Amityville condos still on drawing board

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The developer of the troubled Wellington Park Villas condominiums in Amityville has headed off a foreclosure auction of the property and plans to finish building, people familiar with the matter said.

"We struck a deal with regard to payment of the loan in a reduced amount," said Samuel M. Mizrahi, a Manhattan lawyer who represented the lender, Wells Fargo, in negotiations. "I think they are going to continue the project as originally planned."

Michael DeLuise, president of the Melrose Chamber of Commerce and a spokesman for Gary Passavia, the developer, confirmed the settlement, whose terms he said were confidential. "The project will be finished by the end of 2013," he said. "We're very confident that as soon as it's finished, it will be a big asset to Amityville."

Passavia, whose family owns the Woodbury Country Club, faced an $11 million judgment, and notices of a scheduled auction at Babylon Town Hall of the Wellington Park property have run in local newspapers in recent weeks.

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Amityville Deputy Mayor Peter Casserly said this week that Wellington Park owes the village $443,000 in fees. Officials say those unpaid fees are responsible for a large portion of the budget deficit the village has faced in recent years. The deficit contributed to a recent downgrade of the village's creditworthiness by ratings agency Standard & Poor's.

Village attorney Bruce Kennedy said Passavia claimed in a recent meeting with village officials to have paid some of the debt, but Village clerk Diane Sheridan did not respond to a request for documentation of payments from Passavia.

Kennedy said the village is still demanding payment, before the project proceeds. "They still need certificates of occupancy for those units, and the village is not going to issue any until the fees that are due the village have been paid," he said.

The planned 61-unit condominium project on Wellington Place in Amityville was hailed as a harbinger of a new wave of walkable Long Island development close to downtown and the Long Island Rail Road. As late as 2010, Passavia told reporters that 20 percent of the project was sold.

But Amityville officials say not a single unit was closed upon. Passavia complained of financing trouble in one meeting, Kennedy said. Building department fees, delinquent taxes and complaints from angry would-be buyers piled up until the bank began foreclosure last August.

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