A Huntington developer is under scrutiny for his business dealings and debt, according to news publications that have been examining court records.
The records reported on by two publications involve a property in Huntington, and a development in Riverhead, while the third centers on DeRosa and two officials and the proposed Melville Town Center project.
Newsday and the digital newspaper, RiverheadLocal, first reported last week that Greg DeRosa, CEO of G2D Group, which has developed housing around Long Island, is being sued by multple investors and oithers, claiming fraud.
In one case, John Paci, a former member of the Huntington school board, has sued DeRosa, claiming that he invested $4.6 million with the developer to buy the former Gundermann & Gundermann insurance office at 175 W. Carver St., Huntington, according to Newsday.
“It is readily apparent that the DeRosas spent millions of dollars loaned to and invested with G2D Development Corp. on personal residences, luxury goods, vehicles, yachts, and other self-serving investments, which plaintiff was not aware of and held no interest in,” Newsday quoted the lawsuit. Paci alleged that DeRosa misrepresented the likelihood that United Healthcare would agree to a 16-year lease at the property. It also says that DeRosa had another mortgage on the property.
RiverheadLocal reported the same day that DeRosa, who is putting up a five-story building in a designated district created to revitalize the area around the Riverhead railroad station, is “mired in debt totaling more than $16 million, according to pending lawsuits, judgments and contractors’ liens.”
DeRosa, RiverheadLocal wrote, is a defendant in seven other lawsuits filed in courts in Nassau and Suffolk Counties, “by lenders and a former business partner, claiming DeRosa defaulted on payment agreements.” His wife, Nicolle Girolamo DeRosa, is also named in some of the court actions.
“Three of the lawsuits involve “merchant cash advance” agreements, in which the borrower — the “merchant” — promises future income in exchange for often quick, very expensive funding to provide cash flow for its business,” Riverhead said.
That third article focuses on Councilman Sal Ferro, who was involved in construction for decades before joining the Town Board, and who lent money to the developer, and Paul Tonna, a politically connected businessman and a commissioner of the South Huntington Water Authority, which has a say over water issues in the proposed Melville Overlay District.
On Sunday night, the North Shore Leader, which has frequently targeted the administration of Supervisor Ed Smyth, wrote that Ferro had personally lent $1 million unsecured to DeRosa for a mortgage. The article posits a connection between Ferro and his support for the Melville Town Center, which would bring 2,500 apartment units and commercial business to an area of Melville through proposed code changes made by the Town Board. DeRosa has properties in Melville, including 560 Broadhollow Road. The article said that Tonna is employed by DeRosa as a lobbyist. And it takes a deep dive into mortage records for the DeRosa property in Laurel Hollow, including its actual value, and Ferro’s loan.
Ferro said that he had known DeRosa for years, and that “I have no way of getting repaid. I’m out money” on the loan. He said the North Shore Leader publisher and co-author of the article, Grant Lally, never reached out to him for comment, and he insisted he had not acted on behalf of development projects while a councilman.
“I’m the victim, not the perpetrator,” Ferro said Monday, while hosting his annual Ferro Foundation charity golf event Monday. The foundation supports education, senior activities and other causes.
The Melville Town Center project is expected to come before the Town Board at its next meeting on Oct. 8.
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