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Orangetown Officials Breathe A Sigh Of Relief Over Closing On HNA Property To REVEIL LLC; 342-Unit Housing Development Slated For Bucolic 106-Acre Site
By Tina Traster
Finally!
That’s the sentiment in the Town of Orangetown, now that the ink has dried on the sale of HNA’s Palisades Training Center on Route 9W in Palisades to a group of developers who plan to re-develop the 106-acre dilapidated property into a new hotel and 342 townhouses and apartments.
The closing, just over $26.3 million, marks the end of a long saga filled with plot twists straight out of a Survival Realty Show, including the Chinese government, developer contestants, bankruptcy, vandals, and emergency town board meetings to clear the path for the deal.
REVEIL LLC, a Delaware Limited Liability Company, operating as Palisades Renewal Center LLC, purchased the property from SL Green, the New York REIT that gained the property after the Chinese-government-backed HNA lost it in a bankruptcy case.
Orangetown last month held an “emergency” meeting to clear the path for a developer by updating a Memorandum of Agreement (MOU) to move forward with the purchase of the bucolic property that was once home to IBM and later HNA, which continued to use the site as a conference center and hotel.
The approval – which gave the developer a de-facto path to getting a zone change from hotel and office use to include residential use on the 106-acre bucolic parcel – came with strings. The developer has agreed to restrain from “flipping the property” to a “nonprofit” entity for two and a half years after the purchase is complete. The developer has also agreed to provide the Town of Orangetown with a right of first refusal for five years. Both of these restrictions are recorded by a deed restriction in the Rockland County public records.
“The Town Board is pleased that the process it commenced over three years ago has successfully resulted in new ownership of the former IBM Palisades Conference Center property. The Town Board is looking forward to working with the new owners and local residents to ensure that this critical asset is redeveloped in a way that is consistent with our collective vision for the town,” said Town Supervisor Teresa Kenny.
The town board, according to public records, has settled five years of tax certiorari challenges filed by HNA from 2019 to 2023. The back taxes on the property were nearly $9 million, which were payable to Rockland County. The agreement contemplates refunds back to SL Green, specifically: $1.8 million from the school district, $670,000 from the town, and $192,000 from Rockland County.
REVEIL is planning to rehabilitate the hotel and build 342 townhouses and apartments – ten times more than the original proposal three years ago.
Originally, REVEIL, which included partners Mark Kitching and James Pelayo, envisioned an updated hotel and conference center, glamping, event spaces, a working farm, test kitchens, co-working, and 20 to 30 townhouses.
REVEIL’s enlarged team, which now includes investors Joseph Santullo, owner of Systems2000Plumbing in New York City, and Pegah Ebrahimi, Co-Founder and Managing Partner at FPV Ventures, a $450M early stage fund that backs and serves mission-driven founders.
Now, the housing portion of the proposal is much denser – ten times the original design.
The 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. Detailed plans must still be reviewed by the town and its planning professionals. The developer and the town have agreed the hotel must be open and operating before residential zoning and construction will be approved.
Kenny last month said: “many things have changed since the 2021 proposal, including the degradation of the property and increases in construction costs.”
There was a lot riding on this deal, particularly for Orangetown officials who inserted themselves in the evolution of the property’s next use. Worries about who will own the property and how it will be used date back to the town’s initial endeavor to make itself a player in the redevelopment of the property after HNA’s sale to a Brooklyn-based Hasidic group fell through. Ultimately HNA shuttered the now-distressed property during the pandemic.
During the protracted search for a developer, the town boiled down the pool to three contestants. Two were local: Financier Billy Procida of Piermont had proposed 180 townhouses and a hotel. Kenny said Procida’s plan was not chosen because of disparaging remarks Procida made about HNA publicly. She also said his offer of $18 million was not something HNA was going to accept. Rick Cook of Palisades, a notable New York architect, envisioned an ambitious spread of movie studios and 430 housing units. At the time, the community voiced opposition to the property becoming a large residential community.
In 2022, RCBJ reported REVEIL had said in a capital request that it was in contract to purchase HNA for $33 million. Kenny had said the negotiations were protracted and HNA could “not get out of its own way.”
