The town of Carmel has agreed to pay People USA $100,000 to settle a lawsuit stemming from the Planning Board’s rejection of a controversial stabilization center proposed for Carmel Hamlet, according to Town Supervisor Mike Cazzari.
Under the settlement, Putnam County will also assist People USA in finding another location for the stabilization center, while as part pf the settlement the towns of Carmel and Southeast have received assurances that the facility will not be located in either community, Cazzari said.
“The county is going to help them find a place,” Cazzari told Mahopac News.
The Town Board unanimously approved a resolution Sept. 29 consenting to the settlement of the litigation brought by PEOPLE: Projects to Empower and Organize the Psychiatrically Labeled Inc., which does business as People USA.
The lawsuit followed the Carmel Planning Board’s unanimous rejection in January of People USA’s proposal to operate a stabilization center at 1071 Stoneleigh Ave. in Carmel Hamlet.
The center was envisioned as a 24-hour facility where people experiencing mental health or substance-use crises could voluntarily receive short-term assistance in a non-hospital setting.
The proposal generated significant opposition from residents, particularly those living at The Retreat at Carmel, a nearby 55-and-older community. Residents raised concerns about the proposed center’s location and its proximity to other facilities providing mental health and substance-use services.
Cazzari said he understands those concerns and believes the Stoneleigh Avenue property was simply the wrong location for the facility. He noted that Arms Acres, an inpatient addiction treatment center, and a methadone clinic are already located nearby.
At the same time, Cazzari said he believes Putnam County needs the type of crisis services envisioned by the stabilization center and hopes another suitable location can be found.
The stabilization center had originally been proposed by Putnam County in 2021, with People USA selected to operate it. The county had planned to use approximately $2.5 million in federal American Rescue Plan Act funds to support the center during its first two years.
Finding a home for the project, however, proved difficult. Several potential locations were considered before the Stoneleigh Avenue site emerged, including proposed sites in Southeast that did not move forward.
After a lengthy review process and considerable public opposition, the Carmel Planning Board voted 6-0 in late January to deny the Stoneleigh Avenue application.
People USA subsequently sued the Planning Board and the town. The action was originally filed in state Supreme Court in Putnam County before being removed to U.S. District Court for the Southern District of New York.
At the Town Board meeting, Councilman Rob Kearns called the settlement “a huge win” and thanked County Executive Kevin Byrne and Putnam County for their involvement in resolving the dispute.
Kearns recalled the opposition that the proposal encountered and said the settlement prevents People USA from returning with the project in Carmel.
“They said we settled the suit, and the terms were that they would not try to come back to the town of Carmel, that they would try to find an alternative location here in Putnam County,” Kearns said.
He said Byrne and the county would take the lead in trying to find another location.
“Our county executive is spearheading that project,” Kearns said. “So, I want to thank him for fighting the good fight for the town of Carmel and listening to the people he’s elected to serve.”
The Town Board resolution itself does not disclose the $100,000 payment or the other terms described by Cazzari. It states only that a proposed settlement had been negotiated by Miranda, Slone, Sklarin & Verveniotis LLP, counsel selected by the New York Municipal Insurance Reciprocal to represent Carmel and its Planning Board.
The resolution authorizes the attorneys to execute the documents necessary to complete the settlement. Cazzari said that the $100,000 will be paid by the town's insurance provider.
Earlier this year, after the Carmel project stalled, the Putnam County Legislature redirected approximately $2.15 million in remaining ARPA funding that had been earmarked for the stabilization center to road paving. At the same time, lawmakers established a separate $2.1 million mental health reserve fund.
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