Lien talks between Suffolk and buyer put Wyandanch Rising property sale on hold
Suffolk and Babylon Town plans to redevelop a derelict property as part of the Wyandanch Rising project are on hold while an investor whose purchase of the parcel "blindsided virtually everyone" negotiates payment of liens.
The property, 50 Commonwealth Dr., was set to be "the cornerstone" of the next phase of development, Suffolk County Executive Steve Bellone has said. Bellone initiated the ambitious Wyandanch Rising redevelopment more than a decade ago when he was Babylon Town supervisor.
A day care center had once stood on the one-acre property, but that nonprofit went under nearly a decade ago. Since then, the derelict building has been a community horror, attracting squatters.
"It’s a huge eyesore and it’s not fair to the neighbors," said Suffolk Legis. Jason Richberg (D-West Babylon).
Town officials planned to build apartments and town houses or condos there. The nonprofit Suffolk County Landbank Corp. in July 2020 put out a request for proposals for developers and by October had received nine responses.
But county and town officials’ plans have been on hold since February when the property was sold right out from under them at an auction.
A judgment lien of nearly $75,000 had been placed on the property due to a 2014 lawsuit by a former day care employee, Elisa Andrews. The Suffolk County’s Sheriff’s Office is tasked with carrying out auctions on assets in civil judgments.
Real estate investor Joseph Johns, of Westbury, and his company, 41 Sherbrooke Road LLC, bid $25,500 at the auction, receiving title to the property.
"I kind of knew it was worth more money because I saw what the land bank was doing, I saw the development plans they were considering," Johns said. "So we figured we’re risking $25,000 here, we’ll negotiate something and we’ll get the same deal they were going to give one of the [RFP respondents]."
If John’s wants to keep ownership of the property, he must pay off the $1.2 million in county liens that have accrued.
His company filed for Chapter 11 bankruptcy "to stop them from doing anything with the property" and to enable "delaying and negotiating," Johns said.
The county has filed to have the bankruptcy dismissed, but the proceedings put a stay on any development. A county spokeswoman confirmed the county is negotiating with Johns on the liens.
According to the sheriff’s office, the attorney for Andrews was responsible for providing a list of all lien holders on the property for notification. That law firm, Somer & Heller LLP, of Commack, did not list the county or the state. They did not respond to requests for comment.
"It really threw a major wrench into this," Babylon Town supervisor and land bank board member Rich Schaffer said of the sale, adding that he was "annoyed" that land bank staff didn't notify other county departments about their plans.
"The land bank is a terrific group … but I think this was a major screw-up on our part," he said.
Dorian Dale, a land bank officer and the county's director of sustainability and chief recovery officer, said the sale "blindsided virtually everyone."
"The only party to the process who gauged the flaw was the purchaser who picked up a valuable property for less than two pennies on the dollar," he said.
Johns claims the property is over assessed by the town at $6.5 million. In August he filed an Article 78 against the town after he received appraisals of between $300,000 to $500,000. An appraisal done for the county in July put the property’s value at $1.05 million.
According to a state spokesman, Johns also will have to pay off nearly $1.3 million in mortgage debt from the New York State Housing Finance Authority, which gave the day care center a mortgage in 1972.
Johns said he would like to possibly partner with one of the RFP respondents to develop housing at the site but said Schaffer is unwilling to talk to him.
"We bought this at a county sheriff’s sale that was publicized in the paper," Johns said. "It was no secret. Just because these people don’t know what each other is doing is not our fault."
Schaffer said Johns doesn’t care about Wyandanch. He said the town will instead focus on other parts of the next development phase south of the railroad tracks.
"If he thinks we’re going to allow someone like him to disrupt all the progress we’ve made, no, we’ll just work right around him," Schaffer said.
Anne Stewart, who lives near the property, said she is stunned.
"We’re back to square one," she said. "I was getting so excited . . . but now I’m even angry to a degree. We’re in limbo now as to what’s going to happen to that building and it’s a shame."