Haverstraw village loses eminent domain case, will likely take out multimillion dollar bond to meet obligations

BY MICHAEL RICONDA

HAVERSTRAW – The Village of Haverstraw might be on the hook for over $6.2 million in eminent domain refunds if it cannot compel the developer of the waterfront Haverstraw Harbors condos to provide at least a partial payout to the plot’s previous owner.

The State Supreme Court ruled in 2009 that the village owes AAA Electricians-the former owners of 18.9 acres of what is now the 25-acre location of the Harbor-a revised appraisal of the property, meaning the village is now obligated to pay $6.2 million.

On September 23, the State Court of Appeals opted not to take the case, effectively setting the lower court’s decision in stone. The village is also on the hook for legal costs and interest fees of $621 for each day after September 24, when AAA Electricians notified the Village of their obligation.

Haverstraw invoked eminent domain on the property in 2003 when it was unable to reach an agreement with the original owner and forced AAA Electricians to accept a $2.6 million offer. AAA argued the true value of the property was $16.3 million, but the State Supreme Court bumped that down to $6.5 million.

A discussion has already begun on the contractual obligations of Ginsburg Development Companies, the developer who built luxury condominiums on the site and reportedly agreed to share its obligation in its contract for the property. According to Haverstraw Village Attorney and County Legislator Jay Hood, the village has already contacted outside legal consultants to help collect the payment. Hood referred to the agreement as “ironclad” and assured that Ginsburg Development Co. would be responsible for their share.

“The board will do everything they can to make sure the taxpayers are protected,” Hood said.

Haverstraw Mayor Michael Kohut expressed disapproval of the decision, but stated that the village is exploring the possibility of bonding the $6.5 million in anticipation of negotiations with Ginsburg, and hopes to minimize the decision’s impact on village finances.

“There was a gross injustice done by the lower court, and the public has to pay the price,” Kohut stated. “That being said, the village is obligated to pay the judgment and we are preparing to do so by bonding the debt now and negotiating with the developer for payment.”

Former Deputy Mayor Rick Sanchez, who helped the village handle the case in the early 2000s, said that Ginsburg should be held liable, but added that the terms of the contract might hold Haverstraw responsible if the company cannot pay.

“When you have a public and private sector working together in a partnership there, the Village of Haverstraw is like the co-signer,” Sanchez said. “If GDC or his corporation doesn’t have the money, then the village needs to go out and bond the money in order to pay for the lawsuit that has been won by the owner of the property.”

Sanchez also stated he felt the case was a “land grab” which made him uncomfortable and faulted the Village of Haverstraw for pursuing eminent domain rather than striking a deal at an earlier stage before the case became more expensive.

Former Haverstraw Town Council candidate and property rights activist Lynn Teger has been using the case as an example of what she feels is eminent domain’s over-expansion by a ruling of the U.S. Supreme Court.

“The case, that went on for over a decade finally made it clear that the original property owners were not paid the true value of the property and the property owner is now owed over $6.2 million,” Teger stated. “By what means did the village determine ‘just compensation?’ How could it differ so much from that of the court decision?”