City Hall issues another denial as Rivington House deed change deal worries de Blasio's aides : reports


A new denial was issued on Friday by City Hall in respect of the controversial deed changes to Rivington House, the former AIDS nursing home, even as the lobbyist reportedly involved, for a time, at least, in pushing for the deed changes sought to clear his name.

First Deputy Mayor Anthony Shorris learned in February of the lifting of the deed restrictions on Rivington House that cleared the way for its sale by its former owner, Allure Group LLC to a consortium of developers for $116 million, according to a report published on Friday by The New York Post.

The revelation about when First Deputy Mayor Shorris learned of the deed change was qualified with the invocation of the claim that he didn’t inform Mayor Bill de Blasio (D-New York City) about the Rivington House transaction that has now snowballed into a full-fledged crisis for de Blasio’s City Hall. First Deputy Mayor Shorris claimed that he kept the mayor in the dark, despite the fact that First Deputy Mayor Shorris knew that each of the New York City Department of Citywide Administrative Services, the municipal agency that had effected the deed changes, was forced to review its procedures for deed changes and the New York City Department of Investigation, a municipal oversight body headed by Mark Peters, the former treasurer of Mayor de Blasio’s campaign committee, had initiated an investigation of the changes to the Rivington House deed.

Prior to Friday’s revelation about First Deputy Mayor Shorris knowing about the deed change in February, First Deputy Mayor had admitted to reporters from The Wall Street Journal that the administration didn’t know that Allure Group LLC had entered into a contract to flip Rivington House before the de Blasio administration approved the lifting of the deed restrictions. Whilst the deed restrictions were intact, the use of Rivington House was limited to the operation of a nonprofit healthcare facility.

Approximately one month before the time when First Deputy Mayor Shorris claimed he learned about the deed change, Manhattan Community Board 3 passed a resolution, calling, in part, on Mayor de Blasio to disclose the details of the secretive transaction that led to the lifting of the deed restrictions. The existence of the Community Board 3 resolution has complicated the claims that Mayor de Blasio and his staff did not know about the deed changes, given that the resolution noted that the deed change was effected in November 2015.

A request for an interview for this report was made by Progress Queens to Austin Finan, the mayor’s spokesperson on housing, but Mr. Finan did not answer the request.

As the controversy has continued to escalate around City Hall, Mayor de Blasio expressly declared that he had not learned of the Rivington House deed transaction before it became public, according to a report filed by Yoav Gonen for The New York Post. Mayor de Blasio’s claim of ignorance has been repeated by the press, including in a report published on Friday by POLITICO New York.

News about the Rivington House transaction was first made public in a report filed by Rebecca Davis O’Brien on March 22 for The Wall Street Journal.

Because James Capalino, the lobbyist who engaged to push for the deed change, was an early supporter of Mayor de Blasio’s fledgling mayoral campaign in 2013, Mr. Capalino helped to telegraph to big business leaders in New York City that the radical proposals being floated by the then mayoral candidate would eventually meet the conservative expectations of New York’s wealthy business community. Mayor de Blasio ultimately won the mayoral primary with help from a controversial Super PAC and after forcing former Comptroller Bill Thompson (D-New York City), with the help of Gov. Andrew Cuomo (D-New York), to concede the primary election, even though former Comptroller Thompson was believed to have met the threshold to qualify for a runoff election.

In a public relations offensive launched on Friday, Mr. Capalino sought to clear his name in the Rivington House controversy, claiming that his initial lobbying for the deed changes failed under a previous owner of Rivington House, and Mr. Capalino claimed that lobbying work he did for an affiliate of the consortium that later purchased Rivington House was unrelated to the deed changes.

Potential electoral consequences of a land use controversy tied to campaign donations

According to the latest report published by The Wall Street Journal, Mayor de Blasio’s top aides are worried about the fallout of the controversy surrounding the Mr. Capalino’s proximity to both the Rivington House transaction and to Mayor de Blasio.

Mayor de Blasio has reason to worry.

In 2013, as he was campaigning to win the Democratic Party mayoral primary, he exploited the issue of the closing of St. Vincent’s Hospital and the then potential closing of Long Island College Hospital to rally support for his campaign in communities across the city that had faced closures of their own, respective healthcare facilities. Because the issue proved so potent for him, Mayor de Blasio now faces the same political liability going into his 2017 reëlection campaign that contributed to the loss of his chief 2013 mayoral primary rival, former New York City Council Speaker Christine Quinn (D-Chelsea). (Adding to the poor optics, Mr. Capalino was hired by the real estate developers to work on the rezonings on each of St. Vincent's Hospital and Long Island College Hospital.)

Former Council Speaker Quinn represented the council district that included St. Vincent’s Hospital. Her constituents blamed her for not fighting to save the hospital, because she had accepted approximately $30,000 in campaign contributions from the beneficial owners of Rudin Management Company, the real estate developer that converted St. Vincent’s Hospital into a $1 billion luxury condominium and townhouse complex.

One of the first prominent acts of support provided by Mr. Capalino to Mayor de Blasio’s campaign committee was to serve on a 2013 host committee for a $1 million fundraiser at the Waldorf-Astoria attended by former First Lady Hillary Rodham Clinton and other political celebrities. In the time since, Mr. Capalino has remained a dedicated fundraiser for Mayor de Blasio, donating or bundling contributions worth $50,000 to Mayor de Blasio’s various campaign committees.

The consortium, which purchased Rivington House, plans to convert the former nursing home into luxury condominiums.

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