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Mortgage Lender Takes Over 21 West Water Street Project in Sag Harbor

Posted on 04 September 2013


By Kathryn G. Menu

Five years after it was approved by the village, and after years of virtual stasis, the condominium project at 21 West Water Street in Sag Harbor has a new owner.

Amalgamated Bank, the mortgage lender that first funded East End Ventures — managed by Emil Talel, Michael Maidan and Terry Soderberg — for the luxury condominium project is slated to become the new owner of the property sometime this month.

According to attorney John Westerman, who represents Amalgamated Bank, the title transfer is expected to go through this week or next. The deal has already been approved in bankruptcy court. The bank plans to see the three-story, 19 unit condominium project to fruition.

Originally, a bankruptcy auction was schedule on August 20, however, no bids met the auction requirements.

The decision comes following years of uncertainty surrounding the project, which was originally proposed in 2006 and approved in 2008. While construction was underway the same firm proposed a second luxury condominium project at 1, 3 and 5 Ferry Road — failing to capture the same community support as it did for the 21 West Water Street project, a development that took the place of a rowdy nightclub in Sag Harbor known as Rocco’s.

Following a zoning change in 2009, East End Ventures filed several suits against the Village of Sag Harbor including a $30 million damages lawsuit. At the same time, subcontractors began walking off the 21 West Water Street project, and by July of 2010 there were over $3 million in liens recorded with the county clerk against the project.

By the time developers filed for Chapter 11 bankruptcy in October of 2012, there were a total of 26 mechanics liens against the property including secured claims listed in the bankruptcy case totaling $34.6 million. According to court papers, the bank alone loaned the corporation $28 million in March of 2007 and had filed a claim for $32,061,321 in the bankruptcy case.

At the same time, Talel has filed new plans for a luxury condominium project at 1, 3 and 5 Ferry Road, incorporating 2 Bay Street, known as the 1-800-LAWYER building locally in honor of that property’s longtime owner, 1-800-LAWYER founder Bruce Davis.

The Sag Harbor Village Planning Board was presented plans last week for a total of 24 units spread over the four parcels. The project will only go before the village boards for formal consideration once an application is filed with the village building department.

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One Response to “Mortgage Lender Takes Over 21 West Water Street Project in Sag Harbor”

  1. Pennebaker says:

    The question I would like to have answered is can the building at 21 West Water Street now referred to as a condominium become a hotel and a successor to Roccos? Can you or the Express have some way of finding this out? Thanks Pennebaker and Hegedus.

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