The plan that developer Abraham Rosenberg offered to build a new homeless shelter in Peekskill appears to be off the table.

In the summer of 2022 Rosenberg proposed the new home for the Jan Peek House homeless shelter on the northern end of his 1070 Lower South St. property next to Manzer’s Landscaping. A new three-story self-storage building was proposed on the south end across from McDonald’s.

Rosenberg estimated the new shelter could cost $7 million, which he would fund without state or federal grants.

However, on Monday, Dec. 4, a notice of foreclosure action was filed against Rosenberg to take back the property, demanding repayment of the $950,000 mortgage that the Cartalemi family holds on the parcel of land at 1070 Lower South St.

Rosenberg presented his plan to the Common Council in May 2022, seeking to build the new self-storage facility on a portion of the narrow four-acre site off Welcher Avenue.

He said he wanted to do something for the citizens of Peekskill and proposed the 20,000-square-foot shelter to replace the decrepit 7,500-square-foot Jan Peek Shelter’s current home on North Water Street. His plan included a third building as well.

The following month, Rosenberg hosted a public forum at his Square Cube self-storage facility on Highland Avenue where he elaborated on his plan for the new shelter. In November of 2022 he won a vote at the Common Council that started the process to rezone the property as a shelter site.

Now, the city has annulled those approvals after being sued and the foreclosure notice threatens to take the property back from Rosenberg.

Reached by The Herald, Rosenberg declined to comment on the latest developments.

Cynthia Knox, CEO of Caring for the Hungry and Homeless of Peekskill, the shelter operator, said the group will continue to pursue other options. “It’s disappointing to have these setbacks, but I believe the community and our local elected and county officials are not going to let us fail and will ensure that all the work that CHHOP and the food pantry does continues well into the future.”

Setbacks in court derail the shelter plan

Rosenberg bought the Lower South Street property from the Cartalemis in October 2021 for $1.35 million, borrowing $950,000 from the seller through the mortgage.

According to the foreclosure notice, Rosenberg failed to pay off the mortgage less than a year later.

“Defendant 1070 Park Estates LLC defaulted under the terms of the Note and Mortgage as a result of, inter alia, its failure to pay the full sums due upon maturity of the Note on August 20, 2022,” court papers state.

Rosenberg and two others, Joseph Krauss and Amrom Weinstock, personally guaranteed the mortgage according to the filing. They now owe the principal balance of $941,020.73 as well as 8 percent interest after August 2022 and an additional 10 percent after September 2023.

“The aforesaid default(s) continued beyond any applicable grace or cure period(s) set forth in the Note and/or Mortgage, and by reason thereof, Plaintiff has elected and hereby elects to declare the entire unpaid balance of principal of the Note immediately due and payable together will all other sums due under the Loan Documents,” the papers state.

Three months after he missed the mortgage payment on the property, Rosenberg sought and won action from the Peekskill Common Council to start the rezoning process. On Nov. 28, 2022 the Council voted to approve a zoning change and move the amendment on to the Planning Commission.

Then in March of 2023 the owners of the Blue Mountain Shopping Plaza at the bottom of Welcher Avenue across from the proposed shelter sued the city to stop the zoning change, fearing the impact it might have on business and questioning the legality of the process.

One month ago, on Nov. 2 the city settled that lawsuit, agreeing to annul the zoning change and sending Rosenberg back to square one if he wanted to pursue the shelter plan.

Lingering environmental concerns remain

At the Council meeting of Nov. 28, 2022, concerns were raised about a state Department of Environmental Conservation (DEC) spill report regarding 1070 Lower South St. Then City Corporation Counsel Tim Kramer was handed a copy of the report and said he was not aware of it.

Concerns about possible contamination would be addressed in the future if the proposal continued to move forward, Kramer said. Allegations were made that the developer had not disclosed the report.

In the report, the DEC states that Rosenberg’s consultant reported that soil sample and boring tests had been conducted in October and results were being analyzed.

In March of 2023, the DEC reported that the Rosenberg consultant asked the DEC to close the case but instead DEC required further testing.

Regarding the environmental condition at the site, Peekskill City Manager Matt Alexander told the Herald in an email “The City is waiting for more information from DEC regarding the environmental status of this property.”

Urgent need for a new shelter site

The Jan Peek Shelter is operated by the non-profit Caring for the Hungry and Homeless of Peekskill (CHHOP) and is open seven days a week, 365 days of the year, offering case management, access to healthcare, education, behavioral services, employment assistance and independent living.

Jan Peek House is a Westchester County Department of Social Services-funded shelter for single adult men and women. The shelter provides supportive case management services for clients to develop an independent living plan that focuses on obtaining housing and supportive services such as medical, behavioral, employment and educational.

According to a Nov. 17 post on the Facebook page of CHHOP, “Our landlord has not yet agreed to extend our current lease set to expire on December 31, 2023, and has stated that any possible renewal would include a minimum 12 percent increase.”

Shia Lebrecht and Malkie Lebrecht are listed as managing members of 200 North Water St. Equities LLC., owner of the building at 200 North Water St. that rents space to the Jan Peek Shelter.