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Town of Orangetown Hopes To Play A Role In Selling HNA Palisades Training Center

Government Other News Real Estate

Town Is Concerned Parcel Will Be Taken Off Tax Rolls; Inappropriately Developed

By Tina Traster

The Town of Orangetown is hoping to play an influential role in the future fate of the privately-owned HNA Palisades Training Center in Palisades.

Similarly, the Village of South Nyack, perhaps belatedly, has also tried to insert itself in the pending sale of Nyack College.

On Oct. 1, the Town of Orangetown board hired engineering/planning firm AKRF and attorneys Zarin & Steinmetz to assist with the marketing and sale of the 106-acre parcel located at 334 Route 9W. The resolution instructs the parties to circulate a Request for Expressions of Interest (RFEI) to potential buyers.

Why does Orangetown want a say? Did South Nyack miss the boat?

Town officials say they are concerned the bucolic property will lend itself to a “fire sale,” meaning it will be sold on the cheap to a potential buyer that will take the property off the tax roll or develop it inappropriately. Many residents have said they do not want to see manufacturing (which the site is zoned for) or multifamily housing (which it is not zoned for) on the parcel.

“A religious organization expressed an interest,” Supervisor Teresa Kenney said at a town hall meeting on August 18th. “That would take the property off the tax roll .”

The HNA Palisades Center pays $1.2 million in school taxes and approximately $600,000 in town taxes annually.

In 2017, HNA won approval from Orangetown’s Planning Board to build an additional five-story hotel with 100 rooms on the property. But there was a snag: HNA didn’t have the right to rent those rooms to the general public because the center is located in a zone (Laboratory Office, or LO) that does not permit hotels. Rather than seeking a use variance for its hotel addition and its current hotel facility — an onerous process for any applicant — HNA worked closely with Orangetown to come up with a solution: the 106-acre tract would be rezoned “Office Park (OP)” – a zone that allows hotels — but HNA would agree to a restrictive covenant that capped building heights at 50 feet and any free-standing outside retail vendor would be prohibited. The new zoning and the restrictive covenant runs with the land in perpetuity.

In explaining why the town has gotten involved in steering the fate of the site, Councilman Tom Diviny said the site is zoned for manufacturing. He said the town doesn’t want another “Annellotech,” referring to a fight by citizens of Pearl River five years ago to fight Annellotech’s plan for a bio-tech plant.

In July 2017, town officials were caught off-guard when RCBJ reported HNA was for sale. Vasco Ventures, a south Brooklyn-based, real estate investment business that buys commercial and residential real estate, was in contract to purchase the property for $40 million, according to sources. At that time, Vasco Ventures paid HNA $4.4 million for the Hudson Valley Resort in Kerhonkson, a downtrodden upstate hotel.  ZVG@Palisades LLC, an entity affiliated with Vasco Ventures that was negotiating the deal, did not meet its Nov. 12th, 2019 deadline to purchase the HNA Training Center in Palisades.

Vasco, according to sources, said it planned to maintain the HNA training center as a hotel and conference center. Palisades residents who spoke at a recent town board public hearing have expressed a desire to see the property redeveloped as an upscale hotel, spa and conference center but any appetite to build such a property amidst the coronavirus pandemic is suppressed.

In its recent resolution, the town says the plan involved is “in cooperation with the property owner,” and the Town Board recognizes that “in order to properly evaluate the property and plan for redevelopment, it is necessary and in the best interests of the Town to engage the services of a professional planner in any such review and plan for redevelopment.”

Insinuating itself in the sale of private property is unusual but the town says it will consider using its powers of eminent domain if the Chinese government, which owns HNA, does not cooperate. The property is privately owned and could be sold at any time by its current owner. The threat of utilizing eminent domain amounts to a rather bold claim considering Orangetown would need appraise the property and likely have to pony up roughly $40 million to purchase the center at a fair market price.  The threat of the Town utilizing its condemnation authority to acquire the property could effectively dampen the market for private buyers and devalue the property.

Kenney has said there are several buyers eyeing the property, but many have requested zone changes, including one for senior rehabilitation housing.

HNA and Nyack College occupy two of the most significant sites in Orangetown. Town and Village officials alike – along with many vocal residents – are concerned about the future of these large parcels.

Nyack College has for more than five decades been off the tax rolls but the announcement that a yeshiva is planning to purchase the campus has led citizens to try and fold their village into the Town of Orangetown. On December 17th, Village citizens will vote on dissolution in a special election.

Earlier this summer, the Village board voted to hire William P. Harrington of Bleakley Platt of White Plains/Greenwich Ct., who has represented both municipalities and developers in all phases of land use development and related litigation. Parcels being evaluated are 146, 168 and 179 South Highland Avenue, which includes the sports complex. The Village would either have to purchase a portion of the land or take it by eminent domain.

The board also agreed to move forward to hire Greystone Valuation Group of Bedford, NY for an appraisal on some buildings that may serve as future recreational use for the Village.

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