MEDIA RELEASE SENT FROM COUNTY EXECUTIVE’S OFFICE

MAYVILLE – The Chautauqua Area Regional Transit System (CARTS) is announcing that it plans to acquire the existing downtown Jamestown Hub location at 215 East Third Street to benefit and promote public transportation in Chautauqua County.

CARTS has been operating under an existing license agreement since 2018 that allowed CARTS to utilize a portion of the property that is to be acquired for public transportation use.  This location was originally selected because of its central location in the City of Jamestown, proximity to office locations that provide public services such as City Hall and other county social services, and availability of off-street bus parking.

One of the most important issues facing our public transportation customers is knowing that the Jamestown Hub location will be in the same spot every day.  By acquiring this property, CARTS will be able to control the Jamestown Hub location and make it the permanent home for many years to come.  CARTS was able to obtain 100% New York State Department of Transportation grant funding to purchase this property, which means that there will be no local share cost to county residents.

“CARTS has never had a place to call its own in Jamestown and now CARTS can create a space that can fulfill its core public transportation mission,” said Brad Bentley, Director of Public Facilities for Chautauqua County.  “Our central location is only a couple of blocks away from most public services, businesses, and tourist attractions in the Downtown Jamestown area.”

As part of this acquisition, CARTS will partner with the City of Jamestown and the Jamestown Urban Renewal Agency (JURA) to renovate the building and site. The redevelopment of the site will not only establish a permanent public transportation hub for CARTS, it will also offer an opportunity to establish a visitor welcome center that will provide a public restroom, tourist information and resources, and options for riders to grab a bite to eat or drink. The City will also partner with CARTS to develop a portion of the building as business incubator space for local entrepreneurs and early stage startups interested in opening a business such as a café, restaurant, or specialty retail shop, providing the physical space to jumpstart their businesses in a cost-effective way.

This effort will be spearheaded by the City Department of Development with the goal of providing infrastructure that fosters and supports a culture of entrepreneurship within the local community by providing a space and the resources for business owners to try and test their businesses out while also providing services and offering products that benefit CARTS ridership as well as the surrounding community.

“The County extends its appreciation to GPatti LLC and the Downtown Jamestown Development Corporation for their continued assistance during the acquisition period,” said PJ Wendel, Chautauqua County Executive.  “CARTS looks forward to the partnership with the City of Jamestown and JURA to develop a site that will benefit and promote public transportation in Chautauqua County.”

“I am proud of the work that CARTS, JURA, and the City did to make this exciting project a reality,” said City of Jamestown Mayor Eddie Sundquist.  “Ensuring that CARTS has a permanent, central home in Jamestown will grow ridership and make the downtown core accessible to all as it expands service throughout the county. The vision to make the necessary investments to make this a multi-use space will provide another anchor in Jamestown’s downtown redevelopment.”

In addition, CARTS recently announced that it had received a $1.5 million grant from New York State, which will be spent to improve bus signage, technology upgrades such that customers can locate their bus on a smart phone app, route optimization studies, and the purchase of hybrid trolley buses to help promote tourism in Jamestown and throughout Chautauqua County.  CARTS is also committing to investing future New York State Department of Transportation grant funding as it becomes available to renovate this location to provide other public transportation customer services.

As is currently the case, CARTS buses will continue to have many stops throughout the downtown Jamestown and surrounding areas and will still be picking up customers along its City Fixed Routes for any customer that may require that service.

For more information or to schedule a trip, please call CARTS at 1-800-388-6534, 716-665-6466 or 716-366-4500.  You can also follow CARTS on Facebook at www.facebook.com/CARTS.NY.

A September 2018 image of the Jamestown Brewing Company from Google Maps.

JAMESTOWN – The owner of a building that houses a new brewery in downtown Jamestown is trying to evict the business for failing to keep up with rent.

GPatti Enterprises – owned by local developer George Patti – owns the building that houses the Jamestown Brewing Company (JBC) at the southeast corner of Third and Washington Streets. According to a petition filed in State Supreme Court in Erie County on Tuesday, GPatti is claiming it’s received less than 20 percent of four months worth of rent, dating back to Sept. 30, 2019.

The complaint says that JBC owes a total of $85,000, but has only paid $15,000 so far. It also says that the brewing company – which is co-owned by John McLellan Sr. and John McLellan Jr. – has been unable to pay various debts it owes various lenders. Under its lease agreement with the business, GPatti argues it has the right to evict the operation if it fails to pay rent owed after 10 days of its due date.

A hearing for the case is scheduled for Thursday, March 5, in Buffalo.

Meanwhile, the lawsuit is not the first one that’s been filed between GPatti and JBC. In December 2018, JBC filed a lawsuit against GPatti, claiming a Breach of Contract, Fraudulent Inducement, Fraudulent Misrepresentation, and Negligent Misrepresentation when it entered into a lease agreement in 2017. At the time of signing its lease, JBC claims GPatti had said work on the building would be completed in time for an April 2018 opening. However, numerous delays in construction – including an environmental abatement mandated by the state – pushed that opening date back for more than a year. As a result JBC felt GPatti was misleading when it provided the timeline for when the operation could open. It is suing GPatti for compensatory and punitive damages.

In April 2019 the court dismissed three of the claims, while the issue of breach of contract is still playing out in the court.

That case is currently in the discovery phase, with a deadline of April 30 for both sides to present their evidence. The next scheduled court date in that matter is a discovery compliance meeting set for July 10.

According to the Post-Journal, the total project cost for renovating the property and preparing it specifically for JBC was estimated at $3.84 million. Financing for the project included a $475,000 state Main Street grant that was awarded through the Regional Economic Development Council program in December 2015 and $830,000 from the Downtown Revitalization Initiative in 2017. The Jamestown Local Development Corporation has a $180,000 loan attached to the project. The IDA also offered tax abatements for the property.

The Jamestown Brewing Company has announced it will temporarily shut down until a New York state liquor license is received so operations could resume.

The restaurant – which is located at the building formerly known as the Lillian Vitanza Ney Renaissance Center at the corner of W. Third and Washington Streets – initially opened in mid July despite not having its license.

The business is owned and operated by the father-son partnership of John McClellan Sr.  and John McClellan Jr. of Buffalo. They are leasing the space from the building owner, G. Patti Enterprises, which received a portion of the $10 million Downtown Revitalization Initiative Grant to renovate the building.

Delays in that renovation effort has led to the McClellan’s suing G. Patti Enterprises for a breach of contract and that issue is still being played out in State Supreme Court in Erie County.

Meanwhile there is no word on when the State will finally grant to the liquor license, which is needed in order for JBC to not only serve alcoholic drinks but also begin brewing its own beer.

A post by the Jamestown Brewing Company on its Facebook Page announcing its opening on July 12

JAMESTOWN – The Jamestown Brewing Company in downtown Jamestown will be opening for business on Friday, July 12.  The company made the announcement this past Friday on its Facebook page.

The brewery was originally planned to be opened in the the Spring of 2018 but several unforeseen delays in renovation of the property on the southeast corner of W. Third and Washington streets kept pushing the opening date back.

In recent months construction has been slowed by litigation between the developers of the brewery and the property owners and redeveloper GPatti Enterprises. That matter is still playing out in State Supreme Court in Erie County.

According to the Post-Journal, the total project cost for renovating the property and preparing it specifically for Jamestown Brewing was estimated at $3.84 million. Financing for the project included a $1 million in funding from the Downtown Revitalization Initiative Grant the city received in 2017, plus $475,000 state Main Street grant that was awarded through the Regional Economic Development Council program in December 2015. The Jamestown Local Development Corporation has a $180,000 loan attached to the project. The Chautauqua County Industrial Development Agency also offered tax abatements for the property.

Once open the business is expected to employ between 30 and 40 people. The restaurant will seat 280 guests in five different areas.

Recent filings in State Supreme Court in Erie County show that GPatti Enterprises is asking the court for compensatory damages as a result of alleged breaches of the lease agreement by Jamestown Brewing, along with costs, disbursements, interest and fees.

The counterclaim was port of a response the attorneys for GPatti Enterprises filed related to a lawsuit brought forward by Jamestown Brewing Company claiming a breach of contract between the two parties. Three other claims from the business against the building owner were recently dismissed by the court.

The lawsuit was filed by brewery owners in December 2018 after numerous delays in construction on the building resulted in the business still failing to open at the originally scheduled time of Spring 2018.

Attorneys for the entities will be in court again in mid-June as the case proceeds.

Meanwhile, there is no word on when the business may open, although it has finally received a certificate of occupancy from the city.
According to the Post-Journal, the total project cost for renovating the property and preparing it specifically for the Jamestown Brewing business was estimated at $3.84 million. Financing for the project included a $1 million in funding from the Downtown Revitalization Initiative Grant the city received in 2017, plus $475,000 state Main Street grant that was awarded through the Regional Economic Development Council program in December 2015. The Jamestown Local Development Corporation has a $180,000 loan attached to the project. The County IDA also offered tax abatements for the property.

Once open the business is expected to employ between 30 and 40 people. The restaurant will seat 280 guests in five different areas

On Wednesday, April 17 Erie County Supreme Court Judge Timothy Walker ruled to dismiss a portion of a lawsuit filed in December by the owners of the Jamestown Brewing that claim their landlord and property developer – G. Patti Development – committed fraud when courting the business to enter into a lease agreement to rent out the former Lillian Ney Renaissance Center building (AKA Grant Building)  at the corner of W. Third and Washington Streets.

Jamestown Brewing owners John McLellan Sr. and John McLellan Jr. had filed a lawsuit against GPatti after continued delays prevented them from opening their operation as scheduled. While the business was initially slated to open in the spring of 2018, it saw numerous construction and development delays and has yet to open its doors.

The McClellan’s are suing GPatti, claiming it wasn’t fully transparent in regards to the work that was needed to prepare the site, nor regarding communicating some environmental work that was required before the site would be ready. As a result, Jamestown Brewing was asking for compensatory damages, punitive damages, interest, attorneys fees and costs based on the alleged misrepresentations.

At the request of GPatti Development, Judge Walker dismissed those claims.

But the judge also denied a motion request by G. Patti Inc to dismiss a breach of contract claim from Jamestown Brewing that dealt with the spending of $1 million in state money from the Downtown Revitalization Initiative (DRI) fund. Jamestown Brewing claims GPatti misappropriated that money, leading to the breach of contract.

Judge Walker said he first wants to see a breakdown of how state that DRI money was spent on the Jamestown Brewing project before ruling on that matter. That review won’t take place until the project is completed because state economic development money typically isn’t released until a project is finished.

According to the Post-Journal, the total project cost for renovating the property and preparing it specifically for the Jamestown Brewing business was estimated at $3.84 million. Financing for the project included a $475,000 state Main Street grant that was awarded through the Regional Economic Development Council program in December 2015. The Jamestown Local Development Corporation has a $180,000 loan attached to the project. The IDA also offered tax abatements for the property.

There still is no word on when the brewery will open.  Once open the business is expected to employ between 30 and 40 people. The restaurant will seat 280 guests in five different areas.

The day after WRFA reported the civil suit filed by the JBC against GPatti Enterprises, GPatti sent out a press release/statement from its legal counsel – Rupp Baase Pfalzgraf Cunningham LLC – to local media vehemently denying any wrongdoing in the multi-million dollar effort to prepare the building for the brewery operation.

GPatti, owned and operated by George Patti of Jamestown, is the owner of the former Lillian V. Ney Renaissance Center (and previously known as the Grant Building) on the corner of Washington and W. Third Streets in Jamestown. The operation is renovating and leasing the property to JBC, owned and operated by Jon McLellan Sr. and Jon McLellan Jr. from Buffalo.

In December JBC filed a civil complaint in New York State Supreme Court – Erie County claiming GPatti failed to live up to its end of its lease agreement to have the building prepared for a grand opening by April 2018. Instead, several environmental setbacks have resulted in the operation still not being open – with a new date set for mid March of this year.

“If JBC had been made aware of the environmental issues in a timely fashion, it would not have entered into the lease agreement with GPatti,” the lawsuit contends

In its response to the lawsuit, the statement from Rupp Baase Pfalzgraf Cunningham said GPatti was disappointed to learn of the legal action by its tenants and it would have preferred the brewery work with it to resolve any issues or concerns, rather than filing a lawsuit. The statement also said that JBC was aware of the potential for delays and took on that business risk as part of its lease, adding that the business was made aware of the progress of the work at all times.

And it said that if the lawsuit does move forward, GPatti will vigorously defend against the allegations, and it will assert claims of its own.

JBC is being represented by Ryan Cummings from the Buffalo law firm Hodgson Russ.

He told WRFA via email on Tuesday that the lawsuit was only filed after JBC tried unsuccessfully for months to resolve its issues with GPatti privately.

“The delays discussed in the complaint have presented challenges to Jamestown Brewing Co. and those challenges continue to mount,” Cummins said.

The brewery is seeking damages in excess of a million dollars as a result of the project being 11 months behind schedule.

Cummins also said despite the lawsuit, the brewery continues to work diligently to open the restaurant and brewery.

According to the Post-Journal, the total project cost for renovating the property and preparing it specifically for the JBC business was estimated at $3.84 million. Financing for the project included a $475,000 state Main Street grant that was awarded through the Regional Economic Development Council program in December 2015. The Jamestown Local Development Corporation has a $180,000 loan attached to the project. The IDA also offered tax abatements for the property.

Last week City Development Director Vince DeJoy said JBC was expecting to open in mid-March.  Once open the business is expected to employ between 30 and 40 people. The restaurant will seat 280 guests in five different areas.

BUFFALO, NY – The long-delayed opening of a new downtown brewery has led to the business suing the building owner and project developer.

According to a legal complaint filed in State Supreme Court in Erie County in late December 2018, Jamestown Brewing Co., Inc. (JBC) is the plaintiff in a case against GPatti Enterprises, LLC, (GPatti) the defendant.

JBC is suing for breach of contract, negligent misrepresentation, and fraud.

The complaint was filed by JBC legal counsel Hodgson Russ LLP, based out of Buffalo.

• READ FULL LEGAL COMPLAINT FILED BY JBC

JBC is based out of Buffalo and is being operated by the father-son duo John McLellan Sr. and John McLellan Jr. GPatti is owned and operated by Jamestown-area resident George Patti. Because the McLellan’s business is based out of Buffalo, the complaint was filed in State Supreme Court in Erie County rather than Chautauqua County.

As part of its complaint, JBC says it entered into a lease agreement with GPatti without being fully informed of environmental issues that could have delayed its opening. It also claims GPatti breached its contract by failing to meet the original construction schedule and performing work as required under the lease.

UNDISCLOSED ENVIRONMENTAL ISSUES FORCE RECURRING DELAYS IN OPENING

In August 2017 JBC entered into a lease contract with GPatti and moved forward with an initial plan of opening in April 2018.

GPatti purchased the former Lillian V. Ney Renaissance Center on the corner of W. Third and Washington Streets from the Gebbie Foundation in December 2017 for $330,000 as part of its plan to redevelop the property for JBC. The purchase took place after the brewery project was awarded $830,000 from the $10 million Downtown Revitalization Initiative (DRI) Grant (announced in the spring of 2017).

As part of its business plan and in coordination with the timeline provided by GPatti, JBC purchased and stored long lead items for the brewery and also hired employees in preparation for the installation of the brewing equipment and the pending grand opening. The JBC Grand Opening was intended to take place in advance of the opening of the National Comedy Center in August 2018. However, the April opening did not occur and in June, GPatti presented an updated timeline that said work would be completed by October 2018. Once October arrived, the completion date was pushed back another month and again another month until it eventually was pushed back to mid January 2019. At that time the lawsuit was filed.

The recurring delays in the development timeline were reportedly due to environmental remediation required by the state due to the property being located at a former dry cleaning facility, as well as asbestos abatement that had to take place.

According to the legal complaint filed by JBC, GPatti had attributed the delays to a Phase II environmental study from the Department of Environmental Conservation from the fall of 2017. Because a Phase II study only occurs after a Phase I study has been done and indicates that there is a potential problem, JBC says it appears that the Phase I strudy was done before the lease was signed, but they were not informed of the results of the Phase I study prior to signing the lease.

JBC also feels GPatti was aware of the environmental issues in advance of the 2017 Phase II or Phase I study because the Gebbie Foundation had a Phase II study done in 2007 when it owned the building. At that time the Jamestown Renaissance Corporation (JRC) was a tenant in the Lease Premises. JBC believes GPatti knew of the Gebbie Foundations’ 2007 Phase II study before the lease was signed because an executive who worked for JRC at the time of the 2007 study began working for GPatti prior to August 2017.

“If JBC had been made aware of the environmental issues in a timely fashion, it would not have entered into the lease agreement with GPatti,” the lawsuit contends.

JBC also states that its principles and employees quit their jobs in anticipation of the original April 2018 grand opening date and the principles contributed significant personal funds to bridge the period of time between the original grand opening date and the new anticipated opening dates, and the company has incurred carrying costs including bank loan repayments and insurance.

JBC received several loans and funding grants in order to get the operation off the ground. As a result of the delays in opening, all lending sources – both public and private –  made an effort to restructure their respective loans to accommodate the McLellans and ensure they have enough startup capital for the business once it finally opens.  But the delays in loan repayments have lead to additional interest being added until the loans can be fully repaid.

As part of its claim, JBC says it has suffered damages of at least $1,000,000 and is also seeking compensatory damages, interest, attorney’s fees, and costs as a result of the alleged breaches by GPatti.

Also, As part of its lawsuit, JBC claims that even though GPatti has received DRI funds that were earmarked for the brewery project and it is a joint beneficiary of those DRI funds, GPatti has not identified the DRI funds it has received, nor identified what those funds have been spent despite numerious requests. As a result, JBC is requesting GPatti be compelled to account for the DRI funds and their expenditure.

WRFA reached out to the parties involved on Tuesday. A representative for GPatti didn’t want to make an immediate comment.  However, the attorney for JBC – Ryan Cummings from Hodgson Russ, sent a statement late Tuesday afternoon.

“The lawsuit was only filed after Jamestown Brewing Co. Inc. tried unsuccessfully for months to resolve its issues with GPatti privately. The delays discussed in the complaint have presented challenges to Jamestown Brewing Co. and those challenges continue to mount as just [Monday] one of GPatti’s subcontractors filed a lien against the property, claiming that they have not been paid for work and materials provided to GPatti. Notwithstanding the lawsuit and delays occasioned by GPatti, Jamestown Brewing Co. continues to work diligently to open the restaurant and brewery,” Cummins wrote.

Cummings also said that the lawsuit is in its infancy, but a typical commercial case takes approximately 18 months to resolve.

WRFA also reached out to city development director Vince DeJoy, who tells WRFA the city is aware of the lawsuit and is hoping for a quick resolution, adding that it remains committed to seeing the business open in the near future.

According to the Post-Journal, the total project cost was estimated at $3.84 million. Financing for the project included a $475,000 state Main Street grant that was awarded through the Regional Economic Development Council program in December 2015. The Jamestown Local Development Corporation has a $180,000 loan attached to the project. The IDA also offered tax abatements for the property.

Last week DeJoy said JBC was expecting to open in mid-March.  Once open the business is expected to employ between 30 and 40 people. The restaurant will seat 280 guests in five different areas.

That’s according to a story in the Jamestown Post-Journal, which says the business is currently waiting on an environmental remediation to take place at the property along Washington Street between Second and Third Streets.

The location is the former Lillian V. Ney Renaissance Center and prior to that, known as the Grant’s Building.

The Brownfield Cleanup is taking place due to contamination from an old dry-cleaning operation that had been on the site and had contaminated to soil around the property. G. Patti Development – which owns the property and will be leasing it to Jamestown Brewing Company – is spearheading the cleanup as they have also led the renovations to the upcoming brewery.

The remediation is expected to be completed within the next couple months, meaning the long-awaited opening of the brewing company will likely take place in January.

According to a March 2017 article by the Jamestown Post-Journal, the original plan was to have the business open in late 2017 or early this year.

No opening date has been announced yet. A post on the Jamestown Brewing Company Facebook page from Oct. 11 stated, “Every day we are closer to drinking beer with you. As soon as we have our official opening date, you guys will be the first to know!”

Once open the business is expected to employ between 30 and 40 people.

The Jamestown City Council during its October 2018 voting session.

The Jamestown City Council voted Monday night to restructure a loan for the Jamestown Brewing Company that was originally approved in the spring of 2017.

The loan comes from the Jamestown Local Development Corporation and is for $180,000. It was one of several loans and funding sources the business owners – father-son duo John McLellan Sr. and John McLellan Jr. from Buffalo – requested in order to get their operation off the ground.

However, delays in the renovation effort of the building the business will renting have forced a delay in the opening.

As a result of the delay, all lending sources – both public and private – have made an effort to restructure their respective loans to accommodate the McLellans and ensure they have enough startup capital for its opening.

The city council is required to sign off on any JLDC loan or any changes to past JLDC loans are over $100,000.

On the recommendation from JLDC executive director and city development director Vince DeJoy, the council approved the new terms of the loan, which says the business won’t have to make a payment for the first six months after disbursement. The new terms also mean the business will only have to make interest-only payments for the first six months and its repayment term was extended from seven to eight years.

The vote wasn’t unanimous. Councilman Andrew Liuzzo (R-At Large) was against it on the grounds that most privately owned businesses are not given the ability to restructure their loans once they receive them and he felt the city shouldn’t give this business additional assistance.

Jamestown City Councilman Andrew Liuzzo in August 2018

“If this was a private venture and whatever pitfalls or short comes happen, that person – because he has skin in the game – would have to figure out how to manage his debt and how to repay his loans,” Liuzzo said. “I find it troubling that because it’s subsidized we are very eager to help. Of course we want them to be successful, but that doesn’t happen when someone is doing something on their own and its a private capital investment.”

“Quite frankly, there is private investment. It’s called Five Star bank and they are offering the same terms [as the revised JLDC loan],” DeJoy countered. “This is something that is somewhat routine that any private lender would offer their recipient of their loan.  And let me make it clear that this money isn’t money that comes from the taxpayers of the city of Jamestown.”

It’s also worth nothing the redevelopment project of the building, and not the actual brewing business, is what’s being subsidized. While the property owner – G Patti Development – received significant state and federal funding for upgrading the building, the McLellans received little actual grants or tax subsidies for their business, with most of its investment coming from loans from both private and public sources.

The total project cost between G Patti Development and Jamestown Brewing Company was estimated to be $4,835,760. Of that, the total project cost attributed to just starting the Jamestown Brewing Company was estimated at $750,000. The JLDC loan covers about a quarter of the McLellan’s total cost.  The McLellans also received a $100,000 Al Tech loan from the county IDA andnd the Greater Jamestown Zone Capital Corporation also acted on a $50,000 loan for the business. The remaining funding for the business was provided by a loan from Five Star Bank.

DeJoy also explained that the business was not being given any type of break on the amount it would have to pay back to the JLDC and if anything, the extension meant the business will have to pay more money through interest than what it had initially paid.

Mayor Sam Teresi also explained that the business owners to have “skin in the game” because they are putting their own assets up as collateral.

“The owner has a requirement of providing between 10 and 15 percent of the total product cost in the terms of cash equity,” Teresi noted. “So their bringing their own dollars to the project. They are on the hook for every penny of the money they are borrowing and they’re providing collateral in the form of not only their business assets, but their pledging their own properties as real estate collateral for the deal.”

There also seemed to be misunderstanding regarding state grants that were given toward the project.

Jamestown Brewing Company will be located in the former Lillian V. Ney Renaissance Center at the corner of W. Third and Washington Streets.

According to a March 2017 article by the Jamestown Post-Journal, the original plan was to have the business open in late 2017 or early this year.

No opening date has been announced yet. A post on the Jamestown Brewing Company Facebook page from Oct. 11 stated, “Every day we are closer to drinking beer with you. As soon as we have our official opening date, you guys will be the first to know!”

Once open the business is expected to employ between 30 and 40 people.