DCAS silent about use of $16 million payment to lift deed restrictions on Rivington House

Rivington House, as it appeared in 2013. As reported by Progress Queens, real estate speculators target independent healthcare facilities for luxury condominium conversion, because the community facilities are big and bulky and sit on large plots of real estate. Source : CC BY 2.0 Eden, Janine and Jim/Flickr

Rivington House, as it appeared in 2013. As reported by Progress Queens, real estate speculators target independent healthcare facilities for luxury condominium conversion, because the community facilities are big and bulky and sit on large plots of real estate. Source : CC BY 2.0 Eden, Janine and Jim/Flickr

By LOUIS FLORES

Officials with the New York City Department of Citywide Administrative Services are mum about the use of a $16 million payment made to lift the deed restrictions on Rivington House, the former AIDS nursing home in the Lower East Side.

The deed to the nursing home had restricted its use to a nonprofit healthcare facility. The transaction that led to the payment and the lifting of the deed restrictions are now reportedly the subject of two investigations : by the office of Comptroller Scott Stringer (D-New York City) and by the New York City Department of Investigation. Additionally, some elected officials are now interceding on behalf of the public by requesting information about the sale from DCAS, as the city agency is known.

When asked by Progress Queens about the use of the $16 million payment, officials with DCAS did not answer Progress Queens’ question.

After a previous owner, VillageCare, hired the politically-connected lobbyist James Capalino to reportedly persuade DCAS to lift the deed restrictions ended in failure, Mr. Capalino’s lobbying firm was hired by Slate Acquisition LLC, an affiliate of a member in a consortium that subsequently purchased Rivington House from VillageCare. It was under the owernership of that subsequent owner, Allure Group LLC, when the deed restrictions were lifted on condition of the $16 million payment to DCAS. The lifting of the deed restrictions resulted in a further sale of Rivington House to the consortium, Rivington Street Investors LLC. Once the deed restrictions were lifted, the market value of the property skyrocketed due to its planned conversion into luxury housing.

Mr. Capalino’s involvement with at least two back-to-back owners of Rivington House has been called into question by government reform activists, healthcare activists, and members of the press. Mr. Capalino was an early establishment supporter of Mayor de Blasio’s fledgling mayoral campaign in 2013, and Mr. Capalino has proved to be a generous campaign contributor and bundler to the mayor’s various political campaign committees. Under two years of the de Blasio administration, Mr. Capalino’s lobbying firm has leapfrogged to the top spot of the New York City lobbying league table. As was noted in an editorial published by Progress Queens, the revenues of Mr. Capalino’s firm have nearly quadrupled since 2012.

Questions have been raised about how the de Blasio administration has allowed lobbyists to profit from what should be the honest provision of government services, as was noted in a report published by Progress Queens.

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