Allure Group in hot water with lender on dubious BK nursing home
Firm tied to Rivington scandal defaulted on $20M Bed-Stuy loan: suit
The mastermind behind the Rivington House scandal is in trouble again, this time with a lender on a Brooklyn nursing home that’s under investigation from state authorities.
Joel Landau and his partners at the Allure Group have repeatedly fallen behind on a $20 million loan on the CABS Nursing Home in Bedford-Stuyvesant, and are trying to force its lender, the Midtown-based financial consulting firm Sabr Group, to buy the property next week at a price 60 percent higher than the figure the two had agreed on earlier, Sabr claims in a new lawsuit.
Landau, who negotiated to have a deed restriction removed that paved the way for the controversial sale of the Rivington House nursing home on the Lower East Side to Slate Property Group and partners, obtained a $20 million loan from Sabr when Allure bought the Brooklyn nursing home at 270 Nostrand Avenue for $15.6 million last year, property records show.
But Allure defaulted multiple times and failed to repay the loan when it became due in June, according to a complaint Sabr’s lawyers filed in Manhattan Supreme Court Wednesday.
As per the terms of the loan, Sabr has the right to purchase the property for $25 million in the event Allure defaults. But the lender’s attorneys say Allure is trying to exercise a “put right” option that requires Sabr to buy the property instead for $40 million, and has scheduled closing for Dec. 22.
Sabr has “tried to exercise its purchase option, but [Allure] has refused to honor it,” the lawsuit read.
Representatives for Allure [TRDataCustom] could not be reached for comment. The lawsuit is not the only difficulty the company is facing with the site.
New York state Attorney General Eric Schneiderman in April issued subpoenas after Allure filed demolition plans for the property, with the intention of replacing it with a seven-story, 241-unit rental building.
“The investigation includes the Allure Group’s history of purchasing nursing homes, substantially vacating them and profiting on the conversion of the buildings to residential use,” according to Sabr’s lawsuit.
Approval from the state Department of Health is necessary to change the nursing home’s status, and ahead of the property sale, Allure reportedly told officials it would continue to operate the facility as a nursing home.
Sabr Is Asking The Court to view Landau and his partners Solomon Rubin and Marvin Rubin as personally responsible to pay back the $20 million, plus unpaid interest and fees. The lender is also asking the court to declare it has the right to purchase the property for $25 million, and to invalidate Allure’s “put right” option to sell it for $40 million, in part because the company’s principals are under investigation.
Earlier this year, Sabr paid $54 million to buy a portfolio of four contiguous Midtown east townhouses on East 55th Street.