Surprise Bidder Snags A Piece Of History

Exactly two years after a legendary New Haven printing press abruptly shut down, a low-profile developer walked into court and snatched up the shuttered factory for a half-million dollars without a clear plan — then set to work talking to others who’ve been drafting detailed visions.

Gil Marshak of RBFH LLC (at right in photo above) was one of several bidders who showed up to what was slated to be a public auction Thursday morning in U.S. Bankruptcy Court in Hartford.

Up for sale was a piece of New Haven history: the shuttered Lehman Brothers factory on East Rock’s Foster Street that produced delicately engraved, high-end stationery for 100 years.

The building has been in the hands of the U.S. Bankruptcy Court since the company fell into Chapter 7 bankruptcy on Dec. 9, 2008, suddenly stopped the presses, and sent home 17 non-managerial workers, most of whom had spent decades at the plant.

On the second anniversary of the company’s collapse, the building’s fate was determined Thursday in a seventh-floor courtroom, where suited lawyers gathered before U.S. District Judge Albert Dabrowski. Wearing a simple blue sweater without a jacket or tie, Marshak sat on a bench near the door and kept a low profile.

When the hearing began at 10:04 a.m., U.S. Trustee Richard Coan announced that there would be no public auction because Marshak’s LLC had outbid his competitors by so much.

Coan said he received five bids for the factory.

The lowest bid came from architect Peter de Bretteville (at left in photo above), who had the most advantage going into the auction. De Bretteville was chosen last year as the ​“stalking horse” bidder, the preferred bidder for the site. De Bretteville, a Yale architecture professor who lives in Hamden, sought to turn the old factory into luxury condos. It would have been his first project as a developer.

De Bretteville (pictured) originally agreed to buy the property for $575,000, though he reserved the right to pay less depending on his analysis of how much cleanup needed to be done.

The site includes 191, 197 and 199 Foster, which comprise three factory buildings, a sliver of vacant land, and a rundown, single-family home. The properties are assessed at $590,380, without taking into account cleanup costs, according to land records.

As part of his deal as the ​“stalking horse,” de Bretteville paid for an environmental study and shared his results with other interested buyers.

Coan said the study showed there wasn’t any serious contamination directly attributable to the factory’s production. Instead, it showed that some soil should be removed because of of coal and ash that’s prevalent around New Haven. Coan said the study was ​“vague” as to the cleanup costs, which he estimated at anywhere between $100,000 and $600,000. 

After calculating the cleanup costs, de Bretteville significantly dropped his offer. He renegotiated with the trustee and agreed to offer $185,000, a bid that would have to be tested by a public auction.

As he walked into the courtroom Thursday, de Bretteville said he was ​“discouraged” with what the competition brought.

In the bidding process, he faced seasoned developers — including the former Starter sportswear exec David Beckerman of the Acorn Group — who were ready to take a bigger gamble on the site.

In the end, four competitors out-bid de Bretteville. Only the highest bid was publicly disclosed.

Trustee Coan announced that with a bid of $505,000, Marshak came in so high above the other bidders that no public auction was required by law. Judge Dabrowski replied that he had reviewed the paperwork before the hearing, and was ready to approve the sale of the factory to Marshak’s LLC. The sale must go through by Jan. 14, he said.

After five minutes, the case was settled and interested parties filed out into the hall.

In the corridor, Marshak found himself surrounded by a small crowd, making introductions.

Marshak revealed the meaning behind his company, RBFH LLC. The letters stand for ​“Rebuilding Fair Haven,” he said. He said he has one partner in the LLC, a man by the name of Oren Bitman. The company has focused on buying ​“distressed properties” in foreclosure, including 55 Pine St. and 17 Maltby St., and fixing them up. He said he tries to sell the buildings to the tenants who were renting them, though in the last couple of instances the tenants could not afford to buy them.

The developer, who speaks with an accent hinting at his native Israel, said he has settled down in New Haven with his wife, who grew up here. He said he and his partner aim to improve Fair Haven by fixing up abandoned or rundown buildings.

“We really love the city,” he said. He said his work ​“is about the people of Fair Haven.”

Lehman Brothers is just outside of the area where Marshak and his partner have worked.

“We want to make it a nice residential” project, he said. He declined to say whether he would keep the building or tear it down. He said he has ​“no specific plans” for the site.

“I was surprised that nobody else got it,” he admitted on his way out.

As he decides what to do with the building, Marshak will have plenty of eager consultants. Just after the hearing, Marshak left to have coffee with de Bretteville to talk about his ideas for the site. And he got a business card from another group that had poured time and energy into coming up with a proposal for restoring the factory.

Fernando Pastor and Alek Juskevice (at left and right in photo) said they have been working for two years on a plan to transform the factory into green condos complete with energy-efficient windows and geothermal pumps. They hired an architect to put a detailed plan together. They got together a group of investors who live in the area. Together they formed Foster Street Group LLC.

The group had a project that is essentially ​“shovel-ready,” said Pastor.

Pastor is co-founder of SEEDnh, a local development company that has focused on restoring old buildings in a sustainable way. He recently bid on the Cott building and the Strong School, both in Fair Haven.

Pastor said his group bid $220,000 on the Lehman Brothers factory. He wasn’t giving up yet about remaining involved: He took down Marshak’s number and made a pitch for collaboration. SEEDnh and Marshak’s company are both rebuilding Fair Haven, he said: ​“We’re the same.”

Juskevice, a historic preservationist, said the group is very ​“emotionally invested” in the former printing press. He said he wants to see it restored to ​“bring vibrancy to that area that’s sort of vacant and dead right now.”

Unpaid Tabs

Meanwhile, staff who got laid off from Lehman Brothers are hoping the building’s sale will bring some long-awaited cash. The 17 non-managerial staff are seeking $180,000 in unpaid benefits, including vacation pay, 10 weeks’ severance pay as well as their final paycheck.

Trustee Coan said other creditors, such as Wachovia Bank and the City of New Haven, come ahead of the workers in being repaid.

When it filed for Chapter 11 bankruptcy in 2004, Lehman Brothers owed over 50 vendors a total debt of between $1 million and $10 million, according to court records.

Coan said he has not yet determined how much the creditors will be paid, but ​“there’s not going to be very much money available out of this.”

Past stories on the Lehman Brothers closure:

• Shuttered Lehman Bros. Plant Has A Future
• Rescue Effort Blocked
• White Knight Proposes Lehman Bros. Rescue
• State Steps In To Help Laid-Off Workers
• Booted Workers Seek $180G In Unpaid Benefits
• New Haven’s Lehman Bros., Too, Goes Belly Up