Rivington House (Photo: Kavitha Surana)

Rivington House (Photo: Kavitha Surana)

As members of Mayor Bill de Blasio’s administration faced questions regarding the Rivington House debacle in a contentious City Council hearing this afternoon, de Blasio’s office released a none-too-subtly timed press release announcing a plan to build a new affordable senior housing and health care facility on the Lower East Side. The new development is designed to replace essential services the neighborhood lost after the nursing home at 45 Rivington Street was sold to a luxury condominium developer under controversial circumstances in 2015.

With this new development, the city plans to provide affordable housing to more than 100 seniors at 30 Pike Street, a parcel adjacent to the Manhattan Bridge that is currently owned by the Department of Environmental Protection. According to the mayor’s statement, the property “will be reconfigured to accommodate the new project as well as DEP’s operations.”

Looming over de Blasio’s announcement is the spectre of Rivington House, the nursing home and HIV/AIDS treatment center that operated at 45 Rivington Street until 2015. Since it was purchased by the nonprofit Village Care in 1992, the Rivington House property had been subject to a deed restriction designating it for use as a nonprofit residential health care facility. In February 2015, Village Care sold the property to the for-profit nursing home operator Allure Group for $28 million. City officials later said they received assurances from Allure that the facility would continue to operate as a healthcare facility.

But soon after Allure purchased the building, the city lifted the deed restriction in exchange for $16 million, opening the door for Allure to flip the property to a luxury housing developer for $116 million mere months after acquiring it.

Top de Blasio fundraiser James Capalino was involved in lobbying the city to lift the deed restriction. The mayor publicly cut ties with Capalino in August.

Rivington House has since been the subject of investigations conducted by the city comptroller, the city Department of Investigation, and state attorney general’s office. The de Blasio administration has characterized the Rivington House case as a regrettable incident stemming from an outdated deed modification process. The Department of Investigation’s report found that “City Hall was both aware of and involved in the deliberations to remove the deed restriction and failed to stop it.”

In the wake of the Rivington House controversy, the mayor’s office changed its deed modification policy in an effort to prevent similar outcomes in the future.

Earlier today at a joint meeting of the Committee on Oversight and Investigations and the Committee on Governmental Operations, City Council members questioned key members of the de Blasio administration, including Deputy Mayor Anthony Shorris, about their handling of the Rivington House deed modification. “I recognize that what happened here was not the right outcome, for the community, for the taxpayers, and nor was it consistent with the policy goals of the de Blasio administration,” Shorris testified, according to the Daily News.

As for the new development at 30 Pike Street, de Blasio’s statement says that the cost of the new facility is expected to exceed the $16 million the city received in exchange for lifting the Rivington House deed restriction (a somewhat curious admission to highlight in a press release).

“Rivington House’s conversion to luxury housing never should have happened,” de Blasio said in the announcement. “This community was the victim of a broken process, City error and unscrupulous developers looking to make a buck. Our reforms will prevent that from ever happening again. This investment is a reflection of our unwavering commitment to the health of this neighborhood.”

Update, Sept. 30, 4:00pm: A spokesperson for City Council member Margaret Chin, whose district includes the sites of Rivington House and the planned new development, tells Bedford + Bowery that although the new facility would be a “win for the community,” Chin remains committed to reforms that would require the city to create and maintain a searchable public database of properties subject to deed restrictions. Chin has urged the administration to look into all available options to return Rivington House to serving the Lower East Side, including purchasing the property via eminent domain.