“Don’t put all your eggs in one basket.”  Better advice would be hard to find. Unfortunately the current administration---including former councilman Bill Schmidt---has ignored that traditional wisdom several times in the last 5 years.  Now the residents of Peekskill will be paying the price.

Ginsburg Development Corp.
GDC was initially brought to town by the Chapel Hill Condominium Association to complete the 3 remaining developments at Chapel Hill. Their success at Chapel Hill, and their purchase of property at St. Joseph’s and St. Mary’s, led the City to name GDC the sole source developer for the Waterfront Redevelopment Project.

The GDC Waterfront Plan

GDC looked at Peekskill’s waterfront, as they were doing in many other river town communities, and offered to rebuild ours. GDC had seen the Sasaki Master Plan for the waterfront and knew what the community wanted when that plan was completed. GDC’s offer was enticing and our city’s leaders bought it--- “hook, line and sinker”. They did so without even considering competitive developers or visiting other GDC projects to determine if they had ever built the type of mixed use commercial/retail/restaurant and water related recreational space our plan called for. Simply, GDC had come to town and they would solve the City’s problems. Oh, how wrong our leaders turned out to be.

Condominiums by the hundreds
GDC built 200 units at Riverbend and marketed the units by describing the new waterfront they would also be developing. The City’s elected leaders and GDC representatives sponsored presentations of the new Waterfront development back in 2003 while Riverbend was being built. GDC’s artist renderings of the new Waterfront were attractive drawings of pedestrian walk ways, restaurants, parks, open pond and brook, and condominiums---not real development plans that they would be able to execute. But our elected officials did not know the difference.

GDC wanted an exclusive deal with the City as the preferred developer of the Waterfront---still no hard plans developed or delivered. The City GOP team ---including former councilman Bill Schmidt---agreed to this.  No discussion with other developers, and so of course no other bids.

Initially GDC made no effort to preserve historically interesting buildings but they did include a pretty picture of an open MacGreggory brook.  As residents voiced concerns about tearing down all the buildings, some historic buildings reappeared in successive artist’s renderings. However the brook went back underground because parking lots were needed to accommodate the increasingly denser residential areas.

The housing plan morphed from 350 units to 500, the retail and restaurant space shrank, and the open brook disappeared along with its delightful footpaths. Public discussions between council members about the long-term consequences to the City of another large residential development, with condominiums placed only 10 feet from the train tracks, inspired residents to pay closer attention to the details. This is what elected representatives are elected to do: examine each deal carefully, look at it from all sides to make sure it is the best possible deal for our community. If the developer does not like this scrutiny—so what?

But the waterfront plan didn’t stop there. It started to creep up the back side of the Kiley Center to Main Street and up the slopes of Central Ave. to South Street. Although no specific number of units was presented for these new project areas, a new development along Main Street, next to the Kiley Center, would enhance market rate housing at the Gateway project (you were told this was workforce housing) and enhance the sales value of the St. Mary’s units. Mr. Ginsburg said he needed to break the $750,000 sales ceiling for the St. Mary’s units.  (We’ll look further into this under the heading Gateway Project.)

GDC has not presented a final plan to the City.  Considering the current housing market, Mr. Ginsburg’s other financial commitments he may never do so.

Dain’s and Target
GDC representatives, with the blessing of the City’s elected officials, offered relocation packages to the many businesses that stood on land that GDC wanted along Water Street As of September 2007, not one business relocation package has been signed, but three houses on South Street were purchased and torn down.

In 2005, the Mayor and his GOP running mates told the new residents of Riverbend that they were bringing in a Target store. [They didn’t have a deal with Target and were not even supposed to make reference to them by name.] Campaign materials were used showing a Target on the empty lot on Louisa Street across from the ball field. What the Mayor and his running mates failed to tell these residents is that they did not know what would be required of our City to make this happen. What was required would turn out to depend on GDC’s plans for Dain’s Lumber Company and Home Mason Supply-two long standing businesses in our community.

Dain’s draws the short straw
GDC negotiates an offer in 2006 with Dain’s Lumber Company to relocate them to a portion of the Karta property. This moves Dain’s off of the desirable property on Water Street and sets up a cleaner retail/wholesale type business on a piece of the dirty recycling property. In 2007, after the City and Dain’s took all the necessary planning and zoning steps to allow the deal to close Mr. Ginsburg withdraws his offer. GDC knew the Department of Transportation would be acquiring a portion of Dain’s land through eminent domain proceedings in order to accommodate the Route 9 overpass reconstruction. Perhaps they thought they could renegotiate a cheaper deal if Dain’s were under duress. So instead of moving to a new location as negotiated in good faith with GDC, Dain’s Lumber Company is presently reconfiguring the use of their present space, with very little time to do so.  Adding insult to injury, word is out that GDC is trying to put together a deal with R. Birdoff (Target developer) to have a Lowes big box store built on the Karta land that had been designated for Dain’s. This is bringing in a direct competitor to Dain’s Lumber, the business that would not accept GDC’s lesser offer when GDC pulled the original deal off the table.

And as for Target, they were promised by the City that they would have retail neighbors and part of the Karta Recycling site cleaned up. Without Dain’s and Home Mason moving onto the Karta and L&L sites, another big box retail store will need to move there. If Birdoff wants to make money developing a Target store, he’ll need to bring in Lowes. [Birdoff is the developer in this region for both Lowes and Target.] So the story goes, No Lowes, No Target.

The saddest aspect to this story is that the City has the ability to clean-up the entire Karta Recycling property on Lower South Street by exercising it’s purchase options and locating  Target on that property which is directly alongside Rt. 9.Target would be visible right on Route 9, accessible, and a great re-use of the existing land. The City also has the money to buy the Engelhard property (empty Louisa Street lot) and thoughtfully plan for its redevelopment based on the studies currently underway for Riverfront Green South (area from Crystal Bay to Peekskill Landing).

Homestyle Desserts
Rose Sanca (Homestyle Desserts) gave up dealing with GDC after their offers were revised down several times. Rose Sanca also owns the Meyers building on Water Street and has saved it from demolition by GDC. She is on her way to restoring the exterior and creating new commercial (office and restaurant) space on Water Street, if the City will only grant her the building permits. The Planning Commission has approved her plans, the contractors to do the work have been picked but Rose has not been able to get her permits to start work.  GDC still weighs in with his disappointment that the City has not taken the building away from Rose.

So as of today, these two key businesses on Water Street are staying put.  But for Jeff Dain and Rose Sanca the saga is not over. 

GDC proposes to build at the St. Mary’s property.

GDC representatives brokered an honest deal about the Fort Hill Park land, which pleased the Nelson Ave and Fort Hill neighborhood. They also offered to improve the City's water main along Belden Ave. leading into the St. Mary's property and Chateau Rive. As of September 2007, with building permits and all approvals in place for one year, GDC has backed away from the offer to build a new water main and has finally dedicated Fort Hill Park this past weekend. There is no incentive for them to build or do anything during a housing decline. The residents of Chateau Rive still have inadequate water pressure, and the taxpayers of our city will see a large item added to the next multi-year capital budget.

But the complex dealings with GDC also include Fourmen Construction, Inc. The entrance to the St. Mary’s property is past Bohlman Towers and the “Gateway” project. Upscale condominiums at St Mary’s cannot be sold if the surrounding neighborhood is not changed. So, enter Dave Furfaro and Fourmen Construction/DCM Management. We’ll pick up the rest of this story later under the heading Gateway Project.

Fourmen Construction/DCM Management

Fourmen started with a successful restoration of the Paramount East Building and several successful construction projects for the City’s DPW. They have ended up with three troubled residential projects---Terrace View Gardens (on Lincoln Terrace), Gateway (Main St), and The Cove (Simpson Pl).

The residents of Lincoln Terrace have been looking at an eyesore for 3 years--- the clear cut hillside, one model house and one foundation. The plans for this residential development cannot go forward due to Fourmen’s lack of capital. If someone buys a home, he’ll build one. If not, the land remains torn up and vacant. Fourmen Construction is a builder, not a developer. Their expertise is building schools and commercial space. They do not have the staff to market residential units and this would be an impediment to successfully market the homes that are supposed to be built on Lincoln Terrace.

Capital was invested in The Cove project, where the units were viewed as more marketable. Unfortunately for the builder, the approved building plans were not followed and this project of 5 town homes faces severe neighborhood and City criticism. More capital must be spent to fix the height and other issues at the Cove which means that even less capital will be available for Lincoln Terrace and Gateway.

Gateway Project

This is where Dave Furfaro and Martin Ginsburg cross paths in Peekskill. They have already crossed paths in Carmel on a controversial commercial development.

The GOP majority, including former councilman Bill Schmidt, awarded the Gateway project to a non-developer—Fourmen Construction.  Fourmen would pay roughly $250,000 less for the land than the City had paid to acquire the various properties through purchase and condemnation or tax foreclosures. This favorable award was granted to Fourmen Construction even though their Lincoln Terrace project was experiencing problems as they clear cut the steep slope that undermined the stability of one man’s home on Crompond Road. This house eventually had to be condemned and torn down.

Being a builder but not a developer, Fourmen Construction could only undertake the Gateway project if he had the names of the 4 confirmed families that would buy units subsidized by HUD. Without these names, Fourmen could not get the bank financing to build the project. Even with a favorable land purchase price and the HUD subsidies, Fourmen could only afford to build the exterior of the town house complex. It would only complete the interior construction as families paid for their units. Since Fourmen Construction lacks the marketing staff to sell the 11 non-HUD subsidized units, they needed help to pull off this project.

Dave Furfaro turned to Mr. Ginsburg for this help. He sent GDC his cost projections for Gateway on the assumption that this would help broker a deal to get him out from under the project. The selling price for the units started at $350,000, too high to qualify as the workforce housing the City had promised yet not high enough to guarantee a profit.  Fourmen’s dilemma could have been an opportunity for GDC. GDC needed to build some affordable housing as part of the Waterfront project.  If they took over the Gateway and constructed affordable housing they could have gotten credit for 15 affordable units without actually locating them at the Waterfront. GDC could also gain control of this key site, the entry point to the St. Mary’s project. Looked like a win/win solution for all involved!

Except that GDC is not moving ahead at the Waterfront and is stalling on St. Mary’s, so there is no incentive to help solve Fourmen Construction’s problem. Now that Fourmen Construction has the names of the 4 families for the HUD subsidized units, they are in the unenviable position of having to build the units or withdraw from the project. As of September 2007, Fourmen Construction has not closed on the land acquisition deal for the Gateway project even though his building variances expire at the end of October.

This Is What Happens When The Elected Officials Put All The City’s ‘Eggs’ Into One Developer’s Basket And That Developer Believes He Owns The City.

CPC/Main Street Development

Unfortunately for the residents of Peekskill, the story continues with a redevelopment project that began in 2003 and 7 parcels along Main Street and North Division Street into the hands of a one company---CPC. Even though several bidders offered higher prices to purchase the individual properties to build art lofts and retail space, the Mayor and GOP majority voted to sell all 7 parcels to CPC for $250,000, less than the individual bids.

As of September 2007 the only aspect of this project to be completed is the rehab of the old Johnson Studio building. All other construction activity has ceased and the City is suing to get the vacant land back. The Mayor promised the taxpayers an $8 million plus investment in the City. Instead we have vacant lots and a costly lawsuit.

The Mayor and GOP majority blame the developer for this mess and accept no responsibility for the bad judgment they initially exercised. Councilwoman Claxton was the only council person to vote against selling all the parcels to one developer and argued that the local artists had submitted reasonable bids and solid proposals and were better suited to guarantee that the project would be completed.