What do we know about Kitching / Pelayo – Orangetown’s choice for HNA redevelopment?

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Howard Lorber, Director of New Valley Realty, brings the hotel experience to the package

By Tina Traster

Now that the City of Orangetown has chosen a “preferred developer” to redevelop the HNA Palisades center at 334 Route 9W, curious minds want to know who is behind plan number one, as the plaintiff has become known.

Plan Number One, or the Kitching / Pelayo team refers to Mark Kitching and Jerome Pelayo, respectively real estate broker for Douglas Elliman and home builder. Kitching, director of the Estates division, sells high-end homes in California and Pelayo, of Sunia Homes, is a small-scale developer of state-of-the-art, eco-friendly homes, also in California.

Pelayo has built a portfolio of modern homes in California under Sunia Homes. He was introduced as an “architect” at the June 2 city council presentation by attorney Taylor Palmer of Cuddy & Feder LLP; however, he is not licensed as an architect in New York or California, according to databases that list licensed professionals.

Pelayo is also listed as an ‘architect’ on Cornell Farms in the town of LaGrange in Dutchess County, a redevelopment project that features 55 green, bundled single family homes and a farm-to-table restaurant, farm shops, a dairy, and brewery / cider house with 166 parking spaces.

“No, we are not,” Pelayo said, when asked if he was a licensed architect. “For the subdivisions we design and build, no architectural license is required. For other projects, we have architectural partners.

“We’re really excited about the project,” Kitching said. “We look forward to working with the city to make this work for everyone. “

The Kitching / Pelayo team publicly presented their proposal on June 2sd via a city ZOOM meeting. As the team’s proposal is posted on the city’s website and the vision is presented in detail, almost nothing is known about the directors and their investment and equity partners. Sources told RCBJ that the Kitching / Pelayo team came up with the highest bid for the 106-acre HNA site, compared to its competitors, funding group Procida and team, and Rick Cook of Cook / Fox Architects.

So who is the financial muscle behind Kitching / Pelayo?

“It’s the same question we were asking,” said Michael Zarin, special counsel for the city of Orangetown. “We have done due diligence. This team has the financial means. The team submitted the best pro forma.

Complementing Kitching / Pelayo, which has been the public face of Plan Number One, is an entity called New Valley Realty, a real estate investment subsidiary of New Valley LLC, a wholly owned subsidiary of Vector Group Ltd (NYSE: VGR) . Led by CEO Howard M. Lorber, New Valley invests in renovations, office and rental condominium conversions, underperforming assets, land development and sale, resort and city hotels, basic rental buildings.

howard lorber
Howard lorber

Lorber is also president of his 70 percent owned subsidiary, Douglas Elliman Realty, LLC.

The Vector Group, which owns New Valley through its subsidiaries Liggett Group LLC and Vector Tobacco Inc., manufactures and markets “high-quality cigarette products,” according to its website.

Lorber’s affiliation as a former board member of Morgans Hotel Group Co., which owned and operated boutique hotels, made him a vital asset to the Kitching / Pelayo team, sources say. familiar with the city’s decision-making process.

“It was an important leg of the stool,” said a source familiar with the procedure.

Morgans Hotel Group was a global hotel company acquired by SBE Entertainment Group in 2016. The company, founded by Ian Schrager, invented the concept of boutique hotel in 1984 when it opened the Morgans Hotel in New York City.

The “Brooklyn Comes to Rockland Plan,” as we have dubbed the Kitching / Pelayo design, envisions an updated hotel / conference center, a world-class spa, a restaurant with biodynamic gardens, spaces for creators , 50,000 square feet of photo and film studios, test kitchens and co-working. Phase two of the plan also calls for 20 to 30 townhouses to create “larger accommodations for families and longer term stays.”

The city will take the initiative to pair the developer with HNA, but ultimately HNA, a private owner, has the power to decide whether a purchase offer is acceptable.

“We’re the directors, but we have a team,” Kitching said. “For obvious reasons, a lot of things are confidential. We must act with discretion.

With over $ 400 million in sales, Kitching has represented properties designed by influential architects including A. Quincy Jones, John Lautner, Marmol-Radziner, Charles Ward, Lorcan O’Herlihy, Thom Mayne, Ted Tokio Tanaka and Rodney Walker, according to his biography online. He was ranked among the top 100 agents in Los Angeles by sales volume, as reported by REAL Trends.

In 2003 Pelayo built his first Sunia home in Echo Park California – 2,000 square feet and packed with green features such as solar panels, a gray water system, rainwater harvesting, and a pellet stove. Of wood. The three-bedroom, two-bathroom home took four months to build and cost $ 350,000.

Pelayo made this self-taught experience a model for the development of Sunia Homes in other urban areas. Sunia Homes are built to create eco-friendly communities using little water, little waste, and locally grown food.

The builder of the house told other media that he trained as a lawyer, not an architect. He fell into house building by accident because he couldn’t find modern, energy efficient homes that were affordable. The construction of the first house won him media attention. He told reporters: “I am not an entrepreneur. In fact, I’m not an architect either (I studied law) and this is my first home. When we couldn’t find the house we were looking for and decided to build our own house, I taught myself some 3D modeling software (AutoCAD, Sketchup) and some architectural basics and went from there .

For Cornell Farms, Pelayo partnered with Tom Lee, a hedge fund manager, who bought the 182 acres in 2019 for $ 2.4 million. The plan is on track to receive site plan approval, but changes to the plan requiring the green light from New York State agriculture and markets have delayed the review process in the town of LaGrange.

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