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Entertainment Properties Trust Grossly Misrepresented New Roc Deal to Wall Street Analysts Says Capelli, Demands Retraction

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Entertainment Properties Trust Grossly Misrepresented New Roc Deal to Wall Street Analysts Says Capelli, Demands Retraction

June 11, 2010 - 15:42
6 comments

Louis Capelli.jpgLouis Capelli today fired off a searing email to David Brain, CEO of Entertainment Properties Trust, accusing EPT of unfairly damaging his reputation by making false statements and using inflammatory language during a publicly broadcast conference call last month.

Capelli asks Brain to give "immediate attention" to his call for EPT to retract its previous statements regarding a $700,000 transfer of funds among two Capelli entities which Capelli has described as both proper and necessary to his efforts to sign lease deals with Kohl's and Target at New Roc City.

In a story first reported by Talk of the Sound, EPT's CEO David Brain, COO Gregory Silver and and CFO Mark Peterson repeatedly bashed Capelli to Wall Street analysts and investors during a May 3rd conference call which was webcast live over the Internet, claiming a $700,000 transfer of funds was an "unauthorized loan", that Capelli management of New Roc had been "terminated" and bank accounts "seized" as a result.

In an exclusive interview with Talk of the Sound, Capelli paints a very difference picture. He says the $700,000 was for the purpose of paying expenses related to developing building plans needed to close the deals with Kohl's and Target. Capelli also states that he offered to turn over control of bank accounts to EPT a week before the actual transfer took place, that he has documentation of this, and that EPT's use of the term "seized" completely mischaracterizes the circumstances under which control of the bank accounts moved from Capelli to EPT.

He went on to say that EPT does not want to bring Kohl's and Target to New Rochelle for reasons unrelated to the needs of New Rochelle or the success of the project and that EPT has been and continues to stand in the way closing deals with the two department stores.

Perhaps most significantly, Capelli says that the two sides have settled their disputes involving New Roc City, the City Center in White Plains and the Concord resort in upstate New York.

His email to EPT (printed below in full) indicates that an announcement of a settlement may come as early as today.

Email from Louis Capelli to David Brain

----- Original Message -----
From: Louis Cappelli
To: '[email protected]' ; '[email protected]'
Cc: '[email protected]'
Sent: Fri Jun 11 10:43:59 2010
Subject: Fw: New Roc Article

Gentlemen, this is doing me a tremendous amount of reputational damage. I suggest we sign today and there is a very supportive press release issued immediately which attempts to clear up these issues and gain back my stellar reputation.

You didn't "seize" the accounts. I emailed David a week before offering to turn over the accounts for your control ( if you don't have that email I will send it again ). You need to retract this statement immediately.

Also all payments were made as a "loan" for transparency purposes and project bills were paid and allocated for payment of project expenses ( plans you now want for Target and Kohls )

I need immediate attention to this and a closing today with a funding Monday.

Louis

----- Original Message -----
From: Louis Cappelli
To: '[email protected]' ; '[email protected]'
Sent: Fri Jun 11 10:11:40 2010
Subject: Fw: New Roc Article

We need to deal with this in the press release ASAP as it has caused numerous calls to me today. These were funds used for company/partnership expenses, and EPT knows that.

This is damaging to my reputation

Developing...

There are 6 Comments

This man has been protrayed as a monster and I only hope that the truth comes out one way or another in some judicial venue. I am sick of innuendo and while no fan or foe of Capelli, I can only feel that in this day and age of unfettered and uncontrolled 24 hur a day media, "expert commentators, tweets, twitters, and God knows what else, the presumption of innocence still stands. Frankly I wish for a simpler time when sound bites, 25 words or less, or even the overblown (Jeez am I guilty of this) commentary with so called "facts" can be replaced by a more direct way of communicating with people. We have become a nation that lives and breaths negative commentary, narcissitic "me first" positions, and I wish things were back to the too distant past.

Sounds like the blacking out of the council meeting was based on foreknowledge of the Capelli situation. Don't really know the law, but perhaps there is such thing as executive privilege or guidelines on sensitive issues that protect boards and other public or quasi public venues from open forums. Maybe Bob can cite the law in a blog and I would appreciate it as I am curious as to what is public and what could be protected.

warren gross

When you look at the breathe and body of Cappelli's actions its hard to feel sorry for him even as he appears to be in dire circumstances.
One could say it could not happen to a more deserving person or persons.
He is being sued by Andersen for non payment on a contractual real estate deal associated with Le Count Place. This brings this project to being one beat above dead.
He is being sued by Contractors/Sub contractors for work he ordered on his Concord Hotel Project. They have filled mechanics liens.Somehow he has gotten a deal from New York State that exceeds what Indian Tribes get as a split. Exactly where was his tribal reservation? Open a few campaign contribution trails and that will give you a clue.
He will be sued by his partners on New Roc and certainly there is the potential of criminal charges if he in fact broke the law.
His overall body of work is dismal when you consider that he rides IDA Pilots and Government Brownfelds on just about every project and in most cases does not live up to his end of the agreements.
I believe Mayor Bramson goes down with this sinking, nope sunk ship known as Cappelli Ent. They even tried to get Schumer to influence the USPS to price the North Avenue Post Office below market. The desperate are really desperate. New Roc is sunk empty and potentially could go completely dark if they don't get the charlatan out of the picture.
I am glad you feel sorry for him, if there were any justice you could bring him bread to go along with the Water he would get in Debtors Prison. I know it won't happen but certainly his ride is over.
Wait till the shoe drops on Trump Cappelli and the small owners of units get hit with running a half empty building. Your compassion is wasted you can bring him an old world sandwich in prison if there is any justice left.

Capelli promised Kohl's would sign a lease in 10 days, which was 7 months ago. Capelli said there were no problems with any properties owned, managed or under contract. He has been sued by two property owners, owes back taxes, been terminated as the managing agent of New Roc City and has not maintained the properties he controls. Capelli promised to repair and put window treatments on the block of vacant stores along North Avenue between Huguenot & LeCount and reneged. Club Carib on North Avenue was purchased to relocate Family Planning by Capelli and recently was placed back on the market. I cannot label him a monster but Capelli's representative, Joe Apicella, sat before council representing Capelli and out right lied to council's face. How can any member of council even consider a 14th amendment for a businessman who lied to them, a businessman who didn’t make good on his promise to clean up the blight which he created and a businessman whose financial status is so dire that he requested (and the IDA granted but that’s another story) release from a $600,000 letter of credit?

In my opinion, the council should let the MOU expire which would permit Cappelli to remain “in the game” while allowing the City the right to entertain and or solicit other development projects.

I have much respect for you and your opinions, but I have to say that just about everything reported regarding LeCount has been taken from public meetings, news reporting, legal documents and, most of all, Joe Apicella's failure to deliver on what he "promised" to city council, at a public meeting, as he persuaded council to continue with extensions. Whether you agree with the project, or the man, has no bearing on the problems (well documented, not just hyperbole or conjecture)they face and the negative effect of holding such a large part of downtown as hostage. They haven't even been able to spruce up the eyesore they've created and that would have been pennies compared to what's at stake. They released a press statement in Yonkers, of all places, about New Rochelle, conveniently right about the time they're begging for another extension. The promises made at their last request have died out with a whimper, Council Stowe didn't like the extension before this last one, Council Fertel said in public there would be serious concerns if another extension were asked for. So, given the failure to deliver on even the most rudementary promises, coupled with the tremendous financial problems faced by this entity (for whatever reasons), why should the city be compelled to freeze all possible potential for a major part of downtown? Nothing can move forward, New Roc hovers in limbo and the streets look abandoned along Anderson Street. Ask yourself, does New Rochelle benefit from this, or does Cappelli. In my opinion, the answer is clear. Please re-read the stories that reported on Cappelli and his actions, I think you'll understand my logic.
Again, thank you Warren for your perspective. Be well.

Robert Cox's picture

Warren,

"I am sick of innuendo" - to what innuendo do you refer?

"so called 'facts'" - I see reporting of basic facts that are just a mouse click away -- transcripts, audios, etc. That you do not wish to view them does not make them less real.

"the presumption of innocence still stands" - in case you had not noticed, the Talk of the Sound is not a court room. The presumption of innocence is a legal standard that applies to the justice system not the media.

"Sounds like the blacking out of the council meeting was based on foreknowledge of the Capelli situation" - In case you missed it, Capelli came before the board. It would therefore be an executive session AT HIS REQUEST. The Council did not go into executive session by accident.

"Don't really know the law, but perhaps..." - this sounds like a typical Warren statement. The law is brief, readily available on the NYS web site and was both linked and excerpted in the article. The relevant portion of the law is one line from Section 105. Instead of theorizing about a law that is placed directly in front of you why not just read it and then comment on that the law says rather than your vague theories about what it might say.

"Maybe Bob can cite the law in a blog" - I did.

"I am curious as to what is public and what could be protected" - really? how curious are you when you did not bother to take any time to read the material linked from the Capelli loan story and did not read the excerpt of Section 105 published in the story to which you refer?

New Rochelle City Council Goes Dark...
http://www.newrochelletalk.com/node/2062

The information you SAY you want is in the FIRST paragraph of the article.

"I am curious as to what is public and what could be protected."

Protected?

Let me educate you a bit on the founding of the United States.

What made the United States at its founding different than all other countries in the world was having a document which clearly spelled out how the government works and the requirement that its citizens could watch the legislature function. It is called the U.S. Constitution. You should read it some time.

Any and all attempts to hide from the public the workings of the government is fundamentally undemocratic and un-American and should opposed with all possible vigor. The people who seek to operate the government in the dark are attempting to take out birthright and should be treated with the utmost contempt as the despicable, traitorous scoundrels that they are.

I have no idea why you want to be on the other side of this issue but when a government seeks to withhold information from the public they are required to make an affirmative statement as to why. For Bramson, in this case, to simply say this is "a matter of real estate" does not cut it. While there MAY have been SOME moments during which there was SOME discussion related to SOME ASPECTof leasing property from the City by Capelli that in and of itself does not mean that the subject can be used to invoke an executive session. Further, as is now clear from the IDA agenda published to the City web site on Friday, much of what was discussed had NOTHING to do with leasing/buying/selling property and had everything to do with Capelli arguing for an extension of the MOU on LeCount Place. There is not a single thing at LeCount that would qualify for executive session because the City does not own any of that property.

They spent THREE HOURS in executive session and, according to my sources, spent most of that time on topics that de facto do not qualify for executive session. I am also informed that Capelli "forgot" to mention that he was forcibly removed from running New Roc by EPT.

The rather obvious purpose of going into executive session was to prevent the public (and Talk of the Sound) to see what Capelli and Joe Apicella had to say and how he intended to explain his statements last November when he assured the council that Kohls and Target would be signed in 10 days. Neither they nor the Democrats supporting Capelli want the optic of Capelli making the same hollow assurances he has been making for years. As to motive, there are many but keep in mind that Apicella is Vice-Chairman of the Democratic Party of Westchester and thus has a direct role in allocating funds and political support for these same Democrats.

As you are so curious about all this, why not join me in attending the IDA meeting on June 23 when all this will be discussed?

I expect there will be a direct correlation between the number of people who show up to watch and the speed with which the IDA attempts to go into executive session.

One may recall three years ago when the Mayor and City Manager told New Rochelle ice hockey players and ice skaters that the New Roc Rink will not close and, if it did, a temporary solution will be found.

All players and parents asked was that before Capelli was offered another extension, worth millions, was that the rink be kept open until a replacement was built.

Three years later, the rink remains closed, all the equiptment just sits there, unused. Thousands of players, skaters, parents and friends of all ages brought revenue to New Roc via the rink. Now, it goes to Pelham and Mt. Vernon.

We were told Target is coming.
Then it was Kohls.
Target, Kohls, Target, Kohls.
Every month, same story, same lies.

Meanwhile, Fairway and BJ's goes up in Pelham without any IDA monies. Hmmmm.

That the Mayor, City Manager and Council members would even have the audacity to entertain another extention to these liars is beyond belief. How much longer is this joke going to go on? Can't wait for the next tv blackout, I guess it's best to show up in person.

Time to say what's in it for us, Mr. Capelli, and maybe someone on Council will have the cojones to say it: You want a deal? Re-open the rink, then we'll talk.

And we're supposed to believe that a rink will be built in City Park in 2012? Yeah right. And I've got a bridge I want to sell ya . . .

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