Deal to develop Mahwah drug treatment center falls apart
By LINDY WASHBURN and TOM NOBILE
Apr. 17, 2018
MAHWAH, N.J. (AP) — A onetime Catholic retreat center in Mahwah was to have been transformed into a residential drug-treatment center operated by Hackensack University Medical Center and the Carrier Clinic until a deal with a management company fell apart earlier this year.
Now the dispute between the two sides has landed in federal court in New Jersey, and it's unclear what will happen to the property, once known as the Carmel Retreat.
The developer of the site — Jonathan Lasko and his company, JNL Management, of Florida — intends to push forward with the project, his attorney said Tuesday.
"We are exploring every available opportunity to save this project," said Holly Schepisi, Lasko's local attorney and a Republican Assembly member from the 39th District, which includes Mahwah. "It's something desperately needed in our communities, and we're speaking with some amazing potential partners."
Mahwah Mayor Bill Laforet said he was disappointed "that the partnership fell apart." But "this is a facility that any community would find attractive," he added.
According to court papers, an agreement had been signed to sell the 34-acre property for $10.5 million. The buyer — a company that provides back-office services to several drug-treatment facilities in Florida — had obtained the necessary variances from the township of Mahwah to convert the onetime mansion into a residential treatment center. It would have had 80 beds for treatment, Schepisi said.
Hackensack University Medical Center was going to contribute $4.5 million to the purchase price and oversee the renovation of the retreat center, located on Ramapo Valley Road.
Hackensack and the Carrier Clinic, which announced their own partnership agreement last month, were to operate the center. Treatment would have been provided in conjunction with an in-patient detox program at one of Hackensack's "satellite hospitals." Hackensack University Medical Center at Pascack Valley in Westwood is the closest such hospital.
But now the deal is off.
Laforet said he looked "forward to the next applicant who can make the best use of that property."
It's not the first time that a mansion in northern New Jersey once used by a religious order has been proposed to be converted to a drug-treatment residence. Addiction treatment offers a third chapter for such massive, well-built estates. Initially built a century or more ago, they were renovated at mid-century as convents or retreat centers with large kitchens and meeting rooms, as well as multiple dorm-style rooms.
In Ringwood, American Addiction Centers is renovating the former Mount St. Francis convent on 96 acres into a 150-bed addiction treatment center at cost of $25 million. The project has been slated to open this year.
The Carmel Retreat, which shut its doors almost six years ago, was the highest-priced piece of real estate in Bergen County when it was listed in 2015 for $14.5 million. It was zoned for residential use, and could be divided into only two parcels, each with one single-family home.
The zoning change approved in September 2016 allowed the operation of a nonprofit business with administrative offices in an R80 zone.
Mahwah's zoning board approved the facility by an 8-1 vote, but rejected a variance that would have allowed townhomes on the property, according to meeting minutes.
Nearly a dozen neighbors, however, had objected to the project, many believing the residential area was not suitable for a clinic, according to minutes.
Surrounded on three sides by Campgaw Mountain Reservation, the property includes a main house and two smaller stone guest houses. The main house was built in the early 1900s by Charles Chapman, a New York financier and gentleman farmer who once employed more than 60 people on the land. It was sold to the Carmelites in 1955.
In the lawsuit, Lasko and JNL Management accuse Hackensack and Carrier of breach of contract. Lasko blames a Philadelphia law firm and one of its law partners for wrecking the deal, and has accused them of defamation and interference with Lasko's business relations.
The lawsuit says Antonio M. Pozos, who joined the law firm of Drinker, Biddle and Reath in January from the U.S. Justice Department's criminal fraud division, told Hackensack hospital officials that Lasko was a "person of interest" in an ongoing Medicare fraud case. As a result of that information, Hackensack and Carrier pulled out, the lawsuit says.
The information was "false, inaccurate, and/or misleading," the lawsuit said. And Pozos was required to keep information from his previous position confidential, the suit said.
The information Pozos allegedly passed along concerned business dealings between Lasko and Philip Esformes, who was indicted in the largest criminal health-care fraud case ever brought against an individual by the U.S. Department of Justice. Esformes, an assisted-living and nursing-home owner in Florida, is currently awaiting trial.
The lawsuit says that Hackensack and Carrier already knew of Lasko's relationship with Esformes and had asked for a special provision to be added to their contract to protect their interests. It would have allowed them to purchase the Mahwah property from Lasko if he was ever barred from participating in Medicare or other federal programs.
Hackensack University Medical Center said through a spokeswoman that it does not comment on pending litigation. Drinker Biddle did not respond to a request for comment.
Lasko's lawsuit claims he should be reimbursed for the $400,000 he invested to develop the joint venture, and for profits of $16.4 million he would have realized if the venture was consummated.
JNL had already retained engineers, Schepisi said, and anticipated investing $5 million to $7 million in the renovation. "We're still moving forward with the project. We have every intention of not letting this project die."
Information from: The Record (Woodland Park, N.J.), http://www.northjersey.com