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Mid Hudson TimesTrouble at the Foundry

Trouble at the Foundry

The City of Newburgh Industrial Development Agency has asked the Orange County Supreme Court for permission to intervene in a thorny legal dispute between the board and developer of the Foundry at Washington Park Condominium.

At issue are 59 condominiums, which remain un-built due to a financial dispute and now a lawsuit filed by the Foundry Development Group, which claims the board has deliberately undermined its ability to obtain financing needed to complete the condos.

“The parties have failed over and over to work cooperatively in order for FDG to do the development it needs to build the 59 condo units,” said IDA attorney Thomas Whyatt.

“We’re asking the judge to make the findings necessary to get them to cooperate and settle the dispute and get the building fixed up to meet code and make the improvements required by the lender.”

The IDA’s goal? “We’re trying to get the parties to the table, to spend the money and get the building back in order,” said Whyatt. And, according to an IDA press release, because the condos “will provide an important economic benefit to the city and its Liberty Street Corridor.”

The building was deeded to the IDA in 90s. A reverter clause contained in the deed means the property can revert back to IDA ownership if development comes to a halt. “We have a legal interest in the property,” said Whyatt.

All was quiet on Johnes Street in front of the condominium on Friday afternoon. There was no sign of the legal battle taking place over the building, a former iron foundry and ice machine-manufacturing plant dating back to the late 1800s now occupied by renters and condo owners.

In addition to undermining its ability to obtain financing, said Whyatt, FDG claims the board has failed to properly maintain common areas and overcharged for “common charges,” monthly maintenance fees paid to the board by condo owners.

“My client has been frustrated by the condo board’s failure to properly maintain the building,” FDG attorney Michael Sussman stated in an email this week. “This failure caused our funding source to withhold funding. That has created a vicious cycle.”

The board has counterclaimed that FDG has defaulted on a construction schedule and owes the board more than $1.3 million dollars in common charges, Whyatt said.

The IDA asked the court to require FDG to pay the board approximately $110,000 in common charges, “which the FDG has refused to pay because of the ongoing disputes between the parties,” IDA Chair Joshua Smith stated in the press release.
Foundry condo owners declined to comment on the situation this week. The Foundry board did not respond to requests for comment.

In the meantime, the building appears to be suffering. A violation notice from the City of Newburgh Fire Department last year outlined several building code violations at the Foundry, some relating to weeds, roof drainage, garbage, an uninspected fire sprinkler system, electrical issues, unsafe staircases and a structurally-deficient parking deck.

The IDA criticized both parties, stating, “FDG and the board of managers share responsibility for maintenance of the condominium building, but have failed to maintain the condominium building properly and have failed to remedy code violations…”

Sussman maintains FDG wants to come to an agreement with the board. “The IDA has tried to play the role of honest broker and its legal papers criticize both sides,” he stated. “We continue to hope for a positive consensual resolution that serves all, including the city.”

All documents relating to the IDA’s request will be filed with the county Supreme Court by April, said Whyatt. It is possible the court may then order the parties to appear for a hearing or a status conference, he said.

By SHANTAL RILEY
sriley@tcnewspapers.com

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