By Adam Pincus
The anonymous buyer of 45 Rivington Street, the former AIDS/HIV nursing home on the Lower East Side that became a flashpoint of controversy for the de Blasio administration, has created a complex ownership structure following its $159.6 million purchase from Slate Property Group, Adam America Real Estate and China Vanke.
Despite that, the recorded documents show no change to the anticipated occupancy of the building by Mount Sinai Health System for a Comprehensive Behavioral Health Center, following a deal struck by the hospital in December 2018 with Slate Property Group and its partners.
At the same time as the purchase, Kranken House FH, as the fee holder, signed a 99-year lease with Kranken House LH, as the lease holder. The city for tax purposes gave a value of $63.49 million to that lease. Both entities are in the care of the New York office of the law firm Goulston & Storrs.
In addition to a multi-tiered new ownership structure, the new owners, Kranken House FH, which owns the ground, and Kranken House LH, which owns a leasehold, borrowed about $135 million total. The ground landlord borrowed $107.9 million including $80.6 million in new debt, while the lease holder borrowed $27.3 million. The debt was issued through a trustee, UMB Bank, based in Kansas City.
The owners have given little indication of who they are, but offer one potential clue in the name: Kranken House is from the German word for hospital, krankenhaus. In addition, many of the legal papers were drawn up by an attorney based in Chicago with the law firm Mayer Brown, not one in its New York office.
The 32-year lease Mount Sinai signed with the seller, with options to extend another five or 10 years, also gives the hospital a purchase option.
Slate and partners assigned that lease to Kranken House FH for the first 40 years of the lease, until 2059. After that, the entity Rivington Remainder FH will own the remainder of the lease.