Court clears way for Costco project
A real estate partner”™s legal effort to block a $6-million land sale in Yorktown to keep out a low-cost competitor who posed a threat to his gas station business interests has been throttled by a state Supreme Court judge.
The suing partner, however, already had notified Yorktown officials that he no longer opposed a Costco development on property whose pending sale he has blocked since 2010.
The court decision in White Plains this month could end the legal stalemate and partners”™ duel in lawsuits over a Long Island developer”™s plan to build a Costco Wholesale Club retail store on a 14-acre site on Crompond Road beside the Taconic State Parkway. The approximately $50-million project has been stalled for about a year and a half since Sammy Eljamal, the founding partner of Best Rent Properties 202 L.L.C., refused to close a deal with the developer, negotiated by his investment partner Majed “Mitch” Nesheiwat, that would have earned them $3 million each.
Eljamal, owner of Wholesale Fuels in Thornwood and a managing partner in a company that owns or controls Shell service stations throughout Westchester County, claimed he was not told that Costco would operate a gas station for Costco club members at the Yorktown site when he first signed a purchase contract with Retail Store Construction Co. Inc. in 2009. Eljamal, in his lawsuit against his partner and the development company, said he was told the developer planned to bring in Lowe”™s, the home improvement retailer, and that he only learned of the Costco plans almost a year and a half after signing the agreement.
But Nesheiwat and Garden City developer Wilbur Breslin claimed Eljamal knew from the start that a gas station was included in the Breslin company”™s Costco development.
Nesheiwat, president of Gasland Petroleum Inc., a Kingston fuel distributor, and the owner of several Dutchess County service stations, claimed Eljamal thwarted the deal to protect his and his extended family”™s control of gasoline prices at their service stations in Yorktown and northern Westchester. His attempt to scuttle the Costco project, as town of Yorktown officials began their review of plans, came soon after Eljamal and partners in New York Fuel Holdings L.L.C. in 2010 made their $43.3-million acquisition of Shell stations in Westchester, New York City and on Long Island.
Supreme Court Justice Sam D. Walker in a March 15 decision sided with Nesheiwat and Retail Store Construction. “By taking the unilateral step of attempting to block the Retail project based solely on his personal business interest, Eljamal risks the $6-million sale of the Best Rent L.L.C.”™s only asset and the potential profit that his fellow L.L.C. member could earn from the transaction,” he wrote.
The judge ordered Eljamal to sign sale documents and do what”™s needed to close the deal. He said Eljamal cannot oppose or take any action against the developer”™s plans for the Costco project.
“Now he has no choice,” Nesheiwat said after the court decision. “The sale will go through.”
Breslin, president and CEO of Breslin Realty Development Corp., the parent company of Retail Store Construction, said the court decision “was not necessary.” Eljamal a few months ago sent a letter to Yorktown officials rescinding his objection to the Costco project, the developer said.
Asked whether Eljamal gave an explanation for ending his opposition, Breslin said, “Because I charmed him.”
Eljamal could not be reached for comment.
Breslin in late November submitted a draft environmental impact statement for the project to the Yorktown Planning Board, which will schedule a public hearing on the plan. The developer said he expected a final environmental impact statement to be adopted by May or June and hoped to begin the one-year construction this year. Breslin”™s company will do site preparation work and Costco will build the 151,000-square-foot retail warehouse.
Nesheiwat said he plans to sue Eljamal for damages for holding up the Yorktown deal. Nesheiwat, in his successful lawsuit, requested a $4.6-million award from his business partner, to cover his $3-million share of proceeds from the blocked sale and $1.6 million that he paid to Eljamal and their company.
Nesheiwat said he is about to file another lawsuit against Eljamal in state Supreme Court in Dutchess County. He claimed Eljamal tried to interfere in his contract to purchase 11 Bottini Fuel gas stations in the county by bringing in other buyers with a higher offer. Nesheiwat said he closed on the purchase in December.
In his gas station business, Eljamal in January was dealt another legal blow when a state Supreme Court judge ruled that his partners in the Shell stations venture, who seek to oust him as a managing partner, could sell their 3-year-old business without Eljamal”™s consent.