After reaching an agreement with the Attorney General, a New York nursing home chain is prepared to grow throughout the tri-state area. The Brooklyn retirement home chain, Allure Group, came under heavy criticism after purchasing a retirement home and assisted living facility for New Yorkers living with HIV/AIDS and then subsequently selling the properties to luxury developers. After Allure’s growth plans were halted by a state investigation into the matter, Allure seems poised to rapidly expand – with the purchase of Greater Harlem Nursing first on its list.
Allure was started in 2010 by Marvin Rubin and Joel Landau when they purchased the vacant Victory Memorial Hospital in Bay Ridge for $20 million, according to Crain’s New York. The pair changed the name to Hamilton Park Nursing and Rehabilitation Center, a successful purchase for the pair that led to buying four more nursing homes in Brooklyn. Allure’s assisted living facilities now have a revenue stream of almost $200 million a year.
Allure’s legal fiasco began in 2015 with the purchase of Rivington House, a Lower East Side living facility for individuals living with HIV or AIDS. Allure purchased the property for $28 million, and within months had sold the facility to luxury developers for $116 million. In the same year, Allure sold CABS Nursing Home in central Brooklyn. Communities in the neighborhood were understandably outraged. Attorney General Eric Schneiderman immediately launched an investigation into whether anything illegal occurred with the sales, and a stop work order was placed on the Rivington House, an order that will finally be lifted in the next couple months.
According to the Attorney General and Mayor, there was nothing actually illegal about the sale. However, Mayor de Blasio has made sure this type of situation will not occur again. “This was a mistake. It was ridiculous. Not only did we entirely change the rules around anything like this; now it will require a personal signature from me to happen,” said the Mayor.
Allure Group was not out of the clear, though. According to the Attorney General, members of Allure’s board failed to exercise sufficient oversight over the for-profit nursing home chain. In the settlement announced over this violation, Allure will pay a fine of $750,000 and donate $1.25 million to healthcare providers in the Lower East Side, where the assisted living center was located. Further, it will spend $10 million establishing health care facilities on the Lower East Side and in Central Brooklyn. Allure will be legally obligated to run these facilities for at least eight years.
The first purchase for Allure Group is in Harlem, though. With the Attorney General finally allowing the sale as part of the settlement, Allure will purchase Greater Harlem Nursing Home. The local community hopes Allure will not repeat their previous mistakes. In response to the settlement, Landau, co-founder of Allure, said: “Now that the roadblocks holding up our full control have been lifted, we look forward to turning our Harlem center into a world-class facility similar to all other Allure facilities.”