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Bill de Blasio to blame in condo-flipping deal, watchdog report says

Mayor Bill de Blasio

Mayor Bill de Blasio "knew or should have known" about a land deal to convert Rivington House, which had served AIDS patients, into luxury condos, according to a 161-page report released Thursday, July 14, 2016, by the Department of Investigation. De Blasio is shown at a news conference at One Police Plaza in Manhattan on Monday, July 11, 2016. Photo Credit: Charles Eckert

“A complete lack of accountability” under Mayor Bill de Blasio is to blame for a deed lifting to allow a nonprofit nursing home on Manhattan’s Lower East Side to be flipped to luxury condos and a $72 million profit, according to an investigation released Thursday by the city’s corruption watchdog.

In a 161-page document, the Department of Investigation found that City Hall “knew or should have known” about the land deal at the site known as Rivington House, which had served AIDS patients.

The report appears to question the mayor’s long-standing insistence that City Hall was snookered by greedy developers and the administration had no clue they intended to convert the property to luxury condominiums.

“DOI’s investigation further revealed a complete lack of accountability within City government,” the report said. It also found that “several City employees knew the property owner considered selling the property for conversion to luxury housing” and that the developer could legally do so without the restrictive covenant.

VillageCare, the owner of the site at 45 Rivington St., bought the property in 1992, with the deed restrictions limiting it to a nonprofit medical facility. The owner sold the property to the Allure Group in 2015 for $28 million, paid the city $16.15 million to lift the deed restrictions, and Allure sold the property this year for $116 million to luxury-condo developers. Amid public outcry about the sale, the project has been put on hold.

The push to lift deeds was led by one of the mayor’s top fundraisers, James Capolino. He was an early supporter of de Blasio’s bid to the mayoralty and became the city’s top-earning lobbyist after the mayor took office, according to a published report. He could not be immediately be reached for comment.

The controversy over Rivington is one of at least five fundraising investigations of de Blasio and his inner circle by city, state and federal agencies.

Speaking to reporters Thursday at an unrelated event in East New York, Brooklyn, de Blasio said “we take full responsibility, I take full responsibility,” but that no one would be fired because of the investigations’ findings. He blamed since-changed city policies governing deeds.

“I think what’s clear is, the left hand and the right hand were not coordinated,” he said, adding that he had not been asked personally whether to approve the deed lifting or “it would have been the easiest no I’d ever given in my life.”

The DOI report concluded that officials at the highest levels of government — including First Deputy Mayor Tony Shorris and Stacey Cumberbatch, then-head of the city’s administrative services agency — knew what has going on or should have known.

“Congratulations! Thank you and staff for great work and bringing this to closure in the best interest of the city,” a Nov. 10, 2015, email from Cumberbatch said, the report quoted. “Much appreciated.”

Cumberbatch was quietly transferred to the city’s public hospitals corporation earlier this year.

The report hints at probers’ frustration with the de Blasio administration, which was “hindered by” de Blasio’s lawyers’ “lack of cooperation.”

Despite an executive order mandating that investigators get unfettered access to documents and city computers, de Blasio’s law department once handed over 1,000 pages of relevant documents — 990 of which were blank.

De Blasio said Thursday night that “everything was provided that was necessary.”

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