Developers have proposed building apartment towers on Shore Road between Riverside...

Developers have proposed building apartment towers on Shore Road between Riverside and Long Beach Boulevards in Long Beach. Credit: Danielle Silverman

Manhattan developer iStar Financial has filed a second lawsuit against the City of Long Beach after the city’s zoning board rescinded the permit to build two oceanfront apartment towers.

The latest legal challenge follows iStar’s $100 million lawsuit against the city alleging breach of contract for not supporting the developers’ request for tax breaks to build 522 apartments on the Superblock property between Long Beach and Riverside boulevards.

The Long Beach Zoning Board of Appeals released a report Friday affirming its May 24 decision to revoke iStar’s building permit on two 15-story towers because developers failed to start construction in the first year and never obtained “all necessary permits” within nine months to build the project. The zoning board was ordered to review the permits after a group of residents successfully sued in Nassau County Supreme Court. 

Attorneys with iStar in their June 22 lawsuit said the zoning board “unreasonably, wrongfully and illegally” revoked height and density variances granted for the project in 2014.  

“The board’s unjustified and arbitrary and capricious decision to invalidate the March 2017 extension of a building permit … have halted the project and threaten the destruction of Shore Road's multimillion dollar investment, as well as the loss of the economic benefits to the community to be derived from the project,” attorneys for iStar wrote.

Board members said that iStar only filed for one six-month extension in 2014 to obtain all permits and filed for a foundation permit in May 2015. Building Commissioner Scott Kemins extended the building permit twice through May 2018, but the zoning board ruled the building department did not have the authority to grant an extension based on “an over-exuberance in favor of the project.”

Zoning board officials said the city was forced to acquire the property in 2006 through eminent domain and has returned no profits from the property.

“The Zoning Board of Appeals finds it regrettable that the property known as the Superblock has lied fallow in excess of 40 years, resulting in an eyesore in the heart of the community, millions of dollars in unrealized revenue and a blight on extremely valuable and rare oceanfront property, which abuts a brand new $42 million boardwalk,” board members wrote in the report.

Attorneys with iStar said the developers have spent $12.2 million on the permit process, including laying the foundation and driving piles up until May in preparation of construction. They argued that the project would create hundreds of new jobs and $40 million in state and local taxes over 20 years. The property would generate $5.4 million in property taxes during that time if vacant, attorneys said.

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