New York City, Karta Corp. Reach Agreement on Dispute

The city of Peekskill, NY, and recycler Karta Corp. have reached the end of their decade-long dispute with the parties calling the settlement a "win-win-win" situation for everyone involved.

In a move that will open up the company's waterfront property for development, the two sides reached an agreement two weeks ago that will involve the company moving 80 percent of its operations to a vacant site.

With Karta having filed for bankruptcy protection earlier this year, approval of the agreement is in the hands of the bankruptcy court.

Company president Kenneth Cartalemi said he was seeking an end to the 10-year-old legal battle between his company and the city. "It stops the bleeding," he said.

However, he said he was also sure that the rail access at the South Street site would ultimately result in cost savings for the company, once the costs of the move and expanding the facilities at the new site are taken care of.

The rail connection will also end concerns about noise and dust at the site, as metals will now be shipped elsewhere for processing, Mayor John Testa said.

The agreement gives the Hawthorne-based Ginsburg Development Corp., which was put in charge of the city's waterfront development plans earlier this year, the option to buy the 6.5-acre property at 1011 and 1017 Lower South St. from Karta for $3.125 million.

That, in turn, would create a possible place to move the businesses that would be displaced by the development being proposed by Ginsburg, said Stephen O'Brien, director of development for Ginsburg.

"It offers the opportunity to get the best for all concerned," he said.

Other terms of the agreement include Karta's payment of $550,000 in back taxes to the city, the creation of a new contract between Karta and the city for recycling services, the end of Karta's $20 million breach of contract lawsuit against the city and Karta hiring an environmental monitor for the new site.