Cabrini Center Will Close, Make Way For Redevelopment

CabriniStephen Rex Brown

Efforts to keep the building that houses the Cabrini Center for Nursing and Rehabilitation in use as a nursing home have proven fruitless, as Cabrini announced today that it will close its doors and will likely strike a deal that would move its beds to Brooklyn under a new operator. Benjamin Shaoul, whose company Magnum Realty Group bought the building at Avenue B and Fifth Street late last year, plans to start redevelopment immediately after the Center’s closure – likely in the summer.

“This week we are informing patients and their families and providing employees a three-month WARN notice required by the State Department of Labor,” Patricia Krasnausky, the CEO and President of Cabrini, wrote in a letter addressed to the elected officials who had tried to keep the Center’s 240 elderly residents in the East Village. According to the letter, which you can read below, a private nursing home operator in Borough Park is negotiating to acquire 117 of the Center’s beds for around $2.5 million, with plans to move them to Brooklyn, pending the state’s approval.

Even with that income going toward closure costs, said Ms. Krasnausky, Cabrini will have to spend another $4.5 million on its shutdown, due to the costs of unemployment insurance, pension funding, and severance pay.

Cabrini said it was working closely with Benjamin Shaoul, Principal at Magnum Realty Group, to insure that its closing goes smoothly. Kenneth Fisher, Mr. Shaoul’s attorney, confirmed that his client would cooperate with the Center. “Unfortunately, the closure was prompted by the previous owner’s decision last year to sell the property at a price that the Center could not meet,” Mr. Fisher said in a statement. “We tried to accommodate the Center’s interest in relocating or transferring the facility to another operator, but ultimately those efforts proved unsuccessful.”

The politicians who had been fighting to keep the beds – including State Senator Daniel Squadron, Assembly Speaker Sheldon Silver, Borough President Scott Stringer, Councilmember Rosie Mendez, and others – issued a statement saying they were “deeply disappointed” by what they called “a terrible loss for the Lower East Side, and for the greater New York City community.” The statement read: “We collectively and aggressively worked to encourage the parties to reach a better conclusion, and believe they should have reached an agreement to keep Cabrini open in its current location until a new site became available.”

Cabrini is now asking those elected officials to help it secure a grant from the Department of Health, to cover its closing costs. “If we do not receive these closing funds,” reads the letter, “Cabrini will be forced into bankruptcy.”

In November, The Local reported that the residence for low-income seniors was in danger of closing due to the sale of its building, which went for $25.5 million. On Dec. 28, Mr. Fisher sent a letter to politicians indicating that the building’s buyer, Magnum Real Estate Group, was negotiating to resell the building to a potential new operator of the nursing home. That deal was taken off the table in mid-January.

Mr. Fisher said his client is now planning a “substantial rehab” of the building. “It’s an as-of-right project,” said Mr. Fisher, “and we anticipate starting the renovation work immediately after the property is vacated.”