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City Council votes to settle lawsuit on vacant site

Long Beach City Manager Jack Schnirman acknowledged that

Long Beach City Manager Jack Schnirman acknowledged that the city has talked about developing its Superblock property "not just for years but for decades." (July 11, 2013) Credit: Barry Sloan

The Long Beach City Council voted to settle a lawsuit against the current and former owners of the 6-acre Superblock property, clearing the way for a new proposal to develop the site.

Manhattan-based developer iStar wants to build two 15-story towers with more than 520 total luxury rental apartments and a promenade with 11,000 square feet of retail space on the property.

But the project has been hindered by litigation involving the vacant site, where the city has been trying to foster development since the 1970s, officials said.

The city will receive $5.25 million from the settlement with current owner iStar and former lead developer Philip Pilevsky, city records state. Pilevsky also must reopen a movie theater near the site, which is located between Long Beach Boulevard and Riverside Boulevard, records state.

"This project is one that has been talked about not just for years but for decades," said Jack Schnirman, city manager.

The city council's approval sets the stage for a pivotal Zoning Board of Appeals meeting Thursday night at city hall at 7 p.m. Developer iStar is asking the board for height and density variances for its project.

The board will hear the proposal Thursday, but is unlikely to vote on it, officials said.

Don Middleberg, a spokesman for iStar, declined to comment on the project beyond saying that Thursday's zoning board meeting is "major" for the project's future.

The recent history of the Superblock traces back to Long Beach's 2006 decision to transfer the property to lead developer Philip Pilevsky, who wanted to build two towers on the land. Shore Road Development Partners, led by Pilevsky, took a mortgage from Fremont Investment and Loan, which was later assigned to iStar.

Pilevsky defaulted, and the Superblock property became property of iStar. The city sued Pilevsky and iStar in 2011, resulting in extensive litigation between the parties.

City Councilman Anthony Eramo said the settlement of the lawsuit shows the city is working in good faith with iStar and "encourages them that there will be no more litigation with the city."

Mark Tannenbaum, executive vice president of the Long Beach Chamber of Commerce, said he supports the new iStar proposal. The developer pitched the plan to the chamber Wednesday night.

"It'll send a signal out to the rest of the world that we're back in business and we're booming again," he said.

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