While the final hurdles have been cleared for the completion of his controversial luxury condominium project overlooking Cruz Bay, Sirenusa owner Carlo Marzano is in another battle over lofty building plans.
The young developer was behind plans to build high-rise condominium buildings in Estate Pastory, according to a recently filed lawsuit, which states Marzano was behind the building permit application for an eight-story, 116-bedroom, $15.5 million condominium project.
Those proposed plans were eventually scrapped, but not before Marzano signed a contract for the purchase of the golf course, restaurant and adjacent lot — a total of two and a quarter acres, according to property owner and developer Richard Singerle.
Singerle, the president and CEO of Commonwealth Investments Corp., which built Pastory Gardens mini-golf course and Compass Rose restaurant and owns the land and adjacent parking lot, is suing Marzano for $8.5 million for breach of contract.
Approached on Marzano’s Behalf
“In March 2005, I was approached by a local real estate agent on behalf of Marzano to see if I was interested in selling,” Singerle said. “At that time they gave me an offer to buy one acre of the one-and-a-quarter-acre lot adjacent to the restaurant and mini-golf course for $5 million. That contract was drawn up and signed by Carlo A. Marzano.”
Shortly after it was signed, a first addendum to the contract covering the entire one and a quarter acres was signed, Singerle explained.
“What they did was change the contract and under the terms of the new contract they would buy the whole one and a quarter acre parcel for $5.2 million and give me back a quarter acre for parking in an easement,” Singerle said.
“They wanted to get the whole parcel to be able to build to the maximum density.”
Before long, Marzano and a new partner asked to buy the entire two and a quarter acre parcel, Singerle added. The suit identified the partner as Christian Rosenburg.
Addendum Includes Rosenburg
“Then they wanted to buy the whole thing — the entire two and a quarter acres for $8.5 million,” Singerle said. “Christian Rosenburg came into the picture as Carlo Marzano’s partner on this second addendum for the whole package. They each signed this contract individually.”
“There were no contingencies for permit approval or anything in the contract,” continued Singerle. “The bottom line is the contract called for us to close the deal and vacate the premises by May 2006. We planned on closing the restaurant on May 1 in anticipation of the sale.”
Just as the restaurant was ready to shut its doors, Singerle was notified that Marzano and Rosenburg were no longer interested in the deal, he explained.
“On April 27, 2006, one of my attorneys, Ronald Belfon, got a letter from Marzano’s attorney, William McConnell, which said they wouldn’t go ahead with the contract,” said Singerle.
Purchasers Cannot Proceed
“Please be advised that the purchasers have determined that they cannot proceed with the purchase of 5DA and 5DA-1 Estate Pastory,” read the note which was faxed to Belfon in April 2006.
Since there were no contingencies included in the contract Singerle contacted another lawyer, A.J Weiss, who advised him to proceed with a case against Marzano and Rosenburg for breach of contract, action for specific performance and damages, he explained.
“We proceeded with the case and in early June Attorney A.J. Weiss sent a demand letter for specific performance which they didn’t respond to,” said Singerle. “On June 14 we filed a suit with the District Court of the V.I. for breach of contract.
“We are asking for $8.5 million plus incidental damages stemming from loss of business, loss of staff and increased interest on my debts,” he added.
The defendants, listed as both Marzano and Rosenburg, have 20 days from June 15 to answer the complaint.
Rosenburg could not be reached as of press time and Marzano declined to comment on the law suit. Attorney Belfron also did not return calls requesting comment on the suit.
As a result of the planned closing, the restaurant lost a considerable amount of business, according to Singerle.
“We were turning away banquets, wedding rehearsals and group events because we were going to be closed,” he said. “I’ve incurred some huge losses as a result of being under this contract. Our business was cut in half because of anticipating we were going to be closing.”
While rumors were flying around last year, Singerle said he did not know about Marzano’s plans for the Pastory parcel.
Singerle Denies Knowledge
“I read about the plans to build an eight story building when I read it in the newspapers with the rest of the island,” he said. “Just like everyone else, I didn’t know what they were going to build.”
When rumors about a proposed multi-building condo project, including at least one nine-story structure, spread across Love City in April 2006, both a representative for Singerle and Karr refused to comment on the matter to the St. John Tradewinds.
Singerle’s Corporations Were Listed on Permits
At that time, it was reported that Reef Management Group LLC — the principals of which have never been identified — submitted the building permit application. It was actually Singerle’s companies, Caribbean Island Adventures Inc. and Commonwealth Investments Corp., which were listed as the owner of the building, according to a copy of the application.
Singerle said he allowed Marzano and Rosenburg to use his corporate names in order to make it easier for their application, although he continued to deny knowledge of what the developers were planning to construct.
The use of the corporation names, however, did not clear things up with the Department of Planning and Natural Resources, who cited confusion regarding ownership as the reason it was denied the permit application in the first place.
“There is no proper proof of legal ownership,” DPNR spokesperson Jamal Nielsen told the Tradewinds in April 2006.
“There are two separate lots with two separate owners.”
Big Plans for Pastory
The developers had big plans for the two and a quarter acre parcel. The building permit application requests permission to build an eight-story, 63-unit, 116-bedroom condominium project. The total cost of the project is estimated at $15.5 million and William Karr and Associates is listed as the “contractor who will do the work.”
The land was zoned Business-medium density, or B-2, when Singerle purchased it in 1997.
“I bought the first parcel in 1997 from the original owner Jim Samuels who had the zone changed to B-2 I think about seven years before I bought it,” said Singerle. “A few years later I got the adjoining parcel.”
Pastory Gardens mini-golf course is open daily from 3 to 10 p.m. and Compass Rose restaurant — both now run by Walter Rankin — is open daily with dinner served after 5 p.m.