Paterson's 19th century Art Factory buildings up for auction
Joe Malinconico
5 min read
PATERSON — The Art Factory complex, a collection of once-vacant mid-19th century industrial buildings converted into artist studios and banquet halls, is scheduled for auction later this month because of its owner’s messy bankruptcy.
The property stands along the gateway to the Great Falls and the outcome of its impending sale looms crucial to Mayor Andre Sayegh’s hopes that the national park will become a catalyst for Paterson’s revitalization.
Whoever buys the complex faces some hurdles, including the poor condition of some of the buildings and the historic preservation restrictions that could drive up the cost of renovations, according to people involved in development.
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But community leaders said the Art Factory property offers potential financial rewards that may outweigh the risks.
“It’s a gold mine,” said Councilman Luis Velez, who represents the 5th Ward, where the property is located. “It’s a great place to invest.”
Paterson’s most prolific housing developer, Charles Florio, called the Art Factory property “one of the prize locations in Paterson” and said he would participate in the auction.
“I don’t know if it’s a gold mine or a money pit,” Florio said, saying it would take years of costly planning applications before anyone could get city approvals to move ahead with development plans.
The Max Spann Real Estate & Auction Company has scheduled the sale to start at 9 a.m. on Nov. 22 and to end at 11 a.m. on Nov. 26. The auction is taking place “by order of U.S. Bankruptcy Court,” Max Spann said in announcing the sale of buildings.
The buildings date back to the 1840s and once were part of The American Hemp Company.
“Over time, the location evolved from its pure industrial roots and grew into a center for creativity and community that celebrated the rich cultural heritage of Paterson,” said Spann’s auction announcement. “Most recently, the location was the home of the former Art Factory and featured artist studios, workshops, event space, and performance venues.”
Owner couldn't make loan payments
The property’s owner, David Garsia, who filed for bankruptcy toward the end of the summer, could not be reached for comment for this story. Garsia’s undoing turned out to be a $12.5 million loan for renovations he took in 2018 from Bergen County real estate investor Billy Procida.
Garsia couldn’t make the payments and in August a state judge found him in default for $10.9 million on that loan. Eighteen days later, Garsia filed for bankruptcy.
Procida told Paterson Press he plans to be among the bidders in the Art Factory auction. “We’re going to go up to a certain number,” Procida said, not revealing what that number would be.
The Art Factory building in Paterson could be auctioned.
Procida said he was not sure what he would do with the property if he turned out to be the high bidder. He said he was “researching and evaluating” various options.
As part of the bankruptcy, Garsia had to shut down the complex, forcing more than 150 couples who planned to hold their wedding receptions there to scramble for alterative locations.
Procida blasted Garsia for continuing to book weddings — and taking people’s payments — while his financial problems were mounting. Procida said he recently heard from one Art Factory tenant who received a rent bill from Garsia even after the complex was forced to shut down.
Sayegh expected site to play big role in city revitalization
Six years ago, Garsia seemed ready to become a key player in Paterson. Days after taking office, Andre Sayegh, then the newly-elected mayor, held one of his first press conferences at the Art Factory with Garsia to announce a new trolley service that would serve Paterson residents.
At the time, Sayegh said he thought the Art Factory would play a big role in Paterson’s revitalization.
"The arts bring people together, and this is going to bring Paterson back to where it belongs," said the mayor.
The trolley ended up becoming a transportation service for Art Factory event guests and never functioned the way Garsia and Sayegh said it would.
Paterson Press on Thursday asked the mayor about the impending auction. Sayegh cited various improvements being done in the Great Falls area under his watch, such as the reopening of historic Hinchliffe Stadium and plans for the new Vista Park overlooking Paterson.
The mayor said he thinks a hotel “would be ideal at the old Art Factory site,” as part of a mixed-use development project.
Key nonprofit wants to play a role
One of the biggest property owners near the Great Falls is the New Jersey Community Development Corporation (NJCDC) nonprofit group. NJCDC’s headquarters is essentially next door to the Art Factory and the charter school it founded is across the street.
“It’s an incredible collection of buildings that has to play a role in the historic district’s revitalization,” said NJCDC executive director Bob Guarasci. “It will be important for any future owner to be committed to the highest principles of historic preservation and creative adaptive reuse. I would be eager to be part of any discussions about the future of the site.”
Paterson historic preservation activist David Soo also talked about the need at the Art Factory for “adaptive resuse,” basically using using a building for a purpose different from what it was constructed for.
Soo said he doesn’t want to see the 19th century factories demolished.
“As a historic preservationist, I think the highest and best use of these landmarks will protect their historic fabric so future generations can enjoy them,” Soo said. “The preservation of these historic buildings has to be the cornerstone of any future development.”
It’s not entirely clear the Art Factory auction will go forward as scheduled. The bankruptcy judge issued an order on Wednesday saying that Garsia has failed to submit various financial records required by the court.
The judge scheduled a hearing at 10 a.m. on Nov. 26 — an hour before the auction is supposed to end — to decide whether Garsia’s bankruptcy application should be dismissed.
