2/27/2005

Issue of fairness: The (Westchester, Rockland and Putnam NY) Journal News, 2/27/05

By Bob Baird

Accountant Bruce Kanner's family still owns the property on the Haverstraw waterfront where his father operated the Empire State Chair Factory and where developer Martin Ginsburg plans eventually to build part of a luxury housing development.

Just when and how Ginsburg will come to own the property has Kanner and his elderly mother watching the U.S. Supreme Court, which last week heard a case from New London, Conn., where property owners challenged the city's right to use eminent domain solely to promote economic development by creating jobs and boosting property taxes.

Several years back, Haverstraw created an urban renewal area to promote redevelopment of largely abandoned industrial sites on its Hudson waterfront. As part of that, the village can use eminent domain laws to condemn property - like the old site known as the "Chair Factory." Before that, the developer may try to buy the property, but in Kanner's case, that hasn't ended in a deal.

Ginsburg has made two offers - one in 2000 and another last October - but Kanner says neither was realistic relative to the worth of real estate on the river.

Kanner's relations with Haverstraw and Ginsburg have been cool from the beginning, in part because the Kanners have to pay about $90,000 in annual property taxes while getting no benefit from their property. The family recently paid $100,000 to demolish the old factory.

Kanner's also upset because Haverstraw entered the property without permission to do environmental tests. Haverstraw Village Attorney J. Nelson Hood acknowledged in an August letter that debris from another property had been deposited on the Chair Factory site by the village.

The major concern for Kanner remains that Ginsburg can wait until he's good and ready to develop the site, and then have Haverstraw condemn the property for a fraction of its market value.

Although the amount paid is not known, that's basically what happened when Ginsburg and property owner Ruby Josephs couldn't come to terms on a piece of land for the project's first phase. After three years of talks, Haverstraw condemned it.

Kanner says it's his understanding that some units in the first section of Ginsburg's project are selling for between $600,000 and $1 million. Without specifying the amount of Ginsburg's most recent offer, Kanner says, "He's offering me the price of one unit for something he's going to put 150 units on."

He would be happy to sell the property for a realistic sum, or develop it now himself, Kanner says, but the village's agreement with Ginsburg doesn't permit that.

Andrew Maniglia, director of development for Ginsburg Development Corp., has another view of how dealings with the Kanners have played out. "We've suggested that both parties get appraisals; we've suggested that we meet for negotiations, and we've made an offer and we haven't heard back from them," he says.

That offer, which Maniglia says was for $1.5 million, was made late last year. He says it could be five to seven years before the company is ready to build on that property, but it is willing to make a deal before that. "We remain interested in an amicable solution," he says, "but we can't reach one alone."

In addition to Ginsburg's project, eminent domain is being used in more traditional ways elsewhere in Rockland.

The same power that gathered the land for the New York State Thruway is now being used by Rockland County Sewer District No. 1 to construct a wastewater treatment plant.

With a merger of Haverstraw's town and village police departments progressing, the town is using eminent domain to acquire a site on Route 202 near Town Hall - a private home owned by Hector Luis Mateo.

Mateo's family purchased the property in September 2003 from Jaris Fancy Ltd., whose principal officer is County Legislator Ilan Schoenberger.

After the sale and about $130,000 in renovations, the town informed the owners of the plan to condemn the property.

Initially, Mateo challenged the condemnation in state Supreme Court, but then filed a $25 million federal suit against the town.

Budget concerns have put plans for the $11 million building on hold, but Mateo still has to pay the mortgage on a property he may ultimately lose to condemnation.

Schoenberger has said he had offered to sell the property to the town, but they hadn't completed a feasibility study and wouldn't act until it was done. Haverstraw Supervisor Howard Phillips has said the town's offer to Mateo was more than fair. Mateo's lawyer called it "an insult."

Mateo says of eminent domain, "It's good when the law is applied for the public good." But in his case, he says, "They abuse the power of the law to protect a powerful politician and take advantage of a middle-class person."

Kanner says the Supreme Court permitting use of eminent domain for private development "would be a horrible empowerment of government. Then no home is safe; no business is safe - certainly no house of worship is safe."


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