Efstathios “Steve” Valiotis is the immigrant American success story. He started as a busboy and dishwasher 51 years ago in the United States after arriving from his homeland in Greece.

Over the decades he built a personal empire once estimated at $1.45 billion through real estate development, property management, banking and other ventures, including the family olive oil business back in Greece.

But lately, the 77-year-old Valiotis suffered setbacks, including a failed glass recycling business in New Jersey that lost millions, legal action by the New Jersey state attorney general, a lawsuit from New York City and an unfinished apartment project in downtown Peekskill that is several years behind its projected completion. Alma Realty, one of Valiotis’ companies, is the developer of the Peekskill project.

One Park Place is a nine-story, 181-unit rental apartment building which received approvals in 2017 and broke ground in 2019 with a target date of opening in the spring of 2021. The development takes up an entire city square block along Broad, Brown, South James and Park streets.

While major construction work appears to be finished, much remains to be done with some workers seen on the site during the past several weeks. A lot of interior work is completed. All the labor employed on the project is non-union.

Alma also owns the office building at One South James Street adjacent to the new apartment project. Valiotis bought the three-story office building from the bank in 1998 after the prior owner, the major landlord for IBM throughout the Hudson Valley, walked away when IBM closed their manufacturing facility and offices in Dutchess County. The huge parcel sat vacant in downtown Peekskill for nearly 20 years.

“The One Park Place project is full of economic potential for the City of Peekskill, bringing with it a population infusion of new consumers and economic stimulus for the city and its local economy,” the developer stated in documents filed with the city’s Industrial Development Agency.

The IDA granted sales tax exemptions and mortgage filing fee exemptions totaling $853,943 in 2020. The property owners pay approximately $110,000 in school property tax annually.

The market-rate project was approved prior to Peekskill’s 2022 affordable housing ordinance that requires a set aside of  10 percent of the units to be affordable in new projects. One Park Place rents were planned in 2021 at a range of $1,200 for studios to $2,750 for three bedrooms.

“The principal benefit is that you will have people with moderate incomes walking in the downtown- feet on the ground,” said William Florence, the Peekskill attorney who represents Alma. Florence was the Peekskill Corporation Counsel from 1982 to 1995.  “They’ll need groceries, doctors, dentists. Every dollar they spend turns out to be seven dollars of well-being in the community,” he told the Herald last week.

Delays lead to millions in revenue lost

Trouble appeared early on during construction at One Park Place. The state Department of Environmental Conservation (DEC) stopped work there in November 2019 requiring remediation of contaminated soil that initially cost nearly $2000,000, according to documents filed by Alma Realty.

When the Covid pandemic struck in 2020, work again stopped from February until June, costing another $675,000 in insurance and rental equipment expenses and delaying construction further. Lengthy delays on such a large project extract a high cost. Two years ago, the developer estimated that the added expense and lost rent came to a shortfall of over $5 million by 2021.

Since then, with a projected residential and storefront rental income of over $1 million a month, the project is approximately another $20 million behind in expected additional income because of the ongoing delayed opening.

Alma financed the project with  a $35 million loan from Sterling Bank and invested another $16 million.

There’s still a lot to be completed before a certificate of occupancy will be issued by Peekskill. Major work remains on a rooftop park and water irrigation system. Also, the developer is obligated to install a signaling system on Park Street that will stop traffic whenever the Central firehouse sends out trucks, at a cost of about $300,000.

Lawsuits from New York City and New Jersey

Alma Realty and Valiotis were charged in legal actions from two government agencies over alleged violations by two other businesses he runs.

Alma Realty is one of three landlord and management companies sued by New York City this past January, alleging thousands of open code violations.

“All New Yorkers deserve to live in safe, clean homes, which is why we will not tolerate landlords who repeatedly flout the law and put the health and wellbeing of tenants at risk,” Mayor Eric Adams said in a press release.

“Alma Realty, Empire Management America and Sentinel Real Estate allowed thousands of code violations to go unchecked for years, endangering the well-being of thousands of resident. These lawsuits and agreement underscore our administration’s commitment to more aggressive enforcement actions against bad actors and deterring this sort of negligence in the future,” continued the release from Mayor Adams.

The lawsuit alleges that Alma has maintained dangerous and unsanitary conditions in 13 buildings, where more than 800 violations remain uncorrected. Some of the worst conditions in these buildings include deteriorating facades, defective electrical wiring, missing fire doors, lead-based pain hazards, and infestations of rats, and mice, according to New York City officials. The New York City Department of Housing Preservation and Development (HPD) also previously sued Alma over two of these buildings.

On May 15, an attorney for Alma Realty and Valiotis denied the allegations charged in the city lawsuit. They also claimed that the case was filed incorrectly against buildings outside of new York County, and said time had lapsed to file charges.

Alma Realty manages dozens of apartment building in New York City and New Jersey. The Long Island City-based company handles residential and commercial properties containing approximately 15,000 apartments and 5 million square feet of nonresidential space.

In the New Jersey case, the state Department of Environmental Protections charged Valotis and his company Pace Glass with operating an illegal dump site with waste products in piles up to 40 feet including approximately 300,000 cubic yards of crushed glass material, which was mixed with plastic, paper, food debris and other solid waste at two sites in Jersey City, creating noxious odors, dust and fire hazards, as well as failure to correct numerous violation notices.

The state’s case against Pace and Valiotis was resolved in January this year with a consent agreement requiring Pace to remove all debris and remediate the site without acknowledging any violations of the law. Remediation must be completed by June 2025. The company paid $5, 470 in fines. Pace also agreed to a penalty of $30,000 while a co-defendant paid $20,000.

Pace Glass was a glass sorting and recycling business that planned on building a massive, $90 million facility in Andover, New Jersey. That business failed in 2021, and according to a published report, Valiotis was listed as a creditor owned $38.7 million.

Firing contractor caused another delay in Peekskill project

Aside from the land remediation and Covid setbacks, the greatest delay in completing the Peekskill project on time came in August of 2020 when Alma and Valiotis fired the general contractor on the job, Green Works, based in Tomkins Cove in Rockland County.

In the wake of the competing allegations in an ongoing lawsuit, there are now nine mechanic’s liens filed against the property from contractors who claim they were never paid for their work on the project.

In the lawsuit, BNS LLC, another Valiotis company, charges that Green Works and its successor company TPK did not complete the work they billed, did work poorly, and failed to pay subcontractors. They are seeking $7 million from the fired contractor. BNS says they paid five other subcontractors nearly $500,000 to settle their claims agains Green Works and TPK.

In court papers, attorneys for Valiotis say the fired contractors were paid “not less than 19,076,574.62 for the Project, or approximately 50 percent of the agreed-upon price under the parties’ agreement.”

“Defendants, despite being paid approximately 50 percent of the agreed-upon price under the parties’ agreement, collectively only completed approximately 30 percent of the Project work before being terminated…”

In response, TPK’s attorneys claim the company did all the work they were hired to do and that they are owed $5.8 million by BNS LLC.

“…Alma has used BNS to commit either a fraud or other type of wrong against Counterclaim Plaintiffs,” the attorney’s claimed in court papers.

“Despite (defendants) performance of all Work in a quality and workmanlike manner, and in full compliance with all requirements, BNS and Alma have refused to pay for all of the Work, leaving an outstanding balance of at least $5,830,042.03.”

Green Works, the general contractor that Valiotis hired and then fired on the Peekskill project, was headed by Michael Mahoney, who was also a principal with Valiotis in the Pace Glass recycling company in New Jersey. Michael Mahoney died in February 2020.

A call to Alma Property’s main office in Queens requesting comment for this story was not returned.