“Daily News: Allure Group to Build New Health Care Facilities in $2M Settlement with AG Schneiderman”
January 8, 2018
As published by The New York Daily News, on January 5, 2018.
A group investigated for the controversial sale and closure of two nursing homes in the city has agreed to create new health care facilities as part of a $2 million settlement with the state Attorney General’s Office.
The Allure Group’s purchase and subsequent sale to luxury condo developers of Rivington House, a nursing home for AIDS patients in the Lower East Side, and CABS Nursing Home in Brooklyn, sparked several investigations.
The purchases came under scrutiny when Allure got the city to lift a deed restriction on the Rivington St. building that limited its use as a nursing home.
The partners then sold it to a condo-developer for a huge profit. Mayor de Blasio said the firm had assured the city they would keep the site as a nursing home and claimed the city had been duped.
While no charges by the feds or Manhattan District Attorney’s Office were ever filed over the Rivington sale, state Attorney General Eric Schneiderman’s probe into the sale and closure of the facilities continued.
Allure as part of the settlement announced Friday agreed to pay $750,000 in penalties to the state and $1.25 million to Lower East Side healthcare non-profits.
Allure also agreed to undertake “substantial improvements” to the 200-bed Greater Harlem Nursing Home that it is purchasing and to not sell the facility for at least nine years. The AG’s office, as part of the deal, will withdraw its objections to the sale of the facility to Allure.
To make up for the loss of Rivington House, Allure also agreed to create a new nursing home or other healthcare facility that will primarily provide long-term care to the elderly or disabled on the Lower East Side that cannot be sold for at least eight years from when it opens.
And in central Brooklyn, where CABS Nursing Home closed, Allure must open a new residential substance abuse treatment facility, skilled nursing facility or other healthcare facility primarily providing long-term care to the elderly or disabled that cannot be sold or closed for at least eight years from its opening.
The group agreed to spend at least $10 million combined for completion and operation of the facilities over five years.
“The processes that led to the closure of Rivington House and CABS never should have happened — this settlement ensures they won’t happen again, while addressing critical healthcare gaps in the impacted communities,” Schneiderman said.
Meanwhile, three directors of the Rivington House charitable board that approved the sale of the nursing home are barred from serving on any other charitable boards for at least five years. Schneiderman found they violated their duties.
Allure must also hire an independent compliance contractor for at least three years.
The group in the formal settlement neither admitted nor denied the Attorney General’s findings.
“We are pleased that, following a careful review, both the New York Attorney General and the Department of Health have not only approved The Allure Group’s acquisition of the Harlem Center for Nursing and Rehabilitation, but are encouraging and supporting Allure’s future investments in healthcare facilities in the Lower East Side and in Brooklyn,” Allure Group lawyer Andrew Levander said.