Dick Hubert’s Worldview: Two huge stories impact our local communities
August 21, 2024 at 11:06 p.m.
This week: a focus on two huge local stories with national implications—both stories having been covered exclusively by media to which you may not subscribe.
Charles Cohen and
a looming foreclosure auction
Billionaire real estate magnate Charles Cohen and his plans for turning the old Arrowwood property in Rye Brook into a world class boutique hotel with a conference center, apartments, townhouses, and medical offices may well be on the road to financial ruin with the prospect of foreclosure proceedings on a multitude of his properties, including the proposed project in literally the Doral Greens Homeowners Association’s (DGHOA) back yard.
That news published Aug. 14 in the real estate trade publication The Real Deal can be likened to a meteor headed your way with advance warning but no seeming way to avoid it.
Here’s how The Real Deal’s Suzannah Cavanaugh described it:
“The on-again, off-again foreclosure auction dogging Charles Cohen is back on.
Fortress Investment Group, the lender pursuing the $534 million UCC foreclosure, won the right to proceed with an auction of Cohen Brothers Realty’s equity interest in a grab bag of assets, according to a decision filed last week.
A New York Supreme Court judge approved a Nov. 8 auction date.
The New York-based landlord postponed the auction in June when the judge ruled Fortress’ plan wasn’t commercially reasonable, a standard set by the Uniform Commercial Code.
Cohen had pushed to cancel the auction entirely, arguing that it had never defaulted on the $534 million loan because it had reached an agreement with Fortress in December to restructure the debt.
The judge denied that motion and in the same June decision gave Fortress a second shot at proposing a “commercially reasonable auction” plan.
At a conference last week, Judge Joel Cohen ruled Fortress had met the mark.
‘I’m persuaded, based on what I’ve seen, that it has not been shown to be commercially unreasonable,’ the judge said, according to a transcript. ‘The auction can go forward as scheduled.’
The auction is expected to be the largest UCC foreclosure ever.
The collateral is sprawling, including the companies that control the Design Center of the Americas, and Le Méridien hotel in Dania Beach, Florida; a Westchester redevelopment site formerly known as the Doral Arrowwood; 50 bleeding movie theaters in the U.S. and U.K. and Tower 57, a Midtown office building in default on its ground lease and which Cohen asked his landlord to take back last year.”
Judge Joel Cohen, no relation to Charles Cohen, was quoted in transcripts released by his court and quoted by the Real Deal’s Cavanaugh as follows:
“After the judge denied Cohen’s motion to kill the auction, the landlord’s legal team pushed for an early 2025 date, arguing Fortress’ November 8 proposal wouldn’t extend enough time for bidders to familiarize themselves with the collateral and find financing.
In short: the process was “too short” to pull the top dollar bids Cohen would need to pay off his debts, the firm’s attorney Kevin Nash said ahead of the decision.
Fortress’ attorney Lindsey Harris during the conference speculated Cohen had alternative motives for the delay, according to the transcript.
Cohen was racking up $7 million in interest each month, she alleged, and it was less likely that more time would boost bids by that much each month than merely saddle the firm with more debt that the sale of the collateral would be unable to offset.
‘Wow,’ the judge said. ‘So that’s assuming a fairly risky game on [Cohen’s] side.’
‘They would rather expand the debt and potentially be responsible for all these increased costs, all on the assumption that even if they lose everything, they’ll be bankrupt anyway, so who cares?’ he said.
‘I think that’s plausible, yes,’ Harris said.
Nash dismissed Harris’ speculation.
‘There’s all these sinister motives being attached to the objection,’ he said. ‘There isn’t any.’
Neither attorney immediately responded to additional requests for comment.”
And so locally there’s a painful wait until Nov. 8.
Will the former Arrowwood property ever be developed, and by whom, and with what plans are some of the questions Rye Brook residents are and will be asking. As for the DGHOA, there are more immediate pressing issues: if Cohen loses the property in foreclosure, who will maintain the ponds and pumps there that irrigate the DGHOA’s trees, flower beds, lawns, and more; and who will cut the grass on the abandoned golf course that runs through and around the DGHOA?
As for the Village, the Blind Brook School District, and its taxpayers, the prospect of hotel tax and property tax revenue and more from the projected Cohen investment slowly recedes into a distant future.
The country will be asking: how many more massive foreclosures on office real estate owners can we expect, and how many banks and investment houses who lent money for the now low value properties will be affected?
East Ramapo School Board
vs. the non-Hasidic community
Back in April 2014 The New York Times’ Michael Powell did a tough investigative report on Rockland County’s East Ramapo School Board headlined: “A school board that overlooks its obligation to students” and began with this provocative series of paragraphs:
“East Ramapo is not simply another tale of insufficient funds leaving a poor district marooned. This is a cautionary tale of communal politics and secular political leaders who lack the means or the courage to confront it. Years ago, the Hasidic Jews of Brooklyn — the Satmar, the Bobover and other sects — began their migration here.
Their intent was to recreate the shtetls of Eastern Europe in the leafy precincts of Rockland County. Now 19,000 Hasidic children here attend yeshivas while about 11,000 or so black, Latino and Haitian children attend the once well-integrated public schools.
Voting in disciplined blocs, ultra-Orthodox Jewish residents elected leaders to the school board. An Orthodox-dominated board ensured that the community’s geometric expansion would be accompanied by copious tax dollars for textbooks and school buses.”
Now it’s 10 years later. The Hasidic war on public education, both in East Ramapo and in Brooklyn, continues unabated, with news organizations like The Times that detailed Hasidic outrages being accused by the Hasids of antisemitism—about as outrageous a charge as you can get.
But those charges have, over the years, scared away news organizations from covering these ongoing ugly power politics and religious warfare. Even The Times has yet to report the latest battle between the Hasids and, this time, the New York State Department of Education.
We all would have missed it except due to the courage of The Gannett Journal News (LoHud.com) and its longtime staffer Nancy Cutler.
As she reported and Gannett published Aug. 14:
“East Ramapo's school board on Wednesday evening passed a dramatic directive by the state Education Commissioner to increase the 2024-25 property tax levy to a total of 5.38%, more than four times higher than the 1% hike voters approved in June.
The majority of board members voted for the increase, they said, under protest.
"I vote yes as directed by the commissioner," said Trustee Moshe Samuel Feder. "It is an unfair and unlawful decision."
Trustee Moses Koth said he believed Rosa's ruling was illegal. But he voted for the tax-levy change, as well.
Koth and others noted that violating an order of the commissioner could lead to a board member's removal.
Education Commissioner Betty Rosa, in a surprising July 31 order, said the board's decision to propose a 2024-25 budget plan that raised the tax levy by 1% was "arbitrary, capricious and violative of education policy due to the ways in which it inequitably favors nonpublic school students at the expense of public school students.”
East Ramapo school board President Shimon Rose made clear his dissatisfaction with the directive. He questioned how the current board was saddled with blame for past boards' actions. Rose called the link "concerning."
"The only similarity between the board of now and the board of 10 years ago, which the actions the commissioner brings up in the letter, is that they are visibly Orthodox and we are visibly Orthodox," Rose said before the rollcall vote. "This inflames tension and causes hate and animosity between community members."
There is shame to go around for the public, let alone the religious and secular Jewish communities, who have failed to noisily and publicly come to the aid of the Black and Brown students in East Ramapo who for years have been thrown to the fiscal wolves by the Hasids, who run the school board with total disdain for their non-Hasidic constituents.
Guaranteed the Jewish community in Port Chester and Rye Brook would never tolerate that behavior by any group living here. So, why abandon our principles when there’s a disaster happening on the other side of the Hudson River in our former 17th Congressional District?
Last week television viewers across our country had to be sickened by the lead reports on both the PBS NewsHour and the NBC Nightly News (with Richard Engle reporting from Jerusalem) on the brutal physical attacks and destruction of property perpetrated on peaceful West Bank Palestinians by extremist Orthodox “settlers.”
It’s hard not to make a connection between East Ramapo and the West Bank.
Dick Hubert, a retired television news producer-writer-reporter living in Rye Brook, has been honored with the Peabody Award, the DuPont Columbia Award and the Robert F. Kennedy Memorial Journalism Award.
Editor’s Note: This column, written by Dick Hubert, represents his opinion and not that of this newspaper.
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