Capitol Plaza demise ruled due to improper practices
Judge: $4M in real estate debacle
ROTTERDAM Rotterdam’s Capitol Plaza has long since been reduced to rubble — a new restaurant and bank now stand in its place.
But the sad saga of the kitschy 1950s-era shopping center lives on in Schenectady County Supreme Court, where a judge recently awarded the former owner a multi-million dollar settlement for a botched real estate deal that ultimately led to its demise.
Judge Barry Kramer ordered Eric Diamond and Bob Blank — two principals from HDB Rotterdam — to pay former Capitol Plaza owner Jeff Musiker $4 million in damages and interest; the lawsuit was filed after a deal to build a Walgreens pharmacy on the site went south nearly five years ago.
Kramer issued his judgment last month, which assesses the two partners and their subsidiary companies $2.7 million in damages, plus $1.3 million in interest. The damages were based on the money Musiker lost in rent from the plaza, tenant claims that were filed against him after several leases were broken, the depreciation of the plaza after the initial sale fell through, attorney fees and the cost to insure the building after the development company walked away from the deal.
“This judgment is based on fraudulent behavior by them and the individuals involved with their corporation,” Musiker said during a phone interview from his home in South Carolina. “They lied to me.”
Contacted this week, Bob Blank refused to discuss the lawsuit or why the deal went so horribly awry.
“I can’t comment on that,” he said. “No comment.”
Capitol Plaza was home to more than a dozen small businesses before the developers proposed demolishing it to build the 14,700-square-foot pharmacy. Opponents of the project — mainly the plaza’s tenants — argued there were already too many chain pharmacies in the town and that another would merely displace viable businesses.
Blank insisted his company would help relocate the businesses with long-term leases to other areas of the town. He even suggested the company might provide money for their move if the project received town approval.
Rotterdam’s Planning Commission approved the pharmacy in July 2006, contingent upon the developer acquiring a sliver of land adjacent to the plaza and needed to allow enough room for parking. But ownership of the land remained in dispute for nearly a year until Schenectady County was able to claim title and sell it to Musiker for $25,000 in April 2007.
With demolition seeming inevitable, many of the businesses vacated Capitol Plaza. The last business left the building in February 2008.
Yet the land deal for Capitol Plaza remained stalled and the building quickly started to fall into disrepair. Thieves robbed the structure of its copper and a drunk driver crashed through one of its storefronts.
Behind the scenes, Musiker watched what was once a lucrative deal for the property quickly unravel. Walgreens acknowledged they no longer had an interest in building in Rotterdam in July 2008 and the developers started to break the promises they made when they agreed to buy the property.
The developers never helped to relocate Capitol Plaza tenants and three of them ultimately sued Musiker for breaking their leases. The developers also allowed a second property in the deal — a residence in South Carolina that was to be transferred to Musiker — fall into foreclosure.
The home, originally valued at $166,000 and where Musiker planned to retire, sold for less than a fifth of its value at tax auction. He even offered to pay the taxes on the property until they could work out a settlement, only to have the developers ignore his suggestions.
“They were callous enough to do nothing with it.
Musiker ultimately sold Capitol Plaza to BBL Construction for $1.5 million in 2010 — about $1 million less than the contracted sale price with HDB. Plans for the Recovery Sports Grill and a bank branch were quickly approved in August 2010 and the forlorn shopping center was demolished later that month.
The new structures occupy only a fraction of the 29,000 square feet that Capitol Plaza once occupied. The restaurant occupies about 7,300 square feet, while the adjacent bank takes up about 2,500 square feet.
Musiker said the failed Walgreens deal ultimately crumbled a perfectly viable shopping center. He believes the building he purchased in 1991 would still be standing today, were it not for HDB’s broken promises.
“I know it would be there,” he said. “I had nice tenants and they were happy to be there. They wanted to be there.”