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ANOTHER EPIC FAIL: TOWN POSTPONES FRANK’S NURSERY SALE AFTER AUCTIONEER SAYS BIDDERS WON’T BID BECAUSE OF UNQUANTIFIABLE ENVIRONMENTAL REMEDIATION COSTS

The Town’s on-again, off-again sale of the former Frank’s Nursery property on Dobbs Ferry Road is off again – this time indefinitely.An auction to sell the six-acre site, which the Town first acquired in a tax foreclosure sale in January 2011, was to have been held November 18, 2014, but the auctioneer, former Edgemont resident Harold Bordwin, told town officials today that prospective bidders were unwilling to bid more than a nominal amount because of unknown environmental remediation costs at the site.Mr. Bordwin had warned the town board last April, when he was first interviewed for the job, that if the Town had not completed a Phase II environmental study which detailed precisely what the costs would be to clean up the site, prospective bidders would assume the worst and discount their bids by what they estimate the maximum amount of the cost of the cleanup would be.

Town officials dismissed Mr. Bordwin’s warning even though they knew all along that the Town had not completed a Phase II environmental study that estimated cleanup costs. Instead Town Supervisor Paul Feiner has been confidently predicting for months that bids would exceed $3 million.

Town officials said today they would instead proceed with an environmental assessment to determine what the cleanup cost would be and that no effort to sell the property would take place until those costs were known. A preliminary environmental report issued in October 2012 found evidence of cancer-causing carcinogens and other chemicals on the site, as well as an ongoing oil leak from a storage tank.

The Town’s efforts to dispose of the property have been marred by years of controversy.

Before the Town acquired the site in 2011, Mr. Feiner had tried in September 2006 to lease it as a temporary location for the Town’s library, but was forced to abandon the idea when residents pointed out that under the terms of the deal Mr. Feiner had negotiated, taxpayers would be required to bear the cost of any environmental cleanup if at any time during the lease the property’s owners voluntarily agreed to enter the site in the state’s environmental clean-up program.

It was understood at the time that the reason the property’s owners had abandoned the site rather than try to sell it was that the environmental remediation cost made any sale impractical.

Nevertheless, when the Town acquired the property in 2011, Mr. Feiner had originally wanted to lease the property for 15-years to a start-up firm – GameOn 365 — that wanted to erect an eight-story bubble on the site and use it for indoor recreation. That summer, Mr. Feiner announced a “request for proposals” for the site that pointedly omitted any mention of the property’s environmental problems. During the brief six-week window the Town made the property for sale, only one bidder — Game On — offered to lease the property. Two other businesses offered nominal amounts to purchase the property, which the town did not consider.

Mr. Feiner’s efforts to lease the property, however, were immediately challenged by a competing sports company – Ardsley-based House of Sports – which said it wanted the site for its own indoor recreation complex. It then funded a lawsuit to challenge the legality of leasing property acquired by tax foreclosure.

Under the Westchester County Tax Code, municipalities that acquire property in tax foreclosure proceedings are required to sell the property and use the proceeds to replenish municipal coffers used to fund delinquent taxes. Frank’s Nursery owed the Town more than $1.5 million in back taxes which it had funded, as required by law, to pay all school, county, fire, sewer and town taxes.

Without waiting for the courts to rule, Mr. Feiner insisted that the legality of the lease deal be put to a vote in a non-binding town-sponsored referendum in November 2012 which promised residents “$5 million for Greenburgh” if they said yes to the deal. The referendum passed handily in all areas of the town except Edgemont, which opposed the deal.

Many residents were critical of the deal on economic terms, citing among other things, certain unspecified environmental conditions on the property which, under the terms of the lease that Mr. Feiner negotiated, would be the responsibility of taxpayers to clean up. Town Attorney Tim Lewis meanwhile had assured residents that the cost of the environmental cleanup would not exceed $100,000.

Then, on the eve of the referendum, an environmental report commissioned by the Town found evidence of carcinogens on the site which, if not cleaned up, could pose serious risk to children playing on any outdoor recreation fields to be constructed there.

Children in other towns in Westchester County who had played on athletic fields built on similar carcinogenic-bearing material had developed cancer resulting in millions of dollars in liability suits and cleanup costs.

Town officials, however, did not make the report public until after the referendum, saying they were too distracted by Hurricane Sandy a few weeks before.

Despite the referendum having passed, Game On was unwilling to sign the lease and Mr. Feiner decided instead to sell the property to GameOn in a “private” sale for $1.65 million. House of Sports found out about the sale and offered the Town $3.5 million. Mr. Feiner, however, refused to consider the House of Sports bid, claiming it was subject to certain unspecified conditions. House of Sports said the only condition was that it wanted to speak with the Town’s environmental consultants, which the Town would not allow.

In the meantime, however, lawyers representing Game On discovered that the Town never got good title to the Frank’s property, having failed to give notice to a bank which held a $3.5 million mortgage lien on the property. The Town, however, kept the title defect a secret. The bank later gave up its claim to the property – presumably after determining that after paying the $1.5 million in back taxes, the environmental costs of the property rendered it worthless or would create a liability.

Undaunted by these setbacks, Mr. Feiner announced in May 2013 that Game On had agreed to buy the property for $3 million, with $1.7 million to be paid upfront and the balance to be paid out over time once Game On received approvals to build its 8-story “bubble.” However, that deal fell apart almost as soon as it was announced when the details of the contract of sale showed that Game On had the right to flip the property free and clear without ever having to pay the additional $1.3 million.

Mr. Feiner then insisted that the Town would proceed with a sale of the property in November 2013, but word leaked out that the Town didn’t have good title to the property – and had secretly brought litigation proceedings in an attempt to extinguish the bank’s lien and thereby acquire good title. That process did not end until the spring of 2014, when the Town began interviewing auctioneers with the idea of selling the property by June 2014.

Mr. Bordwin was selected as the auctioneer and the date for the auction was eventually set for November 18, 2014. In the meantime, however, residents insisted that the property be sold as is – under the existing zoning code – which only allows residential property, churches and assisted living facilities.

Within the past week, Mr. Feiner was trying to interest residents in allowing an indoor storage facility such as Westy’s to bid on the property, which would require a zoning change. Under the Town’s current zoning code, an storage facility is only permitted in light industrial or intermediate business districts where, among other things, indoor recreational facilities of the type proposed by Game On is also an accepted use. Residents told Mr. Feiner they were opposed to any such use.

In recent days, residents began to speculate that the auction would be put off. Mr. Feiner had issued press releases saying he “hoped” the property would sell in November and in his budget message, released yesterday, he made a point of saying that no revenue from the Frank’s sale was being included in his budget.

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