The city’s Zoning Board of Appeals voted unanimously Thursday to revoke a building permit issued to the developer of the Superblock property after a group of residents filed a lawsuit saying that the permit was invalid.
The lawsuit sought to revoke a building permit that was issued to the developer beginning in May 2015 and twice extended, which the suit claims was invalid because a variance issued in 2014 had expired. The developer is looking to build two 15-story luxury apartment towers and retail space along the boardwalk, and was twice rejected by the Nassau County Industrial Development Agency for tax breaks up to $129 million.
Resident James Kirklin, Michael and Rianna Goldshall, Boguslaw Pawlowicz, Republican former City Councilwoman Mona Goodman and Leah Tozer, Christopher Jones and William Haas filed the lawsuit last year in Nassau County State Supreme Court against the zoning board, the city’s building commissioner, Scott Kemins, and Shore Road Long Beach Superblock LLC, a subsidiary of the developer, iStar Financial.
Last year, Kirklin, who lives on Riverside Boulevard, appealed the Building Department’s most recent year-long extension of the building permit — which was set to expire this month — arguing that iStar was no longer entitled to the building permits and would have to go before the zoning board to obtain a new variance. The lawsuit also forced the zoning board to hold a public hearing last month before rendering a decision on the appeal.
On Thursday, the board voted to grant Kirkland’s appeal, effectively revoking the permit and leaving the property in limbo.
“We are obviously disappointed with the decision by the Long Beach Zoning Board of Appeals,” iStar Executive Vice President Karl Frey said in a statement. “We had hoped to continue with moving this project forward in order to benefit to the city and its residents. The City of Long Beach has breached its contract with iStar, and iStar will vigorously pursue its remedies.”
Just days before the vote, construction activity could be observed on the property, with heavy machinery driving piles into the ground as part of work on the foundation, a spokesman for iStar said in an email.
That work came to a halt, a city official said. iStar is expected to appeal last week’s ruling in Nassau County State Supreme Court.
Trustees did not comment on the decision, but had pressed attorneys representing iStar at a court-ordered public hearing last month to determine whether the building permit was still valid and should be extended. The board is expected to issue a written decision in the next 60 days.
Trustee Michael Leonetti and other board members had questioned the developer’s efforts to move the project forward, saying that little progress had been made.
The vote came as welcome news to many residents, who have long criticized iStar representatives for telling the zoning board in 2014 that it could begin construction shortly after the variance was approved — and that the project would generate $4.8 million per year in property tax revenue — and then claiming the developer needed more than $100 million in tax breaks to move forward with the project.
“Four years ago, [iStar] lobbied us to get approval for the height,” said resident Richie Boodman. “And then four years later, they're claiming that they can't do it, they're not going to make enough money [without tax incentives] and they want us to subsidize them. If they had just went ahead and built it without tax breaks, they would have been fully rented and paying taxes.”
“I think to deny the extension ... the zoning board made the right decision,” added resident Mike Delury. “I don't think they were in their right mind to grant 17 floors in the beginning. If you look out here, every building is 10 stories. The zoning board was also told by iStar that they were shovel-ready and could begin construction within three- to six-months.”
In 2014, the zoning board voted 5-1 to grant iStar a height and density variance to develop a mixed residential and commercial development on the six-acre parcel between Riverside and Long Beach boulevards, saying that it would revitalize property that has remained vacant for 30 years.
The $400 million project includes two 15-story buildings atop a two-level parking garage — roughly 50 feet taller than the city’s height limit of 110 feet — with 522 one- and two-bedroom luxury rental apartments and retail space along the boardwalk.
Though the zoning board said in April that it could not consider iStar's requests for tax breaks in its decision, Trustee Esteban Acevedo said that in 2014, the developer made no mention of a need for tax incentives.
iStar filed a lawsuit against the city earlier this month for more than $100 million, claiming that the city reneged on an agreement in which it would support tax incentives the developer is seeking from the IDA.
Last year, the city told residents that iStar would take legal action against the city if it did not submit a letter to the IDA supporting the developer’s request for a 20-year, $82 million payment in lieu of taxes, or PILOT, program.
In its complaint, iStar said that the city had agreed to support both the zoning board application for the variance as well as the developer’s request for tax breaks. The developer has said that it could not move forward with the project without tax breaks, but that it would generate $110 million in construction jobs and millions of dollars in economic activity.
“I'm happy with the decision that [the zoning board] made and I think it's the right one,” said County Legislator Denise Ford (R-Long Beach), one of the more vocal opponents against the developer’s request for tax breaks. “I think what's going to happen is ... that they are going to challenge this decision and probably hope that the courts rule in their favor and overturn this decision. And right now, it’s going to hold up their request to the IDA for another PILOT.”