Tag Archive | "Michael Maidan"

Developers Sue Sag Harbor Village Again

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The developers who want to build condominiums on this waterfront property have sued Sag Harbor Village.

By Stephen J. Kotz

The relationship between two developers who want to build a condominium project on Sag Harbor’s waterfront, which seemed to be thawing in recent months, has plunged back into the deep freeze.

Michael Maidan and Emil Talel, the principals in East End Ventures, who have recently proposed a scaled back eight-unit condo project on their property at 1,3,5 Ferry Road, have reinstated a federal suit against the village.

The reason for the renewal of legal hostilities is twofold, they say. First, they are upset that Mayor Brian Gilbride hired a contractor to remove a derelict dock on the waterfront of their property and second, they claim that the village has been trying to confiscate their property, or at least delay their project, by claiming ownership of a portion that was a former Metropolitan Transit Authority right-of-way.

“We resolved the last lawsuit with the understanding that the village was going to allow us to proceed with our development,” said Sam Israel, the developers’ attorney. But since last summer, “the mayor started making noises about owning a piece of our property and he had someone come onto the property and destroy a dock.”

“To make a long story short, all we want to do is do the right thing in the village,” said Mr. Maidan on Tuesday. “We want to build you a park. If you want an easement to the water, no problem. We’ll give it to you.”

“We want to show them we are nice people. We don’t want anything that doesn’t belong to us,” he added. “We are trying to do a very nice project, a very scaled down project that meets zoning.”

Village attorney Fred W. Thiele Jr. said on Wednesday that the village was within its legal rights to remove the dock, which, he said, was in danger of collapse and could have posed a major liability issue to the village because it claims ownership of the underwater land there.

He added that although East End Ventures purchased a strip of land that was the former Route 114 from the MTA at auction several years ago, outbidding the village in the process, the village had since uncovered an easement the MTA gave it to the property, rendering that purchase moot.

He said the first step in untangling the legal mess was to determine the ownership of the Route 114 right-of-way.

“It’s not that big, but it is critical,” said Mr. Israel of the right-of-way. “Take it away and it craters the whole thing.”

Mr. Thiele acknowledged that East End Ventures had withdrawn their suit earlier, but he said they did so only after “98 percent of it was dismissed.”

East End Ventures purchased the property nestled between the 7-Eleven convenience store and the North Haven Bridge in 2005. The developers at first proposed to build 22 condo units on the site, but that plan engendered fierce resistance from the community.

The village later declared a moratorium while it updated its zoning code, and Mr. Maidan and Mr. Talel have claimed in court papers they had at first been assured they would be allowed to proceed with their project under existing zoning, only to be told later they would have to meet the new stricter limits. In the meantime, they claim the conversion of the old Bulova factory into the Watchase condominiums was moving along smoothly.

Last fall, East End Ventures presented a new plan calling for the construction of only eight condos to the village Planning Board as a discussion item. The board has yet to entertain a formal application.

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.

Water Street Condo Project Faces $1.7M in Liens After Building Permit Expires

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The luxury Sag Harbor condominium project known at 21 West Water has $1.7 million in liens filed against it by contractors and suppliers and as of press time has yet to renew its building permit with the Village of Sag Harbor, which will cost developers roughly $45,000.

The waterfront condo project, which was approved over two years ago by the village, is a three-story, 19-unit development proposed to include a rooftop swimming pool and luxury amenities throughout the residences. Michael Maidan and Emil Telal under the limited liability corporation East End Development are the developers of the project. Residences are priced from $1.6 to 4.5 million according to Prudential Douglas Elliman associate broker Robert Evjen, who is the exclusive agent for sales. According to Evjen no contracts have been signed, but there have been five offers made on condos in the building that are in the midst of negotiations.

The duo, under the name East End Ventures, have also proposed a second waterfront condo project at 1, 3 and 5 Ferry Road, although that development has also been stalled after changes to the zoning code prevented it from moving forward as originally proposed. Last month East End Ventures filed two suits against the village to move the project forward as originally proposed and seeking monetary damages to the tune of $30 million.

The suits allege that village officials altered the code to specifically thwart this condo project and that the new village code was adopted without proper environmental review.

Over a week ago, village officials placed a stop work order at 21 West Water Street after discovering its building permit had expired in late 2008. After two 90 day-extensions were granted, village officials stopped work on the project, although project manager Mark D’Andrea said Tuesday he expects the project architects and developers to renew the permit shortly.

“It expired through the normal course of business,” said D’Andrea, who added developers would stay true to the stop work order until the proper paperwork has been filed with the village. D’Andrea said the project, which he says is roughly 90 percent complete, faced delays as a result of difficult winter weather, which pushed its completion back several months.

 “We are so close to the finish line,” he said. 

At the same time, while the project has been stalled, according to records available with the Suffolk County Clerk’s office, local contractors have filed some $1.7 million in liens against the project for unpaid work and materials during the last nine months.

In February, A & F Fire Protection Co. Inc. filed a $25,000 lien against the future sales at the development for engineering, drafting and professional services. D’Andrea said on Tuesday that while they had spoken with the company, their quote was too high. Despite that, he said, A & F hired a draftsman to create plans for the project and are seeking to be paid for that work. D’Andrea maintained that lien is in the process of dismissal.

In September of 2009, Oldcastle Precast filed an $84,000 lien against 21 West Water Street, which D’Andrea said on Tuesday was to pay for their retainer. He said generally that money is kept in escrow until a project is completed and receives its certificate of occupancy.

All Systems Maintenance Inc filed a $247,794 lien on October 2 for plumbing related materials, A Richmond County Stucco & Stone Contractors Inc filed a $102,359 lien on October 5, Southampton Brick & Tile filed a $94,340 lien on October 9, Inter-County Mechanical Corp. filed a $510,241 lien on October 9 and B & G Electrical Contractors of NY Inc. filed a $630,274 lien on October 8.

D’Andrea said those claims are common, filed as a result of construction stopping as the developers await renewal of their building permit.

“When construction stops the bank stops paying, so sometimes people working on-site put liens on the property to keep you motivated,” said D’Andrea. “It is common practice in New York and not at all a sign of financial distress.”

 “None of these contractors is in an adverse relationship with us,” he later maintained.

He added, considering the estimated $30 million the project is worth, $1.7 million in liens does not amount to much of their bottom line.

As for the developers relationship with its bank, Amalgamated Bank of New York, D’Andrea said their loan “is fully funded and in very good shape,” but that the project has seen time delays due to weather and the intricacies of a luxury condo project.

“A building of this quality and intricacy, you can’t rush it,” he said. “It’s like a 12-tier wedding cake. You can’t run down the street with it on your head.”

Schedule Hearing for Ferry Road

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During the Village of Sag Harbor Planning Board meeting on Tuesday night, the board scheduled a public hearing for Monday, August 10 at 7 p.m. on a waterfront condominium project on Long Island Avenue known as Ferry Road, but not before the village attorney had sharp words for the developer’s attorney and planner.

Michael Maidan and a group of investors under the limited liability corporation East End Ventures have proposed 18 waterfront condos with 18 accessory docks on a parcel of waterfront adjacent to the Lance Cpl. Jordan Haerter Veterans Memorial Bridge. The planning board has been waiting for several months for the completion of a draft environmental impact statement, in which the developers answer questions posed by the community and board members about effects the project may have on the village.

Last Wednesday, the village received copies of the massive document, which enables the board to bring the project in front of the public for review, although Sag Harbor Village Attorney Anthony Tohill scolded the project’s attorney and planner for a lack of communication and timeliness in delivering the tome of research.

In accepting the documents for public review, a resolution drafted by Tohill pointed to the fact the board expected to receive the work prior to last’s months meeting. As the meeting neared, village consultants attempted to reach consultants at VHB Engineering, Surveying and Landscaping Architecture, which was preparing the impact statement, only to discover the applicants would seek an extension just hours before the meeting. Tohill added the documents were then handed in late, placing a burden on the board and its planner to review the work prior to Tuesday’s meeting. 

Despite what the resolution termed “the failures of communication by the applicant’s representative,” and the disruption of the regulatory process, the board agreed to accept the documentation for review, although Sag Harbor Building Inspector Tim Platt will need to determine whether the plan complies with village code. The village has recently adopted a new zoning code that changes what is allowed at the parcel, limiting the developers to just six-units, although the board will rely on Platt’s determination, expected to be filed by July 17, before they can discuss the new code in relation to the luxury condo project.

VHB representative Kim Gennaro stressed to the board it was not the intention of her firm to frustrate the board with minimal time to review the documents, but that she believed the board would have a longer period of time to go over the work. At the request of village planner Richard Warren, Gennaro promised to have copies available for review by members of the public and other involved government agencies by the July 4 holiday weekend. 

In other planning board news, board member Ann Hansen submitted her resignation on Tuesday night. Hansen’s replacement will be announced at the village’s reorganizational meeting on July 6 at noon.

“It has been my privilege to serve the village since 1994,” said Hansen. “Good luck to my successor.”

New Proposal for Ferry Road; Challenge to Parcel Ownership

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By Marissa Maier and Bryan Boyhan

Developers for the planned condominium complex on Ferry Road adjacent to the bridge in Sag Harbor have proposed what they hope will be a plan that will satisfy local boards who have been skeptical and critical of previous incarnations.

At the same time, a local organization has commissioned a title survey for the property, the results of which challenge the developer’s ability to build as large a project as proposed.

Mark D’Andrea, project manager for developer Michael Maidan’s East End Ventures delivered to the village this week a design he said addresses most, if not all, the concerns the village’s boards and the community have about the project.

It is, he said, smaller and offers a less intensive use of the property.

“We could, by right, have 40 units there,” claimed D’Andrea last week. Instead, the current plan is for 18 units, the same number as proposed last year, but still fewer than the 22 when the project was first pitched two years ago.

The most recent plan also features a new architect, Kathryn Fee of Bridgehampton.

Fee proposes to break the development up into five separate buildings. There will be small streets around the buildings to create the feeling of a “village within a village.”

    ”The concept is to break down the massive feeling, and create more of a townhouse façade,” said Fee. In earlier proposals, the development was housed in one large brick building. Fee said separating the units into townhouse buildings was more consistent with the architectural character of the village.

    With the new design, four buildings will have three units and will surround a center building, containing six units. Each of these buildings will use different colored brick material to make the buildings look like “they had evolved over time.” Every unit will have a balcony. Fee also designed gardens on two rooftops.

    In addition to the rooftop gardens, Fee incorporated several eco-friendly building features into the design of the project. Insulated concrete form will be used for the buildings, which lessens the amount of energy needed to heat and cool the units. Fee also integrated the use of efficient gas boilers, which are activated only when a person is occupying the unit.

    Overall these green building designs will increase the price of development by almost seven percent, said Fee. She added that this percentage will probably translate to a few hundred thousands dollars.

    Fee hopes the project will receive a Leadership in Energy and Environmental Design (LEED) certification, and believes this certification will make the project more agreeable to the village. Fee’s design concept was already presented to the village’s Historical Preservation and Architectural Review board last fall. During these meetings, Fee said her designs received favorable feedback from the board.

But ownership of an abandoned road may stand in the way of the project moving forward.

At issue is a parcel of land once used as an approach to the first bridge that crossed between Sag Harbor and North Haven. In the late 1800s, the Long Island Rail Road acquired, through condemnation, much of the property that East End Ventures hopes to develop. The LIRR in the early part of the last century granted an easement on that property to the village for a road that led to that bridge, which was several hundred feet further to the west than the current bridge.

The bridge was eventually moved in the 1930s, and the access road abandoned. In the ensuing years the land owned by the railroad was sold to a succession of owners, including former Sag Harbor mayor James McMahon, members of the Remkus family, and members of the Diner family, all who used the property — including the road bed — to some degree.

But whether the road bed itself was actually transferred from the rail road company to any of the successive owners remains a question.

“The subject had come up in several public meetings,” said Save Sag Harbor member April Gornik, “and we felt we wanted to spend the money to find out ourselves.”

The proposal as designed would need the 15-feet to the center line of that road — which East End Ventures claims it owns — in order to meet set back requirements.

The group hired attorney Marcia Finkelstein of Lamb & Barnosky, who in turn commissioned First American Title Insurance Company of New York to do a title search on the property.

Their findings indicate that none of the successive transfers of title, from the time the rail road owned the property, included the road bed. A description of the transferred property, in metes and bounds, seems to specifically exclude the road bed, and in fact uses its southern edge to create a border for the old rail road property. Maps indicate the land on the northern side of the road bed belong to Sag Harbor Village, and on one map provided with the search, the piece of road is simply listed as former state road 114. It does not even include a tax map number, the report says.

“East End Ventures does not own it,” said Finkelstein in an interview this week.

But Dennis Downes, attorney for East End Ventures — and for the Diner family — disagrees.

“The rail road property included everything to the center line,” Downes maintained in an interview this week, and contrary to the title search commissioned by Save Sag Harbor, says that when the rail road sold the property to McMahon, the southerly side of the road bed went with it.

In April, on behalf of East End Ventures, Downes filed an action for adverse possession of the narrow strip of property, and he argues that all of the previous owners back to McMahon regularly made use of the abandoned road bed, ultimately giving them the rights to it.

But claiming land through adverse possession is tough, especially when it involves a government entity.

“You can’t claim public land through adverse possession,” said village attorney Fred Thiele, adding the piece, whether owned by the LIRR or the state, would still be government property. The LIRR, he said, was under the Metropolitan Transit Authority, a state agency.

Downes disagreed, saying “it wouldn’t be the first time” governmental land was annexed via adverse possession.

“That will be for the court to decide,” he said.

“Clearly the road bed was for a public benefit,” continued Thiele, and argued that, if the LIRR or state were to give up the property, it would more likely go to another public agency, such as the village which owns the adjoining land.

But an argument over ownership would not necessarily derail the project, said Thiele. As long as the developers have an insured title to the property, the application for developing the property can go through the process.

“Obviously, though,” said Thiele, “if we have other information that put a cloud over this, we wouldn’t ignore it.”








Barons Cove Motel Destined to Be High End Resort Spa?

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Barons Cove Motel, built as a modest one-story motel that faced out on the water when Sag Harbor was emerging as a tourist destination in the early 1960s, may soon have a life as a luxury high-end destination resort hotel.

The 66-room complex, which features a two-story crescent shaped building in front where the original motel stood nearly 50 years ago, and a pair of two-story wings at the rear, was sold on December 30, first to developer Michael Maidan, who then flipped it to developers KBR Fund, LP the same day. Maidan is the developer of the neighboring 21 West Water Street condos, currently under construction. He also hopes to develop a condominium project on the property at the foot of the bridge to North Haven.

The sale price, according to Prudential Real Estate broker Robert Evjen, was $11 million to Maidan, who purchased it from long-time owner/manager Donald Whitehead. Maidan’s sale to KBR was “slightly higher,” said Evjen.

The plan is to completely renovate the building, from “top to bottom,” said Evjen, who added the new owners have no intention to expand the buildings on the property.

“It will get a complete upgrade into a high end hotel,” he said.

Initially, Maidan, who had courted Whitehead for most of 2008 and had an option on the property, had intended to change the layout of the buildings on the property so that all rooms would have a view of the water. In addition, he hoped to add a spa and gym that would complement services in the luxury condos next door. At one point he even offered to build Bay Street Theatre a new theater on site.

But, said Evjen, Maidan became frustrated with confronting village officials on his other projects and decided instead to sell.

“We looked at the building every possible way and the numbers didn’t add up running it as is,” said Evjen, who noted that the code allows for accessory uses, such as a spa or restaurant for the property. “It needs to become a destination, so that they can ramp up the off-season business.”

The new developers expect to have plans in front of the village within the first quarter, according to Evjen.