No septic, no loan: Phoenicia Pharmacy sale falls through

(Photo by Dion Ogust)

(Photo by Dion Ogust)

Pharmacist and WellCare founder Ed Ullman’s plans to buy the Phoenicia Pharmacy have been scotched by the refusal of the Catskill Watershed Corporation (CWC) to grant him a low-interest loan for renovating the property. Ullman’s is the second application to the CWC since the Phoenicia town board’s failure to act on the sewer system proposal resulted in New York City’s withdrawal of funds from the project in 2012. Both Ullman and the previous applicant, Mike Ricciardella, who was seeking a loan to renovate the former Al’s Restaurant, were turned down by the CWC.

Ricciardella succeeded in obtaining private financing for his new restaurant, now renamed The Phoenician and scheduled to open this fall in its expanded building on Main Street. Some other options would have been going through a GreenTouch internet Lender.  Ullman pointed out that Ricciardella, as owner of three other restaurants in town, has plenty of collateral, and The Phoenician is not in the floodplain. Ullman, doubtful about the prospects of getting a private loan for the pharmacy, has withdrawn his purchase offer.

The CWC develops and implements programs such as septic maintenance and rehab, economic development, community wastewater management and stormwater planning. The programs are funded by New York City to offset costs and restrictions imposed by the increased regulations that help maintain the quality of the water in Ulster and Delaware County reservoirs.


At the CWC board of directors meeting on September 2, Richard Parete made a motion to approve Ullman’s request for a loan and did not get a second. CWC Executive Director Alan Rosa said he could not discuss the reasons for the board’s decision because the details were discussed in Executive Session and are therefore confidential. When asked if Ullman has any recourse, he replied, “He could try a bank. Certainly the septic issue is going to be a problem, whoever he tries to get financing from. The building is in a floodplain, it has a septic system, we don’t even know what kind it is, and it’s under a parking lot. It shouldn’t have a septic system, even under a parking lot, and there’s no land to put a system in.”

Shandaken supervisor Rob Stanley was surprised by the contention that a septic system should not be located under a parking lot, when both the town hall and J. Rocco’s restaurant on Route 28 have under-pavement septics not far from the Esopus Creek. When he questioned Rosa, he was told those systems had received variances, and there were other considerations in Ullman’s case, which could not be specified due to the confidential nature of Executive Session.

“I certainly hope the CWC is not holding it against the people of Phoenicia for not moving ahead with the sewer project as proposed,” said Stanley. “Windham’s sewer got filled with cobble and couldn’t be used for a time after the 2011 flood. In Phoenicia, the septics were usable both during and after the flood.”


No documentation on current system

“I put over 100 hours into the business plan and due diligence,” said Ullman, who had to deal with watershed issues due to three major floods on Main Street over the past five years. Before the CWC made its decision, Ullman had explained, “I want to bring in more access to health care services. Our floor plan has a time-share concept. I’ve had strong support from health professionals who want to be part of a co-op, possibly add a yoga studio. We have a massage therapist who works at our pharmacy here.” Ullman’s Wellness Rx in High Falls is a privately operated pharmacy with “an apothecary feel” that has been successful since its opening in October 2013.

No expansion of the Phoenicia business can occur without an approved septic system. The system was installed so long ago that no one can find documentation on its capacity. Owner Marty Millman couldn’t locate his records. “The DEP looked for the permit for two weeks,” said Ullman. “Unless they can find the papers, we have to rip up the blacktop and find out what size the septic tank is. You couldn’t do apartments, a soda fountain — you can’t do much. The humbleness of turning down the commercial sanitation in Phoenicia is now coming home.”

Ullman’s business plan called for $200,000 in renovations, including asbestos removal, mold cleanup, and roof repairs. He worked with CWC staff on the details of his application and was impressed with the competency of the staff, who helped refine his package. The loan committee okayed the proposal and recommended it to the board of directors. Before the board’s vote, Ullman said, “The CWC has to decide if they want to invest in a zone with a limited septic system, or do they feel it’s a poor collateralization. This will impact my ability to what I want to do. It’s a big project.”

After the vote, he commented, “I don’t know how much it’s related to bad blood over the sewer issue, since I don’t know what’s in their minds. I looked at other communities in the watershed. Tannersville got private money from the Hunter Foundation. Other communities have local, county, and state funding sources. I couldn’t find any for Phoenicia.”

Millman, who wants to sell the pharmacy and retire, hopes the business will stay a community pharmacy. He said, “Mr. Ullman could not get financing, so we’re on the list again with the real estate agent. We will keep looking.”

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