Haberman’s building permits were revoked in 2003, according to court documents, based on the zoning board’s finding that a modification of permits it had issued Haberman in 1992, extending the terms of the variance, was unenforceable because it had not been brought before the board for ratification. The case has been wending its way through the courts ever since.

Last week’s move by the city to hire outside legal counsel comes after an attempt to resolve the lawsuit with Haberman. Based on a mediator’s recommendations — and to avoid what could potentially be a crippling financial liability for the city — both parties agreed last December to enter into a “stipulation of settlement” in Nassau County State Supreme Court.

Under the terms of the stipulation of settlement, a copy of which was obtained by the Herald, Sinclair Haberman was permitted to seek approval from the zoning board for a revised project that would include construction of two 19-story apartment buildings, instead of the previously proposed trio of 10-story structures.

The stipulation called for a public hearing before the zoning board. If the board denied the developer’s application, Haberman would be permitted to move forward with the lawsuit. If the zoning board granted the application, Haberman would agree to drop the suit, Mollen said.

“After Hurricane Sandy, the city welcomed and encouraged development that would show that people strongly believed in the future of Long Beach and were willing to invest their money in the city,” Mollen said. “Haberman believed that their development brought many substantial benefits to the City of Long Beach.”

However, officials said that the city is no longer pursuing the stipulation of settlement, and explained that if it had gone before the zoning board, the City Council would have expressed its opposition.

In a comment on Facebook, Councilman Anthony Eramo said, “This property has been in litigation for decades. We just brought in outside counsel to deal with it. Though we can’t comment on details of the case, I can assure you that absolutely no members of the City Council or administration support a project of this magnitude.”

“The city is not in agreement with the terms of the 44-page stipulation with conditions, and so we brought in outside counsel,” said City Manager Jack Schnirman. “This has been a long, ongoing litigation, and we are dealing with a scenario where we are out-lawyered, and we want to bring outside counsel in to assist the city.”

One city official, who asked not to be identified, said that the zoning board would not support Haberman’s revised project, and that most residents would balk at such a proposal.

“This whole thing was designed to get [the dispute] to go back to the zoning board,” the official said. “The theory being that if you go back to the ZBA, everyone gets an opportunity to argue their points. … What would happen is, the zoning board would conduct another hearing, everyone would present their evidence, and then the ZBA would make another decision. If the ZBA denied it, then the case is not settled, but everything that was presented to the ZBA goes into the lawsuit. However, the city is no longer moving forward with the stipulation; there was no reason for it, at this point in time, to go back to the zoning board.”

Mollen, however, said that the city reneged on its agreement, and that Haberman has not filed its application with the zoning board because the city said it was “backing out” of the settlement agreement.

“The city has once again reneged on a written agreement, and as a result, our client, understandably, intends to pursue its damage claims, which is in excess of $50 million,” Mollen said. “People would have had an opportunity to present their views, and the city reneged on the deal before it even went to the ZBA.”