Wall Street Journal Fireworks Expected at Council Hearing on Rivington Decision by Josh Dawsey

Wall Street Journal
Wall Street Journal
Fireworks Expected at Council Hearing on Rivington Decision
Josh Dawsey
09/27/2016

Mayor Bill de Blasio’s administration may give its most extensive public accounting of how deed restrictions were lifted

The 45 Rivington St. building on the Lower East Side, as seen in March.E
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The 45 Rivington St. building on the Lower East Side, as seen in March. PHOTO: AGATON STROM FOR THE WALL STREET JOURNAL

A New York City Council oversight hearing Thursday examining a decision by Mayor Bill de Blasio’s administration to lift deed restrictions on a Manhattan nursing home is expected to be contentious, exposing simmering tensions between lawmakers and the mayor’s office.

First Deputy Mayor Anthony Shorris and other top city officials are scheduled to testify at the hearing, which council members anticipate will be the administration’s most extensive public accounting of the removal of deed restrictions at Rivington House on the Lower East Side.

The deed change led a for-profit nursing-care provider to sell the property for $116 million to a group of developers that plan to build luxury housing, making what appears to be a $72 million profit. The mayor has described the deed modification, which has prompted a flurry of investigations, as a mistake.

“We want to give the public an unprecedented view into what’s happening and the different forces and actors at play,” said Councilman Ben Kallos, a Manhattan Democrat and chairman of the Committee on Governmental Operations, which is holding the hearing.

Eric Phillips, the mayor’s chief spokesman, said: ‘We’re happy to have the city’s second-highest official and top lawyer testify. Providing that level of transparency, cooperation and accountability to the council and public are critical to the mayor.”

Other officials testifying include Zachary Carter, the city’s corporation counsel, andLisette Camilo, commissioner of the Department of Citywide Administrative Services, the agency that oversaw the deed change.

Earlier this year, the city outlined a number of policy changes aimed at preventing a similar situation from occurring. The deed change at Rivington is under state and federal investigation; no one has been accused of wrongdoing.

In interviews with investigators, top city officials have said they didn’t read memorandums about the decision or forgot about meetings in which it was discussed, records show.

Council members said they are hoping to get answers about the administration’s handling of this matter and assurances that there are enough safeguards to prevent it from happening again.

“Whether it’s an embarrassment depends on the performance of the administration,” said Councilman Ritchie Torres, a Bronx Democrat. “We are more concerned about transparency and accountability than the hypersensitivities of City Hall.”

Mr. de Blasio, a Democrat, has personally involved himself in negotiations over the hearing, according to people familiar with the matter. His aides, including Emma Wolfe, a top political aide, have been concerned about who would testify and the kinds of questions they will be asked, these people said.

The mayor’s office sought to keep Mr. Shorris from testifying, these people said. Ramon Martinez, chief of staff to Council Speaker Melissa Mark-Viverito, a Manhattan Democrat, has privately complained about the difficulties scheduling the hearing, which had already been postponed once.

The council eventually made clear to the mayor’s office that Mr. Shorris and other top officials needed to testify, one of these people said.

The officials testifying will likely decline to answer many questions, citing the investigations, according to people familiar with the matter. The council’s legislative division has been reviewing thousands of pages of documents, preparing for the showdown.

Oversight hearings have a long history of raucous exchanges between lawmakers and mayoral aides.

Officials in former Mayor Michael Bloomberg’s administration were grilled over the city’s use of the stop-and-frisk police tactic and criticism over the city’s response to a snowstorm in 2010. Mr. de Blasio’s administration has faced tough questions at hearings on superstorm Sandy recovery and a now-defunct plan to limit horse carriages.

George Arzt, who served as press secretary to former Mayor Ed Koch, said the Koch administration took council hearings very seriously because “you never knew what could happen.”

“This one is much more complex for them,” he said. “You don’t want people going down a slippery slope with the investigations ongoing.”