Local Law #7: Huntington Pols' $1.4M Gift to Fraudster DeRosa

By Leader Staff

Huntington Supervisor Ed Smyth and Councilman Sal Ferro engineered a $1.4 Million windfall to a developer - Gregory DeRosa - now charged in Court with stealing millions from Huntington residents in a "$50 Million land Ponzi scheme," at the same time DeRosa was giving Ferro a personal $240,000 secret "Consultant" contract.

Local Law # 7 was passed at Smyth and Ferro's instance in 2023, to re-designate one condo unit in DeRosa's Spring Road development from a $300,000 "affordable" unit, into a $1.7 million "full-price" unit.

DeRosa needed Smyth and Ferro's permission, because the affordable housing laws - and the permit and re-zoning waiver that allowed DeRosa to build the 9 high-density luxury condos in a single family homeowner neighborhood on Spring Road - required the one condo unit to be sold as an "affordable" unit, for approximately $300,000.

Ferro introduced the narrowly-tailored amendment to the Town Code to allow DeRosa to raise the condo price to $1.7 million, changing the Town Code's affordable housing requirements.

On April 11, 2023, Ferro introduced "Local Law #7" - an amendment to the Town Code to allow an apartment building developer to "swap" one condo unit required by law to be "affordable," for three rental units at another property owned by the same developer. Provided the developer owned two multi-unit buildings, both under construction, in the same school district, in Huntington, and the buildings had "comparable" units for rent or sale.

DeRosa was the developer of the Gateway Plaza apartments - 67 units at 1000 New York Avenue; and the  133 Spring Road condominiums - 9 condo units being sold at $1.7 million per condo. 

He was the only Huntington land developer who would qualify to benefit from Local Law #7 - and the only developer to actually apply for and get a "swap" from the Town of Huntington under Local Law #7.

The matter came before the Town Board on May 9, 2023, for a Hearing.

Ronald Steinlauf, a Huntington resident stood up to ask the Board what the resolution was for. 

"It is complicated," answered Supervisor Ed Smyth (R-Halesite), explaining what the law would do, but not addressing why it was introduced.

"Can I interrupt ?" interjected Ferro. "This has to do with replacing a specific project, a specific affordable unit for sale, and swapping it out for another project..."

"This has nothing to do with creating affordable units..." added Ferro.

The resolution passed at the June 13, 2023 Town Board meeting. Both Ferro and Smyth voted for it.

DeRosa then immediately filed with the Town Planning Board, to "swap" one affordable unit at his Spring Road development in exchange for re-designating three rental units at his Gateway Plaza apartment building as affordable by slightly reducing their apartment rents.

The Huntington Planning Board then approved the DeRosa application at its August, 2023 meeting, under new Local Law #7.

DeRosa got a $1.4 million windfall from the Town's code amendment. And Huntington lost one more owner-occupied affordable home.

In the middle of this windfall, DeRosa gave Ferro a secret $240,000 "Consultant Agreement," according to records from DeRosa.

The Consultant Agreement - dated August 1, 2023 - provided for Ferro to be paid in six (6) monthly installments, of $40,000 each, by wire transfer to Ferro's RSF Group. The address listed for RSF Group is Ferro's home address in Huntington, and Molly Ferro, Sal Ferrro's wife, is listed as the President of RSF Group.

The $240,000 Consultant Agreement required no actual work to be done by Ferro, beyond a vague requirement to "consult" on a 7-11 convenience store in East Islip.

DeRosa's paid Lobbyist is South Huntington Water Commissioner Paul Tonna (R-West Hills) who previously served for 12 years as a Suffolk County Legislator. 

The FBI and State Attorney General are currently investigating the multiple allegations of criminal conduct involving DeRosa and government officials.

Local Law #7

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