The rebuilding of the Lido Beach Towers -- a condominium complex whose pink, Moorish architecture has been a Lido Beach landmark for more than 80 years -- has reached a standstill because of a dispute over insurance payments between condo owners and the federal government.
Superstorm Sandy hit the six-story building hard, flooding out its first floor and causing more than $16 million in damage to the complex.
Residents of the building had hoped the damage would be covered by Federal Emergency Management Agency flood insurance for the complex. But FEMA sent a check for about $8 million, citing a missed premium payment that residents say was the result of a paperwork error, according to an attorney for the individual condo owners.
Upper-level unit owners in the 184-unit complex began returning in July, but more than 30 lower-level owners have not because work isn't finished and the insurance money has been exhausted, said Jonathan Wilkofsky, the Manhattan-based attorney.
The condo association is appealing to FEMA for more money; otherwise the unit owners will need to secure an expensive loan to finish the work, Wilkofsky said.
"The community is now saddled with an $8 million debt," said Alan Kramer, whose first-floor unit remains uninhabitable. "The consequence of not having a loan is putting the brakes on our ability to move forward."
The crux of the dispute is that FEMA reduced the towers' insurance plan about six weeks before Sandy, Wilkofsky said. He said a brokering agent missed a $20,000 premium payment, which caused the penalty.
The condo owners have filed a lawsuit against brokering agent Denis Miller of Long Beach, as well as the building's current and former management companies, to get them to pay for the gap in insurance, Wilkofsky said. Attempts to reach Miller and the companies were not successful. The parties are scheduled to be in Nassau Supreme Court on Thursday, Wilkofsky said.
The owners believe FEMA should reconsider its insurance payment because the missed bill -- which was paid a few days after the Oct. 29 storm -- wasn't the residents' fault, he said.
FEMA has received the appeal and is reviewing it, said agency spokesman Lars Anderson.
"FEMA's top priority is to provide assistance to those in need as quickly as possible, while also meeting our requirements under the law," he said.
The towers, originally a beachfront resort, have had many identities over the years. The building served as a Navy discharge center during World War II and later a kosher resort.
Entertainers who performed there in its resort years included Milton Berle and Sammy Davis Jr. Locals sometimes call it "the Pink Lady."
Resident Alan Graboyes, who has yet to move back, said he just wants to call it home again.
"The building is in trouble, big trouble," he said. "We're just individuals trying to live our lives, that's all."