Olyphant nullified the highest bid for a lot on Delaware Avenue to a nearby restaurateur, keeping the property in borough hands as the would-be buyer’s attorney prepares to sue the town.
Borough council voted Tuesday night to disqualify the $130,000 bid of Mike Dennin, who owns the Bar and Company at 415 W. Lackawanna Ave., for a vacant, borough-owned lot at 105-109 Delaware Ave. because he did not complete the sale by Monday’s deadline, according to a letter from borough manager and solicitor C.J. Mustacchio to attorney Michael Pisanchyn, who represents Dennin. Council voted 5-0, with Councilman Robert Hudak and Councilwoman Beth Frushon absent, Mustacchio said.
In addition to declaring the bid null and void, council voted to forfeit Dennin’s $7,100 bid security to the borough because of his failure to comply with the conditions of the Dec. 3 auction, as well as voting to close out the auction proceedings until council takes further action, according to the letter.
Dennin was the highest bidder for the land after outbidding developer John Basalyga, who sought to turn the lot into outdoor dining for his Queen City Tavern, which is next door to the property. The borough appraised the land at $71,300, but the Dec. 3 auction devolved into a bidding war between Dennin and Basalyga, nearly doubling the price.
In a statement Wednesday, Pisanchyn said Dennin has sustained substantial damages because he had a business venture that will now likely fall through.
“The highest bidder is disappointed in Council’s decision but in light of how they have acted it was very predictable which is a shame they threw away $60,000 (plus another $70,000 the appraised value) of the tax payer’s money,” Pisanchyn wrote in the statement.
Pisanchyn, who founded the limited liability company that owns the Bar and Co.’s building on Lackawanna Avenue, said Dennin will now be filing a lawsuit naming borough council and its members individually, contending council acted beyond the scope of its duties.
Shortly after the Dec. 3 auction, Pisanchyn raised concerns over the Queen City Tavern storing its garbage receptacles on the lot, as well as another neighboring property owner at 406-408 Lackawanna Ave., Anthony Barrett of NAB Holdings LLC of Dunmore, building a deck that encroached on the property. The borough told the tavern to move its waste receptacles and issued Barrett a stop-work order Dec. 10 instructing him to remove the deck.
The borough later discovered the Queen City Tavern’s deck encroached on the property, prompting the town to extend the sale deadline one week from Dec. 30 to Jan. 6 and offer Dennin a $2,106 discount representing the 1.62% of the 6,650-square-foot property covered by the deck.
Throughout the dispute over the sale, Pisanchyn argued Dennin would close on the property when the encroachments and waste receptacles were removed.
“The highest bidder won the bid and instead Council gave him a headache, refused to remove the Deck from their friend John Basaglia and Councilmen Abda’s nephew, and ran up his legal fees now for a month only to take the property away instead of working with him,” Pisanchyn said in his emailed statement. “Now the taxpayer will receive no revenue, litigation and expense will ensue.”
In a phone interview Wednesday, Mustacchio said he told Pisanchyn and Dennin that if Dennin signed the sales agreement, he would continue the closing for as long as necessary to determine if the borough could mitigate the encroachment from the tavern, and if not, other remedies, including negotiating a discount. Otherwise, the buyer had the option to walk away, Mustacchio said.
“You don’t have a remedy to sue somebody,” he said. “Do you realize the chilling effect that would have on the sale of property?”
Mustacchio, who previously noted the Queen City Tavern could have a claim through adverse possession because the deck has been there since at least 2000, said the Delaware Avenue property and the Queen City Tavern building once had the same owner — Cyril and Mary Solomon, who owned Bucky’s Bar, which is now the tavern after multiple rebrandings and owners. He believes the Solomons likely built the deck when they owned both properties.
Olyphant bought the lot in June 2020 for $30,000 and then spent $44,745 to tear down a blighted, vacant building on the land two years later. Borough officials discussed turning the land into a pocket park, senior center or parking lot.
Council will now have to decide what to do with the land, including doing nothing with it or re-auctioning it, Mustacchio said.