Developer Of Former IBM/HNA Center Presents Revised Plan With Additional Housing Density

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In A Presentation Before The Orangetown Town Board, Developer REVEIL Says Project Not Sustainable Without Additional Residential Density

By Tina Traster

The developer chosen by the Town of Orangetown to re-develop the HNA Training Center in Palisades three years ago asked the town to greenlight its latest plan, which exponentially increases the proposed housing portion of the plan from 30 townhouses to 342 townhouses and apartments.

“But we just received this revised plan and we’re just as surprised by the number of units. We are not voting on anything tonight,” said Supervisor Teresa Kenny.

Members of the development team, including attorney Taylor Palmer and new project investors Joseph Santullo and Pegah Ebrahimi, have asked Orangetown officials for an updated memorandum of understanding (MOU) to allow the development team to build a larger project than what had been originally agreed to in 2021 when the California REVEIL team of Mark Kitching and James Pelayo was chosen in a contest seeking a developer for the 106-acre bucolic parcel. The hidden property at 334 Route 9W was first home to IBM’s hotel and conference center, and later owned by the Chinese government-backed HNA, which shuttered the property during the pandemic and subsequently lost the property to the REIT SL Green in a bankruptcy case.

In 2021, REVEIL LLC, a Delaware Limited Liability Company, proposed an updated hotel and conference center, glamping, event spaces, a working farm, test kitchens, co-working, and 20 to 30 townhouses.

Now, the housing portion of the proposal is much denser.

“This is like another community we’re building,” said Liz Bailey. “This will change the entire complexion of Palisades.”

Palisades, a small hamlet, is made up of mostly single-family residences. It is one of the wealthiest enclaves in Rockland County.

Santullo, owner of Systems2000Plumbing in New York City, told the town board and a small group of residents attending last week’s meeting who said they only learned about the new proposal days before, that the development team hopes to create a “crown jewel” for the community. The plumber has been involved in high-profile New York City developments including the Beresford, the Printing House, and the Future Building.

The plan includes refurbishing the 425,000 square-foot, 200-room hotel, restaurant, spa, wellness center, bar and lounge, collaborative workspaces, a coffee shop, gourmet market and “creative spaces”, as well as trails and walkways. Part of the original hotel structure will be converted from conference space to apartments.

Santullo said the original plan was not viable in the current economic climate, explaining why the developers have added housing density.

“A lot of people are saying it’s too big, it’s overwhelming, but today, to sustain a piece of property like this, you need a certain amount of density,” he said.

Santullo, said the property would be an asset to the community, with its walking trail, a place to go for a cup of coffee, a venue for a special occasion.

REVEIL’s representatives told Orangetown board members earlier this week there was urgency to have the MOU updated because the developer is set to go to a closing on June 17 with SL Green to purchase the property. In 2022, RCBJ reported REVEIL had said in a capital request that it was in contract to purchase HNA for $33 million.

However, an updated MOU does not guarantee the project’s zoning requirement: a zoning text amendment will be needed to update the zone to include a residential component. The developer and the town have agreed the hotel must be open and operating before residential zoning will be approved.

Palmer said the developer came before the board for a “continued discussion,” and that their team had submitted “adjustment language,” to the MOU.

“We’d like to have it buttoned up,” he added.

Town Supervisor Teresa Kenny said both the town and school district need to hold meetings about the project. She said the town would need to hold a special hearing to approve changes to the MOU.

“Most people know this has a long and sordid history,” she said, recapping the more than three-year long road leading to the sale of the HNA building to the tapped developer. “But we just received this revised plan and we’re just as surprised by the number of units. We are not voting on anything tonight.”

Paul Valentine indicated the town board supported the development plan, but added, “We agree with the concept but we’re not agreeing to the number of units right now.”

In April, the Second Circuit Court of Appeal affirmed a District Court ruling that required HNA to transfer the Palisades Training center to SL Green in partial satisfaction of a $185 million money judgment secured back in 2022.

It is unclear at press time what REVEIL is paying for the property, but the former HNA site is severely degraded: the building is filled with mold, wildlife, and “the roof is on its last legs,” said Santullo. “If we don’t jump on it quickly, it will not be able to be repaired.”

During the time that REVEIL and HNA were negotiating a sale, the town had deemed the site unsafe and dangerous, saying it was a public safety hazard, and had slapped HNA with a series of violations for lack of maintenance. There has been a petroleum spill, sinkholes, impassable roads making it difficult for emergency vehicles to access the property, leaking fire hydrants, burst pipes and a dumping ground for illegal fill. The property has become a target for vandals and trespassers, necessitating several police calls.

In 2023, the town began the process of eminent domain to take the property through condemnation, but it was always clear that town officials hoped a deal would materialize.

REVEIL has committed to first rebuild the hotel.

Town board members and a small knot of the Palisades community who have played an active role in the reshaping of the property, including Rick Cook, who was one of three contestants for the redevelopment plan, expressed concern that the property would be bought and flipped.

“We know there are other buyers waiting in the wings,” said Carol Baxter.  And later added, “Let’s just do it.”