The Strange And On Going Tale Of the Collamer Lot Sale

Introduction

This story is about the conflict over the land deal to sell the Collamer Parking lot and purchase a parcel to build a public safety facility on the city’s eastside.  The city is currently defending itself against a lawsuit that challenges the deal and an inquiry by the New York State Attorney General. My interest in this story was piqued by the last city council meeting.  At the meeting the city council agenda included a request for additional moneys to pay attorneys who are defending the city in these matters.  My friend, Remigia Foy, excoriated the council for considering such expenditure.

Briefly, Joel Aronson who owns the Algonquin Building would purchase the Collamer lot which adjoins his building for $750,000.00 and at the same time, the city would purchase a parcel of land in the vicinity of Union Avenue and Gilbert Road for $200,000 to build its facility on.

To me, the most interesting thing about this is the strange role being played by Joel Aronson.  Many decades ago Mr. Aronson’s father ran a successful furniture store (Standard Furniture) for many years on the first floor of the Algonquin Building.  The senior Mr. Aronson speculated heavily in property throughout the city which his sons inherited.

The property being sought by the city is currently owned by the Congregation & Yeshiva Pardes Yosef D’Chasidei Belz.  It is a conservative Jewish religious group of which Mr. Aronson is apparently a member.  I think it is reasonable to assume that the property originally was owned by Mr. Aronson.  When it became the property of the religious body the property conveniently became tax exempt.  This was very fortunate since it cost nothing to leave the land undeveloped.  What seems very odd is that this group somehow became interested in a deal in which they sell their property and Joel Aronson ends up purchasing a very valuable parking lot next to his building.  As noted in Commissioner Mathiesen’s narrative a considerable amount of negotiations were carried out with an agent of Mr. Aronson.

In New York, when a piece of property owned by a religious group is sold, it requires the approval of the Attorney General of New York State.  No one is challenging what the city is paying for the parcel of land owned by the religious group and if the appraisal is sound, the price is fair.  It is probably legal but it appears that the religious group has interests that have slid into the temporal realm.

In order to understand the conflict that surrounds this sale I spoke at length with Commissioner Chris Mathiesen and with Tom McTygue and his brother Billy.  I have done my best to fairly and accurately present both of their positions as they expressed them to me.   I attempted to interview Mayor Joanne Yepsen for this article.  In response to my request she emailed me indicating that she was traveling with her son and asked that I forward my questions to her.  I emailed back saying that it needed to be an interview.  She never responded.

This photo shows the location of the Collamer Parking Lot.

Collamer Lot

This photo shows the location of where the planned EMS/Fire Station would go if the RFP were finalized.

The

Tom McTygue’s Narrative

Tom began by noting that the suit was brought by himself, Remigia Foy, and Raymond Watkin.  All three were past elected officials who had served on the City Council and were experienced in the procedures that dictate city acquisitions.  He asserted that the suit was brought because on multiple levels the process used to transact the deal was flawed.

Tom said that their attorney had requested that the judge put the lawsuit on hold pending the outcome of the Attorney General’s inquiry.  He had not heard from the attorney what the judge had decided but assumed that it was on hold.

Tom noted that there was no disagreement about the need for an emergency response facility on the eastside.  He does disagree with many aspects, however.  First, he does not think there is a need for a full blown fire station/ambulance facility on the eastside.  He believes that all that is required is a modest building to house an ambulance and the staff to run it.  He believes that Empire Ambulance, which is the backup service for the city, could staff it in the short run and that city employees could eventually take responsibility for it.  He thinks a smaller piece of property could be purchased and if not, as a last resort, that the city should take land using eminent domain.  He emphasized that using eminent domain would be a last resort, but he says that years ago when he was Commissioner they seized a property and it was done quickly and inexpensively.  He asserted that Commissioner Mathiesen’s plan to use mostly existing staff to operate the new facility is poorly considered.  To accomplish this, the city would be reducing the firemen on the trucks from four to three.  He concedes that the chief believes this is doable but notes that the union does not and that he himself, having been a fireman, believes that it will put the firemen in jeopardy.  Tom believes that if the station is built, eventually the city will have to hire additional staff which he believes will be expensive and not necessary.

He also wondered why the city was not working more closely with the Town of Saratoga Emergency Squad which could help provide service for the eastern plateau area of the city.

Tom and his brother, Billy, believe that the appraisal for the Collamer lot was flawed.  The appraiser used the Lillian’s parking lot as the base for the appraisal.  Billy contends two things:

  1. The appraiser used as the “valuation date” the date the property was actually sold in 2012 instead of the date when the bid of $750,000.00 was made which was in 2006.  He contends that the property value would have increased during the six years.
  2. The appraiser determined the square foot value based on the property in 2012 rather than the property as it was offered for bid.  The footage of the property had changed during the six years.  When the property was actually finally sold, Mayor Johnson agreed to include a walk way that while it would be owned by Bonnacio would remain a public access area.  The original RFP described the space as 16,553 square feet.  The appraiser included the walk way in his appraisal.  Including the walkway increased the square footage to 20,037 square feet.  This was an additional 3,484 square feet.  The result was to reduce the value per square foot.  He argued that this diluted square foot value ended up underestimating the value of the Collamer lot.  Based just on the square footage alone, he believes the Collamer lot was undervalued by $172,000.00.

There was also the fact that Joseph Zappone, an attorney from Latham, had offered the city $1.1 million for the property the night the Council agreed on the contracts and later came back with an appraisal for the property of $1.6 million.

Tom believes that the process by which the deal was made was highly questionable.  He asserted that the city and Joel Aronson had been negotiating for months and had determined the prices of both properties prior to the RFP being issued.  He also noted that the RFP was written in such a restricted fashion that Aronson was the only possible respondent.

In 2007 the city produced a report on its public safety needs called the LaBelle Report.  Tom noted that the report identified a property on Dyer Switch Road owned by Belmonte builders as one of the possible locations although it was not for sale.  He questioned how hard the city pursued its search for properties and said the city should have been prepared to use eminent domain if necessary to get the land they wanted.  Had they done this there would have been no need to sell the Collamer parking lot.

He could not explain why the City Council repeatedly voted unanimously for the concept and the eventual contracts.  He did note that Mayor Joanne Yepsen voted against hiring the Nixon Peabody law firm to defend the city in the lawsuit.  He questioned the enormous amount of money the city was paying the law firm.

Billy McTygue had laid his concerns out in correspondence to the city council.  The Email To The Council

The Statement To The Council

Chris Mathiesen’s Narrative

Before he was elected, Mathiesen met with Bob Williams, the fire chief, to learn about the issues facing a new Public Safety Commissioner.  Williams described the problems the FIRE/EMS Department faced regarding response times throughout the City and cited the need for a third station on the east side.  He gave Mathiesen a copy of a 2007 study that analyzed possible sites that would allow better response times for the eastern plateau area as well as coordinated operation with the other two stations.  Written by consultants one of the key issues was the lack of prompt response time on the eastern side of the city.  The target was to reach victims in less than ten minutes.

Starting in 1992 firefighters were trained in emergency medical services.  In February of 2012, the Saratoga Emergency Medical Service ceased operations.  The Fire/EMS Department took over the ambulance transport responsibilities with Empire Ambulance serving as back-up. This was a logical transition, he argued, with the added benefit of bringing in $800,000.00 in revenue for its services.  It also made more acute the importance of addressing the need for effective response times to the East side of the city.

The study identified an area East of the Northway in the general vicinity of Gilbert Road and Union Avenue as the prime location for a recommended fire and emergency facility.  According to Mathiesen, five to six percent of calls come from the far eastside of the city.  The study noted that the location should be part of a comprehensive plan for the city.  For example, placing the facility at the extreme edge of the city’s eastern end would limit its reach.  The area along the Union Avenue corridor would give it the greatest flexibility of reaching the most people beyond where the downtown station was.

The Public Safety office then began to search for available land.  They contacted a number of landowners in the area including the Malatinos who own a horse farm there but there was little interest.  They did find a good location by Meadowbrook and Union Avenue.  The problem was that it was predominantly wetlands.  They contacted DEC.  DEC said that in order for them to do infill in the wetland, they would have to provide three times the land somewhere else.  There were also major engineering problems with making the sight viable.  It was scrapped.

Mayor Johnson proposed the land that the city now uses for waterfront access but based on the 2007 study, it was not properly located.

It was around this time that Mathiesen noticed a sign on the land adjacent to the church near the Gilbert Road intersection offering property for sale.  Mathiesen asked his deputy, Eileen Fineran to follow up on this.  When she called the number it was Joel Aronson who responded.  He told her he was representing the Congregation & Yeshiva Pardes Yosef D’Chasidei Belz who actually owned the property.

Of the 14 plus acres, approximately eight was dry land and much of that was above the 500 year flood plain.  The parcel was listed for $725,000.00.  The Aronsons own the Algonquin building which is across the street from the City Center.  They were already working with Sonny Bonaccio on rehabbing the building.  They asked Mathiesen if he would be willing to consider some kind of deal in which the city would sell them the parking lot beside the Algonquin and in turn would buy the parcel on the East side.  Mathiesen contacted the city attorneys to find out if this were possible and worth pursuing.  Joe Scalla who was then the City Attorney under Mayor Johnson and Tony Izzo the Assistant City Attorney said it was possible and to come back when they had more information.

Mathiesen met with Larry Novick who was employed by Bonnacio but was authorized to work on the deal for the Arononsons.  They agreed to both get appraisals on the properties and then meet again.

Mathiesen then asked John Franck for an appraiser and Franck recommended Armstrong Appraisers with offices in Clifton Park.  David Fonatana was assigned by Armstrong to do the appraisal.  He came up with $775,000.00 for the city parking lot and $200,000.00 for the land parcel.

When they met again, Novick did not have an appraisal for the parking lot but the appraised value for the parcel he claimed was $725,000.00.  Mathiesen told them that in light of the Armstrong appraisal, the answer was no.

Some weeks later Aronson contacted Mathiesen and offered to sell the property for $400,000.00.  Again, Mathiesen declined.

Some weeks later, Aronson again contacted Mathiesen, this time offering to sell for $300,000.00.  Again Mathiesen declined.

A month went by and Mathiesen told me he thought the whole thing was dead when he was contacted by Aronson who said they would accept $200,000.00.

It was then discussed in executive session by the City Council.  Following the executive session Johnson opposed the plan because he thought the staffing would be too expensive and because he did not like the deal.

The attorneys believed that due to the unique circumstances of the location and in light of the appraisals, the transaction did not require a bid.  Nevertheless, Commissioners Franck and Madigan said they would feel more comfortable if it went out as an RFP specifying both the area for the parcel and the Collamer parking lot.  It was still possible that someone in that area might come up with the land that was needed.

In the end, the only response to the RFP was from Aronson.

Roughly around this time Bill McTygue wrote Mathiesen a letter arguing that it was a mistake to sell the Collamer Lot.  He believed that the lot could be used for better purposes.  He also proposed land off Meadowbrook Road as another option.

Mathiesen believed that the Meadowbrook location was not suitable in light of the 2007 analysis.

A little history is in order here.  Back in 2005-6, Billy and his brother Tom had proposed a mixed use development for the area behind City hall and included the Collamer Lot.  They envisioned, among other things, a movie theater as part of a mixed use development.  Tom issued an RFP and there were two responses.  As it turned out, the decision to go forward failed on a three to two vote of the Council.

Just after that, the economy went sour with the 2008 crash and any interest in development for that area went into dormancy.

Back to the story, some critics suggested that the city should have used its power of eminent domain to get the land.  Mathiesen told me that there were a number of problems with this approach.  The first was that since with eminent domain they could theoretically choose any property, this brought with it the thorny problem of which land they would seize.  The second was that seizure involves lengthy and very expensive legal actions.

Aronson would be developing the Collamer lot property for mixed commercial and residential use.  This would provide the kind of infilling that was part of the overall strategy for downtown.  There was also the argument that the gap of the parking lot weakened the pedestrian flow between downtown and the City Center.  There was also the argument that as a privately owned building it would provide significant tax income for the city.

On December 17th, 2013, in a four to one vote with Mayor Johnson the lone dissenter, the council voted to approve the general deal and directed the City Attorneys to work on the necessary contracts.  Johnson’s primary opposition was based on what he feared would be additional ongoing costs associated with staffing and maintaining the facility.

According to Mathiesen, both City Attorneys, Matt Dorsey and Tony Izzo, saw no problem with the agreement.  The City Assessor supported the agreed upon property values as fair.

Izzo began to work with Michael Toohey, attorney for Aronson, on the contracts.  A number of issues came up.  There was concern about how to minimize the loss of parking that would result from the construction.  At the time, it was assumed that the City Center parking structure would be done soon and there was interest in trying to coordinate the timing of the two projects.  It was decided to delay the construction on the Collamer lot for fifteen months during which time the city would insure and maintain the parking lot.  There was also concern about excessive delays and it was decided to require Aronson to formally begin seeking approvals from the land use boards within eighteen months.

The entire agreement included the caveat that were Aronson to fail to get the required approvals from the land use boards, the deal would be off and the money would be returned to the parties.

As it turned out the time required to resolve the wording for the contracts dragged on and they were not finished until May, 2014.  In July the contracts were finally ready for action.

At the same time, Mayor Yepsen began to raise objections to the project.  She questioned whether the Collamer lot would be more suited to a mixed use project that would include the High Rock parking lot.  She also questioned the nature of the proposed agreement expressing that it did not seem to be a good deal for the city.

The vote on the contracts was then put off until the August 5 meeting.  In the meantime, Sarah Burger contacted the New York State Department of Environmental Conservation questioning the location.  On the day of the meeting she called David Fontana.  Later that day she would claim that Fontana had agreed with her that the proposed price for the Collamer lot was too low.

Mathiesen called Fontana.  Fontana said that he had been traveling when she called him.  He said he was confused by her call and that it had been clear that she wanted him to say that the land was being undervalued but he had assured her that it was not.  She also pressed him that the value may have changed and he indicated to her that the assessment indicated that the value was good for twelve to eighteen months.  He told Mathiesen that he was quite clear with her that he stood by his assessment.

The night of the meeting to finalize the contracts an attorney named Joseph Zappone with a law practice in Latham, New York , appeared at the public comment period of the meeting.  Ms. Burger distributed a proposal he had written in which he offered 1.1 million dollars for the lot.  This was the first time that Mathiesen had heard anything about Mr. Zappone and his proposal.  There were no communications from any other member of the Council regarding this.

Mathiesen said that he had prepared the State Environmental Quality Review application the night before.  The Mayor expressed her concern about the process but in the end a unanimous City Council approved the SEQR and the contracts.

Mathiesen then went on a vacation to Maine.  He said while he was there he learned that the Mayor had not signed the contracts.  He said repeated calls and emails to the Mayor were not returned.

On the Friday after the meeting Zappone delivered another appraisal to the city with a value now of one million six hundred thousand dollars.  The Mayor then announced that she wanted a third appraisal.

Mark Schachner was brought in by the Mayor who said he had problems with the SEQR application.  The SEQR had been for simply the sale of the Collamer lot.  Mark Schachner wanted to delay the closings until the plans for the Collamer lot and the Union Ave. parcel had been finalized, then to do a coordinated SEQRA review with the City Council and all the other involved land use boards.  Mathiesen felt that the land sale and purchase should be able to proceed as stand-alone actions.   Plans for development of both parcels were too far in the future and were not at all immediate.  Mathiesen reaffirmed with Izzo that it only had to deal with the sale.  Mathiesen also contacted the New York State Department of State who also agreed that it only had to deal with the sale of the Collamer lot.  In reviewing the SEQR with Nixon, Peabody which was the firm that later defended the city in the suit, they also agreed that the SEQR only had to address the sale.

Shortly before the August 8 meeting Mathiesen said that Mayor Yepsen called him and told him that Matt Dorsey (Johnson’s attorney) told her he never gave Mathiesen any legal advice about the deal.  She warned him that if this ever got to court and he asserted that he had been advised by Dorsey that he would be vulnerable to perjury.  When Eileen Finneran called Dorsey, he told her that Sarah Burger had called him and tried to get him to say that he had not advised Mathiesen and he had refused.

The Mayor also told him that the City Assessor, Tony Popalizzio had told her that the assessment was too low.  Mathiesen pointed out that Commissioner Franck, who the assessor works for, had confirmed that his office believed the offer was fair.  Popalizzion had told Mathiesen that the Mayor had tried to get him to agree that the offer was too low but that he refused.

At the next meeting the Mayor said she would not sign the contract.  She moved that the city seek a third assessment.  She could not get a second for her motion.  She signed the contract.

I asked Mathiesen about the issue of how the proposed facility would be staffed.  He indicated that Fire Chief Williams was recommending that the city staff three stations instead of two without significantly increasing the number of firefighters by re-distributing the resources.  Mathiesen conceded that members of the union did go to Mayor Johnson to complain about these plans.  The union advocated that the city continue to have 4-man engine crews.  Mathiesen asserted that the overwhelming majority of engine crews in NYS municipalities are 3-man or less, not four.

Mathiesen noted that the parcel size is much more than would be required for a fire/EMS station.  He told me that his department hoped to use other parts of the property to meet other Public Safety Dept. needs.   He indicated that his department was considering putting a smaller, expandable facility on the east side first to house an ambulance due to possible budget constraints but giving the City important capacity to meet future needs.

Remigia Foy, at the last Council meeting, could not understand why the city was appropriating more money for the attorneys when the lawsuit was currently on hold pending the Attorney General’s inquiry results.  The attorneys are representing the city both in the lawsuit and in the Attorney General’s inquiry.  The attorneys have billed $69,631.66 .  The motion was for covering the costs so far plus additional moneys of $10,368.34 for any additional work that will need to be done.

According to Nixon Peabody, the plaintiffs’ (Foy/McTygue/Watkin) had written a letter to the judge requesting that there be a stay in the process until the Attorney General’s inquiry was completed.  They indicated that they had responded with a letter saying that the case should go forward and be resolved.  They noted that to actually stay the process, the plaintiffs would have had to file a motion which they had,  and the judge would have had to formally issue a decision and notified the parties of his action which he had not.  They said that the case was active and ongoing.

Postscript

One of the things that I find most curious in these events is the appearance of Joseph Zappone offering over a million dollars for the property at the public comment period of the Council meeting.  In December of 2013, in a well publicized event, the City Council agreed to accept the original deal.  The amounts were publicized and generated a great deal of buzz.  It seems very strange that Mr. Zappone makes his appearance in August, some seven months later, on the night the Council meets to formalize the contracts.  The first question is where this man was for seven months.  Even stranger, at least by the statements made by the members of the Council, he did not contact any of them prior to the meeting.  If a person were serious about making this purchase, one would expect the person to attempt to have a civil and thoughtful discussion with the major players in order to explore what could be done in a less charged atmosphere where the speaker is limited to two minutes as is the case with the public comment period of a City Council meeting.  Using the public comment period to make a pitch to buy a million dollars worth of property does not seem to be the best way to go forward.

7 thoughts on “The Strange And On Going Tale Of the Collamer Lot Sale”

  1. There is a lot of information here and while it is a bit overwhelming, I have to note that Ms Berger appears to not have a problem trying to manipulate facts. If she distributed a bid from Mr. Zappone, I have to wonder if there is a connection. The Aronson family were long time land speculators, so there is nothing wrong with being savvy. Mr. Aronson was contacted by Ms. Finnernan at Mathiesens’ request. Because it was for an EMS station for the city, he dropped the price of the land substantially, which I think is only right. You can’t blame him for thinking maybe he could buy the land next door to the Algonquin.
    Also, as a former Firemans sister, I have to say that in order to keep firefighters safe, there needs to be a 4 man/woman crew. Our city has spread out and there are more higher buildings than ever before. I think citizens want a fair deal and one which will add to the tax roles for us and provide a 3rd station to protect us.

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  2. I saw the council meeting where Zappone showed up with a briefcase. It looked like a scene out of a ‘Godfather’ movie truthfully. If I were sitting at that council table there is NO WAY POSSIBLE I even CONSIDER that ‘deal’. Ridiculous doesn’t even touch it – or even ludicrous truthfully.

    I want to go on record here too: as a commissioner of public safety, your main job IS the public’s safety. That certainly includes making sure the emergency respond times are OK. As one who has had a life or death situation I MORE than understand the need for faster response times. Seconds really do matter, let alone minutes. Personally speaking, I would have GAVE that land away to assure the safety of the public – and they are taking shots for what every other council member (now AND then) AND city attorneys agreed was OK? No – this SCREAMS of politics all the way around – but rather on those trying to get back IN city hall (not to mention ‘someone’ had a ‘interest’ in purchasing that lot previously AND is trying to gain a seat on that council). In the process, it makes opponents look bad and corrupt, of which they are not. This faction of ‘democrats’ are the ones costing the city thousands of dollars – not the ones they are pointing a finger at. The due diligence was done on this issue. This lawsuit is pointless and a HUGE waste of taxpayer funds.

    But perhaps that extra money to pay attorneys wasn’t for the Collamer lot deal – but instead to pay attorney’s for that land that was sold at the dump instead? Hmmmm…….

    This is type of ‘politics’ that makes my blood boil, and makes me glad that we finally voted that faction OUT of city hall. But they refuse to go away, and this is nothing more than a pathetic attempt for them to get back in. Personally, I’ve had it with this faction that is trying to rip this city apart for their own personal gains.

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  3. With three engines and two ambulances all staffed by City Firefighters, there will be no difficulty having more than the minimum 4 reaching a fire scene in a timely manner. Three engine crews (9) is better than two (8) and two ambulances (4) are better than one (2). That’s 13 firefighters on duty versus the present 10. The staffing levels and distribution of resources that exist now become less adequate as demands for service increase.

    Chris Mathiesen

    Liked by 1 person

    1. The Union Ave. property is not tax exempt even though it is owned by a religious organization. It would have to be used for a religious purpose if it were to be classified as tax exempt. They have been paying property taxes on that parcel as required.

      Chris Mathiesen

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  4. What I find interesting John is that there has been much speculation that the Attorney Generals investigation is focusing on the Public Safety. However the nature and origin of the complaint is unknown and the entire City Council is named. Your article brings to light some questionable conduct by the Mayor’s Office and her staff. Since the Mayor is the only Council member interviewed by the Attorney General, could it not be the investigation is focusing on the Mayor and her staff (former City Attorney)? Seems to be a reasonable conclusion.

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  5. John,

    There’s more information in your article than in all of the newspaper reports that I’ve read combined (we subscribe to four newspapers, though it would be a stretch to expect the NY Times to cover this story). This really speaks to the failure of the local press to do anything that resembles investigative reporting.

    Why, for example, has no one interviewed Joseph Zappone for more details on the counter offer? It takes weeks for an appraisal, so surely this was in the works for awhile. And how did Sarah Burger come to distribute his proposal? I’ve read anecdotally (it may have been elsewhere on this blog) that Mr. Zappone’s proposal contained provisions that would have been unacceptable under any circumstances, so was this really a serious offer?

    In doing a simple search, Mr. Zappone not only represents clients in the construction industry, such as R.J. Valenti, but he’s also an investor. He previously co-owned the now-defunct Quintessence restaurant on New Scotland Ave. in Albany, as well as the now-closed Quintessence (formerly Chez Sophie and Bloomers) in Malta. See:

    http://www.timesunion.com/local/slideshow/Weekend-in-Photos-April-7-2014-83378/photo-6116345.php

    http://www.timesunion.com/business/article/New-Quintessence-restaurant-scheduled-to-open-1324169.php

    Currently, he owns the Grange Road Mobile Home Park in Greenfield Center, as well as a number of properties in Albany and Colonie.

    “Follow the money.”

    Joe

    Liked by 1 person

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