State looks into Saratoga parking lot deal

PHOTOGRAPHER: Justin Mason

Investigators with the Public Integrity Bureau of the state Attorney General’s Office are probing the city’s pending deal to sell the Collamer lot to a local developer.

Public Safety Commissioner Chris Mathiesen acknowledged he received a letter Tuesday alerting him of an investigation into “misconduct relating to the pending sale” of the 42-spot parking lot on Broadway.

In August, the council unanimously approved a deal to sell the roughly half-acre parcel to Algonquin Building owner Joel Aronson as part of another deal to buy land on Union Avenue owned by his religious organization, Congregation & Yeshiva Pardes Yosef D’Chasidei Belz.

Mathiesen said the letter from Assistant Attorney General Bridget Holohan Scally was addressed to all five members of the council and specifically cites the Collamer lot deal, not the sale of the Union Avenue parcel. He remains puzzled, however, by the probe because he believes the sale of the lot was done in a public and transparent manner.

“We will be providing all the information the attorney general wants,” Mathiesen said Wednesday. “We have nothing to hide, and we look forward to the investigation being completed.”

The Attorney General’s Office was already reviewing the deal for the Union Avenue parcel as a routine matter to determine whether the nonprofit religious corporation is selling its property at an equitable price. That review is not complete. The bureau now probing the Collamer lot deal investigates — and can take enforcement action on — allegations that government officials or private organizations acting in concert with them engage in corruption, fraud or illegal behavior in the course of their public duties.

Still unclear is whether a complaint was made about the Collamer lot sale or whether the Attorney General’s Office turned up a red flag through its review of the deal for the Union Avenue parcel. A spokesman with the office declined to comment on either deal.

A main proponent of the deal, Mathiesen issued a request for proposals for the lot in September 2013, offering to sell it for $775,000 to any land owner willing to part with at least three acres on the eastern plateau for no more than $200,000. The deals were geared toward building a new fire station that would serve the area extending from Northway Exit 14 to the eastern edges of the city near Saratoga Lake.

Aronson’s limited liability corporation was the only company to submit a proposal, which the council accepted in December. Then-Mayor Scott Johnson cast the only dissenting vote, stressing that he didn’t see a need to couple one land deal with the other.

The sale of the two properties didn’t come up again until summer, when Mathiesen returned with a sale agreement in which Aronson’s religious corporation would sell the city about 14 acres of vacant land on Union Avenue for the agreed-on sales price. The deal was contingent on the city selling the Collamer lot to Aronson.

But with the sale poised for approval, attorney Joseph Zappone abruptly offered the city $1.1 million in cash for the Collamer lot during the public comment period of the council’s business meeting in August. The offer also came with a private appraisal suggesting the lot is worth upward of $1.6 million.

The council unanimously approved the deals with Aronson, though Mayor Joanne Yepsen voiced concerns about the contract and the process undertaken to reach the two deals. She reluctantly signed the deals about a week later after unsuccessfully appealing to the council to fund a third appraisal of the lot.

Yepsen declined comment Wednesday.

The probe by the Attorney General’s Office is just the latest hurdle for the controversial land deals. Last month, both deals were the subject of legal action filed by three former commissioners who were on the council during the 1970s, when the land owned by the First Presbyterian Church was deeded to the city.

Thomas McTygue, Remigia Foy and Raymond Watkin filed an Article 78 proceeding claiming Mathiesen created a fraudulent request for proposals designed to limit the pool of bidders to Aronson and his son, Ben. The council approved up to $50,000 to hire the Albany law firm of Nixon Peabody, which is now preparing a motion to dismiss the lawsuit.

Mathiesen remains unfazed by both the lawsuit and state investigation, asserting that the land deals are in the better interest of the city. He also believes the state’s probe should be expanded to include what role the mayor and former City Attorney Sarah Burger played in trying to derail the deal.

“We look forward to the attorney general’s investigation expanding to include the role of Sarah Burger and Mayor Yepsen,” he said.

Burger quit less than a month after the council approved the two deals, citing a “fundamental disagreement” on how to handle the legal affairs of City Hall. On Wednesday, she defended her role in advising the council on the deals.

“I feel sorry for the taxpayers of our community,” she said in an email. “The facts are the facts. The terms of the subject land transactions were formulated long before Mayor Yepsen was elected and I appointed to serve as city attorney as evidenced by the December 2013 City Council resolution.”