A state appellate court this month denied an appeal by the City of Long Beach in a 35-year-old property dispute over a beachfront development, allowing a developer to continue to pursue a $50 million damage claim against the city.
The New York Supreme Court’s Appellate Division in Brooklyn on July 19 upheld a lower court’s finding that Long Beach officials were in default when they failed to properly respond to a lawsuit by Manhattan-based developer Sinclair Haberman, who was seeking to build three 20-story oceanfront apartment buildings on Shore Road.
The decision upholds one a Nassau County Supreme Court judge made in 2015, when he ruled that the city was in default by failing to meet a deadline for a response in the case.
The developer, who filed suit against the city in 2003, is seeking more than $50 million in damages for lost development income, interest and attorney fees.
The city’s Yonkers-based attorney, Robert Spolzino, said the city has filed an intent to appeal with the state’s highest court, the New York State Court of Appeals.
“This is a setback, however, the city will continue to defend its position vigorously during the next phase of the litigation,” city officials said in an issued statement.
The city’s former corporation counsel, Corey Klein, in 2014 had signed a settlement with Haberman in which the developer would have dropped the lawsuit and been allowed to submit a new application to build 20-story condo and apartment towers between Lincoln and Monroe boulevards.
The City Council later rescinded the agreement after council members said they only learned of the agreement three months later, when Klein took paid leave to run for a city court judgeship. He was elected in 2014.
The city hired two outside law firms following the rescinded settlement to handle continued negotiations in the lawsuit. Attorneys for the city argued that officials had been in negotiations with a mediator at the time the default deadline passed.
“We don’t believe a four-day delay in serving an answer was a default when we were actively discussing settlements for the next year and a half,” Spolzino said.
The case dates back to 1982, when Haberman attempted the development and was granted variances on four buildings. Beachfront properties were demolished and Haberman was required to pay the city $200,000 to install underground utilities and road improvements, said one of Haberman’s attorneys, Scott Mollen of Manhattan.
Haberman built one property — Sea Pointe Towers at the corner of Lincoln Boulevard and Shore Road — but Mollen said the city’s Board of Zoning Appeals revoked the permit for the three other developments in 2003.
“The Habermans are longtime residents of Long Beach. They did not want to inflict an enormous damage claim on the city,” Mollen said. “They only wanted the right to develop their own property.”