Squadron Urges Further Rivington House Investigation under the ‘False Claims Acts’

Posted on: December 23rd, 2016 at 5:19 am by
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State Senator Daniel Squadron is upping the ante in the Rivington House scandal.

From the mailbag:

State Sen. Daniel Squadron released a letter to letter to Attorney General Eric Schneiderman and Corporation Counsel Zachary Carter urging an investigation into the Rivington House deed restriction removal and purchase by the Allure Group under the State and City’s False Claims Acts.

At the City and State level, the False Claims Act provides authority to take civil action against those that defraud the government. The City has indicated it was misled by the Allure Group during the deed restriction removal and sale of the Lower East Side nursing home.

“The closure of Rivington House stunned the community and highlighted major flaws in the process that governs deed restrictions,” he wrote. “The role of government is to protect the public interest and to be transparent; but that role is undermined if government is misled, as may have been the case at Rivington House. But, it is also vital that we hold those who violate the public trust accountable.”

As previously reported, the de Blasio administration accepted $16.1 million from the Allure Group to lift the deed on the property that required its use as a nonprofit. This led to a $116 million sale to the developers Slate Property Group, China Vanke Co., and Adam America Real Estate. Luxury condos up next.

To mitigate fallout from the disaster, the Mayor then proposed in September to replace those lost services by converting the city property at 30 Pike Street (between Madison and Henry) into senior affordable housing and a health care facility.

Meanwhile, the joint Brewer-Chin bill in City Council that establishes transparency and accountability in deed removals was signed into law yesterday.

It accomplishes the following, per the press release:

  • Require the City to construct and maintain an online, public, searchable database of any properties with deed restrictions since 1966.
  • Notify the local Council Member, Community Board and Borough President of any deed restriction removal request.
  • Set forth detailed standards and procedures that the Department of Citywide Administrative Services (DCAS) would follow when a property owner requests that a deed restriction be modified or removed.
  • Give the Department of City Planning a formal advisory role in DCAS’s consideration of deed restriction modification requests, ensuring land use decisions are made based on input from the City’s primary land use agency.
  • Require that three separate entities — DCAS, a specially formed committee, and the Mayor — all independently review a request before a restriction can be lifted.
  • Assess a list of factors to determine whether the request furthers the best interests of the City, including the potential impact of the request on the neighborhood, the availability of community-based services and affordable housing.
  • Require that the Mayor personally sign off on any deed restriction removal request.

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