Attorney General Eric Schneiderman has reached a settlement with Allure Group, the for-profit healthcare provider being investigated in connection to the sale of two nursing homes—the Lower East Side’s Rivington House and Bed-Stuy’s CABS Nursing Home—and the lifting of the deed restrictions that allowed the properties to be converted into luxury housing (h/t The Real Deal).
The Attorney General announced on Friday that the settlement requires Allure to pay $1.25 million to Lower East Side nonprofits that provide healthcare to services to the community as well as $750,000 in penalties and costs to the state. Under the settlement, Allure is also required to make major improvements to the Greater Harlem Nursing Home and open new healthcare facilities in Brooklyn and the Lower East Side that will help compensate for the services lost when CABS and Rivington House shuttered.
The Lower East Side HIV/AIDS nursing home Rivington House was owned and operated by VillageCare, a nonprofit care provider, from 1993 through 2014. 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. That move paved the way for Allure Group to sell the property to developers China Vanke Co., Adam American Real Estate, and Slate Property Group for $116 million in February 2016.
Allure Group was involved in a similar deal at CABS, which it shut down a year after it purchased the facility. Allure Group is also the acting manager at the Greater Harlem Nursing Home, and under the settlement, Allure is required to make substantial investments and improvements in the 200-bed facility.
The settlement also forbids the future sale or closure of the facility by Allure Group for at least nine years. Similarly, Allure is forbidden to sell or close the Brooklyn and Lower East Side facilities it opens as part of the settlement for at least eight years.
“The processes that led to the closure of Rivington House and CABS never should have happened—this settlement ensures they won’t happen again, while addressing critical healthcare gaps in the impacted communities,” Attorney General Schneiderman said in a press release.