West Water Street Condos Earn Funding; Bank: Public Sale Likely

Posted on 30 January 2013

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By Kathryn G. Menu; Above: A new rendering of the approved 21 West Water Street condominiums. 

In 2008, Roy “Buddy” Wines, IV and his Southampton-based construction company RLW4 broke ground on the 19-unit, luxury condominium project in Sag Harbor known as 21 West Water Street.

In 2009, the firm joined a number of other sub-contractors in walking off the job after they failed to be paid by development firm, East End Development, LLC.

Despite developers filing for chapter 11 bankruptcy in October, three-and-a-half years after the building was left to sit, vacant and unfinished, the project may be getting back on track.

On Monday night, Wines was joined by architects Ala Alavi and Cindy Meade in front of the Sag Harbor Historic Preservation and Architectural Review Board (ARB), where Alavi and Meade presented changes to the building’s architectural details.

According to Wines, the changes are a part of an overall effort to revive the project with the goal of finishing construction in the fall of 2013.

If finished it would complete a project originally proposed in 2006 — a project that was largely embraced by the community and the village boards, in part, because the development would replace a nightclub that was the source of ire for residents in the surrounding, residential neighborhoods.

However, the project was largely tied to a second development — another condominium project planned at 1, 3 and 5 Ferry Road — parcels owned by East End Ventures, which was owned by the same developers behind East End Development, Emil Talel and Michael Maidan. That project failed to find community support.

In 2009, while the Ferry Road condominium project was still being reviewed by the Sag Harbor Village planning board, the village’s zoning code was rewritten, drastically reducing the number of units allowed in the Ferry Road development.

In September of that year, Talel and East End Ventures filed a $30 million damages suit against the village as well as an Article 78 suit, claiming they were led to believe the project would be exempt from the new code. Both suits were dismissed in 2011 and in the meantime, as early as the fall of 2009, workers were already walking off the job at 21 West Water Street. By July of 2010, there were over $3 million in liens recorded with the Suffolk County Clerk’s office against the property.

For years, Talel said he worked on renewing financing for the defunct project, but in October of 2012, East End Development LLC filed for Chapter 11 bankruptcy.

Talel is listed as the managing member of the LLC, with Maiden and Terry Soderberg also listed as co-debtors in the filing.

According to the original filing, East End Ventures debt associated with the 21 West Water Street property is estimated at $35,344,415.89. The filing states that East End Ventures assets include the half finished 21 West Water Street condominium building, which they value at $27,300,000.

Twenty-six mechanics’ liens are listed against the 21 West Water Street property from creditors holding secured claims in the bankruptcy case totaling $34,653,840.52 with an additional $7,353,840.52 in unsecured claims made by the same companies.

The largest mechanic’s lien filed against the property is by the Longview Ultra Construction Loan Fund through Amalgamated Bank — East End Venture’s loan provider. They filed a $30,484,011 lien on their own.

On Tuesday, Talel said all but one of the mechanic’s liens have been paid back in an effort to move the project forward.

According to James Freel, the Longview ULTRA Portfolio Manager and senior vice president and chief real estate officer with Amalgamated Bank, East End Development has filed a plan of reorganization that will call for a public sale of the property through a bankruptcy process.

Freel said he expects that sale should happen some time in the next several months.

The bank has provided the company with debtor-in-possession (DIP) financing, said Freel, in an effort to allow work to progress at the property, which will ultimately lead to a better return when the property is ultimately sold.

On Monday night, Alavi and Meade presented some of the design changes to the ARB, including replacing the façade with red cedar in a combination of shingle and clapboard Meade said was designed to break up the massing of the building.

They also proposed altering some window locations to align with the floor above and below, trimming corner boards and windows in white to create a more residential feel, said Meade.

They also proposed to alter the main lobby entrance and change the stone for the building’s siding and property wall to a real stone, rather than a composite. Glass railings have also been proposed for the balcony areas, and the wall for the penthouse suite are proposed to be dropped one-foot to allow residents in that apartment a water view.

Additional landscaping is also proposed for the garden apartments on the first floor, primarily in the form of privacy, privet hedges between the units.

“It’s much better,” said board member Christine Patrick, looking at the new plans.

“I would welcome anything to get it beyond where it is right now,” said board chairman Cee Scott Brown.

According to Wines, despite being vacant, the building was heated and cooled throughout and remains “in pristine condition inside.”

“We are ready to go as soon as we get the green light,” said Wines, who added the project will need planning board approval for the privet hedges.

“This is getting back more to what some of the original plans were like,” added Brown. “I don’t know where it took the turns in the stone, but it is getting better.”

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3 Responses to “West Water Street Condos Earn Funding; Bank: Public Sale Likely”

  1. Hank Segal says:

    The town needs protection to prevent a half finished project from just sitting there. A bond for $10 million from the developer should do it.

  2. Joe Peedle says:

    The town needs better decision making period. This is ugly ugly ugly Jersey condo style architecture and only deminishes the area. Finishing it won’t make it any better or nicer to look at,, Sorry.

  3. John McGee says:

    The statement that Talel made that all of the liens except one has been paid in absolutely not true. Check with the county clerks office and see. There is still millions of dollars in liens in place, and the bank and talel are trying to screw all of the subs on this job.

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