Judge rules on Long Beach condo permit at center of $50 million lawsuit

Reverses 2003 zoning board decision on Shore Road development project


A Nassau County State Supreme Court judge recently ordered the city to reinstate a building permit that was granted to a developer planning an oceanfront condominium project, but revoked by the Zoning Board of Appeals over a decade ago.

On Sept. 21, Justice Jack Libert reversed a 2003 zoning board decision that prevented the developer, Sinclair Haberman, from constructing a second building on a vacant lot on Shore Road, ruling that the board’s decision was “arbitrary and capricious.”

But new construction isn’t expected anytime soon. The city said it might appeal the ruling, while an attorney for Haberman said his client is reviewing “all of its options” in light of new Federal Emergency Management Agency building guidelines and the impact of Hurricane Sandy.

“[FEMA has] certain requirements with respect to placement of mechanical space and respect to height,” said Scott Mollen, an attorney for Haberman.

The developer is seeking to recoup more than $50 million in damages and potential profits — as well as interest and legal fees — it claims it lost when the board revoked its permit. It was planning to build four condominiums on Shore Road, a project that dates back to the 1980s.

Haberman al-leges that the zoning board bowed to pressure from unit owners in the first building, Sea Pointe Towers, at 360 Shore Road — operated by the Xander Corporation and designed to be part of a four-tower complex between Lincoln and Monroe boulevards — who claimed that their views would be obstructed by the proposed condos and that the developer did not provide the required 1.5 parking spaces per unit.

“This decision represents the latest extremely positive decision for the Haberman group,” Mollen said. “The decision clearly states that Haberman was prevented from moving forward, as a result of 14-plus years of litigation, after the city revoked the permit. The decision also found that the ZBA’s conclusion that the time to build the additional buildings had expired was incorrect as a matter of law.”

City given 30 days to reinstate permit

Haberman initially filed suit against the city in 2003, and the suit has been wending its way through the courts since then. Last year, a state appellate court rejected the city’s appeal of a State Supreme Court judge’s 2015 decision that Long Beach had defaulted on the lawsuit in 2012, denying the city the ability to argue in court that it was not liable for damages.

The 2017 decision paved the way for a trial to determine just how much the city will have to pay, which Robert Spolzino, a Yonkers-based attorney serving as outside counsel for the city, said has been set for March.

Attorneys for both sides said that the city would likely appeal any judgment from the damages trial.

Though Libert did not award any damages, he ordered the city to reinstate the building permit within 30 days.

“It doesn’t put the city in a different position as far as the damages are concerned,” Spolzino said of the ruling. “The city disagrees with the judge’s decision, respectfully. One of the approaches could be an appeal, and that could involve a stay.”

Variances to build the remaining three towers were issued in the 1980s, but the project languished for years amid various disputes between Haberman and the city.

Sea Pointe Towers was completed in 1988, and Haberman said it was prepared to construct a second building in 2003 — Sea Pointe Towers II, on an adjacent lot — but the Xander Corporation petitioned the zoning board to revoke the permit. Haberman is also suing the zoning board, Xander and several city officials.

In his ruling, Libert disagreed with claims by the zoning board that Haberman had “abandoned” the project, saying that the developer had spent 14 years attempting to get it reinstated. The judge also said that Haberman could not fulfill its requirement to provide 189 parking spaces for the first building because it could not complete the other three buildings.

Libert also said that at one point, Haberman had paid the city $200,000 to install underground utility lines within two years, which the city did not do.

Asked whether Haberman would move forward with construction of the second building on the heels of Libert’s ruling, Mollen said, “The court made it clear that the Habermans’ time to file for a building permit, for building No. 2, shall [not begin] until the city completes the public improvements it contractually agreed to build. The city took the money but never provided the improvements, and never returned a dollar of that money. At this time, the Habermans continue to review all of their options.”

Spolzino, meanwhile, said that the permit was for work on the foundation only, and that Haberman would likely have to seek additional permits from the zoning board to move forward with any construction.

Another effort to settle?

The city and Haberman have made attempts to settle their dispute. In 2014, the City Council scrapped a settlement that former Corporation Counsel Corey Klein had reached with Haberman a year earlier.

That agreement allowed Haberman to seek the zoning board’s approval for a revised project on Shore Road that would include two 19-story apartment buildings instead of the previously proposed trio of 10-story structures. If the zoning board were to deny the application, Haberman could continue with the lawsuit. If the board were to grant the application, Haberman would drop the suit.

But Klein’s move sparked a backlash from residents and some city officials, including former zoning board Trustee Stuart Banschick, who is among those named in the suit, and then council President Scott Mandel. They claimed that Klein was not authorized to sign the agreement, and that trustees were not consulted or advised about it.

Spolzino said that new settlement talks are “always a possibility,” while Mollen said, “It is very difficult to negotiate in good faith with officials who have a documented history of not honoring agreements, even after the agreements have been reduced to writing and signed.”