nothin Dicey Deals Kept English Station Dirty | New Haven Independent

Dicey Deals Kept English Station Dirty

Christopher Peak Photo

English Station, still closed after 20 years of disrepair.

USPTO

Toothbrush peddled by scam artist tied up in English Station.

After United Illuminating unloaded a dirty power plant called English Station, a new kind of pollution seeped into the Mill River — murky financial deals by a series of con artists who moved a lot of cash around and left the plant to crumble.

Three separate deals involved a penny-stock swindler who took six-figure, non-refundable down payments to talk business; a self-storage facility owner who signed off on a $2 million loan that looked designed to fail; and an accused counterfeiter who now holds the deeds and won’t say what’s coming next.

Those consecutive transactions by players across the globe — obscured by three frontmen and a tangle of LLCs — have swirled around the power plant since 2006. That’s when an energy company sold the plant to new owners in a last-minute deal to avoid a city takeover, after its vision of setting the plant’s turbines whirring again was blocked by state regulators.

Since then the property has repeatedly changed hands, with no visible results except broken windows, falling bricks and scrap-metal scavengers.

Now, under a consent decree, United Illuminating is conducting a $30 million remediation to seal away nearly a century’s worth of pollutants. But it’s only a partial clean-up; on the grounds outside the plant, the island will still be too toxic for most uses, with contaminated soil buried on site below a two-foot-thick layer of asphalt.

Still, once again, within the last year, a new owner has emerged from the muck of failed plans for English Station, this time refusing to say what’s planned at the site.

Allan Appel Photo

Dead bunker from Mill River.

The Independent reviewed hundreds of pages of land records, business filings, court briefings and email archives revealing the outlines of a bizarre sequence of deals that have kept properties moving, often among people accused — and in one case convicted — of fraud.

Throughout, taxpayers and ratepayers have been left holding the bag, as the plant was stripped for parts, leaving an even bigger hazard behind.

Who’s been coming out ahead? Questions remain mostly unanswered about who profited from the string of deals that ended with liens, settlements and foreclosures.

One thing is certain: Something around the mouth of Mill River smells fishy, and this time, it’s not just the schools of bunker, belly up and baking at the water’s surface.

Deal #1: Fire It Up Again

Christopher Peak Photo

Throughout its history, English Station, the hulking power plant on nine-acre man-made Ball Island off 510 Grand Ave., has captured the imagination of its neighbors. As it burned coal in the 1930s, its cathedral-like structure was meant to assure residents that they wouldn’t be zapped by the electricity coursing through their city.

Calling it one of the City’s most haunting architectural images,” one observer described reveries of medieval strongholds and electric minarets in a white cloud of smoke.”

Since the plant was decommissioned three decades ago, all kinds of entrepreneurs have been electrified by what they could do with the property. There have been proposals to erect an array of solar panels, a battery of fuel cells, a grid of self-storage units, or a mini-neighborhood of houses. One proposal envisioned a museum of the social history of water, overlooking New Haven Harbor.

One foreign developer even sent city officials a list of 27 ventures that could rise from the site, including a marine terminal with ferries throughout the Northeast, a school-bus rehabilitation factory, a shipping container and barge manufacturer, and a helicopter terminal.

But most of those ideas haven’t been feasible, given the extent of the environmental cleanup needed.

United Illuminating had kept the coal and oil burning there for seven decades, sometimes spraying the yard with PCBs to keep down the coal dust from blowing off. That all ended in 1992, when the utility finally mothballed the plant, saying it was too expensive to keep the aging turbines going. By that time it was one of the dirtiest power plants in Connecticut, contributing to high rates of asthma in the surrounding area.

In 2000, following state deregulation of the energy grid, the utility transferred ownership to Quinnipiac Energy, a Guilford start-up that sought to fire up the plant again. United Illuminating was so eager to be rid of the plant that it paid the new company $4.3 million to take it, even though secret documents obtained by the Hartford Courant later revealed the utility knew the true cost was closer to $20.8 million.

Quinnipiac Energy’s founder argued the start-up could run two oil-fired boilers at the plant on a limited basis: just during four muggiest summer weeks, when dripping air conditioners throughout the region were already overloading power lines.

Eventually, the founder said, if he earned enough money from those peak” charges, Quinnipiac Energy could convert the plant to natural gas, a cleaner fuel, that could have eased up the reliance on oil-burning at nearby factories.

But state regulators never let Quinnipiac Energy get started, denying the company the air-quality permits it needed, after then-state Attorney General Richard Blumenthal intervened. Within a few years, the start-up collapsed in a nasty legal battle, as its principals sued each other over the company’s direction. Neither of the two former principals responded to emails and calls seeking comment for this story.

(Even the environmental consultant who’d led the initial cleanup gave up his job and started writing a sci-fi trilogy whose climactic battle scene takes place within English Station. So the plant is already getting some use, if only in an alternate reality,” he said in 2004.)

After Quinnipiac Energy fell behind on its municipal taxes, the city foreclosed on the property.

Enter a new owner: Asnat Realty and Evergreen Power, two New York partnerships that managed to snap up portions of the property in a last-minute deal before an auction took place. The sale price? One dollar, plus the assumption of all the unpaid bills so far.

Those companies were fronted by three agents: an Upstate New York redeveloper, Uri Kaufman; an Israeli attorney, Ira Schwartz; and a Hamden self-storage owner, Mehboob Shah, who served as the day-to-day manager.

The real owners — never mentioned in any court filings or regulatory orders — are hidden behind a separate trust, according to an affidavit filed in federal court last year.

Asnat and Evergreen’s representatives talked up big plans, but city officials remember that the details always remained hazy.

They had various I guess what I’d call schemes that they were talking about. None of them seemed to be very concrete, and some of it involved sort of leaps of logic: We’ll get UI to pay for this,’” Rob Smuts, the former chief administrative officer under John DeStefano, recalled. They seemed surprised that we in the city wanted to be very careful and deliberate about how we moved forward on this. I think that they just assumed that were interested in the tax revenue and flipping the property.”

Deal #2: Enter The Multi-Named Toothbrush Peddler

Garfield Spencer.

In 2010, another buyer emerged: Ball Island, LLC, which is owned by Ruby Spencer. She’s the mother of Garfield Spencer, a developer who’d failed trying to restore Dwight Gardens, an ailing housing co-op.

Spencer said his company would take over the parcel for around $2.5 million. But in exchange for the property, the sellers said they wanted more than just cash.

Asnat Realty said that it wanted the Spencer to assume a $500,000 mortgage that had been secured against the power plant, to wire $1.8 million in cash — and to sign over the deed to a condominium apartment at 325 Myrtle Ave. in Bridgeport.

Soon, that condo would be taken over by English Station, LLC, a limited-liability company for a so-called Asher Zwedner.” But based on a name — just one letter off — reported on earlier corporate filings that owner appears to be Asher Zwebner, a practiced fraudster.

Zwebner, a 55-year-old Jerusalem resident, would later be sued by the federal Securities and Exchange Commission for perpetrating an unrelated fraud right around the same time, opening sham companies under assumed identities.

He went by many names, usually changing just one letter. He’d be Asher or Ascher. Or he’d be Zwebner, Swebner or Zwedner. But sometimes, as the SEC later alleged in a federal complaint, Zwebner posed as other individuals entirely.

USPTO

Zwebner’s patented slam-proof car door.

Regardless of what name he put on the founding documents, Zwebner usually sought out patents to get his companies started. Often, he looked for minor fixes for life’s inconveniences, like cavities from bad brushing, swollen fingers from a car-door slam, or irritation from a dislodged catheter.

For example, in 1991, the federal government granted him a patent for an injury-preventing system” that could be installed in automobiles. According to his application, the device makes a car door work like a closing elevator; if it detects any obstruction in an electromagnetic field, a small rubber rod would shoot out, bouncing the car door away without crushing, say, a person’s fingers.

Patents like that could give Zwebner a shortcut to taking his companies public. That injury-preventing system,” for example, allowed him to get a company going that would soon claim to be investing in Chinese-made malaria vaccines.

With a similar process, Zwebner later acquired holdings in Romanian tire-recycling facilities, Ecuadorian gold and Ethiopian tantalum mines and Canadian hot springs — all around the same time that his name was popping up in association with English Station.

By September 2010, Zwebner had another patent in his hands: for a new two-sided toothbrush. He used that to open a publicly-traded company, Crown Dynamics Corp. Again, he did so under an assumed name, this time as Amir Rehavi.

Then, Zwebner pretended to line up buyers for an initial offering on a lightly regulated minor exchange. Fake publicity by another co-conspirator allowed them to pull off what’s called a pump-and-dump” scheme, where they fooled real buyers into pumping up the price before they dumped the worthless stock onto them.

In total, the SEC said they netted about $850,000 on what it described as a scam in a 2016 complaint. Zwebner never showed in court to contest the charges, and in 2017 a federal judge assessed a $500,600 fine.

Google Maps

The Queens apartment where Zwebner and Shah share mailing addresses.

While his name only shows up on that one condo deed directly related to English Station, Zwebner has also registered other companies, like Dixwell U‑Haul Rental, Moving and Storage Supplies LLC, out of the same Bayside, N.Y., apartment building that Asnat Realty and Evergreen Power also lists as their company’s mailing address.

When reached by phone at his work, Shah, the former manager for Asnat and Evergreen, declined to comment about English Station.

Two secretaries listed on Zwebner’s corporate filings from over the years also did not respond to emails requesting comment from their boss. Reached by phone at home, one of them said, Don’t call me again,” and hung up.

A Disastrous Mix-Up

Christopher Peak Photo

While that penny-stock scam was ongoing, the power plant’s owners were asking Spencer’s Ball Island LLC to turn over the Bridgeport condominium that would eventually be given to Zwebner’s English Station LLC.

In November 2010, as they came close to closing the deal, Ball Island LLC signed over the condo as the first step in the agreement, along with a $200,000 deposit.

But the closing was extended again to February 2011. The buyers said they’d discount the listing price for all the scrap metal they intended to pull from the building, right up until the final papers were signed.

That ended up being a disastrous mistake. In the process, the contractors drained 4,300 gallons of oil from transformers, slick with PCBs. The contractors tried to take the oil to a local recycling facility, but after spot-testing it, the facility refused it.

Keith Ainsworth, a local attorney who’s been representing Asnat and Evergreen in recent court cases, said that was essentially a paperwork problem that led contaminated oil to be shipped to the wrong location.

Everybody made a lot of hay out of that, but it was not really a serious matter,” he said. There was no release, no contamination. The oil was headed toward the wrong disposal site, and they caught it in time.”

Local environmentalists and preservationists, however, ramped up the pressure, faulting Asnat for its grave mismanagement,” especially as thieves arrived — sometimes by boat — to strip metal from the plant.

All those generations of contamination that had been carefully mothballed were being pulled apart by scavengers, illegal or legal,” remembered Karyn Gilvarg, New Haven’s former city plan director. Miles of copper wire, lots of steel and iron were taken out, to the point where virtually nothing was left inside.”

As other concerns mounted, particularly about a proposed demolition, the state Department of Environmental Protection conducted an on-site inspection and issued a cease-and-desist order, halting work in February 2012.

Even though Spencer had already signed over the condo, Evergreen Power and Asnat Realty allegedly didn’t tell Ball Island LLC about those ongoing problems. In an email exchange, Spencer asked for a list of all and any violations,” but the sellers said there are none that I know of,” according to a subsequent lawsuit he filed.

When he did find out later, Spencer said he’d either take the plant, as is, for a $500,000 discount; or he’d buy it once the site was cleared by state and federal agencies. Right away, the owners responded that the issue had been resolved, even though the U.S. Environmental Protection Agency had just sent them a subpoena and the Connecticut Department of Public Health had locked up the site.

Ball Island LLC walked away from the deal and sued in court to get back the down-payment of the money and condo. Bridgeport property records suggest that the condo eventually reverted back to Spencer’s mother in 2017, before it was sold to another family.

Two weeks ago, Spencer said in a brief phone interview that he still hadn’t been paid back. Then, he said it was too hard to hear on his phone and that could talk later. He failed to return subsequent calls and texts.

Deal #3: Too Big To Succeed

Christopher Peak Photo

In November 2012, unable to offload the plant or continue with their own plans while cleanup was underway, Evergreen Power and Asnat Realty went looking for money elsewhere. They eventually obtained $1.9 million in an unusual loan arrangement that new documents suggest might have been an inside deal.

Pacific Atlantic, a private company, fronted that seven-figure sum, securing it against the power plant, which had been appraised at barely a quarter of that value. But the cash came at a high price: an interest rate of 14 percent annually.

Currently, that’s about three times the going rate for a jumbo mortgage, which is a home loan that’s too big to be backed by the federal government. And it’s about twice the going rate for a junk bond, which is a risky investment in a business that credit-rating agencies think could go belly up.

At the time the deal occurred, as the country recovered from the Great Recession, the Federal Reserve kept its own interest rates at record lows, meaning Pacific Atlantic’s charges would have looked even steeper than than they do now.

Law professors consulted for this story cautioned that these types of transactions, known as hard-money loans,” don’t look like traditional lending. There’s little government scrutiny, because the dealmakers are expected to know what they’re getting into.

Interest rates tend to be much higher than average and the commercial players tend to be more sophisticated than ordinary consumers, providing a justification for less regulation and oversight,” said Linda Fisher, a professor at Seton Hall Law School in New Jersey. Terms that would be considered abusive in the residential consumer market may be more acceptable in this subculture.”

Ainsworth, Asnat and Evergreen’s attorney, said that the interest rate was high because the risk was high. It wasn’t like they could loan that with a lot of security,” he said.

Pacific Atlantic offered a vague timeline for when it expected repayment. It could ask for its money back with interest at any time: on demand,” the promissory note reads, with a 15-day grace period.”

In case the borrower defaulted, the interest rate would jack up even further to the highest applicable lawful rate,” or if the law didn’t set one, to 2 percent monthly, which works out to about 27 percent annually. That’s right up there with the highest credit cards.

Ainsworth said that Asnat and Evergreen had taken the money out as a kind of bridge loan” to attract more financing.

At the time [the loan was made], the metal values in the market were very, very high. They could have funded it, but when [the site] got shut down, the value of that property and the value of the project dropped precipitously,” Ainsworth said. There was always some hope it could be revived, but at some point the lender lost patience.”

In June 2017, Pacific Atlantic asked for its money back, right as other bills that had been secured against the property came close to exceeding the mortgage value.

Paul Bass Photo

City officials call for a role in hearings on UI’s involvement at the plant in 2015.

Over the five years since Pacific Atlantic had lent it the initial $1.9 million, Evergreen Power and Asnat Realty had let their other bills pile up, dodging what it owed in property tax, utility fees and cleanup costs at a cost of an additional $1.8 million, at least, including $385,000 to the city for unpaid property taxes.

Because of the high interest rate, the amount that Evergreen Power and Asnat Realty owed to Pacific Atlantic had also nearly doubled over that same time period. By April 2018, Pacific Atlantic alone said it was owed $3.9 million.

Laurence P. Nadel, the New Haven-based attorney for Pacific Atlantic, said he couldn’t explain why the lender waited so long to call the debt. I cannot answer your questions because I do not know the answers,” Nadel wrote in an email.

To cover how much it was owed, Pacific Atlantic took control of the power plant in a strict foreclosure, a transfer that happens when the debts exceed the property value. Asnat and Evergreen hired a lawyer but never put up any defense to stop the foreclosure in court.

Every government agency at every level came down on Asnat and Evergreen. They’re not the ones who contaminated the site; they’re trying to get it back into use,” Ainsworth said. My guys were from out of state, they had no political clout, and in the end, they just got buried. Ultimately, that just made it financially not viable.”

In the end, all these deals produced no new use for English Station. They did produce large debts that investors theoretically could take as a loss to avoid taxes for years. But what exactly was done with the money and the debts remains a mystery, at least for now.

Deal #4: One Last Transfer

Allan Appel Photo

The Coast Guard laid 3,100 feet of yellow boom around Ball Island (above) in 2014, after reports of an oil sheen on the river’s surface.

In December 2018, the very same day it assumed control of the site, Pacific Atlantic spun the property off to two new companies.

It gave the Grand Avenue-facing warehouse to Haven River Properties, LLC, a company based in Kew Gardens, N.Y. And it gave the power plant itself to Paramount View Millennium, LLC, a company for a trust in Forest Hills, N.Y., in an office that also services three travel agencies, a gate-repair service and a surveillance technology company.

David Tropper, the point-person listed on corporate filings for Haven River and technically the new owner of English Station, declined to comment over the last two weeks, saying he was too busy and then on vacation.

He declined to refer the Independent to anyone else involved in the companies. There’s really no one else,” Tropper said. Asked about Zwebner, Tropper said that he was not around.”

Tropper has ties to Asnat and Evergreen’s employees, suggesting that even after the foreclosure, the businesses are still connected. He previously worked with Kaufman, the redeveloper who served as Asnat and Evergreen’s public face.

In 2006, according to documents the New York Secretary of State provided to the Independent, Tropper served as the agent for Harmony Mills Managers LLC, a company based out of the leasing office for one of Kaufman’s redevelopment projects in the Cohoes, a small city outside Albany, N.Y., where he refurbished a textile mill into loft apartments.

Tropper himself is an accused scammer whose previous furniture companies, like Bath Kitchen Decor, allegedly sold counterfeits of brand-name lighting fixtures from a Brooklyn office building.

From 2012 to 2013, three companies, Quoizel, Troy-CSL Lighting, Inc., and Minka Lighting, filed separate suits against him and his company in federal court, claiming that Tropper had committed trademark infringement, false advertising and other crimes. In a settlement deal, Minka Lighting dismissed the case against Tropper personally, in exchange for a $2.2 million payout from his company and his business partner.

More recently, Tropper has been sued again in New York’s state court for selling emergency pendants that didn’t work, which the buyer claimed resulted in $946,000 in damages.

Tropper, who said he prefers to do his work in private, previously told the Independent that no work can start at the site until at least next year. Right now everything is up in the air. Nobody knows what is going to happen,” Tropper had said. There are a million hurdles to get anywhere.”

United Illuminating no longer owns the property, but it’s still involved in the clean-up, thanks to a deal brokered by the state’s attorney general office as part of approval for the utility’s sale to Spanish energy giant Iberdrola. Behind schedule, that process is now running into its own controversies of its own.

UI spokesperson Ed Crowder said that the utility has had preliminary conversations” with the new owners, but that it would otherwise stay uninvolved in English Station’s future.

We have been in contact to the extent necessary to fulfill our obligations under” the deal struck with state regulators, Crowder said in an email. Potential future use of the site is outside the scope of the [partial consent order], and we must defer to the city and property owners to discuss development plans.”

Those who’ve been trying to create something productive at the site for more than two decades faulted UI for trying to pass their mess off to someone else so quickly at the start.

If we all could have said, Okay, how can this be used constructively for the future of Connecticut and New Haven?’ that probably would have saved a lot of useless transfers, tax appeals and cleanups,” said Gilvarg, the former city planner. But those conversations just don’t happen because the utilities, at least in Connecticut, look at the local regulators as a nuisance. What if [UI] had put in $25 million at the start?”

A demolition of the Grand Avenue-facing building, where bricks are falling off, is planned within the month. The new owner isn’t divulging plans for what will come next. Even if UI can seal the PCB-tainted soil six feet deep, will anyone be able to scrub the stench of all those dicey deals from the island?

One suggestion: Don’t bet on Zwebner’s two-sided toothbrush to do the job.

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