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Simao accuses Lundy of interfering with business at county corporate park

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Developers P.J. Simao and Michael E. Lundy have locked horns over a plan by Penske Truck Leasing to open a rental facility at a building owned by Mr. Lundy in the Jefferson County Corporate Park off outer Coffeen Street, across from Car-Freshner.

Originally, Mr. Simao believed Penske was going to move into his building near the entrance of the park at 21291 Route 12F, the former SMX repair center. But the truck rental center has abandoned that plan to move into the building owned by Mr. Lundy, whom Mr. Simao has accused of trying to make a sweetheart deal with the Jefferson County Industrial Development Agency.

As owner of the industrial park, JCIDA’s bylaws prevent retail businesses such as Penske from moving in. Penske qualifies as a retailer, but Mr. Lundy has asked the agency to make an exception to that rule by acquiring special approval for the company to move into his 10,000-square-foot industrial center, which has sat vacant since the West Carthage developer built it in a speculative venture in the summer of 2010.

The agency has moved retailers into the park in the past, however, and approved those agreements by acquiring signatures from tenants in the park. Retailers at the park include Timeless Frames, Morgia’s Pasta and Haun Welding Supply.

“The industrial development park is not there to compete for retail business. It’s my understanding that the IDA gets involved talking with (companies) trying to override these covenants, yet I haven’t been able to find out the agency’s rules,” Mr. Simao said. “My opinion is this would have never been a possibility without an industrial entrance with a traffic light, which it has never had before. I think (JCIDA) should look at traffic impacts at the park, as this would certainly impact the traffic counts.”

The Alexandria Bay developer, who specializes in retail property, has not acquired industrial property within the corporate park but owns commercial property bordering its entrance on Route 12F. Last year, he demolished the former Griff’s store at the intersection to enable Jefferson County to build the new industrial park road, which is aligned with the entrance to Salmon Run Mall. He also has developed the former Bomax site at the intersection, where a Nice N Easy store is being built by Valentine Stores Inc.

Donald C. Alexander, JCIDA chief executive officer, said the agency’s primary focus is to recruit to the park businesses that create jobs, and exceptions are made for some retail projects. The purpose of the agency’s bylaws that restrict retailers is to prevent projects that could draw a high amount of traffic, he said, such as big-box retailers like Walmart.

“The whole point is to create jobs, and obviously Penske needs some people to operate this,” Mr. Alexander said. “We’re not providing any incentives to Penske or Mr. Lundy to do this. Our policy is to work with all developers. And if one comes to us with a viable project, we’re going to do our level best to ensure it moves forward.”

An email from a Penske spokesman Wednesday confirmed it’s seeking to open the facility at Mr. Lundy’s building.

“This new location will have the added space we need to accommodate the large commercial semi-trucks and trailers we rent as well as the moving trucks we rent to consumers for household moves,” it reads. “We anticipate it will open in the fourth quarter of this year.”

Watertown Spring & Alignment, 445 Coffeen St., now serves as a Penske rental agency by renting small trucks for household moves. Penske did not say whether that operation will be discontinued.

Mr. Lundy declined to comment Wednesday about the Penske deal. He defended his past relationship with the JCIDA, however, in light of allegations of favoritism by Mr. Simao.

“Businesses can go anywhere in Jefferson County,” he said. “Whether they’re in or out of the corporate park, they simply have to go to the IDA to request benefits. The IDA is proactive about providing businesses with benefits. A developer — whether it’s Mr. Simao or anyone else — is always welcome to do that. Mr. Simao crying over losing a business is not my problem. It sounds like someone is jealous.”

Though Mr. Simao has never sought to purchase land at the corporate park, he contended Mr. Lundy has prevented other developers from doing so by controlling land there since 2011.

In August 2011, JCIDA made a purchase agreement with Mr. Lundy to sell him 14 acres developed by his Carthage-based construction firm, Lunco Corp. The deal was made after Lunco developed a site to build a warehouse for CFM Food Distributors. But CFM unexpectedly filed for bankruptcy, and Mr. Lundy claimed to have spent thousands of dollars on an environmental review and blueprint for the warehouse.

The agency agreed to sell Lots 10 and 11 to Mr. Lundy; in turn, he agreed to complete additional site work needed to make the land shovel-ready. But while the agreement gave Mr. Lundy control of that land, he didn’t actually exercise his purchase option until this July. Mr. Lundy bought 8.8 acres of property for $110,000, at a reduced price of about $12,500 per acre. He also bought Lot 12 from JCIDA for $124,000 before selling it to North Carolina developer SunCap Property Group for $559,000. SunCap is building a 64,000-square-foot FedEx facility there.

“Those pieces of property have been marketed to developers since Mr. Lundy had control,” Mr. Alexander said. He said that before FedEx entered the picture, Eagle Beverage Co. and another undisclosed company backed out of plans to open facilities on land developed by Lunco. Corp.

From Mr. Simao’s perspective, though, Mr. Lundy has been unfairly allowed by the JCIDA to “tie up” the property since the CFM deal went sour in 2011.

“He didn’t even own the property, but they allowed him to continue to keep the property tied up because they felt bad he lost with CFM,” Mr. Simao said. “But the agency should not have bailed him out and let him become the exclusive developer. To me, it’s patently unfair to people in the park who may have had an interest in the land.”

Mr. Simao also said he believes Mr. Lundy has exercised political influence as leverage with “key agency and political leaders” for business transactions through his connection with JCIDA. Mr. Simao cited an example that occurred in the fall of 2011, when he was in the process of selling property along County Route 202 to Rochester developer Morgan Management. On Nov. 22, Mr. Lundy sent a letter to company owner Robert Morgan that suggested he might benefit by abandoning his plan to buy property from Mr. Simao. Mr. Simao obtained a copy of the letter from Mr. Morgan.

The letter says: “I believe that if you are open to a new location and project philosophy, I might have a solution for you — a solution that I believe would not only be cost effective for the construction of the project, but would also have the potential for better success at obtaining your desired PILOT.”

Mr. Simao said, “By that point, we already had our municipal approvals in place with the town of Watertown. At that point, Morgan was negotiating the PILOT agreement.”

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