March 25, 2009
Frank Cositore, President
UICC Holding LCC
I think you’re not telling this community everything we need to know. Plus, I think you’re beginning to harm this community. Hence this letter.
First, some background. You and I first met at a public meeting, where you were asking the Village of Malone Trustees to include the Flanagan in a NYS building restoration grant application. I found myself admiring your charm (I’m not being facetious) and enthusiasm. The Flanagan, Lord knows, was an abomination—and here was this hyperactive and voluble man from NJ, asking the community to support his bid for public money to fix the joint.
“God bless him,” I thought.
But before God did any blessing of Frank Cositore, I wanted to let you know we’re a small, highly integrated community (read: everyone knows everyone else’s business)–not stupid, mind you, just small and remote from complicated, fast-paced places like NJ and Manhattan. I told you I loved this community and didn’t want you to hurt it or embarrass it with your extravagant plans for the Flanagan.
Extravagant? Swimming pool on top floor, several restaurants, ballroom, Five Star hotel rooms, sports bar, fitness center. Jeez! All these concepts have been afloat since you bought the place and, at least in my mind, all had your name attached.
None of them is even remotely realistic, of course, but that doesn’t concern me at the moment.
So I walked up to the front of the room, took your hand, and asked you to swear to this community that (a) you were a legitimate businessman, and (b) you would never harm or embarrass us. You smiled at my public theater, and answered yes to (a) and, with (b), assured us you would never harm or embarrass Malone. (I think all this amused you. Perhaps, as well, offended you.)
Frank, that was a public conversation we had, and I pressed you into making a public commitment. A vow before the town—all of us. Which is why I’m writing now. And doing so publicly.
I was serious when I posed those questions.
Let me begin by saying I write as one Malone businessman to another. (My wife and I co-own a medical office in Malone. An honest-to-God business.)
Secondly, I’m familiar with renovating and maintaining spectacular yet weird old buildings.
For decades my family owned the above. Dark Island (Singer Castle), in Chippewa Bay, NY. My brother (Chicago lawyer once fond of representing mobsters) and I managed Dark Island for years.
Like you, I’m familiar with pigeon shit, leaking roofs, major structural problems, funding, and workmen. Oh, and asbestos.
For all these reasons I’ve admired what you have accomplished with the Flanagan (speaking as one owner-of-weird-buildings to another).
Now when I drive by I don’t cringe.
Well done, Frank! (I mean that.)
Now for the second half of this epistle. Here, too, I need to give you some context. My context. My father, who bought Dark Island in 1965, was a con man. (He’s long since gone to his reward which, I fear, in his case is not one he would have chosen.)
Yeah, I’m the son of a confidence man.
If you’re thinking it made for an interesting childhood, you’re right. The interesting thing about cons and hucksters and other glad-handing frauds is—well, there’s lots interesting about them. (Just take a look at the wind energy salesmen. Textbook grifters.) As I say, my dad was one. It also means he attracted cons.
Like flypaper. Cons conning other cons. (Sometime, when you get the chance, read Melville’s classic, The Confidence Man. One of the most astute books I’ve ever read. My father’s scam is in there, if you turn to the chapter on religious charlatans.)
Harold George Martin was a pioneer radio evangelist (complete with requisite phony degrees) who made a fortune bilking old ladies out of their life savings. He was exceptionally good at it. Pity is, he was practicing his art before TV got going, so he resorted to radio, revival meetings, and most of all direct mailings. (The latter being known, in the business, as prayer letters. Highly lucrative.)
But I digress. I assure you, I’m not calling you a con man. I use the term to illustrate where I’m coming from, not where I think you’re coming from. Let’s be clear on this. My point is that, given my (how shall I phrase it?) unorthodox background (born into it; I didn’t choose it), I have gone through life burdened with an acute and perverse degree of suspicion.
Suspicion of what, you ask? (1) Any businessman with a Big Plan. (2) Anyone offering something that sounds too good to be true. (3) Any businessman without an obvious and transparent source of income. (4) Anyone who buys, for peanuts, a large weird old building and promises to turn it into a resort.
This explains why I went up to the front of the room and asked you to assure us (a) you were a legitimate businessman, and (b) you would never harm or embarrass us. (You thought I was asking if you were Mafia. No, I was asking if you were a con and, if you were, to please reform before taking on this community.)
By answering my questions as you did, I believed you that you were not conning us. I still believe you.
Or maybe I should say, I want to still believe you. (For I admit I’ve got a soft spot for restoring old buildings. And who else is gonna lead the charge on the Flanagan besides you?)
Hence, this letter. I’m beginning to wonder, Frank, if you’re losing your grip on yes, I’m legitimate and no, I’ll never harm nor embarrass Malone.
Consider two articles recently in the Telegram. You and Brian Hughes and Hugh Hill (President of the Chamber of Commerce) turned up before the Franklin County Legislature the other day and started your dog and pony show when you were cut off by Legislator Paul Maroun.
“It’s nice to see all you gentlemen and everything,” interrupts Maroun, “but what do you want from us?” (Yay Paul!)
Money. That’s what you wanted. Federal stimulus money. You were asking the legislators to “sign on as the applicant” for either a federal grant or federal loan, with the IDA “as the conduit for the resulting funds” (Shelly Livernois, Telegram 3-20-09).
You went on to clarify that the county (read: taxpayers) would bear the cost of the grant application (an unknown sum, at this point). You quite rightly noted that a federal grant was unlikely, since it required matching funds (which you obviously don’t have). So we’re talking about a (federal) loan, you clarified.
“If the legislators agree to be the applicant, and the project is ultimately given money, it [the loan] would be retained by the county LDC [IDA] and lent to UICC at a specified number [interest], the county earning the interest, Cositore said.”
“Whether or not it is a success,” you assured the (I hope, incredulous) legislators, “the county is not losing anything. All I’m asking for is the county’s support.”
Support. Interesting way to phrase it. Like those Wall Street bankers and Detroit auto makers flying to Washington, and asking for, um, support.
Support = bailout.
Frank. Remember all the pigeon shit you shoveled out of the Flanagan? This is more of the same, this time shoveled onto the floor of the county legislature.
Frank, let’s reinterpret all this. You’re broke. In fact, worse than broke (a point I’ll get to in a moment). You claim you’ve got $13.6 million in loans from some mysterious and (so far) phantom London (England) private lender, “whose name the group [you, Hughes, and Hill] said they are not authorized to disclose.”
All sounds so exotic! Nope, not authorized to disclose. Gives me shivers thinking about it. (I can picture Brian Hughes sonorously delivering that weighty message from across the Atlantic. Was Brian wearing his bowler hat?)
Dangling this juicy confection (London private lender) before the wide-eyed bumpkins on the legislature, you proceed to mesmerize them into taking out a loan on your behalf, topped by the maraschino cherry, and you hayseeds get to keep the interest!
Frank, this is hilarious. Almost slapstick theater. The Three Stooges.
Those rustic ignoramuses on the legislature? They’re not; they’re actually very bright. They realized immediately that ol’ Frankie was reachin’ for the county purse.
Following that meeting in the Village hall some years ago, Boyce Sherwin assured me that sooner or later you would be hitting us up to pay your bills. (He thought sooner rather than later.) I don’t know if your performance last week qualified as sooner or later, but it’s clear you’re asking us to pay your bills.
Just so readers know: the Flanagan has been foreclosed. On 2/25/09, NYS Superior Court Judge David Demarest ordered it foreclosed. The building is scheduled to be sold at public auction sometime after June 15, 2009. (Anyone wanna buy a partially renovated burned out weird hotel?)
I quote from the judgment in the case of Stone Mountain Prime, LLC as Plaintiff versus Frank Cositore, UICC Holding, et al., as Defendant:
It appears that this action was brought to foreclose upon a first mortgage, and a collateral mortgage, both on real property situated in the Village of Malone, Town of Malone, County of Franklin, State of New York, and that the entire balance of the principal sum secured by the mortgages, to wit, the sum of $4,000,000, together with interest thereon and other charges, is now due and payable; that all of the defendants [UICC] herein have been duly served in this action; that the time to answer or move has expired as to Defendant Ward Lumber Company and that no answer or motion directed to the Verified Foreclosure Complaint or the Verified Amended Foreclosure Complaint or otherwise has been interposed by or on behalf of said defendant, and that the time to do so has not been extended by consent or by order of this Court….
It appears that (i) the sum of $5,000,000 was due to the plaintiff as of February 11, 2009, and (ii) the mortgaged premises should be sold as one parcel….NOW, on motion of Bryan Cave LLP, attorneys for the plaintiff herein, it IS ORDERED, that Plaintiff’s Summary Judgment Motion be and the same hereby is granted in favor of Plaintiff to the extent that (i) Plaintiff is awarded judgment against the UICC Defendants for all of the relief requested in its Verified Amended Foreclosure Complaint, including judgment of foreclosure and sale; (ii) Plaintiff is awarded judgment against the Town of Malone Receiver of Taxes, the Village of Malone Receiver of Taxes and Franklin County Treasurer for any unpaid taxes, if any, which are not superior to the lien of Plaintiff’s mortgages under RP APL § 1354; (iii) Plaintiff is awarded judgment dismissing with prejudice each of the three counterclaims asserted in the Answer; (iv) Plaintiff is awarded judgment on default, against defendant Ward Lumber Company for all of the relief requested in its Verified Amended Foreclosure Complaint, including judgment of foreclosure and sale….
It is further ORDERED AND ADJUDGED, that Plaintiff is entitled to have judgment herein for the sum of $5,000,000….
It is further ORDERED AND ADJUDGED … that the Mortgaged Premises described in the Verified Amended Foreclosure Complaint and as hereinafter described, be simultaneously sold … at public auction at the Lobby, Franklin County Courthouse, 355 West Main Street, Malone, New York 12952, Malone, New York under the direction of Thomas A. Grue, Esq., who is hereby appointed Referee for that purpose; that on or after June 15,2009, the Referee give public notice of the time and place of the sale according to law and the practice of this Court….
The sum $1244.00 [not to exceed $1,500] to Plaintiff for its costs and disbursements in this action (as taxed by the Clerk of the Court), and also the sum of $5,000,000, the amount so reported due as aforesaid, or so much thereof as the purchase money of the Mortgaged Premises will pay of the same….
Further ORDERED AND ADJUDGED that if the proceeds of such sale(s) be insufficient to pay the amount reported due to the Plaintiff with interest and costs as aforesaid, Plaintiff may seek to recover from the UICC Defendants the whole deficiency or so much thereof as the Court may determine to be just and equitable of the residue of the mortgage debt remaining unsatisfied after the sale of the entirety of the Mortgaged Premises and the application of the proceeds thereof….
Um, Frank, this doesn’t look like “the $10.8 million restoration came to a halt … when UICC’s bank and backup banks folded one after the other” (Connie Jenkins, Telegram 3-24-09). This looks like you defaulted on your mortgage debt (in the judge’s words). Furthermore, to claim that “the building is now deemed to be worth more than $8 million because of the work that Cositore and his crew have done” (Jenkins, Telegram, 3-24-09) is disingenous. More truthfully, because of the work that Cositore and his crew have done, the Flanagan is worth only what some sap is willing to pay for it on the steps of the county courthouse sometime in June.
In sum, you’ve lost the Flanagan and you’re hoping to snow us taxpayers (via the county legislature) into taking out a federal loan and giving it to you–and we get to keep the interest, of course. Sort of like asking me to re-mortgage my home to borrow money which I then hand over to you, so you can fix up the Flanagan.
Frank. This stunt is worthy of my father. No, I’m not suggesting you’re a scoundrel. I’m suggesting you got a junk mortgage several years ago when Wall Street gamblers were more than happy to make book on anyone over 18 with a body temperature of 98.6°. Then the bottom fell out of everything. And you got foreclosed.
That phantom London investor? I’ll eat my (straw) hat if he materializes.
Despite the tone of this editorial, I’m not against you, Frank. Nor am I against the Flanagan. I do think you’re stooping to behavior worthy of my father, as I said, but at the same time you’re in control of a strategic piece of Malone’s real estate. At least you are till June 15th.
Here’s where I make readers’ eyes roll. I suggest that this community consider working with you, Frank, in completing the Flanagan renovations. No—no loans, federal or otherwise. No mortgages.
I suggest we apply the same principle I recommended last fall when Wayne Walbridge and his School Board of programmed robots wanted us to pony up tens of millions for school renovations. To wit, we adopt an Amish model: turn the Flanagan into a community project, using the skills, materials, and financial resources we have right smack here in River City.
Call it the Amish strategy, or the Habitat for Humanity solution.
Frank, if you wanted to call a public meeting to discuss this brazen idea, I’d come. And, believe it or not, I’d actually contribute money to this enterprise.
Surprised? Why would I open my wallet to you? Because I think you’re doing something worthwhile, and, like Hugh Hill, I think the community benefits.
I believe you started out with good intentions, and you had the advantage of super easy financing. Then the financial universe imploded. And, as Connie wrote, “the hammers fell silent.”
Sure, get those hammers hammering again—as a community enterprise. That would mean, naturally, the community would have a financial and managing stake in the finished product. A spiffy New Flanagan, complete with blah blah blah whistles & bells. (We’d have to talk about some of the whistles & bells, Frank. Some of your ideas are a little loony.)
Drop the petition to the legislature to borrow money on your behalf. That’s pigeon shit, if you can excuse my French. Besides, it’s approaching a con job, and we don’t want to go there, right? We don’t do cons, right?
One final matter. You stiffed several local merchants. Ward Lumber ($2,500), Jeffords Steel ($67,731), and Sample Lumber ($53,022). This is disturbing. Sounds like Noble Environmental, which will be the subject of another story in these pages.
Ward Lumber and Sample Lumber. I know them both. I shop there. They can’t afford this. Especially in this economic climate. When we met, in public, you assured us you would never hurt or embarrass us. Fact is, you have hurt us with these unpaid bills. I speak as one businessman to another: Frank, you have got to pay them. Even if it’s $100/month.
To owe Ward Lumber $2,500 and refuse to pay it for a year and a half (since October 2007) is mind-boggling. Sleazy comes to mind. Not even elegant sleaze, but vulgar and pathetic, for God’s sake! You’re a better man than this.
These unpaid bills, and this one in particular, are galling.
Frank, let’s get those hammers hammering again. As a community project. Use your formidable rhetorical skills to weld this community into working with you on the New Flanagan. I’ve had some experience with crazy old buildings. We can dispense with the sleaze, and, thanks to your Augean efforts to date, this community can fix up the Flanagan.1
All the best,
Calvin Luther Martin, PhD
1. Augean: Like Hercules in Greek mythology, you have already done the hard part of cleaning out all the (pigeon) manure and other trash, doing the ground work for a fine restoration.