Condo owners vote to sell fire-destroyed Grandview property
Times Herald-Record
By Leonard Sparks
09 August 2017

LOCH SHELDRAKE – Owners of condominium units at the fire-destroyed Grandview Palace complex in Loch Sheldrake voted at an annual meeting on Sunday to sell the property while a court battle continues over $30 million in insurance proceeds.

If sold “as is,” the property’s value would be zero

An appraiser valued the 99-acre property at $900,000 if cleared of damaged structures, debris and asbestos. If sold “as is,” the property’s value would be zero because the costs to clear the land could be as high as $4 million, according to Grandview’s Board of Managers.

“At this time, the Board of Managers will proceed with searching for a potential buyer for the property,” according to a notice posted at “GVP Justice,” a website set up by Grandview’s board. “If a buyer is found, the Board of Managers will proceed with seeking a partition action from the New York State Supreme Court to allow for the sale of the property as one parcel and the distribution of assets from that sale amongst the unit owners.”

A massive fire on April 14, 2012, destroyed most of the complex, which used to be the Borscht Belt-era Brown’s Hotel before being converted to condominiums.

An estimated 65 fire companies and more than 200 firefighters took part in extinguishing the fire, which started in the afternoon and spread rapidly as residents who escaped the complex’s buildings watched from across Route 52.

Nine buildings were destroyed at the 396-unit complex.

fire-safety and building-code violations, including non-working sprinklers and alarms ... town officials threatened to condemn the property

One month before the fire, Grandview’s managers agreed to correct fire-safety and building-code violations, including non-working sprinklers and alarms. The agreement ended a standoff in which Fallsburg town officials threatened to condemn the property.

Less than four months after the fire, the Illinois Union and the Great American insurance companies sued Grandview.

They accused the board of making false statements on their application for coverage, mainly by attesting that the complex had no existing code violations and that each building was fully protected by automatic sprinkler systems.

In December, New York County Supreme Court Judge Jeffrey Oing refused requests from both sides to rule in their favor despite the absence of sprinklers in some buildings and in the boiler room where the fire is believed to have started.

Issues of fact also exist as to whether Illinois Union had knowledge of the defects in sprinkler coverage prior to the fire and/or should have inspected the property to ascertain its condition

“Issues of fact also exist as to whether Illinois Union had knowledge of the defects in sprinkler coverage prior to the fire and/or should have inspected the property to ascertain its condition,” Oing ruled.

The insurers are appealing the ruling.


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