New York City—New York Attorney General Eric T. Schneiderman announced a settlement with the healthcare and nursing company, the Allure Group, for its controversial closures and sales of two nursing homes. Allure had purchased and sold the Rivington House, a Lower East Side nursing home for AIDS patients, and the CABS Nursing Home in Brooklyn to luxury condominium developers. Both were closed absent ample community notice.
The settlement requires Allure to make major improvements to the Greater Harlem Nursing Home, a 200-bed critical facility on West 130th Street in Manhattan. It imposes a restriction on the future sale or closing of the home as a skilled nursing facility for at least nine years. Allure Group was managing the Greater Harlem Nursing Home as a receiver, during the closure of the other facilities.
Allure is also mandated to create a Lower East Side healthcare facility at a new location to make up for the healthcare gaps caused by the closing of Rivington House. The healthcare group is required to fully fund a new skilled nursing facility or other healthcare facility providing long-term care to the elderly or the disabled, with a restriction on the future sale or closure of the facility for a minimum of eight years. As part of the settlement,
Allure will also pay $1.25 million to non-profit organizations on the Lower East Side that provide healthcare services.
The settlement also requires Allure to open a new healthcare facility in Central Brooklyn to offset the lost healthcare services resulting from its closure of the CABS Nursing Home. This facility will also be subject to a restriction on any closure or sale for at least eight years.
As part of the settlement Allure will pay $750,000 in penalties and costs to the state, in addition to the $1.25 million to the community healthcare non-profits.
Schneiderman is also putting into place new measures to reform the processes that led to the closures of the two facilities. An independent compliance consultant will report to the New York State Department of Health and Allure will be required to inform the department about circumstances that could lead to closure of any of the company’s facilities.
“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,” says Attorney General Schneiderman.
Protesters in the Lower East Side had confronted Mayor Bill de Blasio on his administration’s decision to allow the lifting of deed restrictions on Rivington House, which allowed for sale and conversion of the building to luxury condominiums. Community activists formed Neighbors to Save Rivington House, petitioning the mayor and confronting him at town hall meetings, generating press coverage and drawing attention to the situation.
The attorney general found the Rivington House charitable board had not fulfilled its duties under state law. In a related settlement, three of the board directors will be barred from serving on new charities boards for five years and Allure will pay $400,000 in penalties under not-for-profit corporate laws, and an additional $350,000 to cover investigative costs. (Rivington image provided by Property Shark.)