PURCHASE, NY — Every other day, it seems, a golf project gets hung up because an environmental group raises hell. Most developers don’t make a federal case out of it. But Dennis Frank did, and as far as he’s concerned, the result has been heavenly.
Frank is the president of Franklin Development Company and the front man for a group called Hickory Pine Associates, which wants to build a private golf community in Purchase, New York. Frank has described the planned Country Club of Purchase as “the creme de la creme of all projects”— a $100 million venture whose centerpiece would be a $22 million, 18-hole course designed by Jack Nicklaus.
In October 1993 Hickory Pine broke ground on the project, but getting to that point was an ordeal. Before it could sink the first shovel into dirt, Hickory Pine had to spend three years and something like $5.5 million fighting legal battles against a local environmental group and other residents of Purchase. Moreover, it had to contrive an elaborate “sting” that was designed to expose the environmentalists as con men. Hickory Pine may be the first developer in America that’s gone to such lengths to sink an environmental group.
The ordeal began in 1990, when Masahiko Kasuga, a Japanese investor and the president of Hickory Pine, paid $46 million for 393 acres in Purchase, a small community that’s 24 miles north of Manhattan. Purchase is one of New York’s wealthiest enclaves, and Hickory Pine’s site is said to be one of the most enviable in lower Westchester County.
It didn’t take long for the developers to find obstacles in their path. Frank, who was brought in to guide the project through the approvals process, encountered opposition from members of the Purchase Environmental Protective Association, a local environmental group. PEPA, as Frank soon discovered, wasn’t a group of housewives and college students. Led by its chief counsel, Lelia Wood-Smith, it was experienced and well funded, and it had long been particularly troublesome to local developers.
Frank met with representatives of PEPA on several occasions to discuss his plan, and before long he had the sneaking suspicion that he was being shaken down. At one of their meetings, he’s alleged, a representative of the group noted that PEPA had spent $300,000 in legal fees to fight the property’s previous owner and asked that Hickory Pine reimburse them. Hickory Pine refused to.
PEPA continued to make demands that the developers considered unacceptable, and eventually Hickory Pine decided that it no longer wished to negotiate. In June 1991, working with a Long Island-based detective agency, Frank hatched a plan to sting PEPA.
The detective agency persuaded David Paris, a Los Angeles-based investment banker, to pose as the representative of Japanese investors who wanted to buy Hickory Pine’s property and develop it. A lawsuit filed in the case states that in September 1991 Wood-Smith agreed to have PEPA drop its opposition to the project and to assist Paris in obtaining the necessary environmental and zoning approvals for it. In return, Paris agreed to pay Wood-Smith a monthly retainer of $8,000 and a $250,000 bonus when the project was approved. PEPA was to receive $200,000 when the project was approved.
This “deal” was the ammunition that Hickory Pine needed to sue PEPA under racketeering statutes in federal court. The lawsuit, which was filed in early 1992, alleged that PEPA and Wood-Smith tried to squeeze $300,000 out of Hickory Pine as the price for giving its blessing to its project. Hickory Pine asked the court for $5 million in actual damages caused by delays in getting the project permitted and $5 million in punitive damages, but because the suit was filed in federal court it could have received triple damages.
The case never went to court, however. Earlier this year Hickory Pine and PEPA settled the matter, and Frank quickly picked up the approvals and permits he needed to begin work on the project.
Frank believes that the golf course will open for play in the summer of 1995. It’ll reportedly be the first new course built in Westchester County in 28 years as well as the county’s first golf community.
The 73 houses in the community, incidentally, will cost about $1 million each.
