Mount Sinai merger bid to free up prized East Village land hits snag

Mount Sinai Beth Israel’s under-the-radar plan to sell off precious East Village real estate hit a roadblock when a key New York State Department of Health committee declined to approve the hospital system’s proposal to merge New York Eye and Ear Infirmary into its Beth Israel division.

Mount Sinai is the parent corporation of NYEEI. The Infirmary owns two buildings and some vacant land on Second Avenue between East 13th and East 14th streets, which sources said could fetch up to $70 million if sold for apartment-building construction.

One building, 218 Second Ave., dates to 1902 and was the setting for a scene in “The Godfather” when Al Pacino rescued Marlon Brando from an assassination attempt.

Dr. Howard Berliner, a DOH panel member who voted against the merger last week, alluded at the hearing to concerns that Mount Sinai aimed to dismantle NYEEI so that it could cash in on a property sale.

“If I was a real estate developer I would be drooling at the prospect of getting the [NYEEI] site in the East Village, probably one of the hottest markets in New York City,” Berliner said.

As we reported in June, Mount Sinai has been slowly relocating facilities and staff from the Second Avenue sites to other locations that are part of the Mount Sinai Beth Israel network. The relocated departments included surgery, clinical and ambulatory units.

The DOH panel, known as the New York Public Health and Health Planning Council, voted 11-6 to approve the merger, but it was three votes short of the number needed under the panel’s rules. Those who voted no said that among other issues, Mount Sinai had kept the community in the dark about its plans and dodged questions from the DOH itself.

The committee’s vote is not the final word, as it must be affirmed by DOH Acting Commissioner James V. McDonald, who was named to the post on Jan. 1. A source said it was “rare” for a commissioner to overrule the planning council.

The merger plan is a necessary step toward dismantling the Infirmary to facilitate a sale of the property. If Mount Sinai’s proposal is ultimately shot down, it means that any sale of the real estate would have to be approved by the NYEEI board — which would be dissolved in a merger.

State and city officials recently wrote to Mount Sinai CEO Kenneth Davis urging it to “pause” its proposal. The politicians as well as many NYEEI staff fear that the merger would essentially destroy the Infirmary and scatter its community-focused services all over the map, while preservationists don’t want to see 218 Second Ave. demolished.

“We are still awaiting answers to questions we’ve asked of Mount Sinai throughout this process,” said the letter signed by Assembly members Harvey Epstein and Deborah Glick, state Sens. Brian Kavanagh and Brad Hoylman-Sigal, Manhattan Borough President Mark Levine and City Council members Carlina Rivera and Christopher Marte.

Dr. Richard Koplin, a longtime attending physician at NYEEI, hailed the panel’s vote as a “huge victory for the thousands of patients who receive care at the Infirmary every year, and for the doctors, elected leaders, and community members who have spoken up repeatedly to prevent the destruction of this 200-year old institution.

“Mount Sinai has been misleading and non-communicative about their plans for the hospital, and even referred to the fact that this is a precursor to selling the property,” Koplin said.

However, in an “update” issued on Friday, Mount Sinai president Dr. Jeremy Boal and NYEEI president Dr. James C. Tsai claimed that the proposal was “strictly technical in nature” and that it  would now go to the state “for a final decision without a formal recommendation.”