From left: Ben Shaoul of Magnum Real Estate Group and 542 East 5th Street
Ben Shaoul’s Magnum Real Estate Group shot back today at a group of elected officials who had urged the developer not to convert a Lower East Side property that houses the Cabrini Center for Nursing & Rehabilitation into a residential building. According to a letter from Shaoul’s attorney obtained by The Real Deal, Magnum is close to a deal to sell the 542 East 5th Street property to a for-profit nursing home operator, and the main obstacle to the sale is the lack of an agreement between the for-profit operator and Cabrini.
As previously reported, Magnum acquired the building on the corner of Avenue B for $25.5 million earlier this fall. Cabrini’s lease expires in mid-April, prompting worries from some that the community would lose the 240-bed nursing home.
On Dec. 23, a group of elected officials led by State Senator Daniel Squadron wrote to Shaoul’s attorney, Kenneth Fisher, a partner at Cozen O’Connor, underscoring their desire to preserve the nursing home beds and expressing concerns that the developer planned to sell the site.
The nearby Bialystoker Nursing Home recently closed, and Cabrini has been operating in the neighborhood for almost 20 years, the officials noted. “We ask that the needs of the senior community on the Lower East Side be taken into consideration,” they wrote.
However, Fisher’s letter painted a different picture of negotiations with Cabrini.
According to his letter, Cabrini and the Archdiocese of New York approached Magnum in late September, saying they knew of an alternative site to construct a new nursing home, and requested a five-year lease extension to provide time to complete the new facility. But before the parties could meet, “Cabrini advised that the alternative site was not, in fact, available and that there was no prospect that such a site would be identified,” Fisher’s letter said.
On Dec. 6, according to the letter, Cabrini said it was negotiating with a for-profit nursing home operator to purchase its business operations, which would be more valuable packaged with the real estate. Magnum is willing to sell the building to the for-profit operator, provided the operator can reach a deal with Cabrini. Fisher declined to identify the for-profit operator.
If that deal falls through, financing for Magnum’s planned conversion is in place, and the architectural design is underway, the letter said, although it’s not yet clear whether the developer would convert the property to rentals or condos.
“Preserving nursing home beds on the Lower East Side has been our priority,” said a spokesperson for Squadron in a statement, “and we’re open to different proposals that do that.”
Fisher’s letter was also addressed to New York State Assembly Speaker Sheldon Silver, Manhattan Borough President Scott Stringer and other local and state politicians who represent the area.
A representative for Cabrini did not immediately respond to a request for comment.