Prosecutors allegedly investigating de Blasio sweetheart deal

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

TRD New York /
May.May 22, 2016 11:00 AM

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


Related Articles

arrow_forward_ios
A photo illustration of Mayor Bill de Blasio at a restaurant (Getty)

NYC’s outdoor dining program will become permanent

NYC’s outdoor dining program will become permanent
Mayor Bill de Blasio (Getty)

Business owners request Open Restaurant plan for retail

Business owners request Open Restaurant plan for retail
NYC Hospitality Alliance’s Andrew Rigie and Mayor de Blasio (Hospitality Alliance; Getty; iStock)

City can’t afford to bail out restaurants: de Blasio

City can’t afford to bail out restaurants: de Blasio
Council members Antonio Reynoso and Keith Powers (Twitter, NY City Council, Getty)

City Council proposes bill to expand outdoor dining permanently

City Council proposes bill to expand outdoor dining permanently
New York City Mayor Bill de Blasio, President Donald Trump, and New York Governor Andrew Cuomo (Credit: Yana Paskova/Getty Images, Chip Somodevilla/Getty Images, and Drew Angerer/Getty Images)

Trump threatens to yank $7B from “anarchist” NYC

Trump threatens to yank $7B from “anarchist” NYC
A construction worker at One Vanderbilt in August (Getty)

City reports decline in construction-related injuries, deaths

City reports decline in construction-related injuries, deaths
Bill de Blasio and Andrew Cuomo, with (from left) Steven Roth, Jeff Blau, Rob Speyer, Douglas Durst, Ziel Feldman and Steven Schwarzman (Getty)

Real estate execs to city, state: Let us help with recovery efforts

Real estate execs to city, state: Let us help with recovery efforts
A rendering of the Climate Solutions Center with Trust for Governors Island CEO Clare Newman and Mayor de Blasio (Rendering via WXY architecture + urban design/bloomimages; Governor's Island; Getty)

Going green: Governors Island could soon house climate center

Going green: Governors Island could soon house climate center
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...