Karta, a controversial carting and solid waste recycling company, lost its operating permit in May after the city held months of hearings on the company's environmental track record. Neighbors said that the company polluted the neighborhood with noise and dust. The city denied the permit after twice extending a deadline for Karta to clean up its industrial site.
"They are trying to put me out of business," said Kenneth Cartalemi, Karta's owner, during a bankruptcy court appearance earlier this month.
Attorneys for the city and Karta Corp. came before U.S. Bankruptcy Judge Adlai S. Hardin on Oct. 14. Lawyers met behind closed doors and had no comment following the fifteen-minute hearing. U.S. District Judge Charles L. Brieant has restrained the city from enforcing the no-permit decision while Karta sought bankruptcy protection.
Attorneys for Karta did not return calls confirming tomorrow's hearing, and the city's attorney had no comment. A clerk at Hardin's office said the parties were scheduled to appear tomorrow.
Karta is attempting to reorganize its debt and is suing the city for $20 million for alleged breach of a 1988 service contract.
Cartalemi says that the city failed to pay him in a timely manner for processing its recycling and failed to meet several conditions of the contract, such as collecting the recycling facility's garbage. Cartalemi further charges the city delayed on approving a 1998 site plan that would have allowed him to address many of the neighbors' complaints by moving much of the operation indoors. The city Planning Commission approved the site plan in June.
Cartalemi said that he has to settle the suit with the city before he can move forward with the proceedings. He has charged that the city was purposely stalling on an agreement in order to hurt the company.
Karta's legal complications with the city are one of several the recycler is addressing under bankruptcy proceedings.
In 2001, Karta was ordered to pay Breco Environmental Contractors $940,000 after a state Supreme Court jury found that the Peekskill company had delivered substandard topsoil in 1995 and 1996 to cap the Pelham Bay Landfill. Cartalemi said he was planning to appeal, but the litigation grew too costly. Two years ago, the award had grown to $1.5 million with interest.
"I didn't have the dollars to fight it," Cartalemi said this week.
In another lawsuit that came from the death of foreman Dorlin Kall Jr., who was accidentally run over by a truck at the Lower South Street site in 1999, Cartalemi said the company agreed to a settlement of several thousand dollars.
"I don't know the exact amount, but I know she (the daughter) was paid," he said. Angela Kall, Kall's daughter, could not be reached.
At least one resident said the city was taking the right tack with the company.
"I think the city is handling Karta as best they can at this point," said Mary Ann Ottaviano, a member of the Fort Hill Homeowners Association.
Meanwhile, the company has applied for a permit with the state Department of Environmental Conservation to put the entire Lower South Street operation under one permit. Currently, the recycling portion of the operation is registered with the DEC, but not permitted. If Karta's application is approved, the permit would cover all of the materials the operation processes — construction and debris, municipal waste, and recyclables, said Wendy Rosenbach, DEC spokeswoman.
The application stirred confusion when a Sept. 17 public notice reported that the company's daily tonnage would increase from 700 tons a day to 916 tons for every eight-hour shift. At three shifts per day, that would increase daily totals to about 2,750 tons. Under its current DEC permit, the recycler is permitted 500 tons a day of municipal waste and construction and debris materials, and 200 tons per day of recyclables.
Despite what was printed in the DEC's application notice, Rosenbach maintained that the company's daily tonnages would decrease overall. Cartalemi made the same assertion.
"While daily tonnages would increase for construction and demolition materials, it would decrease for recyclables," said Rosenbach.
The DEC could issue a decision as soon as Friday as to whether there is enough public opposition to schedule a hearing. Absent a hearing, the agency has until Dec. 8 to make a decision.
"It's an astounding and fantastic proposal," Peekskill City Councilman William Schmidt said of Karta's DEC application. "Our opinion is he should not be in business with what he's already processing."
The company continues to fight a March 2002 recommendation from the Westchester County Solid Waste Commission that its waste-hauling license be revoked based on the company's reputed mob ties — a relationship Cartalemi denies. Louis Vetrone, deputy director for the Westchester County Solid Waste Commission said that a hearing for Karta could be scheduled before the end of the year. - The Journal News