James N. Kenny, who is suing the Village to prevent it from being able to lease St. Paul's to a private entity, attended the last Board of Trustees' meeting on Oct. 7 and used his time during the citizens' comments portion at the close of the meeting to address the lawsuit and depositions being taken currently by his attorney, Michael Ciaffa. Ciaffa had deposed Bernie Plant of CareMatrix that day and Kenny opted to share his perception of the testimony given in the deposition with the trustees and the Village.
Village attorney Peter Mastaglio spoke briefly with Garden City Life Monday afternoon, Oct. 11 and noted that while he could not comment on anything said at the Board meeting, as he has not attended, he could comment on the deposition process. Mastaglio noted that Kenny was not present when depositions were taken. Transcripts were not yet available he stated, commenting, "None of us has them." The only people present during Plant's depositions were Mastaglio, Ciaffa, Plant and the court reporter.
Mayor Hecken told Garden City Life Monday morning that "Comments made by Kenny at the Board of Trustees' meeting have no direct relation to the lawsuit. I think he's off-base trying to bring CareMatrix into the discussion when the suit is to stop anyone from leasing the property. Trustee Bob Lewis pointed out at the meeting also that any agreement with anyone would cover the bonding of the entire project before anyone put a shovel in the ground."
As to Kenny's questioning of the interest and financial viability of CareMatrix the mayor noted, "CareMatrix has indicated to us within the past week that Garden City is still their choice spot and that St. Paul's would be a showplace for them. They have 35 or 40 other facilities around the country and each one is essentially financially separate. Location is a very important factor. I'm sure that CareMatrix has really studied this project and while what Kenny said about them passing on other projects may or may not be true, it may have been because of a location issue. They may have decided it wasn't worth the investment at another site, but they are still interested as far as they have communicated to us in this site."
The mayor indicated that certainly the trustees will examine the issue of CareMatrix's financial status raised by Kenny and will consider all factors before finalizing a lease with anyone.
He also addressed Kenny's point about the cost of fighting the suit to the taxpayer. "Kenny said that $7,000 or so has been spent recently on attorney fees for fighting the Kenny case and he as a taxpayer is offended. Well, we've spent well over $90,000 so far on this case that he's brought against the Village. He's taking long depositions from everyone under the sun whether directly related to the case at hand or not and he's asked for a jury trial, which could really delay things if he should get it. He's said in advance that he plans to appeal if he loses. This has cost us money and delayed us in making concrete plans for the building, meanwhile he has yet to propose a concrete alternative on what we should do with St. Paul's."
The mayor also said, "If not for this lawsuit, they would be in construction now. The heating system is going and several other maintenance issues are going to cost us a lot of money if we have to keep it mothballed as it is now. Also, while Kenny argues that CareMatrix is overextended around the country, New York state was slow to finalize its legislation on assisted living, which kept companies from really building here, so they are definitely not over built in New York."
As to the issues Kenny raised about wish lists allegedly made by Plant at the deposition for more parking and a bigger addition than originally planned at the site, the mayor said that nothing of this nature has been agreed to and would not be able to take place without Village consent. The mayor noted, "The Board still feels this is a very viable project."
Kenny had read a prepared statement initially at the meeting that read as follows:
"The financial problems of CareMatrix continue to cast a pall over the proposed assisted living at St. Paul's project. As the price of CareMatrix stock plummets, the ability of that company to obtain the necessary financing for the project becomes more problematic. Concrete evidence of this inability to obtain financing was reported in an Aug. 25, 1999 newspaper article in the Cleveland Plain Dealer, entitled Financing Forces Builder to Halt Senior Housing. This article reports that a CareMatrix plan to build in Cleveland a $25 million assisted living facility could not go forward, 'due to financial difficulties.'
"As a result, CareMatrix has issued a notice of cancellation of the project to the general contractor. It is very likely that an identical scenario will unfold, should the Village of Garden City prevail in its plan to lease the St. Paul's Historic Building and about 10 acres to this, apparently, troubled company.
"How long will the Village of Garden City Trustees continue to 'push this problem under the rug,' and waste Village assets, defending the interests of CareMatrix in the lawsuit brought to declare the assisted living project at St. Paul's illegal. In the parlance of the times, 'Hello -- is anyone home?'"
Kenny then argued, "The Village is litigating in favor of a party that can't deliver." He stated that during depositions in the case (the trial has not yet begun) Bernie Plant, an officer of CareMatrix stated that the company was hoping to go from 148 units -- 57 independent living units in the old building and 91 assisted living units in the new addition -- to 197 units. He said Plant testified to wanting 144 parking spaces instead of the original 90 and an addition larger than the agreed upon 66,500 square feet.
The trustees and Counsel Fishberg all noted that whether or not CareMatrix wants more space does not mean it would get it and that this has not been discussed with the Village.
Plant had agreed to speak with Garden City Life on Monday, Oct. 11, despite being on holiday for Columbus Day, but was then unreachable for comment before press time.
Kenny stated during the meeting that he would be making the transcripts of the deposition testimony public. "The people have a right to know" he argued.
Fishberg argued, "The lawsuit isn't about CareMatrix. It's about the ability of the Village to lease the property to CareMatrix or someone else. If CareMatrix can't perform then there may be someone else out there that could perform -- but no one is saying that CareMatrix can't perform, but should that happen, the Village could pursue other tenants. This lawsuit is trying to prevent anyone from leasing St. Paul's." Fishberg reiterated Trustee Lewis' point, also commented on by the mayor, that before any deal was signed and sealed the Village would ensure that all bonds were covered and criteria was put in the contract that covered the Village. Fishberg noted, "Safeguards will be put in any contract. While one may have concern about the financial viability of a proposed tenant, that is not the concern that is driving this lawsuit."
Mayor Hecken noted during the meeting that financial statements change, but that statements from CareMatrix up until this point have all been good. He also noted that while they may have pulled out of a deal in Cleveland, although he had not seen the article, they were completing a project in Glen Cove. As the mayor stated Monday following the meeting, the trustees have discussed analyzing CareMatrix's financial status, but the Board is confident based on communication with the company that they are willing and able to invest in St. Paul's.
Mort Yuter pointed out during residents' comments that he was sorry Kenny did not stay through the meeting to perhaps answer some questions about his statements. Yuter noted that while Kenny and his fellow litigants have been asked to provide a list of viable options for the future of St. Paul's (Kenny has suggested a community center like the Herricks Community Center, but the mayor's committee on St. Paul's determined several years ago that this would be financially impossible for the Village without drastic tax increases), but no list has "ever materialized."
Depositions are scheduled to continue this week.