Long Beach attorneys are preparing for a damages trial with a condo developer seeking a claim of at least $50 million after the city was found in default on an oceanfront property.
Long Beach City Council members voted 4-0 Tuesday night to hire expert witnesses and construction engineers in preparation of a damages assessment trial with Manhattan developer Sinclair Haberman. Councilwoman Chumi Diamond abstained.
The city was found in default in 2015 by a State Supreme Court judge in Nassau County for failure to properly respond to a lawsuit by Sinclair Haberman. Developers were seeking to build three 20-story buildings on Shore Road between Monroe and Lincoln boulevards.
The New York Supreme Court Appellate Division denied two appeals by the city last month. Long Beach could still request one final appeal to the state’s highest court, but the city’s attorney said Long Beach’s “long-term financial interests are best served” by hiring witnesses and preparing for a damages trial. The city can no longer argue liability in the case, but can argue any penalty claimed.
“A default judgment does not mean the case is over,” Long Beach Corporation Counsel Rob Agostisi said. “The plaintiffs have not offered one shred of evidence to support their allegation that they are entitled to $50 million or anything remotely close for that matter.”
City Council members voted to hire the Manhattan accounting firm KPMG LLP as needed for a fee of up to $575 per hour and engineering consultants with Cashin Spinelli and Ferretti for a fee of up to $185 per hour.
The default judgment followed a 35-year-old property dispute to develop four apartment towers along the boardwalk. The city allowed developers to build one building at Sea Pointe Towers, but the Board of Zoning Appeals revoked the other permits in 2003, following resident complaints, parking concerns and pressure from neighboring building owners.
Sinclair Haberman’s Manhattan-based attorney, Scott Mollen, said the developers were seeking in excess of $50 million for lost revenue, legal fees and interest.
“The damage inflicted by the city is based upon the city’s illegal actions to obstruct the Habermans’ right to develop their property,” Mollen said “Not only will the Habermans prove significant monetary damages, but because of the city’s delaying tactics, the Habermans expect the damage award will include a substantial amount of interest.”
Long Beach officials said defending the city would require technical experts and be critical to the city’s future.
“There is no $50 million judgment. There is a default judgment and a claim with no evidence,” Agostisi said. “On the spectrum of damages, from $1 million to $50 million, we should be much closer to the former. . . . This is the pivotal moment.”