By Sarina Trangle
The former Parkway Hospital property appears to be bound for another auction.
A limited liability company that staked out the 70-35 113th St. property with a $22 million bid during a Jan. 10 foreclosure auction opted not to move forward with the sale, according to Joseph Risi, the referee assigned to the foreclosure case.
Risi said 70-35 113th Street Holdings LLC paid the required 10 percent down payment, but never handed over the remainder of the bid.
Auberge Grand Central LLC, which holds the mortgage on the Forest Hills property, granted the LLC more time to complete the sale after the 30-day window for closing passed.
Risi said the 56,400-square-foot lot would likely be put up for auction again while the court decided where the $2.2 million deposit should be directed.
As of Wednesday, 70-35 113th Street Holdings was not registered with the state. The potential new owners never disclosed their identities publicly.
City Councilwoman Karen Koslowitz (D-Forest Hills) said she tried to organize two meetings with the LLC to discuss its plans for the property. She said the company’s representatives asked to reschedule the first meeting and showed up an hour and a half late to the second.
“I had to leave, so I didn’t sit down with them,” said Koslowitz, who declined to disclose the representatives’ identities because she was unsure if they would assume ownership of Parkway. “I want to know what’s going to be there because right now the building is an eyesore.”
Since the state Commission on Healthcare Facilities shut the hospital in 2008, the empty Forest Hills building has racked up 14 open violations with the city Department of Buildings and seven with the city Environmental Control Board. Telecommunications companies have rented space on the roof.
Parkway currently has a $10,700 tab for infractions that range from failing to maintain the building exterior because of bulging bricks to not having its elevator annually inspected, according to the DOB website. The
Parkway’s owner and chief executive officer, Dr. Robert Aquino, lost the battle to reopen Parkway as creditors began pursuing him for unpaid debts.
Aquino filed a lawsuit in 2009 against then-state Assemblyman Anthony Seminerio and former Jamaica Hospital CEO David Rosen, accusing them of setting Parkway up to fail after Rosen bribed Seminerio to support Jamaica Hospital in the state Legislature.
Seminerio died in prison and Rosen was sentenced to a three-year prison term for bribery.
Aquino pleaded guilty in January 2012 to federal bribery charges stemming from his attempts to pay former state Sen. Carl Kruger $60,000 in exchange for Kruger lobbying to revive Parkway. He was sentenced to four months in prison.
But the former CEO had spent years trying to turn around Parkway.
Between March 2006 and July 2007, he took out $61 million in loans from Medical Capital Holdings Inc. through three entities attorneys believe Aquino or his family controlled — Parkway Hospital Inc., which operated the hospital; Parkway Acquisition I, which leased the land and building to the hospital; and Capitol Health Management Inc., which managed six medical practices in the tri-state area and staffed Parkway’s emergency room, according to federal court documents filed by a receiver for Medical Capital Holdings.
Many of these loans were secured by the hospital’s property.
After executives with Medical Capital Holdings Inc. were arrested by the U.S. Securities and Exchange Commission on fraud charges, the U.S. District Court in Central California appointed Thomas Seaman receiver of the assets held by the investment company, including the Parkway loans, in 2009.
By March 2014, accrued interest had increased Medical Capital Holdings’ investment in Parkway to $76 million, according to Seaman’s monthly report.
Parkway Hospital and Capitol Health Management have filed for bankruptcy. The cases were converted to Chapter 7 bankruptcies, where trustees are charged with liquidating companies’ assets and distributing them to creditors because reorganizing the businesses is no longer considered viable.
Parkway Acquisition, which owns the property, has attempted to file for Chapter 11 bankruptcy protection multiple times in a bid to stall the receiver from foreclosing on the property, according to documents filed in the foreclosure case.
Parkway’s latest bankruptcy bid, filed days before a scheduled auction of the property in June, was dismissed in winter.
Because Seaman helped broker the sale of Parkway’s mortgage to Auberge Grand Central LLC in 2012, Auberge Grand Central assumed the receiver’s position in the foreclosure case.
The referee would now work with Auberge when planning future auctions of the property.
Reach reporter Sarina Trangle at 718-260-4546 or by e-mail at strangle@cnglocal.com.
