A chemical accident at a New Rochelle construction project in 2025 has had wider implications in Peekskill —halting the proposed 158-unit affordable housing project on the former White Plains Linen site, comprising 418 N. Division St., 407 Highland Ave, 425 Highland Ave., and 427 Highland Ave.

After the accident reportedly left a worker severely injured at developer Mark Stagg’s Garden Street New Rochelle Project, New York State revoked 418 North Division Street LLC’s eligibility to participate in its Brownfield Cleanup program, along with three other brownfield development projects associated with Stagg in Yonkers and the Bronx, on June 22.

The deteriorating industrial building at 418 N Division St. requires major environmental remediation. (Stagg Group/Newman Design presentation)

However, developer Stagg Group apparently did not pass that memo along to the City of Peekskill or Planning Commission, nor did it come up at several presentations to the city on July 14, Aug. 11, Sept. 9, Sept. 14 and Oct. 15.

During the Oct. 15 presentation, representatives from Stagg Group provided updated renderings with changes to the architecture, colors, and textures, as well as planned uses for commercial space and a community space, but did not reference environmental remediation at the project site.

“The proposed development qualifies for the Brownfield Cleanup program and will require compliance with all hazardous material removal and mitigation requirements implemented by the New York State DEC,” said Planning Chair Jeffrey Stern on Oct. 15, unchallenged by Stagg Group representatives who were present.

In an email on Monday, Oct. 26, Stern told the Peekskill Herald he was not aware that applicant’s eligibility to participate was revoked until that Monday.

The information only came to light after four lawsuits were filed against the DEC in September and October challenging each respective property losing their eligibility to participate in the Brownfield Cleanup program, as reported first by Talk of the Sound on Oct. 24.

After the Herald reached out to Director of Planning Carol Samol, City Manager Matthew Alexander sent an email to the Herald on Oct. 29, saying the city is actively reviewing the matter to get a better understanding of the issues and the impacts it may have on the 418 N Division St. application.

Rendering of proposed affordable housing project at 418 N. Division St. (Stagg Group/Newman Design)

Alexander did not respond to whether the city was already aware of the June 22 determination.

Developer Mark Stagg did not respond to a phone call request for comment, nor did Stagg Group respond to an inquiry on its website asking how much remediation would cost and if they could do it without the state’s assistance.

A Herald article on Aug. 4, 2023, reported that a representative for building owner CW Realty estimated in 2022 it would cost $100 million to demolish the properties and build a nine-story apartment building, a former project from a Brooklyn developer, at the site off Highland Avenue.

Presently, Stagg Group seeks a special permit for approval of two stories of bonus height for its overall six-floor mixed-use multi-residential building with 158 units, 167,000 square feet of residential space.

The project has previously been a subject of debate among some city residents who oppose it for its proposed height, potential parking congestion, and seemingly “poor fit” in a residential neighborhood. The recent news has already provided more ammunition for those against the project.

Residents listen to attorney Kathleen Bradshaw and Stagg Group’s senior vice president Jay Martino at a community meeting on Aug. 13, 2025. (Eric Harvey)

In a phone call with the Herald, resident Leslie Lawler, who has previously spoken out against the project, shared her reaction to the news about the June 22 determination.

“I’m very disappointed that the City of Peekskill either did not know about this information, or if they did, did not share this with the community,” she said.

In a lawsuit filed in Bronx Supreme Court on Sept. 14, Albert Pirro, attorney representing 418 North Division Street LLC, said prior to the June 22 determination, a Brownfield Cleanup program application had been submitted to the DEC and the property was notified that the application was complete and it should begin the process of public notice of the application.

Pirro noted, “DEC’s instructions to petitioner to begin the public notice was inherently based upon the Highland Light Site serving the public interest: remediating and redeveloping the Highland Light Site that was fairly likely to become an affordable housing project, that would increase neighboring property values and the local tax base, ameliorate public health risks and environmental justice concerns, address food deserts, and spur additional investment in the community — accomplishing all public interest goals and the goal of the BCP.”

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Pirro wrote the only reason the department changed its course of action is because of an accident that occurred at an “unrelated site” that, according to Pirro, had been fully remediated by a number of limited liability companies “totally unrelated” to 418 N Division St. with the exception of “one similar member named Mark Stagg.”

Mark Stagg participates in a Turkey Drive in 2024. (Stagg Group website)

According to Pirro, no final determination has been made to the unrelated Cottage-Garden site and due process is proceeding. He described the treatment of the other sites that Mark Stagg has an interest in as “pervasive” and demonstrating the department’s “abuse of discretion.” 

The LLC seeks an order vacating the DEC’s determination that the site is ineligible for participation in the Brownfield Cleanup Program and for the DEC to reimburse the LLC its damages and costs, including reasonable attorneys’ fees, arising from the determination of ineligibility into the program.

The Herald reached Pirro over the phone who said he was in a meeting at the time and would email the Herald, but has not yet as of this writing.