Smoking gun in Bloomingburg? Documents lay out plan for Hasidic community

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April 21, 2016

Shalom Lamm’s deceptive “Chestnut Ridge” development in Bloomingburg, NY has been riddled with controversy since its inception.

The River Reporter yesterday characterized documents unsealed in Federal court as a “smoking gun” indicating “the development of Villages at Chestnut Ridge was intended to be a Hasidic community from its inception.”

Per Chestnut Ridge’s official website:

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Yet, architectural renderings and “community descriptions” make no attempt to veil Lamm’s exclusive clientele. “Post-marriage learning center and spas” is a cleverly transparent euphemism for kollel and mikveh. Two beds in a “master suite” are not typically found in a housing development that does not “discriminate on the basis of religion or any other prohibited status.”Screen Shot 2016-04-21 at 10.26.12 AM.png

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From The River Reporter

Documents unsealed by a federal judge and obtained by The River Reporter on April 19, indicate that Shalom Lamm, the developer of the controversial project called Villages at Chestnut Ridge, knew at least from 2006 that the project was intended to house a Hasidic community. Further, the document shows that the tiny Village of Bloomingburg was an attractive place to build the development because the local government could be taken over by newcomers.

An executive summary of the project, marked “highly confidential” and authored by Lamm in 2013, had specific details. It reads, “The developers of Chestnut Ridge have worked for 7 years in complete secrecy to achieve a fully approved project (Phase I). It is intended to be a transformative development; building a secure, affordable, growing Hassidic community that will ultimately accommodate thousands of families….”

“Critically, the development is in Bloomingburg, NY, the smallest village in NYS. With the initial occupancy of these homes, the owners of Chestnut Ridge will effectively control the local government, its zoning and ordinances.”

There have been multiple challenges to voters in Bloomingburg, with a state judge exclaiming at one point that members of the Hasidic community had attempted to “stuff the ballot box.” But ultimately, the Sullivan County Board of Elections made a deal with a group of challenged voters, and it became very difficult to mount further challenges. The village board now has a majority of members who support the development.

So far, about 45 units of the proposed 396 units have been completed, but the executive summary makes clear that the ultimate size of the community is envisioned by the developer to be much bigger. It reads, “Additional land contiguous to the first phase has been quietly acquired or optioned during this silent time in order to acquire adjoining properties to expand the community for many years in the future. These lands will be annexed into the village. The intention of the developers is to provide an excellent and secure solution to the housing crises, to build a complete Hassidic/Torah community with all of its support facilities, and to be rewarded for the years of secret toil and investment with a very substantial return on investment.”

Residents have said for many years that the project was first presented as a retirement community with perhaps 120 units. That plan also included a golf course and club house. But the executive summary seems to indicate that the building and a utility building were really meant to be something else. The summary reads, “As the first phase, the developers have secured all approvals and permits for 396 townhouse units, 58,000 sf of retail and professional space, permits for a large community center (shul), maintenance building (mikveh),”

Misdirection regarding this aspect of the project is further indicated in an email sent by Lamm’s partner Kenneth Nakdimen to others involved in the project in 2012. The letter reads, “I think that we are heading the wrong way with the renderings. Right now we have the goyishe architect coming up with renderings and floor plans that we need to get our approvals. We are all cognizant that we will not use those renderings for the real shul and mikvah, but they are what we need to get our building permits. Once we get our building permits, we will turn them over to the Smilowitz’s because they will be the actual builders of these buildings… The fact that the shul and mikvah will not be built like the renderings that were approved simply mean that Smilowitz will have to get as-built C of O’s [certificates of occupancy.]”

The documents were ordered unsealed after being sealed for about a year by federal judge Katherine Forrest in an ongoing lawsuit brought against the Town of Mamakating and others by Lamm. Lamm accuses the town of discrimination for denying a permit for a Hasidic girl’s school. Lamm, on the other hand, has been accused of violating the Fair Housing Act by planning a community that would only allow members of the Hasidic community to live there.

The River Reporter may follow this report with another one after examining more of the released documents. The entire executive summary is published below.

The Villages of Chestnut Ridge
Executive Summary- Very Highly Confidential
January 14, 2013

Executive Summary – The developers of Chestnut Ridge have worked for 7 years in complete secrecy to achieve a fully approved project {Phase I). It is intended to be a transformative development; building a secure, affordable, growing Hassidic community that will ultimately accommodate thousands of families.

As the first phase, the developers have secured all approvals and permits for 396 townhouse units,58,000 sf of retail and professional space, permits for a large community center {shul), maintenance building (mikveh), buildings meant to be renovated and house the first boys and first girls school (18,000 sf and 12,000 sf respectively), an 11 acre campus for school expansions, an ideal commercial corner for a refuah center and additional land for retail expansion.

Critically, the development is in Bloomingburg, NY, the smallest village in NYS. With the initial occupancy of these homes, the owners of Chestnut Ridge will effectively control the local government, its zoning and ordinances.

Additional land contiguous to the first phase has been quietly acquired or optioned during this silent time in order to acquire adjoining properties to expand the community for many years in the future. These lands will be annexed into the village. The intention of the developers is to provide an excellent and secure solution to the housing crises, to build a complete Hassidic/Torah community with all of its support facilities, and to be rewarded for the years of secret toil and investment with a very substantial return on investment.

Phase I- Land Status, Residential The Villages of Chestnut Ridge, is a fully designed and approved 396-unit townhouse development on 198.3 acres located in Bloomingburg, NY on the Orange/Sullivan County border. It is 20 minutes from Kiryas Joel.
The principals of Black Creek Holdings, LLC, the developers, have worked through the highly complex New York State Environmental Impact Statement “SQRA” review process and achieved full approvals, including the filing of the sub-division plat with Sullivan County. The first 3 model homes have been constructed and the first 108 building foundation permits have been granted. 20 foundations are being poured now.
The homes are clustered in units of 5, 4 and 3 townhouses. Each unit is 2,850 sf with 5 bedrooms, a study, large dining room/living room, beautiful large kitchen and second floor laundry room. Each unit has a sukkah­ capable wood porch. A pesach kitchen is available as an upgrade.

A Developers Agreement has been executed by the Village and developers outlining the rights and responsibilities each has with regard to the construction of a wastewater treatment plant that will service both the Village and the development. The project includes the construction of a new 225,000-gallon wastewater treatment plant for the Village; of which 72,000 gallons will be allocated to the current Village residents and the remainder to Chestnut Ridge. In all, the development will provide central water via its own water tower, sewer and natural gas provided by Orange & Rockland.

Phase 1 – land status commercial. On the Chestnut Ridge development, land has been approved and designated for a community clubhouse, sized to accommodate a large, multi-story shul, mikvah, and beis medrash. A maintenance building has been designed on a private community street and sized to accommodate mikvaos with up to 14 boros and a large second floor for a nursery/kindergarten.

In addition, a site within walking distance (with a joining sidewalk from the development) has been approved for 54,000+- of 3 -story retail space with upstairs professional offices. Land has been acquired to be able to ultimately expand this facility to 150,000 sf as the community grows.

Across the street and on one of the four main corners of the village, land has been acquired to accommodate a 12,000 sf grocery store. Although the land is zoned commercial, approvals will be needed for the grocery.

Across the street on a second main corner of the village a commercial building has been acquired that will be replaced with a Refuah Center as the community grows.

Phase I – Land, Mosdos – A fine, existing, new building 1/2 mile away from the community has been contracted to be converted to an 18,000 sf single story boy’s school and beis medrash.
An older building 1/2 mile away from the community is in late stage negotiations to be converted into a girl’s school of approximately 12,000 sf. Both schools are as of right from a zoning perspective, but will need special use permits by the village.

11 acres have been acquired 1/2 mile away from the community and are being held in reserve for the construction of modern, efficient mosdos as the community grows. The land borders on the proposed boy’s school.

Construction – Construction will likely be done by Blitman Development Corp. Blitman has been building high quality homes for over a quarter of a century throughout New York State. They’ve designed and built over 1,000 homes. The founder and still active leader of Blitman Development Corp. is Howard N. Blitman, an award-winning professional engineer who recently held the position of President of the National Society of Professional Engineers. Mr. Blitman is a graduate of Rensselaer Polytechnic Institute and currently serves as a trustee of RPI. Blitman will be providing and bonding a guaranteed maximum cost contract.

Representing the developers will be Saul Levine, PE. Saul has more than 30 years experience in all areas of construction and construction management and is a graduate of MIT with a degree in engineering and an MBA from NYU.

Financing – Construction financing is being arranged by Greenbridge Real Estate Capital (Philadelphia). Blitman, however, has expressed interest in bringing all of the financing to the deal through his own sources (most likely M&T Bank).
Phasing& financing Risk – The project will be built in 4 logical phases. The first phase consists of app. 70 units. Construction of the first phase (as well as subsequent phases) will not commence until non-refundable pre­ sales for the applicable phase has reached 90%. As such, with respect to phase one, construction financing will not be funded until the first 63 units are contracted, with deposit posted and, where applicable, end-loan financing approved. The budged construction cost for the initial phase is approximately $130MM. Based on our projections, by staggering the unit closings as they come online, we anticipate that at the high water mark, we will need approximately $30MM in revolving construction financing – with the average outstanding balance of the construction loan being $18,000,000 over the course of the entire development process.
Marketing – The developers were honored with a visit to the development by the Satmar Rebbe on Wednesday, January 2nd, 2013. The rebbe has been keenly aware of the development and all of its details for about a year. The intensity of the secrecy surrounding this project has been emphasized and the rebbe seems to have taken this to heart. He seemed very pleased with the homes and the giant and transformative nature of the plans.

Since January of 2012 the developers have been engaged with deep discussions with Satmar askanim, a father and son team named Moshe and Volvy Smilowitz. He is a well-known baker and community activist. They were key players in the Satmar-Bethel victory this past summer. We have had a number of informal “deals” with the Smilowitz team. These agreements have changed a number of times as the project has progressed, sometimes at their request, sometimes at the request of the developers.

No final deal between the parties exists in writing at this time. They have invested substantial time and effort to date to bring the development to where it stands.

The developers have worked with them on the development of the home designs, marketing ideas, phasing, pricing, mosdos, infrastructure and all aspects that might involve their community. It is anticipated that 20% of the original residents will be community workers ( ie shop owners, teachers, kollel members) 20% will own internet based businesses, 20% will work in Orange County, and 20% will work in NYC. There will be bus service daily to NYC.

In order to give the first residents confidence in the growth of the community, the completion of the shul, mikva’s, boy’s and girl’s schools, retail and professional space, and all of the excess land for residential and mosdos growth will be in place or under construction when they first move in.

Unit Pricing and Structure – The homes are developed in clusters of 3, 4 and 5 units of townhouses. Each end unit is tentatively priced at $369,000 and the middle units are priced at $349,000, very attractive pricing when compared to Monsey, Kiryas Joel or any comparable pricing for brand new large units. All units are 2,850 sf, which translates into a sales range of $129/sf to $122/sf. Comparable (not Jewish-centered) properties in the area have recently sold for a median price of $143/sf (high of $177/sf and low of $120/sf) without the unique features of the subject development, which is sized to accommodate large families, kosher kitchens, Passover kitchens, and a plethora of off-site community amenities.

Purchasers will first reserve a space with a $1,000 refundable deposit. When over 100 reservations are reached, the reservations will moved to contract, with a $75,000 non-refundable deposit, and either an end loan commitment, or certification by third party mortgage broker who will certify that the applicant will qualify for a loan. In addition a there will be a small HOA fee monthly for maintenance of yards, common area streets, insurance and security. With the interest carry, maintenance fees and real estate taxes, a large family should be able to own their large, new home for less than $2,000/month.

Mortgage broker Lester Bleich of South Shore Mortgage will handle end-Loans. Bleich has deep experience with the Hassidiche community and their mortgage requirements. He is well equipped to handle varied types of credit and can work with co-signers.
Fair Housing Laws – Special attention has been paid to be sure all Fair Housing Laws regulations are adhered to properly. While no one can guard against frivolous law suites, care has been taken to work within the regulations. All of the sales procedures and materials will be produced in concert with legal representation from the Albany law firm of Whiteman,Osterman.

Proforma of Initial and Subsequent Phases – Selling out the initial phase will result in free cash flow of approximately $18,000,000. It includes having embedded the costs of the wastewater treatment plant in the initial units. Subsequent units will have a fraction of the cost, as the costs will have been borne by the first units.

Taking a page from the Kiryas Joel growth, current growth rates within the Satmar community suggest a continuous and growing crises because of the exponential growth of young people having as many children as their parents. In 1990, there were 7,400 people in Kiryas Joel;in 2000, 13,100, nearly doubling the population.

ln 2005, the population had risen to 18,300. The 2010 census showed a population of 20,175,for a population growth rate of 53.6% between 2000 and 2010. The goal is to provide housing that is both relatively affordable and beautiful with sufficient density to satisfy the residential requirements of the community, as well as space for community buildings and recreation.

Given the additional land currently under ownership or contractual control that will be annexed to the village (a process the developers are experienced with), and the change in zoning to equal any of the surrounding areas, one can reasonably estimate the total build-out over 15 years to be in the area of 5,000-7,000 units. Taking the lower number, if one were to average over time a profit per unit of approximately $75,000/unit, that would equate to a gross cash flow of $375,000,000. Paying off bank debt (roughly $2,500,000), reserving for engineering and architectural fees (roughly $3,000,000 over time), and large reserves for legal fees (roughly $3,000,000,over time), overhead (roughly $5,000,000 over time) and leaving $25,000,000 in for miscellaneous future unknown expenses, the net for the entire project would be about $336,500,000.

Current Capital Stack & Usf: of Additional Investment – The current developer and partner funds have been used to: acquire the initial properties, acquire the expansion residential, commercial and community support properties, take the original property through SQRA, annexation, approvals, engineering and architectural design, to fight off the opponents of the development in the past year, to build the model units, and the infrastructure that has been build to date.

The properties that make up the initial phase and expansion properties include: Raymond farm, Blegec Farm, Blejec annex, Waschits,Tetz, Truex, Freemen, Fedun, Market Street, Saunders, Spencer, Concord,Nadine garage, Main street warehouse, and Hoppe.

Total Capitalization as of December 31,2012: Direct Investment – $17,941,780

 H/t – flatearth

5 thoughts on “Smoking gun in Bloomingburg? Documents lay out plan for Hasidic community

    • I guess you didn’t see the billboard on route 17 – nothing here is illegal – you commies want to make dreams of success illegal, what ever happened to the American Dream?

      Like

      • @mike – you are an idiot!

        Find me a black family who they will sell to and then i’ll agree. They won’t sell to Belzers much less anyone else. Satmars that obey the law are about as rare and a Hasidic Rebbe who tells the truth and p ays his taxes.

        Like

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