The Real Deal New York

Cabrini to close this summer, give way to condos

March 08, 2012 09:00AM

Ben Shaoul and the Cabrini nursing center

Negotiations to preserve the Cabrini Center for Nursing and Rehabilitation failed, and the East Village facility will close this summer, EV Grieve reported, to make way for a condominium development by Magnum Real Estate President Ben Shaoul.

Shaoul acquired the 84,000-square-foot building, at 542 East 5th Street, for $25.5 million in November and reports immediately began circulating that the center would close. But at the bequest of the center, the community and elected officials, Shaoul worked to find a buyer that would preserve the nursing facility, a spokesperson for the developer said. But those attempts ultimately failed.

Cabrini’s lease expires in April, but the non-profit, 240-bed center will stay open through the summer to finalize its closure. Once it vacates the property, Shaoul will renovate the building and repurpose it for residential use.

According to a letter Cabrini distributed yesterday, the closure process will cost the center $7 million, and it has requested Department of Health grants to cover those costs, which are connected to unemployment insurance, pension funding and severance pay. Without the grant, Cabrini said it will be forced into bankruptcy.

Cabrini is looking to sell 117 beds to a private nursing home operator in Borough Park so that some residents and employees will have the option of moving to Brooklyn. The sale, which includes the maximum number of beds allowed, would offset closing costs by about $2.5 million, according to Cabrini. [EV Grieve]

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