Developer seeks TKO of sports center rival
“This is going to become a big issue,” said Greenburgh Town Supervisor Paul Feiner. He and other town board officials have been accused of creating an uneven playing field for the sports center developers. The contentious issue ultimately could play out in state Supreme Court.
In Ardsley, Elm Street Sports Group L.L.C. plans a soft opening in August of its House of Sports, an 85,000-square-foot sports and recreational facility rising at 1 Elm St. beside the Saw Mill River Parkway. In a $14 million project, the developer, a new player on Westchester”™s commercial real estate turf, is converting and expanding a former office and warehouse building vacated by a supermarket merchandiser.
With the mild winter, “We”™re way ahead of schedule,” House of Sports CEO Donald Scherer said of the construction project. “It”™s going extremely well.”
Scherer and his family partners in House of Sports are determined to ensure that their rival”™s proposed project does not go at all.
Based in Tarrytown, Game On 365 L.L.C. plans to build the Westchester Field House, a 94,000-square-foot air dome and attached 15,000-square-foot clubhouse on the vacated site of the former Frank”™s Nursery on Dobbs Ferry Road. The developer also plans to build an outdoor soccer field there. Principals in Game On 365 include members of Soccer Coliseum, a management company that operates sports facilities in New Jersey”™s Bergen County.
The town of Greenburgh in a foreclosure proceeding acquired the property, on which $1.3 million in back taxes are owed, and town officials are negotiating terms of a 15-year lease with the developer. Feiner said a lease could be finalized in about one month. The site is a cross-country runner”™s distance of 2.7 miles from the House of Sports in Ardsley.
Since last November, House of Sports partners have mounted a public relations campaign to raise opposition in the community and a multifaceted legal push against town officials to stop the Game On project.
Game On”™s lease proposal was favored by the town board over two purchase offers on the approximately 7-acre property of $950,000 and $1.5 million. Game On”™s annual lease payments as first proposed would start at $260,000 and increase to $402,000 over 15 years.
Stephen L. Kass, an attorney at a Wall Street firm for House of Sports, in a lengthy letter to town officials argued the sports center lease would result in a net loss of about $737,000 to the town. Citing ground pollution and 345-kilovolt power lines that cross the former nursery, Kass said the Game On project would be a “fiscal drain,” require a lengthy and costly environmental impact statement and expose children to potentially harmful electromagnetic fields and environmental contamination, leaving the town exposed to a blitz of lawsuits.
“It became clear that this was not an arm”™s length transaction between the town and another company,” Scherer said. “This was a backroom deal.” Town officials, he said, failed to take “a hard look” at the developer”™s proposal.
“On the whole, we”™re not anti-competition,” Scherer said. “We”™re anti-competition when another organization has an unfair economic advantage. That”™s what we object to, that it”™s being done in a backroom fashion.”
Vito Galasso, managing partner of Game On 365, said the community”™s response to the field house proposal “is overwhelmingly supportive. There”™s obviously a need.”
Galasso said both sports centers can survive in the county”™s fast-growing sports and fitness market. “They”™re very different facilities. If we didn”™t think there was enough room for both of us, that would definitely be a problem for our business model. We think there can be two. I think it”™s actually a great thing for residents to have two.”
Feiner said he supports both projects. The issues raised by the House of Sports attorney are being reviewed and could affect terms of the lease negotiated with Game On, he said. “We”™re doing our due diligence. This could help make it a better contract.”
In more than two decades as supervisor, “I”™ve never seen a full-blown effort to stop competition before,” Feiner said. “They said up front, they”™re going to do whatever it takes to stop it”¦From our standpoint, House of Sports is doing what they can to get people riled up.”