A deal to transform a nonprofit nursing home on the Lower East Side into luxury condos is being examined by the city after public outcry surrounding the plan. The Wall Street Journal, which first reported the February sale of Rivington House at 45 Rivington Street to China Vanke Co., Adam American Real Estate, and Slate Property Group, says that the sale is being investigated by the city because it involved the lifting of a deed restriction that may not have been properly scrutinized.
The property on Rivington Street between Forsyth and Eldridge streets was owned and operated by VillageCare, a nonprofit care provider, from 1993 through 2014. For-profit care provider Allure Group purchased the building from VillageCare in 2014 for $28 million, and months later paid the city's Department of Citywide Administrative Services (DCAS) $16.15 million to lift a restriction that limited the building's use, WSJ says. That move paved the way for Allure Group to sell the property to the developers for $116 million in February.
But why could Allure Group pay its way out of the deed restriction so easily, and for so relatively little? That's what's now being investigated by DCAS and the city's chief financial officer, Scott Stringer. DCAS, which granted the sale, says they were under the impression that the property would be operated as a for-profit nursing home. The investigation into the sale will also asses the valuation of the property.
Stringer, to put it lightly, is pissed. "It is incomprehensible that this property, which provided long-term care for patients with HIV/AIDS for more than two decades, would reportedly be converted into market-rate luxury housing without robust discussion, transparency and input from the community it serves," he said in a statement gleaned by WSJ.
The DCAS is reviewing the process of valuing deed restrictions and how their removals are authorized.