The Real Deal New York

Allure Group “misled the city” on Rivington House deed restriction: officials

James Capalino, a de Blasio-linked lobbyist who represented the initial seller VillageCare, also has ties to new buyer Slate

March 28, 2016 12:30PM

45 Rivington Street on the Lower East Side (inset: Scott Stringer and Slate's Martin Nussbaum)

45 Rivington Street on the Lower East Side (inset: Scott Stringer and Slate’s Martin Nussbaum)

UPDATED, 5:47 p.m., March 28: New details are emerging on the shady agreement that led to the $116 million purchase and planned condo conversion of Rivington House – a former nonprofit AIDS-care facility – by Slate Property Group, Adam American Real Estate Group and China Vanke.

De Blasio administration officials accused the Allure Group, which bought the 45 Rivington Street property from VillageCare in February for $28 million, of deceiving the city by promising it would maintain the building as a nursing home, despite already being in contract to sell it to the condominium developers, the Wall Street Journal reported.

“The mayor is deeply concerned about the result of what was clearly a flawed process,” Anthony Shorris, First Deputy Mayor, told the Journal. “The city must always take every step it can to ensure complete transparency around development.”

City Comptroller Scott Stringer is investigating an agreement between Allure and the city that removed the deed restriction on the property in exchange for $16.1 million.

An Allure executive, Joel Landau, wrote an email to the city requesting the lifting of the deed restriction in October 2014, promising to maintain the property as a nursing home, documents released by the city revealed, according to the Journal.

Slate signed a contract for the property in May 2015, principal Martin Nussbaum told the Journal, a month before the Department of Citywide Administrative Services’ (DCAS) decision.

“At the time there was a deed restriction on the property, but our contract was to purchase a property that was of residential use,” Nussbam said. “To the extent that it was not residential use, we would not have purchased the property.”

James Capalino, a lobbyist who has steered $50,000 to Mayor Bill de Blasio, was hired by VillageCare to sell the property in January 2013, the New York Daily News reported. Capalino held meetings about Rivington House with DCAS officials that year, according to the newspaper. He also has ties to Slate — the developer hired him in April 2015.

City officials say no one from De Blasio’s office, including the mayor himself, had knowledge of the $116 million deal. Risa Heller, a spokesperson for Slate, told the Daily News that Capalino “did not represent Slate on this transaction.”

Officials have taken steps to reform the process around deed modifications, including running new proposals by the borough presidents, City Council members and community boards of the affected buildings. The procedure for evaluating the value of deed restrictions will also be improved, the Journal reported. [WSJ, NYDN] – Ariel Stulberg

Correction: A previous version of this article stated that James Capalino was hired by VillageCare in January 2013.