Developer seeks $2M for scrapped Echo Bay project

The would-be developer of an aborted project on New Rochelle”™s Echo Bay is asking the city to reimburse the company $2 million for its out of pocket expenses.

Mark P. Weingarten, an attorney for Forest City Residential Group Inc., sent the city a letter dated Feb. 5 demanding payment and saying the company had spent $3.1 million in municipal expenses. Weingarten said in the letter that Forest City was entitled to reimbursement up to $2 million for “municipal expenses” such as legal fees and costs associated with the design of the project and review of the proposal under state environmental laws.

A lawsuit may follow whether or not the city decides to pay based on the language of the letter and an email from Abe Naparstek, a Forest City spokesman who was asked to elaborate on what the company was seeking.

“I can”™t comment on pending litigation,” he said.

The developer, an affiliate of Cleveland-based Forest City Enterprises, was looking to build 285 luxury apartments, 25,000 square feet of retail space and a waterfront park on a 9-acre parcel that includes an unused armory building and a city public works yard. A City Council vote in November 2013 effectively scrapped the project and severed ties with the developer after increasing community resistance that boiled over at several community meetings last year.

Despite the council”™s decision, New Rochelle and Forest City had already signed a memorandum of understanding, or MOU, in May 2008, then signed a “re-stated” memo in April 2012. It is the provisions of that re-stated memorandum that are the focus of the letter to the city from Forest City”™s attorney.

The City Council also voted May 2012 to accept a scoping document for the project and accepted a final environmental impact statement July 2013. The council was set to vote on several items related to the project, the centerpiece which was a land disposition agreement. The agreement was a necessary first step that would have transferred the city-owned land over to the developer.

But the council changed course and voted against the agreement by a vote of 6-1, after several months of council debates and fierce community opposition, which included a civic group formed with the singular focus of stopping the project. Provisions of the re-stated memo said the city would act in “good faith to diligently and reasonably perform its obligations under the MOU” and also follow through on the land disposition within 60 days of necessary City Council approvals associated with the project.

Despite it being the same project described in the MOU and other documents, Weingarten said, and despite the fair dealings provision, the City Council voted down the land disposition deal “peremptorily, willfully, arbitrarily, and without any rational basis whatsoever.”

Kathy Gilwit, a spokeswoman for New Rochelle, said there was no comment from the city on the letter or what action it would take. City Mayor Noam Bramson, a Democrat, was a supporter of the project and cast the sole vote on the council last year against the rejection of the land disposition agreement. Reached by phone, Bramson also said he could not comment as a matter of protocol based on the potential legal ramifications.

The mayor also said he was not sure if the council would discuss the matter at its meeting scheduled for tonight, but that if it did it”™s legally sensitive nature would mean it would be discussed in a closed-door executive session.

The letter and the looming potential of a lawsuit is the latest chapter in a tumultuous, decade-long process. The city had viewed the Echo Bay area as ripe for potential development and sought proposals officially in 2006. Forest City was the chosen developer, initially conceiving a larger, 26-acre mixed-use project that would have included 710 residences, 150,000 square feet of retail and two 150-room hotels. The original proposal called for knocking down the former armory building and replacing it with a community center, an idea that drew protests from veterans and other city residents who wanted the building preserved.

A pared-down proposal followed in 2010 after the market was changed by the economic recession. That project focused more centrally on the public works yard and spared the armory. But the reduced scope of the project was cause for concern for many critics who felt the city wasn”™t getting enough of a return while giving away too much in terms the land and expected tax breaks.

Today, the fate of the armory building remains unclear and the City Council has yet to decide to proceed with relocating the city yard now that the Echo Bay project has been scrapped.