By RENEE SAFF
Mayor de Blasio’s second in command testified at a City Council hearing on Thursday that ignorance and miscommunication led to the removal of two deed restrictions, enabling the sale of a Lower East Side nursing home by a for-profit company for a $72 million profit.
“I did not realize the deed restrictions had been amended or lifted in such a way that would allow luxury housing to occur,” said First Deputy Mayor Anthony E. Shorris in his testimony.
Shorris apologized for the city’s mishandling of the Rivington House, admitting that he is accountable for the Rivington fiasco and calling it a “failure of execution” during his two-and-a-half hour questioning by councilmembers in a joint meeting of the Committee on Oversight and Investigations and the Committee on Government Operations.
“I believe fundamentally that accountability lies at the top,” Shorris said. “I am accountable and in some respects to blame.”
City-issued deeds, which restrict the use of a property, have required Rivington House to be used for non-profit healthcare services in the past. Village Care, the building’s original operator on the verge of bankruptcy, sold Rivington House in early 2015 to Allure, a for-profit healthcare company. Allure paid the city over $16 million to have the deed restrictions lifted, and sold the property to a luxury housing developer for an excess of $100 million shortly thereafter.
According to his testimony, when Shorris heard that Village Care was on the verge of bankruptcy, he decided that the best option for Rivington House would be to keep it as a nursing home, so he gave permission for the Department of Citywide Administrative Services to change the non-profit status of the property to allow a for-profit nursing home operator to come in. Shorris said he never intended for the site to be used for anything but a for-profit nursing home. The city never took any steps to ensure that this was carried out. Somehow, as a result of this, both deed restrictions were unnecessarily lifted, allowing Allure to sell the building to a luxury housing developer.
“There was a clear effort to deceive the city,” Shorris said. “This should be a formalized process that should ensure better communication.”
Shorris failed to read weekly memos regarding Rivington House and meet monthly with the DCAS commissioner responsible for handling the deeds during the months while the changes were being made.
“There are gaps, there are mistakes that happen,” Shorris said. “This was one. It won’t happen again.”
When Councilman David Greenfield questioned Shorris on why none of his staff members had been disciplined or fired for the slip-up, Shorris said that there was no one person to blame, choosing instead to blame a flawed system for the miscommunication. To date, the deputy mayor has not disciplined any of his staff members.
The hearing’s most heated moment came just seconds before Shorris left the chamber, when Councilman Ben Kallos asked for an on the record explanation of why the deputy mayor’s appearance at the hearing was limited to two-and-a-half hours. The council was led to believe that Shorris had a flight to catch to Oklahoma with de Blasio, which turned out to be false.
“That’s actually quite disturbing and we’ll deal with that later,” Kallos said upon finding out that there was no pressing reason for a time limit to be imposed on Shorrisris by ’s appearance. “This is an example of yet another communication problem.”
In an attempt to make up for the botched sale of Rivington House, another site owned by the city has already been identified for affordable senior housing and assisted living to replace Rivington’s 200 beds. The city plans to pour the $16 million that it received to lift the deed restriction back into the community.
“Although we can’t literally replace it on that site, at least as far as we know, building several hundred beds of affordable senior housing with an assisted living facility and other healthcare components in that community using the money that the city received is the best way we can to mitigate what happened,” Shorris told reporters after the hearing.
Photo of Deputy Mayor Shores by Renee Saff