Tag Archive | "21 West Water Street"

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

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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.”

West Water Street Developers File for Chapter 11 on the Defunct Condo Property

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It has been over three years since East End Development, LLC — the team of developers behind the now defunct condominium project at 21 West Water Street — have paid workers to complete any work at the 19-unit building.

It has sat, more than half way finished for years, a large box of tiles on one of the building’s balconies unmoved, slowly disintegrating to literal dust.

Last week, the future of that project was dealt another blow.

On October 12, East End Development, LLC filed for chapter 11 bankruptcy in United States Eastern District Bankruptcy Court. Emil Talel is listed as the managing member of the LLC, with Michael Maiden and Terry Soderberg also listed as co-debtors in the filing.

According to a copy of the 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.

The only other asset listed in East End Ventures documentation is $206.53 in a JP Morgan Chase Bank account.

The 1, 3 and 5 Ferry Road parcel, which the same developers unsuccessfully attempted to develop into condos under East End Ventures LLC — a case that resulted in a lawsuit between the firm and the Village of Sag Harbor — is not listed as one of the company’s assets as it was managed under its own limited liability corporation.

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 have filed a $30,484,011 lien on their own.

On Tuesday afternoon, a representative from Amalgamated Bank declined to comment on the Chapter 11 filing.

Several local companies have also been impacted by the project. Bridgehampton Steel & Welding has filed a $76,092 mechanic’s lien, Pristine Pool Construction Corp. has filed a $71,703 mechanic’s lien against the project, Southampton Brick & Tile has filed a $94,340 lien, Southampton-based Squire, Pierson & Sons, Inc. has a $94,239.47 lien and Water Mill Building Supply, Inc. has a lien of $213,949.

Unknown claims may be made from the Internal Revenue Service, the New York State Department of Finance and the New York City Department of Finance, according to the filing.

“Unsecured” and “non-priority claims” amount to $690,575.17, including $11,060 owed to local Sag Harbor attorney Dennis Downes — the attorney who helped secure approval for East End Development for the 21 West Water condominium project. An additional $20,076 is owed to Bridgehampton architect Kathryn Fee, $277,139.94 is owed to RLW4 Construction out of Southampton, and even the Village of Sag Harbor is owed $523.75.

As East End Ventures has filed for Chapter 11, not Chapter 7, it is attempting to reorganize its debt rather than liquidate, although under bankruptcy law Chapter 11 proceedings can move to Chapter 7 proceedings.

However, on Tuesday, Talel remained optimistic that despite the years long delay in getting the project off the ground that it would in fact move forward some time this winter, in part, because East End Development filed for Chapter 11.

“We will settle with everyone involved and negotiate to the best of our abilities,” said Talel. “This will allow us to go back to construction as quickly as possible. Nothing has changed and the project will be completed in an expeditious way.”

The 21 West Water Street condominium project was originally proposed in 2006 and was approved in 2008, with residents and village boards alike largely supporting the project, in large part because the condos would take the place of a nightclub and restaurant just on the edge of a residential district.

The project included 19 condos and a rooftop swimming pool.

While they were gaining its final approvals for 21 West Water Street, Talel and Maiden proposed a condo project at 1, 3, and 5 Ferry Road, under the East End Ventures corporation.

While failing to find support for a number of different versions of that project, in 2009 the village’s zoning code changed, drastically reducing the number of condominium units allowed on the Ferry Road parcel and requiring affordable housing be worked into the project.

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, similar to the approved condominium project at the former Bulova Watchcase Factory.

While both suits would ultimately be dismissed in 2011, as of fall 2009 workers were already walking off the job at 21 West Water Street for non-payment and by July of 2010 there were over $3 million in liens recorded with the Suffolk County Clerk’s office against the property.

According to the Chapter 11 filing completed earlier this month, Amalgamated Bank has already begun foreclosure proceedings against East End Development, which is still in court.

For Sag Harbor Mayor Brian Gilbride, after three and a half years of watching the 21 West Water Street building fall further and further into decline, he said he was not optimistic about the project’s future. But at the end of the day he hopes someone resurrects the project to protect that section of the village from further blight.

“There is not a day I walk into Schiavoni’s that someone doesn’t ask me about this,” said Gilbride.

Trees Cause Stir At Sag Harbor ARB

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A discussion about materials for an approved retaining wall at the 21 West Water Street condo project during a historic preservation and architectural review board meeting turned sour when the developers announced it would be unfeasible to plant trees of a previously agreed upon caliper.

On Thursday, October 9 the board held a discussion on the approved condo project, which will boast 20 units and a rooftop saltwater pool, with Drew Stuart of Incorporated Architecture and Design (IAD) who designed the project for developers East End Ventures.

Stuart came to the board with input on material for an approximately two-and-a-half foot high retaining wall, which he suggested could be constructed with distressed brick to make it appear as if the wall was from a prior development.

Board chairman Cee Scott Brown asked that the base of the wall be installed, followed by a site visit by the full board, during which a discussion of finishes could begin.

While all at the meeting were in agreement on the issue of the retaining wall, some board members were distressed when they were informed the caliper of a cherry tree to be planted on the site would be six inches as opposed to 10 inches – a departure from the developer’s agreement with the village’s tree fund when they agreed to allow the removal of an existing cherry tree.

John Reddington, landscape architect for the project, argued that a 10-inch caliper tree may have trouble establishing itself, and subsequently die, due to the drainage field required by the Sag Harbor Planning Board as a part of its approval.

“Keep in mind as important as aesthetics are, I can’t have it flooding West Water Street every time there is a torrential rain,” said project manager Mark D’Andrea.

Robert Tortora, a member of the ARB and the tree committee, wondered if the board wasn’t being “bamboozled,” noting the plans were set to include this size tree.

Brown suggested the board pull previous minutes of their meetings regarding the size of the trees and discuss the matter with the village attorney.

In other news, a fence was approved for the site of the proposed condos at 1, 3 and 5 Ferry Road, which are also a project of East End Ventures. The board agreed to a natural finish, cedar picket fence on the side of the property closest to the building that houses 7-Eleven and Sing City.