Shuttered Staten Island arcade is in foreclosure
While the default should not prevent the sale of the land, it could lengthen the process
Monday, March 23, 2009
By KAREN O'SHEA
STATEN ISLAND ADVANCE
STATEN ISLAND, N.Y. -- A shuttered South Beach arcade that leaders in the Russian community hope to transform into a new, $4 million multicultural center is in foreclosure, but those who helped secure state money for the project say the default should not affect their plans to buy the building and construct a new facility.
The Staten Island Community Center (SICC), currently based in Dongan Hills, still hopes to build a new, expanded center at 300 Sand Lane, home of the old Beachland Amusement.
SICC is both the beneficiary of government largesse -- Assemblywoman Janele Hyer-Spencer (D-Mid-Island/Brooklyn) secured what she has said is one of the largest, single funding streams with a $4 million grant for the new community center -- and a victim of bad timing.
Foreclosure proceedings against the Sand Lane property began one month after SICC signed a $2.1 million contract to buy the property.
"We don't want to lose this location," said Victoria Shteiman, an attorney for SICC who does not believe pending foreclosure will prevent her client from buying the property.
"We have a contract with the current owner -- that is the bottom line," she added.
But foreclosure could complicate an already arduous process. The sale also cannot take place until the state Dormitory Authority approves the deal and releases $2.1 of the $4 million for the purchase -- and that could take up to 10 more months.
The former arcade owners held a $1.4 mortgage on the property and started foreclosure proceedings in November against 300 Sand Lane LLC and its principals, Edouard (Ed) Gitlin, Gavriel Mosheyev and Boris Yadgarov, public records show.
Gitlin, partner in the New York Steakhouse in Sheepshead Bay, Brooklyn and the former owner of a real estate company on Long Island, said he had hoped to create a supermarket at the Sand Lane property before the market changed.
His limited liability corporation bought the property in 2006 for $1.9 million -- at the peak of the real estate bubble and a time when a mini construction boom was taking place in South Beach, where the Russian population has been growing steadily.
While the default should not prevent the sale of the land, it could lengthen the process
Gitlin and his partners were unable to refinance the property when the market changed last summer. That left them unable to pay the $1.4 million balloon mortgage due in July, he said.
"We are negotiating right now with the people holding the private mortgage. It's a very nice family that owned the arcade for many years, so we are hoping to come to a resolution with them that they would hold off the foreclosure until the buyer can close on it and we will be able to give them all the funds and arrears," said Gitlin.
Assemblywoman Hyer-Spencer, who secured the $4 million in state money for the project, is also optimistic. She thinks foreclosure might be an incentive for all parties to work more quickly to finalize a deal.
"This is an amazing opportunity to build something in an economic downturn," said Ms. Hyer-Spencer. "The fact that they are trying to purchase land in foreclosure -- kudos to them," she added of SICC.
She said her biggest concern is that people understand that the new center is for all Staten Islanders, not just the Russian community spearheading the effort.
"SICC has been catering to every kind of multicultural walk of life on Staten Island, including the burgeoning Pakistani population, and the Russian, and Jewish population," she said. "They were running arts programs, music and language programs. This is a base of operation, an entity in our community doing community-based work."
"We want to give back to the Island," added Arkadiy Fridman, president and CEO of SICC.
Arkadiy is part owner in the Jefferson Avenue building that currently houses the SICC. The non-profit organization shares space with a for profit day care center.
