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LANIN LAW P.C. REPRESENTS DEVELOPER OF $14 MILLION PROJECT AGAINST BANK
DEVELOPER SUES
The Daily Gazette
By Stephen Williams
Developer sues Berkshire Bank over Malta project
The $1 million clubhouse is one of the few buildings finished at the Park Place development in Malta, now subject of a lawsuit.
MALTA — The former owner of the Park Place at Malta mixed-use development is suing Berkshire Bank and one of its employees, charging the bank’s actions forced the sale of the project in 2013 at less than its value.
Park Place at Malta LLC, owned by Frank Tate of Albany, is seeking $2.5 million in damages in the lawsuit filed last week in state Supreme Court in Albany.
In court papers, Tate said he accepted a $6.5 million offer in April 2013 from Sal Leccese and Robert Morgan — an amount he said was $2.5 million less than what he could have received for the unbuilt 298-unit project only a month earlier.
Park Place was approved for 426 units of high-density housing. It has been a potential key to downtown Malta’s evolution since it was approved in 2004, though little construction has taken place.
The lawsuit contends that Berkshire Bank and employee Thomas S. Matejek were told confidentially of negotiations and an offer from Leccese and Morgan, and used the information in making a decision to sell the balance of the $4.5 million mortgage Berkshire Bank had given the project in 2006.
The bank became actively involved in the company after a mortgage payment default in December 2011, according to the lawsuit.
“Defendants became involved in the management of the overall real estate project, including the on-going sale of single-family units and lots for multi-family units, and the inner dealings of the plaintiff’s business,” the court papers allege.
A Berkshire Bank spokesman did not respond to a request for comment.
The lawsuit recounts efforts by Park Place to sell the project following its town approval.
Park Place, which was originally proposed as Enclave at Malta in 2001, was approved by the Town Board as a planned development district in 2004, with 298 single-family or condominium units.
Only about 15 single-family homes and a $1 million clubhouse have been built in the past decade, even as speculation about and then the arrival of the GlobalFoundries computer chip plant has inflated the downtown Malta real estate market.
The company repeatedly came back to the town for changes, and had the condominium units changed to apartments, saying they couldn’t get bank financing for the condo units.
The lawsuit recounts that in 2012 Albany Partners, which developed the Ellsworth Commons complex on Route 9, offered $4.7 million for the multi-family part of the project. The option expired in February 2013 without being executed.
The lawsuit says they were also told, third-hand, that the Spanos family that owns the NFL’s San Diego Chargers and a national apartment development company had an interest in the property.
In February 2013, the Malta Town Board approved a new “form-based code” for the downtown area that allowed Park Place to apply for nearly double the previous density.
Soon after, Park Place representative Terry Fields informed the bank of the changed zoning, and was subsequently told that the bank had sold the mortgage, and Park Place would no longer being dealing with the bank. The lawsuit alleges that the bank intentionally delayed meetings about the project until after the mortgage had been sold.
Tate said in court papers that he was “fearful that plaintiff Park Place would lose everything” and accepted the $6.5 million offer then on the table from Morgan and Leccese.
Tate and Fields said in court papers that they believed their project was worth at least $14 million at the time they sold it, and they lost at least $2.5 million compared to what they could have received just a month earlier.
In two transactions in 2013 and 2014, Saratoga County records show Park Place at Malta LLC sold the property to Lecmor Multifamily of Pittsford, a suburb of Rochester.
Lecmor Multifamily, following the guidelines in the town’s new form-based code, has now received approval to build up to 511 housing units at the site.
Construction hasn’t started, but there have been signs of activity this spring. The town issued a soil-disturbance permit on April 1, and the land is now being cleared.
“I’d say they will be proceeding with construction just after that’s done,” said town Planning and Building Director Anthony Tozzi.
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LANIN LAW P.C. REPRESENTS DEVELOPER OF $14 MILLION PROJECT AGAINST BANK
/in Law Firm News /by Scott LaninDEVELOPER SUES The Daily Gazette By Stephen Williams Developer sues Berkshire Bank over Malta project MALTA — The former owner of the Park Place at Malta mixed-use development is suing Berkshire Bank and one of its employees, charging the bank’s actions forced the sale of the project […]