kallos (D-Manhattan) criticized Shorris for having too many agencies under his control — 30 or so — which Kallos suggested kept Shorris from having adequate oversight over all of them.

“That’s a lot of agencies, wouldn’t you admit?” Kallos said.

By Matthew Chayes

matthew.chayes@newsday.comchayesmatthew

Matthew Chayes, a Newsday reporter since 2007, covers New York City.