The Real Deal New York

Nonprofit Phipps Houses to buy 300,000 sf East New York site for $38M

City plans to rezone burnt-out lot for manufacturing, industrial and resi uses

May 29, 2015 01:57PM
By Rich Bockmann

Firefighters battle a blaze at Blue Ridge Farms and the burnt-out building at 3301 Atlantic Avenue

Firefighters battle a blaze at Blue Ridge Farms and the burnt-out building at 3301 Atlantic Avenue

Nonprofit developer Phipps Houses is in contract to buy a burnt-out former food-processing plant that’s part of the city’s East New York rezoning plan for $38 million, The Real Deal has learned.

Seller Laundry Capital, headed by laundromat kingpin Alex Weiss, acquired a distressed note last year on the Blue Ridge Farms facility at Atlantic Avenue and Chestnut Street, which covers some 300,000 square feet spread across a handful of properties around the ruined factory.

Laundry Capital declined to comment and Phipps Houses did not respond to requests. Phipps,s the largest non-profit operator of affordable housing in the city, is currently developing two residential towers at Hunters Point South in Queens with partners the Related Companies and Monadnock Construction.

Blue Ridge, which processed foods like salads and coleslaw, was once one of the city’s largest manufacturers. But the company fell on hard times in 2004, and owners Jeffrey and Richard Siegel brought on as a partner Thomas Kontogiannis, who would later plead guilty in what was one of the largest mortgage-origination fraud cases on record.

The Siegel brothers claimed Kontogiannis looted the company and failed to make payments, threatening the property with foreclosure. In 2005, the brothers relinquished their portion of the business to Kontogiannis and the factory closed sometime thereafter.

The building has been a burnt-out shell ever since a fire ripped through it in 2012. As part of Mayor Bill de Blasio’s proposed rezoning of East New York, the city would like to see the property transformed into a mixed-use district with industrial, commercial and residential facilities.