A federal judge has dismissed 11 claims of retaliation, conspiracy and conflict of interest against former Mount Vernon Mayor Richard Thomas and development official Roberta James, but allowed one accusation against Thomas to stand in an issue brought by Alan Landauer and his LTTR Home Care LLC.
Alan Landauer and his LTTR Home Care sued Thomas, James and the Mount Vernon Industrial Development Agency for $5 million in 2017, alleging that they had illegally thwarted Landauer’s attempts to sell a 3-acre site at 1 Bradford Road.
While many of Thomas’ and James’ alleged actions may have been improper, U.S. District Judge Kenneth M. Karas ruled on Sept. 10, they do not “reflect retaliation.”
However, Thomas’ alleged actions after Landauer sued him, when a prospective buyer proposed building a hotel – “the precise type of facility that Thomas had previously demanded and had publicly announced he would support”– can plausibly be seen as retaliation.
The Bradford Road property is in a residential neighborhood next to the Hutchinson River Parkway and Willson’s Woods Park.
Landauer Metropolitan, a home health equipment and supplies business operated at the site from 2001 to 2013, when the company filed for bankruptcy.
Landauer has been trying to sell the vacant property ever since.
An Atlanta company proposed a 120-unit apartment building and got IDA approval for tax abatement. But when the developer encountered significant community opposition, the project was withdrawn.
Then NRP Group of Cleveland agreed to buy the property, contingent on securing tax abatement from the IDA. NRP also proposed a 120-unit apartment building but modified the designs to address neighbors’ concerns.
By then, Thomas had been elected mayor and become chairman of the IDA. In his March 2017 State of the City address, he said “I recommend to the current developer that this site be transformed into a boutique hotel with a conference center.”
The property was not zoned for a hotel or commercial use, and when Landauer was trying to sell the property, he stated in his lawsuit, no one expressed interest in building a hotel.
Thomas had hired James, his campaign manager and head of his inaugural committee, as business development director for $86,000 a year. She also continued to work as a real estate broker.
A week after the state of the city address, James allegedly left a telephone message with NRP, identifying herself as “with the city. When a NRP official returned the call, she allegedly identified herself as a private broker and asked if the company was willing to sell the property to a hotel developer.
NRP declined. It did not own the property yet and it was not interested in building a hotel.
For months, Landauer claims, Thomas insisted in private meetings on a hotel project and he delayed putting NRP’s proposal on the IDA agenda.
James allegedly called Landauer directly and said she had a client who wanted to develop a hotel. When they met, he claims, she emphasized her close relationship with the mayor, made it clear that Thomas wanted a hotel and said the IDA would not approve NRP’s project.
She allegedly called Landauer again and demanded that he “give her an exclusive” on the property.
After NRP added a small retail component to the plans, it was notified that its application would be considered at the Sept. 13, 2017 IDA meeting. But NRP was not on the agenda, and Thomas refused to allow a vote on its proposal.
NRP terminated its deal with Landauer.
Weeks later, James allegedly called Landauer and said she might have a hotel interested in buying the property, and again she asked for “an exclusive.”
Landauer says he refused because he found the timing and substance of the call “distasteful and patently inappropriate.”
He claims in an amended complaint that Alfred Weissman Real Estate agreed to buy the property in 2018, contingent on getting all necessary approvals for a hotel, but Thomas refused to discuss rezoning the property. Weissman terminated its contract with Landauer in June 2018.
The federal lawsuit asserts claims under the First and Fourteenth Amendments, New York State Constitution and the state General Municipal Law, including retaliation, conspiracy and conflict of interest.
Landauer also petitioned Westchester Supreme Court to order the city and the IDA to produce records he had requested under the Freedom of Information Law.
The city officials moved to dismiss the federal case. Landauer lacked standing to sue, they argued, and Thomas and James were entitled to qualified immunity.
They argued that the IDA has broad discretion and power to encourage economic development, Thomas saw a need to increase sales tax receipts to the city, and his vision for the property was consistent with the IDA’s policies.
Thomas was not even obligated to put a proposal up to vote by the IDA, they argued, and Landauer had the right to develop the property without tax abatement.
As to James’ private real estate business, “There is no allegation that Mayor Thomas directed James to seek an exclusive or was even aware she had done so. Nor is there any allegation that Mayor Thomas and James were partners in James’ alleged private real estate business.”
Karas found that Landauer had sufficient standing to bring the retaliation claims but had not established retaliation.
Landauer “essentially alleged an ongoing scheme in which Thomas and James used their government position to force plaintiffs to sell the property to a developer selected or approved by Thomas, in a deal brokered by James. While this may constitute improper conduct by government officials,” Karas ruled, “it does not reflect retaliation.”
However, having filed the federal lawsuit and Freedom of Information petition, and then entering into a purchase agreement with Weissman who planned to build a hotel – “the precise use Thomas insisted he wanted for the property” – the amended complaint plausibly alleges that Thomas made it more difficult to sell the property.
Though Karas dismissed all but one of the claims, he said Landauer could file another amended complaint to address the legal deficiencies he had identified.
Meanwhile, Landauer sold the property on Aug. 28 to the Stagg Group of the Bronx for $4,050,000. The price is $987,500 less than a previous offer for the property. Stagg plans to renovate the structure for a headquarters.
Thomas has pleaded guilty to a criminal charge of misusing campaign funds and resigned from office.