Michael Uccellini has led United Group of Companies after the 2012 death of his father, Walter.
Michael Uccellini was running out of time.
It was November 2015, and Uccellini, CEO of the United Group of Companies of North Greenbush, needed to close on a $14.5 million loan to refinance a student housing project at SUNY Plattsburgh that his late father Walter had built six years earlier. The project stood on the former site of St. John's Academy, a shuttered Catholic school next to the SUNY Plattsburgh campus.
If Michael Uccellini couldn't close on the loan by the new year, he would lose the $23 million building — and as it turns out — much more.
The 397-bed dorm, which would be named the College Suites at Plattsburgh, seemed like a good idea when the United Group proposed it in 2007. Plattsburgh city officials were happy to see the site redeveloped after St. John's, located on Broad Street, closed the year before.
United Group bought the site for $1 million in August 2008.
Since then, just about everything about the project has gone wrong. It still haunts the Uccellini family to this day.
The worst of it came on August 15, 2012.
That's when the elder Uccellini and James Quinn, his second in command, took off for Plattsburgh in their single-engine plane to meet with officials from Luck Brothers, a Plattsburgh contractor whom they owed nearly $2 million for work on the dorm project.
The plane crashed shortly after takeoff from Albany, killing Uccellini. Quinn, who was piloting, died two weeks later.
Within a year of the plane crash, the Plattsburgh property was in foreclosure, and Walter's son Michael sought Chapter 11 bankruptcy protection in January 2015 to prevent it from being sold at auction.
Under the bankruptcy plan, Michael had only until New Year's Eve to come up with $16.5 million to pay off the largest creditor, a distressed debt fund backed by Timothy Barakett, one of the world's richest hedge fund managers.
Along with the $14.5 million loan, Michael Uccellini said he would come up with another $2 million in cash.
But he never did, and United Group lost the Plattsburgh dorm to Barakett's Stabilis fund.
A successful conclusion to the deal would not only have kept the property in United's hands, but also perhaps enabled the Uccellini family to better tackle mounting legal challenges the company is facing from investors who are now suing the company.
The lawsuits darken the outlook for United Group, which Walter Uccellini founded in the 1970s. The developer has a long history of constructing buildings at area technology parks and providing private housing adjacent to colleges and universities, including Rensselaer Polytechnic Institute in Troy and Schenectady County Community College.
Its most recent high-profile project is a student housing development for Hudson Valley Community College in Troy, the first dorm to be built for the school, although it will be owned by United Group and operate as a for-profit enterprise like other United Group student housing.
"For over forty years we built our company by managing the risks that real estate projects face, but as with many Americans and businesses, the challenges of the unprecedented fiscal crisis which began as the Plattsburgh project was being completed, compounded by the tragic death of our founder in 2012, proved too great," United Group spokeswoman Corinne Ellis told the Times Union. "We worked very hard to save the Plattsburgh situation."
Investors had put money into two funds that Walter Uccellini and James Quinn established in 2008 to help finance construction of the Plattsburgh project and others.
The two funds, DCG/UGOC Income Fund and DCG/UGOC Equity Fund, had between them raised $22 million, according to SEC filings. Money came from investors in the Capital Region and from as far away as Arkansas and Maryland. One investor was a retired NFL player.
Money raised from the funds helped the United Group finance project costs beyond bank financing. United Group continues to use this highly leveraged approach, raising $4.8 million toward the cost of the HVCC project, for example.
The lawsuits, most filed in U.S. District Court in Albany, claim the United Group misled investors about how it intended to use their money, about one third of which was lost when United Group forfeited the College Suites earlier this year.
Court filings show that United Group officials used about $7 million DCG/UGOC Income Fund to pay for costs of the Plattsburgh dorm project, although the amount was listed as $9 million in bankruptcy records.
But the fund investors, who were supposed to be repaid that money, with interest, were unsecured creditors in the bankruptcy case, unlike Stabilis.
A Florida couple who previously lived in Cobleskill, Bruce and Lori Van Buskirk, filed a suit in June seeking $1.5 million, which includes interest due. They had invested $1.7 million in the Income Fund in 2010.
Like a number of other plaintiffs, the Van Buskirks claim money from the Income Fund paid for Walter Uccellini's life insurance premiums, a house for his daughter, and even substance-abuse treatment for his sons, although the suits provide no direct evidence to support their allegations.
"While this is an unfortunate situation for all involved, the company is confident that its actions were appropriate, and that the litigation will eventually be favorably resolved," United Group spokesman Jonathan Masullo told the Times Union earlier this month. "Based on what we know... the recent complaints don't allege anything new."
The Van Buskirks, other plaintiffs, and attorneys representing them, all have declined to comment.
Despite the accusations, regulators haven't accused the United Group of any wrongdoing.
And parts of at least one lawsuit filed in Arkansas against the company were dismissed.
While construction and real estate development projects always face risks and financial challenges, the Plattsburgh dorm project appears to have faced an unusually cruel series of setbacks.
Walter Uccellini and James Quinn had hoped to use the two funds they created to provide equity for a $50 million financing package from TIAA-CREF, the giant teachers pension fund manager.
But their timing couldn't have been worse. They closed on the sale of the land from St. John's the same month that the bankruptcy of Wall Street investment bank Lehman Brothers helped to trigger the global financial meltdown and the Great Recession.
Banks stopped lending, and United Group couldn't initially get a construction loan for the Plattsburgh project. But the plan was to have the dorm ready for students for the fall of 2009, so construction began in September 2008 without bank financing in place, right around the time that Uccellini and Quinn launched their two investment funds.
Without a bank loan, United Group couldn't pay its contractors on the project. By January, contractors filed liens against the United Group for more than $3.5 million in unpaid work, according to records filed with the Clinton County clerk, including a $1.8 million lien by the main construction firm, Luck Brothers of Plattsburgh.
That same month, work stopped entirely on the project, according to an account by the Plattsburgh Press Republican, although Walter Uccellini later signed a promissory note with Luck Brothers that he personally guaranteed for their unpaid balance.
It wasn't until May of 2009 that United Group finally obtained a $16 million construction loan from KeyBank.
Work soon resumed, but with construction way behind schedule, United Group only partially completed the College Suites at Plattsburgh for the fall semester.
Enrollment at the college also fell due to the recession.
The United Group never recovered in Plattsburgh.
The dorm's occupancy rate hovered between 70 percent and 80 percent, and the loan fell technically into default, even as the property produced more than $2 million a year in revenue.
Walter Uccellini signed two forbearance agreements with KeyBank that tightened the loan requirements, giving the United Group little room for error.
There were other pressures on Uccellini from unpaid bills from the project, especially from Luck Brothers, which was still owed $1.9 million. In June of 2012, Uccellini and his attorneys reached a court settlement with Luck Brothers to pay the contractor a reduced amount of $1.7 million.
Uccellini had 60 days to pay off the debt, but never did.
Two days after the Aug. 10, 2012 court deadline passed without the debt being paid, Uccellini and Quinn reportedly took their fateful plane ride, reportedly to attend a meeting with Luck Brothers officials.
The meeting never happened.
Seven months after Walter Uccellini and James Quinn died, KeyBank decided to exit the project, even though it could have foreclosed on the property instead. It sold the mortgage to Stabilis, likely at a discount to the $15.6 million in principal still left on the loan.
But Stabilis, an aggressive Wall Street firm, was not as forgiving as KeyBank had been, bringing a foreclosure lawsuit against United Group and the Plattsburgh property in September 2013. Stabilis also charged United Group default interest penalties that added more than $1 million to the outstanding loan balance.
KeyBank spokeswoman Therese Myers wouldn't talk about the decision the bank made to sell of the loan, which appears to have accelerated United Group's problems.
"We are unable to comment on this due to client confidentiality," Myers said.
Michael Uccellini charged in bankruptcy documents that Stabilis didn't cooperate with him on paperwork he needed in late 2015 to close on his $14.5 million loan that he was trying to get from a firm named Bedrock, bankruptcy documents show. He alleged Stabilis was secretly hoping to have Uccellini fail and let the property fall into its hands at a discount.
Stabilis denies that description of events.
"Stabilis began working with the previous owners in early 2013, assisting them in attempting to meet their loan obligations," a Stabilis spokesman said. "Despite those efforts, the prior owner filed for bankruptcy.
Stabilis continued to work with the owner during the bankruptcy to develop a fair plan of reorganization that would allow them to pay off the outstanding loan obligations at a substantial discount. However, when the prior owner failed to meet those obligations, Stabilis was given the property pursuant to the bankruptcy plan."
Fund investors likely would have lost out in any case. The Chapter 11 filing would have provided them with just 15 cents on each dollar they invested.
Last February, after being awarded the Plattsburgh property by the bankruptcy court, Stabilis renamed it the Broad Street Commons, and hired Austin, Texas-based Campus Advantage to manage it.
Rents were reduced and occupancy rates are expected to be 95 percent for the coming school year.
"These actions have steadily improved occupancy, stabilized the finances of the property and positioned it for future growth," the Stabilis spokesman said.
Stabilis has also put the property on the market this month, and while no price was listed, observers expect the dorm to fetch more than $18 million in a sale, about $6 million more than the price Stabilis is believed to have paid KeyBank.
NTSB Identification: ERA12FA508
14 CFR Part 91: General Aviation
Accident occurred Wednesday, August 15, 2012 in Clifton Park, NY
Probable Cause Approval Date: 08/13/2013
Aircraft: BEECH A36TC, registration: N678DR
Injuries: 2 Fatal.
NTSB investigators either traveled in support of this investigation or conducted a significant amount of investigative work without any travel, and used data obtained from various sources to prepare this aircraft accident report.
The pilot and passenger were departing on an instrument flight rules business flight. During the initial climb, at an altitude of about 800 feet above the ground, the pilot advised air traffic control that the airplane had lost engine power. The pilot subsequently performed a forced landing; however, the airplane struck several trees about 1,000 feet short of an open field. Examination of the airframe revealed no deficiencies of the fuel or fuel system, and a test run of the engine showed that it was capable of producing power. However, during the test run, the right magneto was found to be non-functional, and further disassembly of the component revealed that its contact points were corroded. Once the corrosion was cleaned away, the magneto functioned normally on a test bench.
The investigation was unable to determine a definitive cause for the reported total loss of engine power, although a non-functional right magneto could result in a partial loss of power and/or perceived rough engine operation. According to the airframe manufacturer’s procedure for a loss of engine power immediately after liftoff, the auxiliary fuel pump should only be placed in the “HI” position in the event of an engine-driven fuel pump failure. With the engine-driven fuel pump operating, the engine would “run rich and may quit depending on throttle setting, temperature and altitude.” Due to the extent of the damage surrounding the auxiliary fuel pump switch, its preimpact position could not be determined.
The National Transportation Safety Board determines the probable cause(s) of this accident to be:
A total loss of engine power for reasons that could not be determined during the postaccident investigation and testing.
On August 15, 2012, at 0727 eastern daylight time, a Beech A36TC, N678DR, was substantially damaged when it impacted trees and terrain during a forced landing near Clifton Park, New York. The certificated airline transport pilot and the pilot-rated passenger were fatally injured. Visual meteorological conditions prevailed, and an instrument flight rules flight plan was filed for the flight, which departed from Albany International Airport (ALB), Albany, New York at 0724, and was destined for Plattsburg Airport (PBG), Plattsburg, New York. The business flight was conducted under the provisions of Title 14 Code of Federal Regulations Part 91.
Review of air traffic control (ATC) information provided by the Federal Aviation Administration (FAA) revealed that the pilot contacted ATC about 0720 and requested clearance to taxi for departure. The controller initially advised the pilot to taxi to runway 1 via taxiway D and A. The pilot subsequently advised the controller that he could accept an intersection departure from runway 1 at D, and was subsequently issued that clearance. At 0722, the pilot requested to depart from runway 1 at D, but was advised that there would be a 3 minute delay due to wake turbulence from a previously departed Boeing 737. The pilot then requested to “waive” the delay, and was issued a takeoff clearance about 1 minute later. In addition to a warning of wake turbulence, the pilot was issued a departure heading of 040 degrees.
The airplane departed from runway 1 at 0724, turned northeast, and continued to climb. At 0725, at an altitude of 1,100 feet msl, the pilot advised ATC, “eight delta romeo just lost our engine”. No further transmissions were received from the pilot, and radar contact was lost about 30 seconds later at an altitude of 300 feet msl.
The pilot, age 68, held an airline transport pilot certificate with numerous ratings, including airplane single engine land, as well as a flight instructor certificate with numerous ratings including airplane single engine. His most recent FAA second-class medical certificate was issued on March 1, 2012 with the limitation, “must have available glasses for near vision.” A review of the pilot’s flight logs showed that he had accumulated 11,008 total hours of flight experience, 1,110 hours of which were in the accident airplane make and model. During the 90 days preceding the accident, the pilot had accumulated 143 hours of flight experience, 34 hours of which were in the accident airplane.
According to the pilot’s son, the pilot was a friend of the accident airplane’s owners, and was allowed to utilize the airplane anytime he needed. He further described that the pilot flew very often, and had previously flown many people in the accident airplane. While the passenger did hold a pilot certificate, he had not flown a great deal in the recent past. The purpose of the flight was for the pilot and passenger to attend a business meeting in Plattsburg, New York.
According to airworthiness records maintained by the FAA, the airplane was manufactured in 1981 and was equipped with a Continental Motors TSIO-520-UB turbo-supercharged, fuel injected engine. Review of maintenance records showed that a factory rebuilt engine was installed on the airplane in May 1996, at an aircraft total time of 1,591 flight hours. The airplane’s most recent annual inspection was completed on October 15, 2011 at 3,190 total aircraft hours. At the time of the accident, the airframe had accumulated 3,364 total flight hours, and the engine had accumulated 1,773 total flight hours since its installation.
The ALB airport was comprised of two intersecting runways oriented in a 1/19 and 10/28 configuration, at an elevation of 285 feet. Runway 1 was 8,500 feet long by 150 feet wide. Taxiway A ran parallel to runway 1 and was located to the west of the runway. Taxiway D intersected runway 1 about 3,250 feet beyond the runway approach threshold. From that intersection, about 5,250 feet of runway was available for a departure.
The airplane was most recently serviced with 85 gallons of 100LL fuel by a fixed base operator at ALB on the day preceding the accident. Following the accident, a fuel quality assurance review was conducted by the fixed based operator, and no deficiencies were noted during the inspection.
The 0753 weather observation at ALB included calm winds, 10 statute miles visibility with patches of fog present to the west and southwest, few clouds at 100 feet, scattered clouds at 8,000 feet, a broken ceiling at 13,000 feet, and a broken ceiling at 25,000 feet. The temperature was 19 degrees Celsius (C), the dew point was 18 degrees C, and the altimeter setting was 29.90 inches of mercury.
The airplane was not equipped with any flight data recording devices, nor was it required to be; however, a hand-held global positioning system (GPS) receiver was recovered from the wreckage, and found to contain data pertaining to the accident flight. The initial data point was recorded at 0721, as the airplane taxied toward runway 1 at ALB via taxiway D. The airplane subsequently taxied onto runway 1 at 0723, at the point where the runway intersected taxiway D.
The airplane accelerated down the runway and began climbing at 0724:26, and 8 seconds later had climbed to a GPS-derived altitude of 341 feet, at a GPS groundspeed of 88 knots. At that point, the airplane began a right turn about 1,600 feet prior to reaching the runway departure end. The airplane continued to climb while on an approximate 40-degree magnetic track. At 0725:50, the airplane reached a maximum altitude of 1,115 feet, at a GPS groundspeed of 111 knots, about 2 nautical miles northeast of the runway 1 departure end.
Over the next 30 seconds, the airplane turned about 90 degrees left as it descended and slowed. By 0726:24, the airplane had established a heading of 305 degrees, descended to 627 feet, and slowed to a GPS groundspeed of 85 knots. About 25 seconds later, the airplane’s final position was recorded at an altitude of 302 feet and a GPS groundspeed of 76 knots.
A plot of the airplane’s position for the final moments of the flight showed that an open field about 1,000 feet long, and aligned with the airplane’s final approach path, was located about 1,000 feet west of its final GPS-recorded position. Additionally, a two-lane asphalt road paralleled the airplane’s final approach path; however utility wires paralleled and crossed the road at numerous points in the vicinity of the accident site.
WRECKAGE AND IMPACT INFORMATION
The accident site was located in a residential area approximately 3 miles northeast of ALB, at an elevation of 260 feet. The initial impact point (IIP) was identified by several damaged tree limbs, at a height of about 30 feet, and was located about 45 feet west of the airplane’s final GPS-recorded position. The wreckage path about was about 150 feet long, and oriented approximately 320 degrees magnetic. A ground scar, along with the outboard portion of the right wing and aileron, were located about 95 feet beyond the IIP, along the wreckage path. The main portion of the wreckage consisted of the fuselage and inboard portions of both wings, and was located about 45 feet from the ground scar. The fuselage remained upright, and was oriented on a 280-degree magnetic heading. The outboard portion of the left wing was located about 10 feet beyond the main wreckage.
The left wing remained attached to the fuselage by all four of its attachment bolts. The outboard portion of the wing separated in the vicinity of the landing gear, and the left main landing gear remained stowed in its well. The right wing also remained attached to the fuselage by its attachment bolts, with the outboard portion separating near the outer portion of the flap. The right main landing gear remained stowed within its well. The landing gear actuator was in the retracted position.
Control continuity was confirmed from the control column to the elevator and left aileron, and through a fracture of the right aileron bellcrank to the right aileron, and rudder control continuity was confirmed from both rudder pedals to the rudder. Measurement of the left and right elevator trim tab actuators revealed extensions corresponding to a 10-degree tab-down position (nose up trim). Measurement of both flap actuator rods corresponded to a flaps retracted position.
The fuel selector was found in the left tank position. Examination of the fuel system revealed that it remained continuous from the firewall, through the selector valve, to both fuel tanks, with no breaches or obstructions noted. Residual fuel was observed in both main and both auxiliary wingtip fuel tanks. The color and odor of the fuel appeared consistent with 100LL aviation fuel, and all samples taken were absent of water or debris. The auxiliary fuel pump switch was found in the HIGH position, though the structure surrounding the switch was deformed consistent with impact.
The pilot and copilot seats remained attached to the seat rails with no deformation noted. The mounting points and buckles for both the pilot and copilot restraints appeared intact and undamaged, and first responders reported that the pilot and passenger were wearing both lap and shoulder restraints upon arriving at the accident scene.
The engine remained attached to the fuselage, and 2 of the 3 propeller blades exhibited impact-related damage. One blade was bent aft about 45 degrees near the mid-span point and the other blade was bent aft about 90 degrees near the mid-span point. None of the blades exhibited chordwise scratching or leading edge gouging.
The engine was separated from the airframe and shipped to the manufacturer for a test run. The impact-related damage was generally concentrated near the aft portion of the engine. The induction system riser to the number one cylinder, the induction system “Y” pipe, and oil cooler, along with several fuel system fittings, were replaced to facilitate the test run. During preparation for the test run, a red clay/dirt-like substance was found at an impact-damaged port of the fuel metering unit. The fuel manifold valve screen, located downstream of the fuel metering unit within the fuel system, was examined and found to be absent of debris or contamination.
The engine was subsequently placed in a test cell and started normally on the first attempt without hesitation or stumbling. The engine rpm was advanced in steps to 1,200, 1,600, and 2,450 rpm for a period of 5 minutes per step to allow for warm-up. The throttle was then advanced to full power for 5 minutes before the throttle was rapidly advanced from idle to full power 6 times. The engine performed normally throughout each of the tests without any hesitation, stumbling, or interruption of power; however, testing of the magnetos showed that the right magneto was inoperative.
Following the test run, the right magneto was removed from the engine and examined. The points of the magneto exhibited corrosion. The corrosion was subsequently cleaned from the points, and the magneto was then run on a test stand. The magneto operated normally, and further disassembly revealed no anomalies.
MEDICAL AND PATHOLOGICAL INFORMATION
The pilot sustained serious injuries during the accident and subsequently succumbed to those injuries on August 28, 2013. An autopsy and toxicological testing were not performed.
The airframe manufacturer published an emergency procedure detailing the actions pilots should take following a loss of engine power immediately after lift-off. After eliminating the possibility of fuel exhaustion, the procedure advised the pilot:
“2. Auxiliary Fuel Pump – LOW If a Failed Engine-Driven Fuel Pump is Suspected (Indicated by zero fuel flow):
3. Auxiliary Fuel Pump – HI”
A warning was noted below that stated:
“The only reason for the high (HI) boost position is to supply fuel for priming prior to starting and to supply fuel to the engine if the engine-driven fuel pump fails. DO NOT USE THIS POSITION FOR ANY OTHER REASON. If high (HI) boost is selected when the engine-driven pump is operating, the engine will run rich and may quit depending on throttle setting, temperature and altitude.”
The checklist advised that if an ignition problem was suspected, the pilot should verify that the magnetos were selected to the “BOTH” position.
The first step of the procedure for a rough running engine immediately after lift-off stated, “Ensure auxiliary fuel pump is not on HI.”
NTSB Identification: ERA12FA50814 CFR Part 91: General Aviation
Accident occurred Wednesday, August 15, 2012 in Clifton Park, NY
Aircraft: BEECH A36TC, registration: N678DR
Injuries: 1 Fatal,1 Serious.
This is preliminary information, subject to change, and may contain errors. Any errors in this report will be corrected when the final report has been completed.
On August 15, 2012, at 0727 eastern daylight time, a Beech A36TC, N678DR, was substantially damaged when it impacted trees and terrain during a forced landing near Clifton Park, New York. The certificated airline transport pilot was seriously injured, and the certificated commercial pilot was fatally injured. Visual meteorological conditions prevailed, and an instrument flight rules flight plan was filed for the flight. The flight departed from Albany International Airport (ALB), Albany, New York at 0724, and was destined for Plattsburg Airport (PBG), Plattsburg, New York. The personal flight was conducted under the provisions of Title 14 Code of Federal Regulations Part 91.
Review of preliminary air traffic control information provided by the Federal Aviation Administration (FAA), revealed that the airplane departed from runway 01 at ALB, turned northeast, and continued to climb. At 0725, at an altitude of 1,100 feet msl, the pilot advised air traffic control, “eight delta romeo just lost our engine”. No further transmissions were received from the flight, and radar contact was lost about 30 seconds later at an altitude of 300 feet msl.
According to FAA records, the left seat pilot held an airline transport pilot certificate with multiple ratings, including airplane single-engine land, as well as a flight instructor certificate with a rating for airplane single-engine. His most recent FAA second-class medical certificate was issued on March 1, 2012, at which time he reported 10,691 total hours of flight experience. The pilot seated in the right seat held a commercial pilot certificate with multiple ratings, including airplane single-engine land. His most recent FAA second-class medical certificate was issued on December 20, 2011.
The accident site was located in a residential area approximately 3 miles northeast of ALB. The initial impact point was identified by several damaged tree limbs, and a wreckage path about 150 feet in length, oriented approximately 320 degrees magnetic, extended through the impact area. Fragments of the airplane, including portions of right wing, right wing tip fuel tank, and ailerons were located approximately 40 feet prior to where the fuselage came to rest between two pine trees. The left wing was located approximately 20 feet beyond the fuselage along the wreckage path. The engine remained attached to the fuselage, and 2 of the 3 propeller blades exhibited impact-related damage. One blade was bent aft about 45 degrees near the mid-span point and the other blade was bent aft about 90 degrees near the mid-span point. None of the blades exhibited chordwise scratching or leading edge gouging.