Public officials are demanding, in louder and louder voices, to know why and how the city quietly allowed a Lower East Side building once reserved for non-profit use to be turned into luxury housing. Today, local politicians gathered to push for stronger transparency and oversight, to prevent it from happening again.
The former schoolhouse at 45 Rivington was operated by VillageCare as an AIDS/HIV treatment facility, under a deed restriction established in 1992 that limited the building to non-profit usage. Since the HIV crisis has dimmed in the Lower East Side, the facility was no longer needed at capacity. At the end of 2014, VillageCare sought to sell it to a for-profit nursing-home operator, Allure Group, with local officials’ understanding that it would remain some kind of medical facility for the general population, likely for the many seniors in the neighborhood.
But last May the city quietly lifted the non-profit deed restriction for about $16 million (a rare act in itself, according to the New York Times), with no stipulations on the types of usage. The only public notice was a small listing of an opportunity for comment in the City Record and apparently it slipped by Community Board 3, politicians and watchdog groups alike. Almost immediately after the restrictions were lifted Allure Group handed it off to to a private partnership between Slate Property Group, China Vanke, and Adam America Real Estate for $116 million (a far cry above the $28 million Allure purchased it for), who plan to build luxury apartments on the site.
Today elected officials, including Manhattan Borough President Gale Brewer, Council Member Margaret Chin, State Senator Daniel Squadron and Council Member Rosie Mendez gathered in front of the pink Rivington House building to express their outrage and push for new legislation to ensure greater protections and transparency for deed restrictions. “The whole notion of the deed restriction is that a luxury developer doesn’t swoop in and take the property away from the community,” Brewer said.
Chin told reporters she hadn’t truly understood the deed was lifted and the property sold to luxury developers until she heard rumors the building was emptying out around last Thanksgiving, and then the Lo-Down began reporting it in earnest in December. “With every single day bringing more bad news about Rivington House, I can’t help but think where we were last year,” Chin said. “The beginning of last year, we were celebrating. We thought we saved Rivington House, we thought we had a victory.” When VillageCare was turned over to Allure Group, it seemed a useful nursing facility was on the way in. “What a difference in less than a year, and now we are confronted with the reality that this community asset is going to be turned into luxury condos?” she continued, her voice rising in outrage.
Both Chin and Brewer called for Mayor de Blasio to compensate the community with more hospital beds and community facilities. They also demanded more government oversight and transparency.
“One of the reasons this deed restriction was lifted is that there was almost no public notification. Just the City Record and who in the world reads the City Record? No emails, no calls, no emails to elected officials–and boy, do people call when they want to,” Brewer said. “We need to do more. I can’t tell you how many properties there are in the city with deed restrictions, where those buildings are and what the restrictions are. That’s unacceptable. Transparency is needed.” She called for a database that would show the location of each building with restrictions, complete with information about its history and an image of the deed.
Chin said she will introduce legislation at City Hall that would require public notice about lifting deed restrictions be given in advance to local community boards, borough presidents and city council members. The legislation will also create a public database of all the property subject to city-imposed deed restrictions.
“It shouldn’t take detective work to find out what’s happening with public assets that get privatized in this way,” said Squadron. “It should be predictable, there should be transparency and public discussion.”
He added that the community had been willing to make compromises on the building because it was clear VillageCare’s services were no longer in great need. “We were willing to talk about how we keep this as a medical facility, a nursing facility, for the community and wanted to have that conversation flexibly and realistically,” he said. “What was unacceptable was to turn this into an auction for the highest bidder without any community benefit. Not only do we lose a nursing facility and medical facility, but there will be no affordable housing and no community services.”
City Comptroller Scott Stringer is already investigating the chain of events that led to the sale, and Chin and Brewer are demanding copies of those documents. Attorney General Eric Schneiderman also announced his office is opening an investigation and sent subpoenas last week to several players involved in the deal.