After last week's story regarding the discussions of the St. Paul issue and James M. Kenny, Helen M. Kenny, Lawrence Rafferty, and Barbara Rafferty against the Board of Trustees of the Incorporated Village of Garden City and the Incorporated Village of Garden City, covered on page one of last week's issue, Garden City Life spoke with lead plaintiff James Kenny and Bernie Plant of CareMatrix in two separate phone interviews.

Plant was quoted as stating in his depositions in the Kenny case that he wanted to see the proposed scope of the new construction at St. Paul's increase dramatically by Kenny at the last Board of Trustees' Meeting. The financial viability of the company was also questioned by Kenny. Plant told Garden City Life, "The lawsuit is a matter between Kenny and his fellow plaintiffs and the Village. I was disturbed to hear that Mr. Kenny was reciting facts from depositions taken only that day. In short, Mr. Kenny attempted to use some background noise to advance his purpose."

Plant continued, "In the end I am convinced that the Village of Garden City will win the case based on its merits. Withstanding Mr. Kenny's attempts to foul CareMatrix's relationship with the Village, we'll remain on the sidelines and continue to express to the Village that we are very much committed to the Garden City project. We have been committed to this project for years and continue to do what we must to advance it."

In response to questions about CareMatrix's financial status Plant commented, "The senior housing business has received its fair share of blows over the last several months. There isn't a single national senior housing provider that is not feeling the effects of devalued stock and diminished credit availability. We've all found that it's been slower than anticipated to fill up projects with tenants, but this is a process that this business must endure." He concluded on the subject, "The strong players will come out of this."

When asked if the company would be able to fund the Garden City project and sustain it Plant indicated that this has been planned for years and has been accounted for in the company's allocation of funds and development.

As to the issue of whether or not CareMatrix plans to seek more parking spaces and a larger addition to the facility than originally listed in the Village Facts and the subsequent lease negotiations, Plant noted, "We will need to have some discussions with the Village. All of our talks were stalled because of the lawsuit. The last time we sat down to discuss the particulars was late summer of last year. Space, parking, etc. are issues that must be revisited once the lawsuit is settled and we are allowed to proceed."

James Kenny sent Garden City Life a downloaded report from a Standard & Poor's release on the Reuter's site on Yahoo! Finance. The site states, "Standard & Poor's today [Oct. 14] placed its single-'B'-plus corporate credit and single-'B'-minus subordinated debt ratings of CareMatrix Corp. on CreditWatch with negative implications." The release continues, "The CreditWatch placement follows the company's announcement of weaker-than-expected earnings and heightened concern that the company's exploration of strategic alternatives may ultimately include the sale of the company in a leveraged transaction."

It was also noted, "The company had relied on fee income from the development and construction of facilities from owners for a major source of its revenues. In addition to the cutback in the development pipeline the slowdown in the fill-up rate for new facilities is of concern."

Kenny responded to the trustees and Village counsel's comments that CareMatrix was not the focus of the lawsuit and that it was inappropriate for Kenny to bring it up by saying, "It's ludicrous." He pointed to the suit filed which states in the heading before paragraph 19, "The Illegal Plan to Lease the Main School Building to CareMatrix" and paragraph 25-31 which specifically name the company. The document states:

"Most recently, at a Board of Trustees meeting held on Oct. 16, 1997, the Board authorized the commencement of negotiations with one of the proposers, CareMatrix Corporation.

"On information and belief, the Village and CareMatrix contemplate and are about to enter into a 50-year lease of the Main School Building at St. Paul's and 10 surrounding acres.

"On information and belief, the contemplated lease would preclude any and all potential public uses of the Main School Building and the surrounding acreage during the next 50 years.

"On information and belief, the contemplated lease would authorize CareMatrix to convert the interior of the Main School Building into 57 'independent living units' (apartments) that would be rented for a monthly fee of more than $3,000.

"On information and belief, the contemplated lease would authorize the construction of a 'new addition' to the Main School Building consisting of 66,500 square feet of space, which will include 91 'Assisted Living Units.' These units would be rented for a monthly fee of more than $4,000.

"On information and belief, the contemplated lease would allow CareMatrix to destroy and demolish the center wing of the Main School Building and to remove from the Building a beautiful and distinctive chapel.

"On information and belief, the contemplated lease would allow CareMatrix to demolish a passageway between the Main School Building and Cluett Hall, and demolish a children's playground near the Rockaway Avenue entrance to the former St. Paul's School Property. It would also effectively eliminate numerous parking spaces that are presently used by Village residents in connection with soccer, lacrosse, and other recreational usage of the fields surrounding the Main School Building, and deprive Village residents of access to several acres of the publicly owned property."

While the suit asks that no private entity be allowed to lease the property without the "express approval of the New York State Legislature," Kenny says the suit specifically says, "from leasing any part of the former St. Paul's School Property to CareMatrix Corporation," thus CareMatrix is relevant. Kenny added, "Without the CareMatrix lease there wouldn't be a lawsuit."

As to CareMatrix's ability to finance the project Kenny argued that it's wrong to look at this as irrelevant. "The Village has agreed to get our lawsuit dismissed without CareMatrix having to do anything. The Village is using taxpayer dollars to undertake fighting the suit on CareMatrix's behalf. CareMatrix has nothing to lose because they don't have to spend a dime fighting the suit or lift a finger. I wish CareMatrix well. I have no ill will toward them, but the Village is spending this money to protect their Memorandum of Agreement with a company that has been pulling out of other projects because of lack of funds."

He added, "Their stock is at less than three now and I don't know if CareMatrix can get the financing for the Garden City project. They not only backed out of a Cleveland project, but one here in Bayport. This is an issue I'm raising as a private citizen. I can't predict the financial future, but this is definitely something people should be asking. There's a pattern of them not getting financing for projects."

"My issue is with the future of a historic structure and the adjacent dedicated park land. This is an environmental issue. Any time you lose a blade of grass in Garden City it's a tragic loss for the residents and the community. One couldn't build a parking lot in Central Park. Now we're seeing plans for parking and the need to create additional parking to accommodate the sports programs to meet the needs of CareMatrix and the public using what will be left of the property. This will do irreparable harm to our Village. We're going to lose even more green space if the lease goes through" he explained.

Kenny continued, "I have nothing against the mayor or the trustees. I have a difference of opinion. I'm exercising my First Amendment rights. We have the ability to petition the government guaranteed us in the Bill of Rights. The plaintiffs in this case and the Committee for St. Paul's, made up of concerned residents, have been referred to with barnyard epithets by one member of the Board. We don't deal in that. We have too much respect for the people who run our government. Most of what they do I agree with."

As to complaints about his sharing information from the depositions he commented, "There's nothing like shining rays of sunshine on the facts. They're public documents in a civil lawsuit. The public has the right to know. I think it's interesting that people involved have had a problem with making the transcripts available to the public. Free speech is a great thing."

While he himself practices law, maritime and admiralty law, he says he has brought this case as a private citizen, which is one of the reasons he sought another attorney to handle the case, Michael Ciaffa, also a Village resident. Kenny noted, "We've got one heck of a lawyer." He also noted that he believes that they have a right to a juried trial and hopes the court allow it in this case.

He explained, "What brought me to bring this case in the first place is that a Village treasure was about to be desecrated. I have asked the Village to consider making it a community center. I and our supporters believe we need one. We could afford this undertaking as a Village and the building is structurally sound. We could have lectures there instead of the small lecture room of the library. Classes could be offered there. The Senior Recreation Center could be relocated there."

Kenny also said it was important to note that he would not object to CareMatrix leasing the property without the addition in the back and the destruction of parts of the property. He commented, "I am not opposed to assisted living there. I am opposed to the blight this will become if implemented the way CareMatrix has proposed the development of the project. I am opposed to the loss of green space." He compared the addition to the rear of the building to the construction of the Wyndham condos by the Garden City Hotel and suggested that had people been notified they could have petitioned the Planning Commission and Architectural Design Review Board to prevent some of the controversy that ensued after their construction.

Kenny concluded the interview by stating that he will be making the deposition transcripts available to the public and will continue to work as a private citizen to protect public land and the rights of the residents to access to that land.