A State Supreme Court judge Wednesday dismissed a luxury mall developer's lawsuit challenging Oyster Bay's sale of adjoining property in Syosset to a competitor.
Justice W. Gerard Asher in Riverhead ruled that the town had not acted capriciously in selling its public works complex to Oyster Bay Realty LLC for $32.5 million rather than to Taubman Centers Inc., which has tried to build the mall on the adjacent former Cerro Wire site for 18 years.
Taubman said it will appeal.
"The court will not substitute its judgment for that of the town, which was responsible for making a determination to sell the premises as unneeded," Asher wrote. "This is especially true where the residents of the town have spoken so clearly on the issue" by approving the sale by a 2-1 ratio in an Aug. 20 referendum forced by Taubman gathering signatures on a petition.
Asher said the town acted on a rational basis in getting the best price for the property while obtaining a window of as long as eight years to relocate its facilities. He also said the town's ability to close a large hole in its 2013 budget through the sale was in the public interest.
He noted that Taubman and Oyster Bay Realty, one of whose principals is mall owner Simon Property Group, both engaged in bidding with the town. "It is unlikely that anyone but Simon or Taubman would agree to pay in excess of $30 million for the property which includes a 'Superfund' site. The town acted properly in marketing the premises as it did," he wrote.
The judge said, "Taubman has never made an offer at a higher price, nor one which would permit the town to close the shortfall in its 2013 budget." He added that Taubman never made an offer that was not contingent on the town's issuance of a special use permit to allow the mall.
Taubman's attorney, Ronald J. Rosenberg of Garden City, said, "The court correctly recognized that the town could only sell the property if it was in 'fact' surplus and recognized the definition of surplus as property not needed for town purposes." But, he added, the court "erroneously upheld the sale despite the fact that the court acknowledged that the property was and for the indefinite future" needed for town purposes.
"We expect that the Appellate Court will correct this erroneous decision upon our appeal," Rosenberg said.
Supervisor John Venditto said Wednesday, "Hopefully, the Taubman organization will get the message and abandon its misguided attempts to place a regional mega-shopping mall in the heart of the Town of Oyster Bay."
Todd Fabricant, chairman of the Cerro Wire Coalition, which has been fighting the mall for 18 years, said, "This is fantastic news." The town and Taubman have been in court over the mall proposal since 2001.