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Appeals Court: Long Beach must pay $19M more for boardwalk properties

The superblock property along the boardwalk in Long

The superblock property along the boardwalk in Long Beach on Sept. 9, 2015. Credit: Steve Pfost

The New York State Court of Appeals has levied a $19 million judgment against the City of Long Beach in nearly decade-old eminent-domain proceedings for the Superblock apartment-tower project along the boardwalk.

Chief Justice Jonathan Lippman issued an order earlier this month denying the city's appeal of a lawsuit that accused former city leaders of undervaluing by $11 million properties that were acquired for the project.

Long Beach city officials said the funds will have to be allocated through the city's budget and reserves. It was not immediately clear how the decision would impact taxpayers.

"This is obviously a setback for the city, but we've shown tremendous resiliency with several other crises we've inherited," Long Beach City Manager Jack Schnirman said. "We'll work to overcome this in financial planning over the next few years. We'll keep the city on the road to recovery."

City officials said previous administrations made the initial appraisals and land agreements.

Mineola-based attorney Donald F. Leistman, representing one of the original owners, Tucson-based Sun NLF Limited Partnership, said that the property was valued for single-family homes rather than beachfront apartments and condos.

"Land is everything. You've got land on the Atlantic Ocean. That's a valuable item," Leistman said. "You'll see elephants fly before single-family homes are built on the boardwalk."

In 2006, city officials were planning an urban renewal project on the 263,350-square-foot property between Riverside and Long Beach boulevards. A new developer, iStar Financial and AvalonBay, plans to build two 15-story apartment buildings on the vacant site.

The city acquired an additional 34,500 square feet over five parcels from the developers, which city officials estimated was worth over $3 million in 2006, according to court records.

The landowners sued, and in 2012, the state Supreme Court ruled that the city owed the defendants, including Sun NLF and New York developers Louis Bombart and Steve Silverberg.

The initial Supreme Court judgment ordered the city to pay an additional principal sum of $11.8 million to Sun NLF Limited. The city initially paid $6.3 million, but still owes $5.5 million plus interest.

Another judgment ordered the city to pay $5.5 million plus interest to Bombart and Silverberg, who owned the additional properties that made up the Superblock. The city owes an additional nine years of interest to each party at 6 percent.

City attorneys are appealing a $1.5 million claim for attorney fees to total the $19 million owed.

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