Decision involves almost 6,000 acres formerly slated for development by now-defunct Adirondack Club and Resort project
By James M. Odato
A foreclosure case that has tied up almost 6,000 acres around the former Big Tupper ski center has tipped in favor of a wealthy investor who has already acquired prime land and a marina near Tupper Lake.
A state judge ruled in favor of a limited liability corporation formed by multi-millionaire Stanley Hutton Rumbough III of Greenwich, Connecticut.
Rumbough’s Crossroads Adk LLC prevailed in a suit against defendants owed millions of dollars for work done years ago, for a proposed vast residential development called Adirondack Club and Resort (ACR).
This group of defendants, creditors and lien holders, have prevented Rumbough from taking control of the acreage after he acquired the mortgage, causing him to sue in 2019. The land should be freed for a foreclosure sale in which Rumbough could purchase the property and potentially pursue some of the residential project development long-proposed on the land.
Much of the ACR project site, 5,800 acres once owned by Oval Wood Dish company in the town of Tupper Lake, is involved the judge’s order. The property had been secured by the ACR project’s former development group, Preserve Associates.
In his ruling, Acting Supreme Court Justice William A. Favreau appointed Saratoga Springs lawyer Michael Catalfimo to determine if the acreage will be sold in parcels or in whole. Catalfimo will also decide how much Rumbough will be due from the mortgage he has held on the property, after acquiring it for $5.2 million.
The April 9 decision in Franklin County Supreme Court is the latest in a nearly two-decade drama involving the proposed development, the largest ever approved in the Adirondack Park.
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The Adirondack Club and Resort became the subject of numerous hearings and the target of lawsuits by environmental groups. It was also the recipient of “thought-to-be-impossible” Adirondack Park Agency permits, as one lawyer put it, but collapsed because the proposed developers lacked money.
In recent years, the property has been tied up in litigation from a host of law firms, engineering firms and other vendors who went unpaid by the original developer.
“He (Rumbough) remains very supportive of the ACR project,” said Jerelyn Creutz, a consultant for Rumbough’s LLC. She said the level of support depends on whether the town of Tupper Lake or Franklin County seizes control of Big Tupper from Preserve Associates, a move still “in limbo.”
She said the creditors who lost the foreclosure case have 30 days from the judge’s order, or until May 10, to file a notice of appeal.
Representatives and lawyers for those creditors did not immediately respond to calls.
One of the most assertive voices among those creditors, the Albany law firm Whiteman Osterman and Hanna (WOH), which won an $8.2 million judgment against Preserve Associates in 2019, complained in court papers that Rumbough was spending a few million dollars to take control of a project with a value many times greater.
The mortgage he acquired called for Preserve Associates to pay Oval Wood Dish Liquidating Trust $5.15 million for the 5,800 acres that was part of the 6,200-acre resort project site, but Preserve Associates defaulted.
The ACR project Preserve Associates plan called for construction of a massive residential community surrounding the long-defunct Big Tupper ski center. The developers said they would reopen the downhill skiing facility, add a lodge, a restaurant, a hotel and set up 651 building lots for residences. The project also called for cross-country skiing and hiking trails, a marina and a clubhouse on Tupper Lake.
In recent years, Rumbough has acquired 11 acres on the periphery of the project site along Simon Pond site called Camp Pine Cove, once owned by the one-time leader of Preserve Associates, Thomas Lawson.
Rumbough paid Lawson $2.8 million for the camp and two lots and for the construction of a 5-mile road through the proposed project site to the camp, according to court papers.
Rumbough’s objective, Robert F. Sweeney, a lawyer for the Whiteman firm, said was to wipe out “the contributions of the law firms to the value of the ACR project by foreclosing their liens and then walking away with the full value of the ACR project after investing the $5.2 million raw land purchase price . . . paid in the assignment of the Oval Wood Dish mortgage.”
He said in court papers that the project was valued in 2017 at more than $155 million “as is” and almost $208 million if completed.
Besides assuming the mortgage on much of the project site, Rumbough also purchased the Blue Jay Marina and Campsite for $2.5 million in 2022. That acquisition, 14 acres along Big Tupper Lake, Sweeney contended, appear to be pieces of the proposed resort development because they offer a waterfront and beach.
The resort project had been popular among Tupper Lake area officials and residents who hoped it would spark the economy and lead to the reopening of Big Tupper, a one-time substantial asset and beloved part of the community. The alpine center closed in 1999.
Photo at top: An aerial shot of the proposed Adirondack Club and Resort property, spread over 6,200 acres. Photo by Carl Heilman II
As much as I opposed the original ACR plan I hope the current mortgage holder prevails and a great resort is built and the ski facility is brought up to current standards. What a plus for the community. Unfortunately the current law suits have to be settled and there will probably be new lawsuits and then there is permitting etc etc. so I guess we should not be buying new ski boots anytime soon.
Lienholders should be paid first and then the property can be sold cleanly. This Guy seems to have gotten all the benefits, with the entities owed money left out in the cold. I would expect an appeal to be filed.
Is it relevant that the person is “wealthy” as noted in the headline? Is he? Maybe he is broke like the others? Alos, if he were really wealthy he wouldn’t need a mortgage.
” Alos, if he were really wealthy he wouldn’t need a mortgage. ”
I don’t think you have an understanding of the efficient use of money, or debt for that matter.
As a former volunteer at the ski area it was obvious what a gem they had. It may be time for the lawsuits to stop. At this point it seems that no one will benefit other than the lawyers. A meeting of all those who are owed money should come together. Decide upon a percentage (that would be the same for all) that will settle all the individual lawsuits and allow the project to proceed. No “one” will get to be the “big winner”, but losses will be diminished and over time the people of the Adks will get a great “new” reason to live here.
The reporter could have included a bit more relevant info in this article. Like the fact that Foxman basically got a default judgement against him because he hadn’t paid his own lawyer($6000) who was going to represent him at a trial scheduled for February.
And that Sweeney guy, he’s upset because he and his law frim got screwed by Foxman to the tune of about $9M, because he and his firm were greed and gulible enough to work through this whole process for free. Beleiving that they would make a killing once the project got off the ground. So he got taken along with many many other individuals and local contractors who will never see a penny they are owed.
And the Rumbough guy was also taken by Lawson, he bought Lawsons camp and thought he was buying 2 other lots, but Lawson didn’t own the lots and had no right to sell them.
Lawson, the so called face of the project locally, disappeared under cover of darkness late in 2018 never to be seen again, I think with a good chunk of Rumboughs $$$$ and many other local “investors” $$$$.
Also, the APA, if it follows proper procedure( not likely) should now rescind the permit given to the ACR as the property will now be in different ownership. So if Rumbough wants to pursue some of the residential aspects of the project he should have to go through another permitting process with the various state agencies like anyone else.
APA permits are on the with land, not the landowner. That has always been how it works. Needing a new permit every time the landowner changes doesn’t even make sense if you actually gave it some thought.
Reader, That’s the issue, the ACR was issued a permit which included various parcels of land assuming they would be under the same ownership. If the sale at the county level goes through, the rich guy will own the 6000 acres that were owned by the old OWD. This does not include a few other parcels that the ACR still has ownership or, the big one is of course BigTupper Ski area which everyone would love to see refurbished and open again.
Thus under current APA guidelines the permit should be voided. But if the rich guy ends up with all the parcels I guess the permit would still be valid.
APA permits are written with the assumption that the land will change hands. That’s why there are conditions in permits. You have to follow x, y, and z in order to get your permit. Doesn’t matter who owns the land, they have to follow those same rules. Plus with the ACR permit, I’m pretty sure deed restrictions limiting the lands future use were also added for this exact reason that had to be put into place when lots were to be sold. This new owner can either follow the old permit or go through the process of trying to change it, which would open them up to new lawsuits.
What are the APA guidelines that say this permit is now void? Never heard of any permits being voided when land changes owners. There are 50 year old permits that are still valid who originally belonged to someone who’s long gone. There are plenty of developers who get a permit for something and immediately turn around and sell the lot or subdivision. All you have to do is go to a real estate land listing and see the ones that say APA permits in place or approved.
Maybe we have different interpretations of the APA in this case. Perhaps rescinding the permit rather than voiding would be a better term. And I think what they were issued was an “order with Conditions” . Once cetain conditions were met then they have a “Permit”
In either case the Permit was issued for the entire ACR project and I beleive that the APA issued the order with various Phases of the project that the developers were required to follow. So my understanding is that if some parcels will be under different ownership and control then those parties would need to re apply to the APA as the orginal permit issued is no longer being followed.
So I think the condition you may be referring to is this in the ACR permit: “This project may not be undertaken or continued unless the
project authorized herein is in existence within 10 years from the date of issuance of Agency Order 2005-100. The Agency will
consider this project in existence when the first lot authorized herein has been conveyed.”
The permit is available online, this is on the first page.
Once that happens the permit is in place, doesn’t matter who owns the lot as the permit specifically requires a change in ownership to be valid. So the next question becomes, did this actually happen in the ten years in the above quote?
According to the Tupper Lake free press article I found dated February 2, 2022, the transfer of a parcel to the Wild Center was done and this filled the above condition. So it seems that no matter who owns the land now the permit is in place.