Civic group leader wants to sell former St. James theater to nonprofit

A St. James arts organization’s plan to buy a former theater owned by its previous president must follow strict procedures to abide by New York State’s conflict of interest rules for not-for-profit corporations, legal experts said.

Natalie Weinstein, founder and former president of the group Celebrate St. James, said she would sell the historic former Calderone Theater building to the organization for use as performance and studio space.

"The building becoming a cultural arts center will change the trajectory of this town," she said in an interview last week. "It so happened I was president [of Celebrate] and I owned the building — I didn’t plan it that way."

Weinstein said she’d had interest from other prospective buyers but did not pursue deals because they did not agree to preserve the theater. She resigned from Celebrate’s board July 1, a move she said was to avoid any appearance of impropriety. She said she would sell the building at or below its appraised value. Weinstein had an April appraisal done of the property at 176 Second St. that valued it at $956,000. Patricia Clark, the current Celebrate president, said the board will commission its own appraisal.

A real estate transaction between a corporation and a related party like a corporate officer is a "classic event that raises a question of a conflict of interest" but is not necessarily improper, said Hofstra University law professor Norman Silber. Silber, who was among the experts consulted for a 2013 rewrite of the state’s not-for-profit corporation statute, said that "depends on whether [Weinstein] has dotted all her I’s and crossed all the T’s."

The board of a not-for-profit must determine that the deal is "fair, reasonable and in the corporation’s best interest," according to the statute. The statute bans the related party — Weinstein, in this case — from participating in board deliberations or voting on the purchase.

It also requires the board to consider alternative transactions and document its decision-making.

According to Celebrate’s April 6 meeting minutes, "Natalie Weinstein proposed, and the Executive Board unanimously approved (with the exception of Natalie who left the room during the discussion and vote to avoid a conflict of interest), to try to raise funds and pursue grants to allow Celebrate St. James to purchase and renovate the building."

Weinstein and Clark said in separate interviews that Weinstein and Celebrate’s board are hiring lawyers to negotiate the sale. The building, believed to have been a showplace for vaudeville and movies in the early 20th century, is unique, they said.

Touro Law Center professor Meredith Miller said "it seems they’re acting in a way to make sure they’re addressing a conflict of interest." She said it was important for the board to survey its options, but "it could be this was the best option, or the only option."

Clark said Celebrate’s lawyer, Hewlett-based Michael Markowitz, told the organization he believed it was complying with the law.

Celebrate’s five-person board includes Jack Ader, who was a partner in Weinstein’s furniture and decor shop, Uniquely Natalie, which formerly occupied the building’s first floor. He has no ownership interest in the building. The shop closed June 30, a casualty, Weinstein said, of a pandemic business downturn.

Property taxes for the building in 2020 were $20,808, according to records. Newsday reported in February that Weinstein was seeking a buyer for the building. She said at the time that she was looking for an "angel" to develop it for the community.

Clark said Celebrate applied for a $400,000 grant from Empire State Development — the state’s primary business-aid agency — and would, if successful, apply the proceeds to the building’s purchase. The organization will also raise funds through events like a planned fall gala.

Celebrate had net assets of $86,192 in 2019, the last year for which a tax form appeared on a database maintained by the news organization Pro Publica.

Celebrate leaders have told the town they will donate $200,000 to build a park in downtown St. James.

By Nicholas Spangler

nicholas.spangler@newsday.comspanglernewsday

Nicholas Spangler is a general assignment reporter and has worked at Newsday since 2010.