CAROGA - The Caroga Town Board has nearly finalized negotiations to sell the former Sherman's amusement park to the Caroga Arts Collective — but the debate over what will ultimately happen to the property is still far from resolved.
Supervisor James Selmser said the majority of the Town Board is prepared to support selling the 8.6-acre property located at routes 10 and 29A to the CAC for a lump sum cash payment, large enough to make the town whole for the approximately $50,000 in maintenance costs incurred since 2015, when the property was donated to the town by Gloversville-based lawyer George Abdella.
"We're not going to make a lot of money on it,," Selmser said. "But we would cover the expenses that have been incurred, and it'll be more or less like we never owned the property."
Never owning the property is an often expressed wish among some town residents attending Caroga's Town Board meetings. Few, if any, topics inspire as much wrath among Carogans as the fate of Sherman's, a property considered by many to be the heart of the town and a link to its past as a tourist destination known for its lakeside amusement park.
Case in point, last week the "Committee to Save Sherman's for All" distributed a mailer titled "The HEIST of Sherman's Property(?)" to 694 property taxpayers in the town, questioning why the Town Board is only entertaining an offer from the CAC. The mailer states that board members received a $250,000 offer from a private developer to acquire the property and that offer was never acted on.
The Town Board then responded with a public statement explaining its intention to make the final sale of Sherman's subject to a referendum vote.
"If we reach an agreement, we will make the details public and host multiple public meetings where questions can be answered and input provided," the statement reads. "After this, if the Town Board decides to move forward with the contract, any resolution accepting the contract would be made subject to referendum, meaning that it would only pass if it enough voters said 'yes.' "
"If we do not reach an agreement with the CAC or if the voters say 'no,' we will consider other options," concluded the Town Board's statement.
The next Caroga Town Board meeting is scheduled for April 10 at 7 p.m.
John "Jack" Glenn is the sole member of the five-member Town Board to oppose sale of the property to the CAC. Glen said he believes the CAC's current offer is approximately $60,000, which he contends is a "financial disaster for the town."
Glenn said a private developer did make a $250,000 offer for the property. But a majority of the Town Board chose not to act on the offer, he said.
"We have two, maybe three different development groups who are interested," Glenn said. "I've spoken to all three. And they'd like to come in and renovate the property and fulfill the town's vision."
Town Board member James Long said Glenn and proponents of selling the property to a private developer are underestimate legal difficulties of that option.
"This is about money," Long said. "And despite what others are saying we do not have clear title to this property."
"They are saying we have another offer," Long said. "But that offer wants clear title. There is no way we can provide clear title."
Much of the rancor over the fate of the property can be traced to the complex donation agreement written by Abdella and agreed to by former Caroga Supervisor Ralph Ottuso and the Town Board in 2015.
Abdella has argued the agreement has strings attached to it that give him the right to take the town to court and oppose any sale of the property to a buyer he doesn't approve.
Glenn said the Town Board has since voted to rescind the donation agreement. But it has maintained control of the property, he said, albeit with a legal cloud over its title.
Selmser said the town needs Abdella to sign a written release allowing them to complete the sale to the CAC, the only buyer he has indicated he currently finds acceptable.
"He said he would do it, but all conversations have only been verbal," Selmser said. "Our attorney sent him a document. But as of this date, we still don't have it back from him."
"That's the big hurdle right now," Selmser said. "That's the document we need to have in hand to pass a resolution to recommend that this agreement be consummated, [contingent] on also having it go before the voters to have the final say."
Glenn said the town board should take Adbella to court.
"The statute of limitations has run out," Glenn argued. "[Abdella] has absolutely no claim to any title or anything else at this point."
In 2017 an evenly split Town Board could not agree to a legal strategy advocated by then Town Attorney Sal Ferlazzo, who advocated Caroga take the issue to court and seek a judgement to determine whether Abdella's donation agreement gives him any legal hold over the property.
Former Town Supervisor Beth Morris and Glenn favored Ferlazzo's strategy. Current Town Board member Jeremy Manning and former member Anthony Sturchio opposed taking the matter to court.
Since then, Morris declined to run for election and the current Town Board majority opposes seeking a declaratory judgement. The majority also fears lengthy court battle costs if they attempt to sell the property to a private developer.
"Litigation is often more expensive than people can anticipate," Long said. "The donor can afford an attorney, because he is an attorney. He has said to me that he would litigate this to [New York State's highest court] the Court of Appeals, and he has the wherewithal to do so."
"Our own attorneys, Dunn and Dunn, have said that if we seek a declaratory judgement, which is what some people have recommended, a judge will rule in a way that we cannot predict ahead of time," Long said. "But we can expect that he would split the baby in half, and neither George nor the town of Caroga would be happy with the outcome. We might still not have clear title."
"We are stuck," Long said. "We are seeking a way out."
Ferlazzo advised that seeking the declaratory judgement would cost only about $5,000, Glenn countered, and he believes that is a reasonable enough amount to risk.
Long said the town was paying Ferlazzo an hourly rate to serve as town attorney and town board members are skeptical that legal action with Abdella would not be lengthy and expensive. For example, Long said, Ferlazzo had advised the town on another legal matter involving eminent domain and the case has proven to be longer and more expensive than initial estimates, costing as much as $100,000.
Caroga for the last two years has had the office of town attorney listed as vacant in the Fulton County directory, highly unusual designation.
Long said Dunn and Dunn are the town's appointed attorneys, but do not wish to be listed as such for "legal reasons."
"Their counsel to us was 'Don't list as your town attorneys, just pay us as needed'," Long said.
Nonprofit versus private developer
In 2017 the town formed the Sherman’s Advisory Committee, which evaluated two proposals for Sherman's, one from the Caroga Arts Collective and one from LPP Management LLC.
LLP Management wanted to build a multi-use location with a hotel, restaurant and entertainment with a long-term plan to eventually purchase the location; the CAC wanted to use Shermans for music concerts, farmers markets, educational classes and other public uses.
Advocates for selling the property argued that the possibility of a lawsuit from Abdella was stymieing the prospects for selling the property, and that the town should seek a private developer to increase revenue from a for-profit taxable location in order to reduce the burden on town residents.
Proponents of keeping the property either in the town's ownership or a non-profit argued it was in Caroga's interest to maintain the property as a public-use tourism and entertainment venue.
The advisory committee in 2017 ultimately chose the CAC. But the Town Board never acted on the proposal. Long served on the committee before being elected to the Town Board, and the committee was chaired by current Town Board member Kent Kirch.
In 2018 the CAC was allowed to hold a seven-concert series, which included a concert by NBC's "The Voice" winner Sawyer Fredericks and weekly Friday afternoon farmers markets.
Town Board member Jeremy Manning said he believes the CAC has proven itself a good steward of the property during its tenure operating it as a concert venue.
"I think they're a great fit for the property," Manning said. "I think they can offer a lot to the town to help us move in the right direction. But it will depend on the deal we can get."
Glenn said selling the property to a nonprofit will mean no property tax revenue for the town, county or fire district, which is one of the reasons he favors selling it to a private developer.
Selmser said CAC has indicated it would be willing to enter into an informal agreement to pay the town property tax for the site if sold to the group.
Long said he's skeptical of whether a private sector developer could make Sherman's profitable, considering the history of its last several owners and the difficulty with which Abdella had trying to sell it before donating it to the town. Long said he believes private sector development of the site would face major repair hurdles and a shortage of adequate utilities at the location.
"We can't imagine that someone who plans to open a high-volume restaurant or hotel has a viable plan, because there is no way to dispose of sewage,:" Long said. "The sewage system that George created has no room for replacement or expansion, and it was only sized for banquets."
Former Supervisor Morris said she believes the current Town Board has too many "conflicts of interest" to fairly decide the issue of what to do with the property. She noted that several town board members have been involved with CAC and the advisory committee that chose CAC.
Morris said without clearing up the town's legal title to Sherman's no proper competitive bidding process can be conducted. Moreover, she said, the property also hasn't been appraised.
"This isn't over by a long shot," Morris said. "The majority will speak and people are fighting back."
Selmser and Long agreed the Town Board wants to avoid a "permissive referendum," which could be initiated by 50 signatures of town residents who want to stop a sale to the CAC. Both said the board instead intends to put the issue before voters as a ballot proposition before finalizing a sale to the CAC.
"We want the voters to be a part of this decision," Long said.
Glenn said the reason the majority of the Town Board wants to avoid a permissive referendum is because it would trigger an Article 78 lawsuit against the town and its leaders. He said Town Board members are only indemnified up to $1 million in damages in an Article 78 lawsuit against a town, which means the board members could be held liable for any amount greater than that.
"One way or another, there's going to be a lawsuit about this," Glenn said.
Long said Caroga collects between $600,000 and $700,000 annually in sales tax revenue, and selling Sherman's to the CAC is the best strategy for increasing that figure. He said the CAC's status as a nonprofit will help it acquire grants and keep it viable as the entity rehabilitates the property.
"The tax money is going to come from bringing families into the town of Caroga for an experience, whether it be a Sawyer Fredericks concert or a movie, or other event," Long said.
Timeline of Events:
• December 2014 - Sherman’s conveyed to Caroga by Balboaa Land Development (George and Ruth Abdella). Donation Agreement between town of Caroga and Balboaa Land Development was signed by George Abdella and Supervisor Ottuso.
• February 2015 - Citizen committee formed to review donation agreement and make recommendations to the Town Board.
• March 2015 - Town Board officially adopts the Donation Agreement unchanged after reviewing the citizen committee recommended changes.
• May 2015 - Due to filing of lawsuit by Caroga citizens, the Town Board rescinds its March resolution adopting Donation Agreement on the advice of outside counsel. George Abdella maintains the Donation Agreement is valid.
• February 2016 - Sherman’s Advisory Committee was established to solicit proposals from developers, real estate agents and others with interest in the purchase, lease or development of the Sherman’s property. The Committee included members of the Town Board, Planning Board, local businesses, and Fulton County development experts.
• February 2016-July 2017- Sherman’s Advisory Committee distributes formal request for proposals, meets with six commercial brokerage agencies, and officially receives two proposals: Caroga Arts Collective (CAC), and LPP Management LLC. The Committee provides extensive feedback to each group and holds public presentations for each proposal.
• July 2017 - Sherman’s Advisory Committee unanimously recommends Caroga Arts Collective (CAC) as the most viable candidate for long-term use of the Sherman’s Property.
• August 2018 - Letter of Intent was presented to Town Board whereby George Abdella indicates that if property is sold to the CAC, Balboaa Land Development will consent to release the town from any and all obligations under the Donation Agreement.
• September 2018 - Public presentation by the CAC regarding their plans for the Sherman’s Property.
• October 2018 - Town Board received contract of sale from CAC attorney. Contract negotiations with CAC begin and are pending final resolution.
• November 2018 - Town Board passes resolution combining Sherman’s parcels into one parcel.
Timeline provided by the Caroga Town Board