Butterfield Developer Wants $2.5 Million from Village

Asserts Cold Spring mayor, former trustee and others intentionally delayed project

By Michael Turton

Developer Paul Guillaro has filed notice with the New York State Court of Claims that he intends to sue the Village of Cold Spring for $2.5 million in damages, claiming Mayor Dave Merandy, former Trustee Stephanie Hawkins and other unnamed village officials intentionally delayed his Butterfield redevelopment project.

“The village’s continual demand to involve engineers, attorneys and other professionals in what had previously been handled in the village administratively by the building inspector and other village officials has delayed progress by over a year and caused an explosion of inappropriate expenses,” reads the complaint, which was filed Dec. 5.

The claim also asserts that Merandy “unlawfully assumed jurisdiction and interfered with the details of all aspects of the project … for the purpose of stopping, destroying, interfering with and/or harming the project without justification and for personal reasons.”

Paul Guillaro and attorney Steven Barshov are shown at a Cold Spring  Planning Board meeting in June when a compromise was reached about relocating the senior center to the Lahey Pavilion. (File photo by M. Turton)

Paul Guillaro and attorney Steven Barshov are shown at a Cold Spring  Planning Board meeting in June when a compromise was reached about relocating the senior center to the Lahey Pavilion. (File photo by M. Turton)

Merandy declined to comment, saying only that the notice is under review by the village attorney. Hawkins, who is his wife, said she had not yet read the notice and also declined to comment.

New York State requires that notice be made before suing a local government. Guillaro is redeveloping the former Butterfield Hospital site on Route 9D into a multiuse parcel that includes homes, apartments, retail buildings, a post office and a county senior center.

This is the latest twist in what has been a long list of conflicts during the planning process. The path to the notice began in February when Guillaro proposed moving the senior center from its site-plan approved location on the second floor of the proposed Building No. 2 to the existing Lahey Pavilion. The medical offices in Lahey would then move to Building No. 2.

Before that change, Lahey had not been included in the redevelopment plans. Guillaro and his legal team argued that the switch was minor and did not warrant review by the Cold Spring Planning Board. The Planning Board, headed by Matt Francisco, disagreed, citing changes in traffic flow and parking requirements. The new plan also placed the long-awaited U.S. Post Office inside Lahey.

The disagreement, which was often heated, was seemingly resolved on June 28 when the Planning Board agreed to a 20 percent reduction in the number of parking spaces required and the developer agreed to add four spaces not included in the original site plan. Signage and other improvements related to traffic flow were also hammered out.

Mayor Dave Merandy and former Trustee Stephanie Hawkins (file photos)

Two weeks earlier, Guillaro and his attorney had threatened legal action if a compromise could not be reached. Ironically, when the June 28 deal was approved, Francisco said, “What we’re trying to do here is apply the [village] code and not get sued.”

The notice also claimed the permit for Building No. 3 was unnecessarily delayed by the Village for more than a year, and that the Village has been improperly charging Butterfield Realty since April 2015 for its site reviews when those fees should be considered part of the application fees.

It also alleged that the Village withheld documents, despite Freedom of Information Law requests, that will “demonstrate the full extent of the illegality of the actions taken by the Village” and that it violated the Open Meetings Law by taking actions during executive sessions.

The notice was submitted for Butterfield Realty by Salvatore Ferlazzo of the Albany-based firm Girvin and Ferlazzo, who said he could not comment on its contents. He noted that under state law a municipality has the right to a deposition to explore the claim and to have an opportunity to resolve the issue. Based on that, he said, it would be premature to comment on a possible lawsuit.

11 thoughts on “Butterfield Developer Wants $2.5 Million from Village

  1. Like a late-stage, festering sore, the insolence, arrogance and total effrontery to fair play of the actions of Mayor Merandy and his band of not-so-merry followers has risen to the surface with an accompanying tune of a $2.5 million lawsuit. Bravo, I say, to Paul Guillaro, the developer of the Butterfield Follies Project, for bringing this lawsuit. It has been a long time coming.

    As witness to the truths behind this lawsuit almost from the beginning, Mr. Guillaro has my total support in this matter. Obviously, the stakes are much higher now, and the arena more unforgiving in histrionics and grandstanding, taking away one of the defendant’s and follower’s favorite tactics. I imagine this trial will move quite swiftly, not nearly the “drag out, and drag out some more motions” the Butterfield detractors have used up until now. The court the defendants will soon find themselves in, will tolerate none of what is usually on display, and thank God for that! The defendants will collectively need to turn and do a complete 360, so they now look straight ahead at the orchestra. It is time for them all to face the music.

    • Excellent letter, and I echo your sentiments entirely. I am only surprised that Guillaro’s patience lasted this long. As you point out, this lawsuit could have been avoided were it not for the intransigence and intolerance of the mayor and his rubber-stamp board. The attitude and actions of Merandy & Co. are reflective of their attitude toward local business, economic development and tourism — namely, that it must be discouraged or stopped at any cost.

      Any other town in this county would have welcomed a developer like Paul Guillaro with open arms. He came to Cold Spring with millions of dollars to invest in a run-down property that was contributing little, if anything, to the tax rolls. Not only that, but once the development is fully functional, it will be generating money for the town and saving the taxpayers hundreds of thousands every year. What could be wrong with that?

      As far as the senior center fiasco, which Merandy & Co. no doubt will cite as one of their defenses, Guillaro is not to blame for the atrocious deal that was made by our elected representatives, the crooks in the Putnam County legislature. That is a separate issue and has nothing to do with the case at bar.

      The mayor does not hesitate to use the power of his office to go after people he doesn’t like or who challenge him in any way, even if it includes having the cops write tickets for non-existent violations. I’m sure there are others out there like me who simply don’t have the financial resources to sue the Village but who have meritorious claims that would probably prevail in a court of law. Public officials like Merandy know this and count on the fact that the average person doesn’t have the time or money to sue the Village. However, when he attacked Guillaro, he was playing with the big boys, a different game entirely.

      As far as I’m concerned, Guillaro’s lawsuit is one of my best Christmas presents ever. I hope that when election time comes, the voters of Cold Spring remember all the problems that Merandy & Co. created for them.

  2. A blind person could have seen this coming. The actions of Merandy, Hawkins and Francisco have put the village at risk. The interesting part to me is that if the court finds that they violated the Village Code and rules or state statutes, the Error and Omissions policy of the insurance is not obligated to cover it and Guillaro can recover the damages from them personally. There are a number of people who should be looking over their shoulders.

    I was a member of the Village Board for 10 years and a previous board got into this jam and the personal liability issue was put forth by the insurance company. Can’t wait to watch this unfold.

  3. Sour grapes from a developer who is unaccustomed to public officials acting in the best interests of a community instead of for the politically connected like him. This is democracy in action here in Cold Spring and he doesn’t like it. Now the Butterfield developer has declared war on the residents and taxpayers of Cold Spring, and is trying to extort a corporate welfare payment of $2.5 million from us for profit he thinks he’s somehow entitled to.

    • Although many refer to it as the People’s Republic of Cold Spring, the Village has not yet seceded from the county or the USA. Mr. Guillaro is protected by the same laws that are guaranteed to all of us under our Constitution, including unjust taking of his property by the government.

      As far as public officials acting in the best interests of the community, I have yet to notice such a thing since I’ve had my shop here. In fact, it has been my own experience that quite the opposite is true, especially under the current regime which never misses a chance to obstruct local businesses every chance they get.

      Guillaro invested his own money in this project that will benefit the residents and taxpayers of Cold Spring and the rest of the county for generations. When he purchased the property, he took a chance that he would be able to do something with it to make it profitable. Is there something wrong with that?

      His decision to sue the village was a long time coming and to characterize someone protecting his legal property rights as “corporate welfare” is so far off the mark as to be ludicrous.

  4. Prediction: this lawsuit will not cost the taxpayers a dime. It will wind through the courts for a while, eventually leading to a dismissal or flat-out verdict in the village’s favor, and the developer will be required to pick up the costs.

    As much as some stakeholders in this village would prefer that we treat big-moneyed interests like conquering heroes, I am of the more realistic mind that the governing boards were performing exactly to their intent: to ensure the maximum benefit for the maximum number of people. God forbid that the boards didn’t just take the developer’s word for it that this project would be beneficial but actually made him prove it. For shame! He has money! His interests must certainly be benevolent and we must be nothing but grateful that he wanted to build a project that will forever alter the landscape and texture of the village.

    A village of this size, with such limited resources and opportunities, should not just embrace every project and idea that comes down the pike, as much as some are so foolhardy to quickly do. The process this project went through, while long, was absolutely appropriate to the scope of the endeavor. To think something of this magnitude should just be rubber-stamped (which it absolutely was for a good long time under a previous Planning Board chair) willfully ignores the context of what it is to be part of this village.

    I should know. I had (still have) a long-term project on my home that was, to put it mildly, subject to an arduous back and forth with the Historic District Review Board. And you know what? As long as it was, and as expensive as it became, it was the right thing to do. The final design is better, the input and cooperation with the board was invaluable, and the all in all, that’s what being a good neighbor is.

    The developer should man up and move his project along, and stop rehashing a process that he might not agreed with but was absolutely necessary.

  5. What is the claim / cause of action here? Presumably it has to be an intentional tort of some sort. But what? Intentional infliction of emotional distress? Interference with prospective advantage? Hard to see what it could be.

  6. We too have come before different boards. One or two questions seemed seemed capricious, but the majority were very helpful. We expected no more or less from our mostly volunteer boards. At the end of these deliberations, we had a better house. This is local government in an historic district. All around me I am seeing renovations that reflect their historic character, like the house on the corner of Chestnut and Main streets.

  7. Nobody is arguing that there should not be zoning, planning and other land-use boards that interpret the laws to determine how private property may be used in a municipality. That being said, there is also the reality of caveat emptor, let the buyer beware. If you buy a house in a commercial / business / industrial area you should be aware that there is going to be a certain amount of development. If you want to live in the middle of nowhere, that is another story.

    Likewise, when Paul Guillaro purchased the Butterfield property, he knew what the zoning laws were and was familiar with Cold Spring because he had already built the condos down by the riverfront. He had every reason to believe that the project he planned to do would comply with the local codes and he was obviously willing to back up that understanding with quite a bit of money. From all accounts he went above and beyond what the various officials told him they desired. It was never a secret what he wanted to do and what Butterfield was supposed to become.

    This lawsuit is a last resort. Nobody with any sense wants to roll the dice and get into serious litigation like this, least of all a developer whose money meter is ticking as the costs keep escalating due to forced delays. Merandy and Co. had this lawsuit coming and they should be personally liable if Guillaro wins. It’s not fair to make the taxpayers pay for what is really a personal vendetta.

  8. Once again I feel these comments re: the developer’s lawsuit are partisan. It is time to end the split, the insinuations, the endless criticism. There is enough of this acrimony and deep fissures in the rest of the country. Let’s try active listening without judgment and with a bit of compassion. We really don’t have to be right or left, but we need to stay human.

  9. It’s Sunday morning and I woke up to two extraordinary events, one of beauty, and one of hilarity.

    Anyone who lives here, and all those who come to visit, know the beauty that surrounds us all in mountains, streams, architecture and more. It all is enhanced when a fresh layer of snow covers us and one can walk out to the silent beauty of Mother Nature at her finest.

    And anyone who has a decent sense of humor can appreciate walking out on the same morning and finding unsolicited political begging hanging on all the door knobs at Chestnut Ridge Senior Housing. For me, it is enough to muffle my huge guffaws and internalize them so as not to disturb a perfect morning’s quiet snowfall. But here they are: Dave Merandy and Marie Early have the audacity to come calling, excuse me — come begging — for our votes, now that the mayor et. al. are facing a $2.5 million lawsuit over his lead role in ruining the planned state of the art Senior Center at Butterfield Follies, one that was destined to bring in more seniors than ever and advance the cause of said citizens by miles.

    If you haven’t got the punchline yet, you will. The joke starts, “Did you hear about the mayor who led the charge to shut down a most needed and wanted construction project, with a huge part designated for Senior Citizens….now going door to door to Senior Citizen housing asking for their votes?” Actually, the real punchline will come later when the town of Cold Spring is on the hook in a lawsuit brought by developer Paul Guillaro because of the actions of soon-to-be former mayor of Cold Spring. It’s a real side-splitter.