New York AG investigating Rivington House deal

New York Attorney General Eric Schneiderman is getting involved in the controversy surrounding the $116 million sale of a former healthcare facility on the Lower East Side. His office has opened an investigation into the matter and sent subpoenas last week to several players involved in the deal.

The November removal of a deed restriction at 45 Rivington Street allowed the former HIV/AIDS-care facility’s owner, nursing home operator Allure Group, to sell it for $116 million to a partnership between Slate Property Group, China Vanke, and Adam America Real Estate.

A spokesperson for Schneiderman confirmed the probe, according to the Wall Street Journal, which will only heighten scrutiny surrounding the de Blasio administration’s lifting of the deed restriction on 45 Rivington Street. The restriction limited the building’s use to a nonprofit residential healthcare facility, but Slate and its partners are planning to convert the 150,000-square-foot property into a luxury condominium building.

The city’s Department of Investigation and City Comptroller Scott Stringer’s office are already looking into the matter, with officials accusing Allure of having misled the city about its plans for the building.

City officials claim the lifting of the deed restriction was intended to help the creation of a for-profit nursing center at Rivington House, while the mayor’s office said it had no knowledge of the arrangement, which saw Allure Group pay the city more than $16 million in exchange for lifting the restriction.

The nursing home operator, which stood to make a tidy profit on 45 Rivington Street after acquiring the property for $28 million in early 2015, reportedly owes the city more than $5 million in back taxes. [WSJ] – Rey Mashayekhi