February 2009

IDA Rescinds Garden City Hotel Resolution

A resolution designed to facilitate the sale and rehabilitation of the historic Garden City Hotel has been rescinded by the Town of Hempstead Industrial Development Agency.

Fred Parola, the agency's Chief Executive Officer, said the action was taken following a decision in the Nassau County Supreme Court which vacated a contract for sale of the 272-room hotel.  

The Alrose Group, based in Woodmere, had sought to purchase the hotel for approximately $91 million and to rehabilitate and modernize the structure to bring it up to current standards.  But a lawsuit between Alrose and the hotel owners, the Nelkin family ended in a decision by Supreme Court Justice Stephen Bucaria that Alrose had defaulted on the sale because it had not been closed by the April 18, 2008 deadline.  

Alrose Group had been granted an inducement resolution by the IDA which would have provided a package of tax exemptions and other benefits to assist in the completion of the purchase and reconstruction. 

"Justice Bucarias decision to invalidate the contract for sale made the matter moot and the IDA board moved, at its meeting on Wednesday, January 28, to rescind the resolution," said Parola.