Brooklyn, NY – Several days after allegations surfaced questioning the propriety of a real estate deal, the company at the center of the investigation has made its first public comment.
As previously reported on TOT News, Mayor de Blasio criticized members of his administration for agreeing to lift usage restrictions on a building that allowed the Brooklyn based Allure Group, a for profit nursing home operator, to sell the property to developers that plan to convert the former nursing home into luxury condominiums.
Allure purchased the property known as Rivington House in 2015 for $28 million, according to the Wall Street Journal.
At the time of purchase, restrictions on the deed limited the use of the Lower East Side property to a non-profit residential health care facility.
Joel Landau, an Allure executive, wrote in an email that the property would be maintained as a nursing home.
A statement released last night by Marvin Rubin, a partner at Allure, cited the company’s long history of converting failing non-profit nursing homes into successful, for-profit facilities.
“We tried to make Rivington House viable as a for-profit skilled nursing facility,” said Rubin. “When it became clear that this was not possible, we followed all proper protocols and sold the building.”
Allure paid the city’s Department of Citywide Administration Services $16 million last November to lift the usage restrictions on the property, located at 45 Rivington Street, as reported by Capital New York.
Within three months, Allure resold the property to Slate Property Group for $116 million, netting a $72 million profit.
Officials at DCAS said that Allure intentionally misled them in a late 2014 email that stated that the home would be “kept as it is.” A later request for a change in deed made in a 2015 email, made no mention of keeping the property as a skilled nursing facility.
For its part, Allure insisted that the change in its plans for the building reflected nothing more than the realization that the property could not be used for its intended purpose.
A spokesperson for de Blasio said that no one at City Hall had ever been informed of the change to the deed restrictions at Rivington House.
de Blasio has said that the city may sue Allure and was insistent that had he been made aware of the request for change, he would have been firm in his denial.
“If they had asked me I would’ve said, ‘don’t do it.’” said de Blasio.
“Someone should have said no farther down the food chain and if they didn’t know how they should’ve come to me and I would’ve said no very quickly,” added the mayor.
Just eight deed restrictions that removed a property’s non-profit status have been approved by the city over the past two years, and in all of those cases, the fee paid was significantly less than the amount paid by Allure.
The Dance Theater of Harlem paid $875,000 in 2015 to lift restrictions on a vacant piece of land and a Crown Heights yeshiva paid $150,000 in November, 2015 to have restrictions removed from a piece of property.
In a third instance, the family of a Scarsdale doctor paid the city $900,000 in 2015 to have restrictions removed from a parcel of vacant, non-residential land on the Upper East Side.
