Deal in works for Beacon landmark

$5 million offered for Craig House

By Craig Wolf
Poughkeepsie Journal

BEACON -- A deal is on the table for the sale of the Craig House hospital property. A New York City company that already claims to be the largest owner of property in the city is expected to make the purchase soon.

The news was confirmed by a spokeswoman for Poughkeepsie-based Health Quest Inc., which owns Vassar Brothers Medical Center as well as Putnam Hospital Center in Carmel. A Putnam subsidiary, Craig House Center Realty, owns the former Beacon private psychiatric center with its historic buildings and about 67 scenic acres along Route 9D.

''We do have an offer on the table that is in excess of $5 million. We expect to close very soon,'' Jeanine Agnolet said. She confirmed the buyer was Milton L. Ehrlich Inc., a Manhattan-based realty firm whose president, William ''Bil'' Ehrlich, is also an arts patron closely involved with Beacon's arts development.

''It's not a done deal, and we're still working out the details,'' she said.

Ehrlich declined to comment Wednesday.

Recently, a ruling in state Supreme Court came down in favor of Craig House Center Realty, which had been sued by Ehrlich. He contracted June 6, 2001, to buy the property for $5.5 million. Ehrlich planned a spa hotel for the buildings, which include the ''high Victorian Gothic'' mansion built in the 1860s and 1870s, and from 40 to 85 luxury condominiums to be built below a crest near the Fishkill Creek. The condo part raised some concerns among City Council members.

In September, Ehrlich became aware the council was talking about a possible rezoning from one-acre residential to three acres. According to papers filed in court, Ehrlich sent a ''notice of suspension'' of the contract Oct. 25, 2001, worried that the change, which was a surprise, would make the condos impossible and ruin the plan.

The hospital owners eventually began looking for other buyers. In March, Ehrlich sued Craig House demanding it follow through on the sale. It's not clear what caused that turnaround.

Acting State Supreme Court Judge Thomas J. Dolan ruled Dec. 4 in favor of the hospital, denying Ehrlich's claim as ''arguing dramatically inconsistent positions,'' saying on one hand the hospital should sell to him but on the other that the city's proposed rezoning justified his pulling out of the deal. There was nothing in the contract about rezoning, the hospital argued. Dolan said such a change was not a fact, just speculation. So Dolan ruled that Ehrlich had breached the contract and the hospital was free to try to sell it to someone else.

Closing in on agreement

Now, two weeks after the ruling, Ehrlich and the hospital are back to making a deal. It's not clear what caused that turnaround, but Agnolet said, ''We have actually received many offers over the last year, none of which we have accepted.''

Ehrlich owns many properties in the city, including commercial buildings, homes and the empty Beacon Terminal factory complex on South Avenue. He gained voters' OK to buy the former Beacon High School.

In an affidavit in the court case, Ehrlich said, ''I believe that Milton L. Ehrlich and its affiliates collectively are the largest landholders and largest taxpayer in the City of Beacon.''

Mayor Clara Lou Gould said Wednesday city officials and consultants are still discussing changes in rules that could affect the Craig House property.

''It's still in the thought process,'' she said.

''We're in the process of making sure that the protection was there ... to protect the 'great lawns,' the creek vistas. We had told anybody coming along that that was in the works.''

The site's broad vistas of lawn and mature trees visible along Route 9D have won support for a preservation scenario, including from Ehrlich.

Jeff Wilkinson, a Beacon architect, said some development could be done if done right, perhaps ''tucked away'' or working with the landscape but not affecting some of the large vistas.

''It's really the last open in space in Beacon, in many ways,'' he said.

The Garden Conservancy in Cold Spring recently had treatment done to one key tree, the eye-catching and rare Sargent's weeping hemlock, which was being attacked by scale and adelgids, two pests.

''We felt we couldn't stand by while the property was in play,'' said Antonia Adezio, president of the conservancy. ''We hope to paly a role in stewardship of the property under whoever the future owners are.''