By Stephanie Mariel Petrellese

A published report announcing that the deal between Alrose GCH LLC and the current owners of the Garden City Hotel recently collapsed was followed by another account that said even though there is currently no contract, Alrose representatives claim discussions have not ceased.

On Wednesday, a Long Island Business News Web report announced that Patrick Smalley, the hotel's executive vice president, had confirmed earlier in the week that the deal was off. The article cited insiders as saying Woodmere-based developer Allen Rosenberg, who heads Alrose, had defaulted three times on its contract of sale, and missed deadlines to close in February, March and April.

By Wednesday evening, an article published online at newsday.com and the next day in Newsday claimed that both sides agreed that there is currently no contract, but Rosenberg's attorney, Steven Schlesinger of Garden City, said they were working to ink another deal that would include a closing deadline of Nov. 30. However, Smalley claimed there is no contract extension agreement being considered.

The hotel is currently prohibited by a lawsuit filed by Schlesinger's firm in June from selling to anyone else. The Nelkin family, who are the current hotel owners, filed a countersuit to lift the restriction. The actions are pending.

As of press time, a hearing was still scheduled to be held at 2 p.m. on Thursday to hear oral arguments in the litigation between Alrose and the Village of Garden City and Garden City School District. The Village and school district commenced an article 78 proceeding on July 8th to halt the sale and block the benefits Alrose was granted by the Town of Hempstead Industrial Development Agency.

The IDA deal with Alrose freezes the property's current $1.7 million total for school, county and village taxes for three years. The corporation will make payments in lieu of taxes, known as PILOTs, which will increase modestly over the next seven years. The agreement also includes sales tax exemptions for the hotel renovation and exemption from a one percent mortgage recording fee.

Residents, along with the Village of Garden City, Garden City School District and Nassau County Tax Assessor Harvey Levinson, have opposed the granting of tax breaks to Alrose, who they perceive to be a well-financed operation willing to spend a reported $91 million to purchase the hotel.

The average homeowner will be forced to carry a heavier tax load as the developer's burden is lessened. Over a 10-year period, the school district has estimated the district will experience a loss of $2.8 million in tax revenue.

In return, Alrose attorneys filed a $20-million notice of claim against the Village and school district, contending that their client will lose a $6-million deposit if the deal with the current hotel owners does not close on time. The Village and school district have since dropped their pursuit of a permanent injunction against the sale of the hotel but still plan to challenge the IDA's granting of tax assistance.