Forest City demands $2M


The Echo Bay saga has risen back into the spotlight and may ultimately conclude in court.

After the New Rochelle City Council voted the Echo Bay waterfront development project, pictured, down, developer Forest City is demanding the city reimburse it for $2 million in expenses. Rendering courtesy

After the New Rochelle City Council voted the Echo Bay waterfront development project, pictured, down, developer Forest City is demanding the city reimburse it for $2 million in expenses. Rendering courtesy

Developer Forest City has taken action against the City of New Rochelle, terminating a more than five year old memorandum of understanding—the document detailing the agreement between the two parties—and demanding the city reimburse the firm for $2 million in expenses incurred in connection with the failed Echo Bay waterfront revitalization project. If the city does not comply, it is likely that Forest City will pursue litigation.

Representing Forest City, attorney Mike Weingarten from DelBello, Donnellan, Wein-garten, Wise & Wiederkehr, a White Plains-based law firm, sent a demand letter, on Feb. 5, to Democratic Mayor Noam Bramson, members of the City Council, and Finance Com-missioner Howard Rattner.

In the letter, Forest City alleges the city “peremptorily, will-fully, arbitrarily, and without any rational basis whatsoever, declined to authorize the execution of the [land disposition agreement]…making it practically and legally impossible for Forest City to continue to perform any of its remaining obligations under the restated [memorandum of understanding].”

According to the memorandum of understanding, if the city intentionally failed to comply with the terms of the memorandum, Forest City had the right to terminate the agreement and seek immediate reimbursement of all municipal expenses and all other out-of-pocket costs incurred of up to $2 million.

The letter states Forest City has incurred over $3.1 million in out-of-pocket costs and municipal expenses since the two parties first entered into the memorandum of understanding back in May 2008.

On Wednesday night, New Rochelle officials released a statement appreciative of Forest City’s efforts and cooperation during the course of the public review of the project. However, the city’s position is that there is simply no legal, contractual or other basis for Forest City’s claims.

“Public waterfront land is an important asset of the city,” the statement read. “While it is unfortunate that the parties were not able to reach full agreement on the project, there is no question that the city diligently and in good faith performed all its obligations in accordance with the relevant agreements. In the event that Forest City determines to pursue its claims against the city, the city is prepared to take all necessary actions to defend itself.”

Last November, the City Cou-ncil voted down the land disposition agreement—which negotiated the terms and conditions of the land use the project would occupy—with Bramson casting the lone vote in favor of the agreement, essentially ending Forest City’s involvement in the proposed 10.8-acre waterfront development project that would have brought residential units, retail and dining to the area.

City Council members expressed varying reasons as to why they would not vote to execute the land disposition agreement with Forest City, including Democratic councilmen Jared Rice, District 3, and Barry Fertel, District 5, as well as Democratic Councilwoman Shari Rackman, District 6, who said the lack of information regarding the relocation of the City Yard—the city’s public works facility, which currently sits on the project site where Echo Bay was proposed to be constructed—and the uncertain future of the Armory building—the former training site for the Naval Militia, which is also located on the site—left them no other choice but to vote no.

Others, like Republican councilmen Lou Trangucci, District 1 and Al Tarantino, District 2, and Democrat Ivar Hyden, District 4, were opposed to the scaled-down scope of the project, which was originally proposed as a 26-acre site in 2006.

Mayor Bramson expressed his continued support for the project and voted yes.

Long before the Nov. 26 vote, the City Council felt the heat from members of the community, who strongly opposed the deal.

United Citizens for a Better New Rochelle, a bipartisan organization that promotes transparency and fiscal responsibility in local government, vocalized their concerns with the project and how it would financially impact taxpayers and overcrowd city schools.

The group protested the project on the steps of City Hall, created anti-Echo Bay lawn signs and petitioned over 800 signatures.

“We fought for what we thought was right and we’re looking forward to being a part of any development conversation,” Daniel Bases, chairman of United Citizens for a Better New Rochelle, said. “We think that when you bring people together and have an open and productive dialogue, you’re going to have a better development that benefits all of the city at the end of the day.”

When asked how he felt about the letter of demand Forest City sent to the City of New Rochelle, Bases said it was unfortunate Forest City decided to resort to such tactics, but it is ultimately between the City Council and Forest City to handle.

Forest City Attorney Weing-arten could not be reached for comment.