AG Schneid slap$ Rivington buyer
State Attorney General Eric Schneiderman on Friday announced a settlement with a shady real-estate group that bought city nursing homes and flipped them to developers who sought to convert them into luxury condos.
The settlement between the attorney general and The Allure Group includes measures to reform the process that led to the closure of Rivington House on the Lower East Side and CABS Nursing Home in Brooklyn — in addition to levying $2 million in penalties to the developers, Schneiderman said.
The scandal rocked Mayor de Blasio’s administration because city officials approved the deal that had Allure Group pay the city $16.1 million in exchange for lifting deed restrictions that required the properties be used to aid the needy.
“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 health-care gaps in the impacted communities,” Schneiderman said.
“We’re requiring Allure to open new health-care facilities in Brooklyn and the Lower East Side, and make major improvements to its Harlem facility, while also providing $1.25 million to nonprofits serving vulnerable New Yorkers.”
Phone calls to The Allure Group were not returned on Friday.
City Hall officials have not given a full explanation as to why the sales even took place and have not justified accepting the $16 million to remove the restriction that led to the windfall for Allure.
“That should not have happened. Period,” de Blasio said last May when asked about the sale. “I don’t know the answer yet. We are exploring that right now.”
After the deed restrictions were lifted, the real-estate group then sold Rivington, a former nursing home for AIDS patients, for a $72 million profit in February 2016.
The new owners were planning to convert the building into luxury condos. The city, however, has placed a stop-work order on the property.
As part of the settlement, Allure must create a new health facility on the Lower East Side to “fill health-care gaps caused by the closure of Rivington House,” Schneiderman said.
After purchasing the CABS nursing home in Bed-Stuy in 2015, Allure allegedly forced out frail patients — leading to the untimely deaths of some residents, according to a lawsuit filed in Brooklyn Supreme Court. The court papers charge that Allure repeatedly lied during the bidding process.
The settlement with the attorney general also requires Allure to open a “new Central Brooklyn health-care facility to offset lost health care services resulting from the closing of the CABS Nursing Home.”