Wall Street Journal At City Council, Answers Elusive on Rivington House Deed Deal by Mara Gay

Wall Street Journal
Wall Street Journal
At City Council, Answers Elusive on Rivington House Deed Deal
Mara Gay
05/13/2016

City agency under scrutiny over probes into the lifting of deed restrictions at a Lower East Side health-care facility Lisette Camilo, the commissioner of the Department of Citywide Administrative Services, testifying Friday in front of New York City Council.ENLARGELisette Camilo, the commissioner of the Department of Citywide Administrative Services, testifying Friday in front of New York City Council. PHOTO: AGATON STROM FOR THE WALL STREET JOURNALBy MARA GAY

The head of the New York City agency at the center of a disputed real estate transaction told a City Council committee Friday she couldn’t speak about the deal because it was still under investigation.

“Because we want to protect the integrity of the investigation we’re not going to be able to speak to specifics,” said Lisette Camilo, the commissioner of the Department of Citywide Administrative Services.

The Department of Citywide Administrative Services has come under scrutiny amid investigations by city, state and federal authorities into the lifting of deed restrictions at a Lower East Side health-care facility, Rivington House, that paved the way for it to be redeveloped as condos.

Councilman Ben Kallos, chairman of the council’s governmental operations committee, asked whether the agency had approved similar deals. “Here’s a chance to come clean,” he said.

Ms. Camilo said the agency had put all of its “13 or 14” requests to alter deed restrictions on hold since the Rivington deal came to light.

 

Ms. Camilo said the agency’s pending real-estate transactions were being addressed on a “case-by-case” basis.

Mr. Kallos said the Rivington deal was disturbing, in part because it allowed a building once designated for a nonprofit to be turned into condos when the city could have used the space for other needs.

“We need schools like you wouldn’t believe. We also need homeless shelters. And affordable housing,” he said.

Ms. Camilo said agency officials shared council members’ concerns about the Rivington deal. “No one was happy with the outcome,” she said.

Councilwoman Julissa Ferreras-Copeland, chairwoman of the finance committee, asked Ms. Camilo to submit deed restrictions that have been lifted in the past five years. Ms. Camilo agreed to do so.

In March, City Comptroller Scott Stringer sent a letter to Ms. Camilo seeking details on the Rivington deed decision.

On Friday, Mr. Stringer said the public has “a right to know how these deed restrictions are being managed and whether taxpayers and our communities are being protected.”

A for-profit nursing company, Allure Group, bought Rivington House for $28 million in early 2015, then paid the city $16 million to have the deed restrictions removed. Months later, Allure sold the 118-year-old, 150,000-square-foot property for $116 million to a residential developer. Mayor Bill de Blasio and other city officials have said Allure misled the city about its plans.

Records and interviews show that an Allure executive, a donor to the mayor’s 2013 campaign, spoke with members of the de Blasio administration about the property months before the deal went through. Several officials signed off on the lifting of the deed restrictions, including Ms. Camilo, in June 2015, when she ran the mayor’s office of contract services

The transactions are under investigation by the U.S. attorney’s office in Manhattan, the state attorney general’s office and two city agencies. No one has been charged with wrongdoing.