Butterfield Developer Drops $2.5 Million Federal Suit

Attorney: Guillaro still pursuing state claim

By Chip Rowe

The developer of the Butterfield Hospital site has withdrawn a $2.5 million federal lawsuit he filed against the Village of Cold Spring alleging that Mayor Dave Merandy had illegally attempted to thwart the project.

Salvatore Ferlazzo, the Albany-based attorney who represents developer Paul Guillaro, said his client had instead decided to pursue his claim in state court, where in December he filed notice that he planned to sue the village for the same amount of damages.

Before suing a municipality in state court, notice must be filed with the New York State Court of Claims. The municipality is then allowed to question the plaintiff and sometimes will settle the case before a lawsuit is filed.

Guillaro has given a sworn statement to village attorneys, but Ferlazzo said the developer is now waiting for the village to respond to multiple Freedom of Information Law (FOIL) requests for documents before deciding whether to sue.

“We are evaluating our options,” he said.

Developer Paul Guillaro and Cold Spring Mayor Dave Merandy (file photos)

At a Village Board meeting on Oct. 10, Merandy said the dropping of the federal suit was “good news” but noted there has been “a lot of concern” in the community about pending lawsuits. Asked why he thought the suit had been dropped, he said that the documents requested by Guillaro from the village had produced “no evidence” of wrongdoing because there was “nothing to find.”

Butterfield Realty filed the federal lawsuit a week before the March election, which saw Merandy win re-election by 23 votes after absentee ballots were counted. In language similar to that of the state notice, it alleged that he and the village violated Guillaro’s rights with a “a malicious and intentional campaign of harassment, usurpation of authority and other unlawful actions” during its review of the project.

Guillaro dropped the federal lawsuit on Sept. 18, with each party handling its own legal costs. That day had been the deadline set by Judge Nelson Román of the U.S. Court for the Southern District of New York for Butterfield Realty to file a response to the village’s earlier motion to dismiss.

During a Village Board meeting on March 16, the day after the federal suit was filed, Merandy said he and the village attorneys were confident that Cold Spring would prevail.

“I know where I was on this,” he said. “I know where the people in this office were, and the people that are implicated in this, and there is absolutely no truth in it. I’m sorry that it has to come to that … that Mr. Guillaro feels that this is true. We’ll see where it goes. It’s unfortunate.”

The state notice of claim, filed on Dec. 5, charged that the village, Merandy, ex-Trustee Stephanie Hawkins, and other unnamed officials intentionally delayed the project, for reasons not stated. Hawkins served on the Village Board from April 2013 through March 2015.

“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,” the state complaint read.

It also claimed 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.”

Merandy said at the March 16 Village Board meeting that Guillaro’s sworn statement was “probably five pages long and is very favorable to us.” In response to a FOIL request from The Current at the time, the village clerk said the mayor was referring to a letter to Merandy from a village lawyer, John Furst, and that the letter was shielded by attorney-client privilege. Furst repeated that assertion on Oct. 11.

The development of the 5.7-acre property on Route 9D in Cold Spring, now well underway, has a long, contentious history. In 2007, Cold Spring Village Board members complained they had not been informed of a deal by Hudson Valley Hospital to sell the Butterfield property to Guillaro for $2 million.

The Planning Board approved Guillaro’s site plan in June 2015, however, the federal lawsuit claimed the village violated the developer’s rights by demanding a fresh review of the plan after he swapped the expected occupants of two buildings, the long-awaited county senior center and medical offices.

The senior center had been slated to occupy space in the new construction while the medical offices remained in the Lahey Pavilion. The medical offices have opened in the new building, and the senior center remains under construction at Lahey.

Guillaro described the switch as “a minor modification” because it did not alter the buildings’ footprints, height, parking needs or appearances.

Seamus Weir, an attorney representing the village, on May 19 asked Judge Román to toss the federal suit, arguing that Guillaro altered the site plan after the Planning Board had signed off on it and thus Butterfield Realty “no longer had an ‘approved’ site plan” and had been “required to have its revised site plan re-approved…. While the plaintiff may have been unhappy about the additional time and expenses required, such is the nature of any large-scale redevelopment project.”

Liz Schevtchuk Armstrong and Michael Turton contributed reporting.


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