Mayor de Blasio said his administration was “too trusting” in not securing a written guarantee from a Brooklyn firm that sold a Lower East Side property reserved for health care services to a developer of luxury condos.
Hizzoner said the Allure Group “lied” to city officials by suggesting the building at 45 Rivington Street would remain a healthcare facility, at the same time that the group asked the city to scrap restrictions on the site’s allowable uses.
After the Department of Citywide Administrative Services lifted those restrictions in exchange for $16 million last summer, the Brooklyn-based Allure Group flipped the building to a trio of developers at a $72 million profit.
Records show the sale to the Slate Property Group and others was already in contract even before DCAS lifted the restrictions, which were written into the building’s deed.
The mayor said he knew nothing of the fiasco until it was first reported last week by the Wall Street Journal – even though DCAS had been reviewing its practices for weeks in the wake of a media story about the $116 million sale.
“I’m not happy about it, that it happened. I’m not happy about the fact that I didn’t hear about it in advance before it became public, and we’re looking now to see what actions we can take to penalize this company,” Hizzoner said at an unrelated press conference at NYPD headquarters.
“We should not be trusting in these situations,” he added. “We need real guarantees that a company will not basically flip a property and use it for private gain when they’ve made a commitment to some public usage.”
A top official at the Allure Group, which operates for-profit nursing homes but is also engaged in real estate development, declined comment.
Both the Comptroller’s office and the Department of Investigation are probing the deal, which also involved top lobbyist and de Blasio pal James Capalino.
He repped the building’s original non-profit owner in unsuccessfully lobbying DCAS to lift the usage restrictions, prior to the site being sold for $28 million to the Allure Group in early 2015.
At the time of the most recent sale, Capalino was working for Slate Property Group — although a spokeswoman for his firm said that work did not involve the site at 45 Rivington.