Sleepy Hollow Tries to Acquire GM Site for $12 Mil

SLEEPY HOLLOW, NY-While talks are still ongoing between the two parties, the village of Sleepy Hollow, perhaps frustrated over the lack of progress in developing the now vacant former General Motors assembly plant here, has decided to exercise an option to acquire the 99-acre site from the automaker for $12 million.

Sleepy Hollow Mayor Philip E. Zegarelli reveals that on Dec. 3 the village notified General Motors that it planned to exercise its option to acquire the property and sent a check for $120,000 to serve as a down payment on the land acquisition. The mayor explains that the sale option was contained in a Payment in Lieu of Taxes Agreement reached between the village and General Motors shortly after the plant shut its doors for good back in June 1996. He said the agreement gave the village the option to acquire the property for up to five-and-a-half years after the facility shut down. Zegarelli said that the option runs out on Dec. 26, 2001.

Zegarelli adds that the village informed General Motors some time back that it wanted to discuss either allowing the option to purchase to be extended for some “financial consideration from GM” or for the village to exercise the sale option. He notes General Motors did not address the village’s concerns until after it received the Dec. 3 letter notifying them of its intent to acquire the property. Zegarelli says that some financial offer has been made by GM since in relation to the possibility of extending the purchase option, however, he refused to discuss specific details of the proposal.

At a Village Board meeting on Dec. 11, the mayor was authorized to draft a contract to purchase the property and establish a mechanism to fund the acquisition. While the mayor says that talks continue with General Motors, he notes “there is a very strong need to continue down this path,” especially in light of the option expiration date of Dec. 26.

Gerry Holmes, a spokesman for General Motors, says the automaker wants to continue to own the property and move forward with a development plan for the site. “We hope that we can work with the mayor and the village to allow us to go forward with our plan,” he relates. “We feel that it is in the best interest of the village and General Motors.”

The land sale issue comes less than six months after General Motors and the village jointly announced the selection of Roseland Property Company of Short Hills, N.J., as the developer for “The Lighthouse at Sleepy Hollow” project.

While few project specifics were released, the parties noted that the development would possibly contain senior housing, retail, office, a hotel and conference center and a marina. Holmes notes that since June, Roseland has been conducting a study to determine the value of the property and whether any further environmental remediation is warranted. After those reviews are done, the company will then embark on a master plan to be approved by the village. He adds that construction on the “Lighthouse at Sleepy Hollow” venture would likely not begin until at least two-and-a-half years from now.

If this sale moves forward, the $12 million proposed purchase price could be a major sticking point between the village and G.M. After the plant closure, the automaker and the village battled over the value of the closed plant for tax payment purposes. Eventually, in 1999, a court decided that the assessed value of the parcel should be set at $12 million. Back then, the village had estimated the property value to be between $35 million and $40 million.

Mayor Zegarelli says the village’s purchase offer is based on the value set by the court and pushed for at the time by General Motors.

General Motors now contends that it has since demolished all of the buildings at the site, undertaken millions of dollars in environmental remediation and now has the property ready for development. Holmes notes, “The $12 million figure is not the current fair market value for the property.”

Mayor Zegarelli had no comment when asked whether the village would retain the property if it moved forward with the acquisition or flip the property to Roseland or another developer.