I’m glad I’m not trying to make a living by working in the media in this town. It’s a brutal business. When a major developer cracks the whip, people have to jump, and writers have to write what the boss tells them to write. After his posting on Masslive on Monday, Fred Contrada of the Republican had to write a retraction, the building inspector is incommunicado, and a million questions will remain unanswered until the new development group meets with the community. If there is confusion in the community about whether Opal or Historic Round Hill LLC is running this project, it’s a problem that Peter Picknelly and Demetrios Panteleakis created. The papers filed with the Massachusetts Secretary of State don’t lie. Picknelly exited the development group on July 8, 2013 shortly after the corporation got bank financing. He never told anybody in Northampton that he had spun off the development to Panteleakis and James Hebert. Panteleakis was running the project all last year, and the freezing of the pipes occurred on his watch. He never had any experience with managing a big project.
I believe Louis Hasbrouck did tell Fred Contrada that the project was dead, but then the Mayor probably called him and told him to shut up. Louis hadn’t seen any progress since last summer. This spring, Panteleakis resigns or is fired. Why, we’ll never know. I’m not going to go find him, although I think I know where he is and what he is doing. So nothing happened at all with the project until Fred and I start asking questions and making calls. Calls are not returned. Public embarrassment looms for the Mayor and Picknelly. Picknelly gets his ducks in order, gets architects and builders lined up, and an interview scheduled with the Gazette. A new beginning, and no one asks any awkward questions.
Last Week’s article
The signs are down, the buildings are empty. By now, the renovation of the historic complex of buildings that Clarke School sold to Peter Picknelly and his development group, Opal Real Estate, should be almost complete. Neighbors and the city were told the renovated high-end apartments overlooking the valley would be ready for occupation by the winter of 2014, then it was the spring of 2015, then neighbors were told that it would ready in the summer of 2015. But there have never been architectural drawings and no signs up boasting of their bank financing and showing what the area would look like. The focus of the project kept shifting and last spring they were talking about adding more residential units and less commercial space. The last the building inspector’s office heard from the developer was last spring, when they applied for a demolition permit to clear out the buildings to the bare walls. The trucks came roaring up the hill, and by the early summer that work was done, and they left. And now almost a year later nothing is happening.
Last winter pipes broke and there was flooding. The buildings on the west side of the campus were supposed to be mostly offices, today there are only a few tenants. The two large buildings on the east side of Round Hill Road, Hubbard Hall and Rogers Hall, slated to become luxury apartments renting from $3,000 to $5,000 a month, are completely empty. When I walked around the place last week the campus had a forlorn air to it. It’s starting to look like the old state hospital before it was demolished. Plywood across some windows, some doors secured with temporary braces.
Back in 2012, the potential developers, Demetrios Panteleakis and Peter Picknelly told the city, the Clark school, and the neighbors pretty much what they wanted to hear. They would reuse and rehabilitate the historic buildings, and acquire historic tax credits to help them finance the development. Maybe, in retrospect, the vision was too good to be true. A painless development. There would certainly be a market for high-end homes in such a beautiful location. There were the views of the valley, there was the close proximity of Smith College and downtown. But was there a market for rental apartments in the $3,000 to $5,000 a month range? The historic restrictions on changes to the outside of the buildings made it hard to install amenities that people are accustomed to in high-end rentals like balconies.
It was a project that promised minimal disruption of the neighborhood, no bulldozers, no trees down, keeping all the open space, no new bulky in-fill houses looming over their neighbors. Peter Picknelly, the chief operating officer of Peter Pan, came up to Northampton with his top corporate officers to beat the drums for the project.
I went to the initial meeting with the neighbors and there were things that worried me about Demetrios Panteleakis, who was the managing developer of Opal Real Estate, Picknelly’s management and development arm. Before he warmed up and turned on the charm, he came across as a big and very tough guy who would brook no nonsense from neighbors. Then later, he turned on the charm. He reminded me of Tony Soprano talking with his therapist. The more I found out about him, the more I wondered about why Peter Picknelly picked him to be his lead man on the project. When he was thirty-one years old (not really a kid) , he and his sister had tried to pass millions of dollars in bad checks; later on he let his house go into foreclosure when one of his ventures failed, and then he was involved in some dubious land development schemes in Bermuda. And there were missing periods in his life history. Read my old article. Many of the neighbors hated the article, afraid I guess, that criticism of the Picknelly bid would open the gate for another developer who would opt for a more intensive development with more demolition. But other neighbors thought the city should do some “due diligence”. Neighbor Richard Greene emailed the planning department and city officials, including the mayor, urging that the development team should be vetted. “Reported past activities of OPAL’s Managing Partner and his choice by OPAL raise questions as to whether OPAL can be relied on to carry out its plans as presented to the community. The city should strive to ensure, that such a large and important project turns out as promised.”
Even though Opal had yet to develop, own, and manage a residential investment property in the area, Clarke opted for their plan.
I called up Picknelly back then and was on the phone sparring with him for a good half hour. He continually deflected my criticism of Panteleakis with talk about how this project was a “win, win” for Northampton. OK. Despite the negative stuff about Panteleakis, the Daily Hampshire Gazette editorialized for the project. The school gave the developers a bargain: selling them a property that had been valued by Landvest Inc. as being worth 14.3 million for 4.8 million, and giving them a second mortgage.
Picknelly created a corporation to hold the property, Historic Round Hill Summit LLC (HRSLLC) He was the only manager of record. HRSLLC got a nine million dollar mortgage from People’s Bank, secured by the property and the income from any leases, should HRSLLC default on its obligations. On April 17, 2013, Picknelly filed his registration papers for his LLC as sole partner. He gets the mortgage money on April 23, but then on June 3, a little less than six weeks later, he resigns from the corporation and puts Panteleakis and James Hebert in as managers. See the paperwork. I think Hebert is a West Springfield businessman who owns Checkwriters, a corporation that provides payroll services for small businesses. There is no evidence that he is a developer or has any kind of a track record managing real estate.
I’m guessing that Picknelly agreed to front for Panteleakis, but the family didn’t want the risk involved if the development went under. There is some money, maybe about five million, to do the work. Nowhere near enough to build it out. I don’t think they ever got a construction mortgage. Did banks think it a risky venture without the Picknelly corporate collateral? Did Panteleakis’s background make banks leery of the enterprise?
Opal’s website is still up, but it is starting to look dated. The “News” section is headed by a clipping dated from 2012. If you click your interest in their Round Hill project, you get a stub of a site that is mostly blank, and leads nowhere. A friend of mine once called Opal and expressed interest in an apartment; the man who talked to him promised to put him on a mailing list, but he never heard back. Panteleakis is gone. The rags to riches story he once talked about has lost its fairy tale quality. He’s off the website, and on March the agent for Historic Round Hill LLC posted this change in management.
I’m not getting any callbacks from anybody. Complete radio silence from Opal. Their phone rang and rang the other day and no one answered it. Opal is located on the second floor of Peter Pan’s building next to the bus station. The day I was there Peter was not in the office and his executive Mark Healey, when the receptionist relayed a message that I wanted to talk to him about Round Hill, said he would be right down. Five minutes later a new message was relayed to me. He was extremely busy and had a conference going on.
In the opening days, Opal signs were everywhere in the valley. Demetrius was negotiating with clients and funding sources to rebuild a large building in Court Square, first for offices and then just recently for a so-called “Boutique” hotel bearing the MGM trademark. The plans have gone nowhere. Last year Peter Picknelly and his brother Paul were putting forth conflicting visions of where the Springfield casino was going to go and who would sponsor it. Peter backed the losing bid. The bulk of his property including the bus station is in Springfield’s North End, the MGM casino is going in the tornado-damaged south end of town.
I don’t understand this town. I don’t understand how gullible people can be to get taken this way. I don’t understand why Clarke didn’t bite on the alternative proposal, which was from neighbor Robert Jonas and Wright builders.
I’m sure the piggybank from the bank is empty. The stage is set for a so-called “flip” to a new developer who will probably have the city over the barrel.