A Schenectady merchant charges that the city reneged on a verbal agreement to sell him the Union Street building where he currently runs his business.
Namat Rasoully, 47, operates Arizona Pizza and Deli at 410 Union St. He recently bid to purchase the property from the city, after it was taken through foreclosure last year because Rasoully’s landlord wasn’t paying taxes.
Rasoully initially bid $30,000, but the city’s law department asked for $50,000, according to his attorney, Tom DeLorenzo. Rasoully agreed to that number, and Deputy Corporation Counsel Rachel Ward said “we have a deal,” DeLorenzo says.
Then the sale of the property failed to show up on the City Council’s agenda for weeks, DeLorenzo said. During that time, the Law Department received a higher bid for the building. Rasoully couldn’t outbid the other offer, leaving his business in limbo.
“If I close the store, where do I go? I have a kid,” said Rasoully, who also lives in Schenectady. “My concern is if I close the store I have nowhere to go. I’m 47 years old, I don’t want to work at McDonald’s.”
DeLorenzo explained the situation to the City Council during a meeting Dec. 22. DeLorenzo said Ward advised him that the mayor “already approved the sale of $50,000” and that “you just have to go through the formality of the City Council.”
According to DeLorenzo, Ward instructed Rasoully to order title insurance before the close of the sale. DeLorenzo said the Law Department received a copy of the title and “we talked about it with them.”
He added: “We wanted a contract before getting title insurance, but they said it was OK. Then the property wasn’t showing up on the agenda. Then they got a higher offer. But we had a deal.”
Ward could not be reached for comment for this story. But Corporation Counsel Carl Falotico said Rasoully was not told he was “definitely getting the property” and was also not told to “invest any money in it.”
“We did not speak about title insurance or that a deal was ready and that it was going to happen,” Falotico said. “They went on their own to the title insurance company and ordered the title insurance. We did not have a deal worked out for the purchase. I believe there was a miscommunication.”
The sale of properties owned by the city requires approval by the City Council. The council is not required to accept the highest offer on a property, although it typically does.
During the December council meeting, Mayor Gary McCarthy responded to DeLorenzo, saying that the final decision on the sale of city-owned properties is up to the City Council.
“I’m surprised an attorney that has been practicing that long doesn’t understand that the final decision rests with the legislative body,” McCarthy said. “Any implied agreement, even though we try to work with as many people as we can, the final decision on the sale of property rests with the City Council.”
Falotico said Wednesday that the other bidder “plans to keep the pizza place there anyway.”
“Our discussions with the person who put in the higher offer told us that they planned to keep the current tenant if they wanted to stay, if they worked out a lease,” he said.
But as of Friday, Falotico said the bidder did not agree to the terms laid out by the City Council in committee last week to keep the tenant there for a year. The sale of the property was tentatively removed from tonight’s council agenda as a result, he said.
“We haven’t received confirmation that the bidder for 410 Union will accept the terms the council laid out in the committee meeting regarding keeping the tenant there for a year,” Falotico said in an email Friday night. “Until they do so, we don’t have anything to vote on for Monday.”
He would not disclose the amount of the higher bid, nor say who had submitted it.
Rasoully said before and around the time of foreclosure, he spent more than $20,000 on repairs to the building. He said he replaced the roof, fixed a wall and put in a new boiler at the direction of the city building inspector.
The property houses the deli on the first floor, plus four apartment units.
DeLorenzo said if Rasoully is not approved to purchase the property, he plans to file a lawsuit against the city to compel the city to sell him the property. Additionally, DeLorenzo said, Rasoully would seek reimbursement for the cost of repairs.
“He agreed to the higher offer on top of the renovations,” DeLorenzo said. “I haven’t heard from the Law Department since. We really want to purchase the property. I will file a lawsuit if the tenant is not approved.”
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