SUFFERN – A firm poised to purchase the vacant Novartis campus for $18 million has filed a lawsuit claiming the deal has been stymied by pharmaceutical company’s refusal to allow aggressive environmental testing.A lawsuit filed Feb. 10 in state Supreme Court in New City by RS Old Mill LLC is seeking to force the Swiss drugmaker to allow the testing or return its $2.5 million deposit. The suit also seeks to prohibit Novartis from seeking other buyers.
Court papers identify RS Old Mill as “a foreign limited liability company” formed under Delaware state law, and which is now located in Mahwah, New Jersey. The complaint is signed by Yehuda Salamon, who is listed as the firm’s manager.
RS Old Mill, which was formed to acquire the Novartis property, has filed for Chapter 11 protection, according to Douglas Pick, its bankruptcy attorney. That did not prevent it from obtaining outside funding to make the purchase, he said.
RS Old Mill wants to move its unspecified operations — identified as “a small group of family owned companies” —from Mahwah to the site of the former Novartis manufacturing plant at 25 Old Mill Road and claims the companies may be forced to close if it can’t relocate, losing 80 jobs.
The lawsuit contains no mention of what RS Old Mill wants to do with the property. Modifying the building for a different purpose would be costly and anything besides an industrial use would require a zone change.
Novartis and RS Old Mill entered into a sale agreement on Nov. 28 for the property, which is mostly in Suffern but extends into Montebello, according to the lawsuit. The agreement contained a due-diligence period during which the buyer had the right to perform inspections and “invasive” tests on the property to make sure there were no environmental issues.
When the buyer inspected the premises and reviewed documents, “critical” environmental concerns were revealed warranting investigation, according to the lawsuit. The site once produced tablets, capsules, vials and inhalation products.
The issues cited in court papers include underground petroleum storage tanks, past reported petroleum spills, former drum burial and solid waste disposal areas. Other concerns include a stormwater detention pond that has “potential significant contamination” from acetone, possible undetected contamination of other wells, and vapor issues from chlorinated solvents and other hazardous materials.
The drugmaker’s refusal to cooperate “may evidence (Novartis’) intent to hide and shield serious environmental risks,” according to the lawsuit.
RS Old Mill’s lawsuit claims remediation could cost more than $1.7 million, and states the firm can’t obtain financing or environmental insurance without conducting testing.
Douglas Pick said RS Old Mill made a Feb. 17 offer to close the deal without the “invasive” testing but the offer was rejected without explanation. One company has agreed to insure the property without the testing, he said.
A phone message left Thursday for the buyer’s White Plains lawyer, Jacob Amir, was not returned.
A Novartis spokesman said Thursday he could not comment on pending litigation, but said the property is in compliance with all state Department of Environmental Conservation regulations.
The company announced in 2014 it was restructuring its pharmaceutical division and closing 20 or so sites, including the Rockland County property,
The vacancy at Suffern’s largest taxpayer has been a gnawing problem for the village. Novartis has been paying at a reduced rate since it closed the facility several years ago. Village records show Novartis paid $673,560 in village taxes 2016, down from $1,010,699 in 2015.
Two potential buyers, Merlin Entertainments, which builds Legoland amusement parks; and Intercos, an Italian cosmetics company with offices in Congers and West Nyack, expressed interest but subsequently backed out.
Source: www.lohud.com
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