PATERSON — Facing foreclosure, the owner of The Art Factory — a complex of 19th-century mill buildings near the Great Falls now used for weddings and other banquet hall events — filed for bankruptcy in August.
Mayor Andre Sayegh, who held his first inaugural ball at The Art Factory in 2018, touted the eclectic arts and events business as an important part of the Great Falls area’s revitalization during his early years in office.
The bankruptcy filing comes as the owner of The Art Factory, David Garsia, said his four party halls are supposed to host about 160 weddings and other “upcoming” events in the near future. The complex also features exhibits and rents studios to artists and filmmakers.
Story continues below photo gallery.
Court papers indicate Garsia plans to continue operations during the bankruptcy. He said in court papers that the bankruptcy was triggered by a New Jersey Superior Court judgment issued last month against his business involving a $12.5 million loan in 2018, which was supposed to provide him with money to do a massive renovation of the complex.
Under the judgment, Garsia is supposed to provide rent and fees from his Art Factory events to the lender, 100 Mile REIT Inc., a group headed by Bergen County real estate investor Billy Procida. Garcia said in court papers that such a requirement would destroy his business.
But Procida’s lawyers said in their court-filed objection to the bankruptcy that Garsia has no right to the revenue generated by The Art Factory in light of his alleged track record of defaults on the loan and the fact that he owes Paterson almost $250,000 in unpaid property taxes and sewer charges.
In a statement issued Monday, Garsia said the bankruptcy was designed to “replace a problematic lender.”
“The Art Factory continues to reserve venues for weddings and events through 2026 and we look forward to providing an exceptional experience for every family’s celebration!” Garsia said in a statement sent via text message.
Neither Procida nor Sayegh could be reached for comment.
Art Factory in controversies
During the past decade, The Art Factory has been embroiled in numerous controversies. About eight years ago, Paterson fire officials intervened and canceled a massive Christmas party planned at the complex because The Art Factory lacked fire safety protections, including requisite sprinklers.
Shortly after that, Paterson community improvements director David Gilmore issued more than 150 violations against tenants at The Art Factory for not having certificates of occupancy. Those summonses ended up being dismissed, and Gilmore filed a political retaliation lawsuit against the Sayegh administration saying the mayor was protecting Garsia, his political ally and supporter.