The Department of Investigation threatened to initiate a lawsuit unless the Law Department opened access to previously withheld documents and computers. On July 26, 2016, the Department of Investigation issued a press release announcing the Law Department’s compliance in producing documents and computers relevant to DOI’s investigation into the sale of the Rivington House, a non-profit nursing home, to luxury condominium developers. The press release was issued less-than two weeks after DOI issued a report on how the City’s procedural failures in handling deed-modifications facilitated the sale of the Rivington House. For CityLand’s previous coverage on the DOI report, click here.
The Rivington House was formerly owned by New York City and sold to VillageCare encumbered by a two-part property restriction ensuring its usage in perpetuity as a nonprofit nursing home. VillageCare sold the Rivington House to the Allure Group in 2015, and the Allure Group—in following typical deed-modification procedure—paid the City a nominal $16 million to have the two-part restriction lifted in November 2015. Three months later, the Allure Group sold the Rivington House to luxury condominium developers for $116 million.
On July 8th, Mayor Bill de Blasio proposed to reform the procedures used in modifying deeds of formerly City-owned property. Because the Department of Investigation did not release its report on the City’s deed-modification procedure until July 14th, Mayor de Blasio’s proposal fails to take into consideration the recommendations issued by DOI in its report. To learn about the details of Mayor de Blasio’s proposal, click here.
In its report, DOI claims the Law Department failed to cooperate throughout the investigation into the sale of the Rivington House. While undergoing an investigation, DOI has “unrestricted access to City documents and computers,” pursuant to Executive Order 16 (EO16). However, in its report, DOI claims that the Law Department “insisted on screening documents and information DOI needed for its investigation” and denied access to computers used by the Mayor’s Office, both of which caused “undue delays and the failure to produce potentially relevant information.”
On July 19, 2016, DOI Commissioner Mark Peters, who has been formally recused from DOI’s investigation into the sale of the Rivington House, formally permitted his Department to initiate a lawsuit against the Law Department if it the Law Department had continued to deny access to the records requested by DOI.
On July 21, 2016, DOI sent a letter to Corporation Counsel Zachary Carter demanding the production of the records requested pursuant to EO16 and threatening a lawsuit, should their request be met with the Law Department’s noncompliance. Further, DOI noted in its letter to the Law Department that several records produced had contained important evidence, which the Law Department redacted and argued against its relevance in this particular investigation.
Ultimately, the Law Department complied with DOI’s request by turning over “thousands of pages of unredacted documents,” all of which the Law Department initially labeled as irrelevant to the Rivington House investigation. On July 26th, the Law Department also complied with DOI’s request for access to Mayor’s Office’s computers.
DOI Commissioner Mark Peters said, “The Law Department’s compliance reaffirms the statutory powers of DOI as set out in EO16 and its access to City records. I am pleased that the Law Department decided to comply with the law. And, I am proud of the DOI staff who doggedly pursued access to these records so DOI can fully investigate the matter at hand.”
The Law Department, in a press release, stated, “In its July 21st letter, after having been provided over 17,000 pages of documents, DOI renewed its request for unprecedented access to computers to allow for the review of any subject, not just Rivington, far beyond what would be necessary to locate any documents relevant to their investigation of the Rivington transaction.Ultimately, DOI agreed to adhere to the standard practice used for searching large databases for a narrow category of relevant documents: the use of search terms reasonably calculated to separate out all documents relevant to the Rivington transaction.”
By: Jessica Soultanian-Braunstein (Jessica is the CityLaw Fellow and a New York Law School Graduate, Class of 2015)