By JAMES M. ODATO
Prospects for developing the Adirondack Club and Resort at Big Tupper are unclear after its developers were successfully sued by their attorneys. The developers must pay their legal team $9 million, according to court papers.
The case against Preserve Associates LLC, also known as Tupper Lake Preserve LLC, reveals the unpaid bills for legal services and discloses that the lawyers say the charges are justified in part because the project has increased in value to more than $200 million by the developers’ own appraisal.
Preserve Associates has been pursued by their team of attorneys for payment on legal work done over 12 years of their relationship.
Winning the judgment is the large Albany firm Whiteman, Osterman and Hanna. The firm is owed more than $8.2 million by the ownership team led by Michael D. Foxman. Foxman, a lawyer from Pennsylvania, has been trying to build what has been billed as one of the largest projects ever proposed in the Adirondack Park, a series of luxury homes, hotels and a rehabilitated downhill skiing center.
Also owed $768,582 is the Albany firm of Shanley, Sweeney, Reilly & Allen.
Both firms sued for fees in November 2018 and won a judgment in State Supreme Court in March. Foxman in May set out to appeal.
Foxman said it didn’t make sense to extend the litigation and now the firms have a “bookmark” for payment.
“There’s no hostility here,” Foxman said. “Obviously, if somebody owed you millions you’d have some anxiety.” He said the project is in a holding pattern after attempts by his partner, Thomas C. Lawson, to buy out him and other owners didn’t come to fruition.
The $9 million in fees and penalties is one of several debts facing the project owners. The failure to pay the debts suggest financial weakness following optimism regarding the long-running project after the Adirondack Park Agency granted a permit for the construction of homes and roads among the more than 6,200 acres of the former Big Tupper alpine ski mountain.
The group is also in default of tax payments owned on six key properties in the project, according to the Franklin County Treasurer’s office. The total owed the county tops $275,000. In May, Preserve Associates lost its ability to make installment payments under a previous arrangement with the county for failing to comply with the deal, said Treasurer Frances Perry.
Lawyers involved in the matter, including the veteran attorney for the ACR, Robert Sweeney, did not respond to calls.
A list of legal fees in the legal papers shows substantial bills during the past decade. The items include a $1.97 million bonus for clearing APA approvals. Whiteman, Osterman and Hanna applied a 12 percent annual interest rate on late payments under a previous agreement with their client.
Other fees: $375,000 for planning board work, $360,000 for the APA applications, $203,000 involving the Franklin County Industrial Development Agency, $390,000 for APA hearings, $429,000 to defend the developers’ interests in a suit aiming to block the state approvals (Protect the Adirondacks vs. APA) and $180,000 for Empire Zone issues.
The lawsuit papers show that developer Thomas C. Lawson signed agreements on the legal fee payments but Preserve Associates maintained that he was not authorized to enter into such obligations and called the bills unreasonable. Whiteman, Osterman and Hanna lawyers say in the court papers that Lawson repeatedly represented himself before public authorities as a managing member and principal of the companies behind the ACR project, including Preserve Associates.
The lawyers note that Lawson worked out a deferred payment on behalf of Preserve Associates on a $787,000 judgment owed the design and engineering firm The LA Group.
The lawsuit papers include an appraisal done for Scott Allen, an Olympic skater who has been helping Lawson. It shows the project’s value growing from $155.4 million in the fall of 2017 to $207.7 million at the assumed completion date of November 2019.
Foxman characterized the appraisal as generous. He could not say what the next step will be. “We’ll figure something out, either a partnership or a sale,” he said. “It’s a pause, if you will.”