The Real Deal New York

Prosecutors allegedly investigating de Blasio sweetheart deal

De Blasio was accused of awarding bid to Hudson Companies despite lower offer

May 22, 2016 11:00AM

David Kramer, Bill de Blasio and the Brooklyn Heights library site

David Kramer, Bill de Blasio and the Brooklyn Heights library site

Earlier this year, Mayor Bill de Blasio was accused of showing preferential treatment to a developer who won a $52 million bid to transform a Brooklyn Heights library into condos. Now, federal and city prosecutors are looking into the controversial deal.

The Hudson Companies, which is controlled by de Blasio friend and fundraiser David Kramer, bid less on the project than some of his competitors, but nevertheless was awarded the development site. At the time the New York Post attacked the mayor and Hudson, publishing a quote from an unknown source familiar with the bids.

“This is a sweetheart deal to a politically connected supporter, directly contrary to de Blasio’s stated goals for development projects,” the source said.

But days later, Hudson and the city fired back, with a city spokesperson saying, “there’s no question this was the best package.” And according to city insiders familiar with the process, one of the three finalists offered to pay $1 million more for the site than Hudson, but would build only about half as many affordable housing units.

The third finalist offered both less money for the site and significantly fewer affordable units. Moreover, Hudson offered the fastest completion time and the most attractive interim space (with a price tag for Hudson of close to $3 million).

But now, investigators are questioning why the city chose Hudson, according to the New York Post.

The offices of U.S. Attorney Preet Bharara and Manhattan District Attorney Cyrus Vance sent subpoenas to several of the 14 developers who bid on the project, according to Post sources familiar with the investigation.

One of those subpoenas was apparently sent to Toll Brothers President David Von Spreckelsen, who offered $1 million more than Hudson for the project. Kramer was not subpoenaed.

Hudson President David Kramer is “one of many people being looked at” but has not been subpoenaed, the sources said.

“‎We worked very hard on our proposal for the Brooklyn Public Library, which included a $52 million purchase price, double the amount of required affordable housing and an interim library to maintain service during construction. We participated in 11 public hearings, which culminated in an overwhelming vote of approval by the City Council,” Kramer told The Real Deal. “This was one of the most reviewed, questioned, transparent, public processes for a development. And as far as I know, none of the purported subpoenas have had anything to do with the library project.” [NYP] Christopher Cameron

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