Developer behind controversial Jamesport project files for bankruptcy

01/30/2014 11:00 AM |
Julie Klein web

BARBARAELLEN KOCH FILE PHOTO | Developer Julius Klein in downtown Riverhead in 2007.

The Calverton company that proposed a long-standing and controversial commercial development project on Main Road in Jamesport has filed for bankruptcy protection.

Jul-Bet Enterprises LLC, owned by Julius Klein, filed for Chapter 11 bankruptcy protection in New York Eastern District Bankruptcy Court on Tuesday, Jan. 21, as did Jamesport Development LLC, in which Jul-Bet Enterprises has 50 percent ownership, and Dollar Storage LLC, another company owned by Mr. Klein.

BARBARAELLEN KOCH FILE PHOTO | The Village at Jamesport is proposed for this property just west of the hamlet's business district on Main Road.

BARBARAELLEN KOCH FILE PHOTO | The Village at Jamesport is proposed for this property just west of the hamlet’s business district.

Jul-Bet Enterprises has proposed a 42,000-square-foot commercial project called Village at Jamesport for 10 acres on the north side of Main Road in Jamesport, across from the Elbow Room. The land is owned by Jamesport Development LLC.

It’s unclear what impact, if any, the bankruptcy filing will have on the Village at Jamesport development application, for which site plan approval is pending before the Riverhead Town Planning Board.

Riverhead town attorney Bob Kozakiewicz said the town will defer to the bankruptcy court or to an attorney with knowledge of bankruptcy law “to let us know whether we can proceed with processing the application or how we get paid for processing fees and so on.”

A group called Save Main Road has sued the Town Board over a decision granting a special permit to allow bistro and professional office uses in part of that development. That case also is still pending in state Supreme Court courts.

Jamesport Development LLC also owns 34 acres immediately north of that property, on which a 160-unit retirement community had been proposed in the past. That land was later rezoned and current zoning will permit only 15 homes to be built on the 34 acres.

“Our case is against the Town Board firstly and the developer second,” said Larry Simms of Save Main Road, who said the application has not been before the Planning Board in quite a while. The case between the town and Save Main Road is scheduled for oral argument March 12, he said.

“The Planning Board has promised to let us know if any new applications are submitted,” Mr. Simms said. “But if Jamesport Development is bankrupt, it’s a little difficult to see how an architect or an attorney is going to get paid.”

In addition, Jul-Bet Enterprises owns the land on which Dollar Storage, a storage facility on River Road in Calverton, is located. Mr. Klein did not return a call to Dollar Storage seeking comment.

His attorney, Eric Bressler, declined to comment.

The Jamesport and Calverton properties have both been in foreclosure.

BARBARAELLEN KOCH PHOTO | Virginia Lammevs of South Jamesport (left) and Helga Guthy of Wading River at Tuesday's Town Board meeting.

BARBARAELLEN KOCH FILE PHOTO | Project detractors packed Town Hall in April 2012.

The Jamesport case, filed by United International Bank on a claim that Jamesport Development LLC and Julius Klein defaulted on a $3.25 million mortgage, was dismissed in 2012 on the grounds that Mr. Klein was not properly served with the foreclosure notice.

The case involving the Calverton property is still active, with the next court date scheduled for Jan. 30. That case is being brought by APC Partners, which bought United International Bank, and claims that Jul-Bet Enterprises, Dollar Storage, Mr. Klein and others defaulted on a $4.5 million mortgage.

In a decision rendered Aug. 12, 2013, state Supreme Court Justice Paul Baisley sentenced 85-year-old Mr. Klein to six months in jail for contempt of court for allegedly failing to comply with court orders requiring him to turn over financial records.

However, that jail sentence was never carried out as discussion of the case continued in court, much of it in the judge’s chambers rather than in a public session. That case is now on hold pending the outcome of the bankruptcy, according to a court official.

The Suffolk County sheriff’s office had seized the Calverton land and was scheduled to auction it publicly on Jan. 21, the same day as the bankruptcy filings. The auction was postponed due to the bankruptcy filing, according to Sgt. Dave Sheehan of the sheriff’s office.

tgannon@timesreview.com