Hempstead Village takes step toward suing downtown developers

The Hempstead Village board of trustees this week voted narrowly to authorize legal action against the community's master developer, calling into question the future of a sweeping downtown revitalization proposal that's been mired in delays.

The board voted 3-2 in favor of the measure, allowing Hempstead to sue the master developer — a group of companies composed of Renaissance Downtowns, UrbanAmerica and RXR Realty — for allegedly breaching agreements related to the proposal to build mixed-use apartment buildings, hotels and a public square on 14 municipal parking lots downtown.

"In the eight years since the parties entered the master developer agreement, almost nothing has been built, and the village has grown tired of the wait," Mayor Don Ryan said.

"We're in a standstill," he said after the meeting Tuesday night. "Every site plan that they've given to us has been approved. Every request for extension has been approved. And here we are."

Renaissance partner Sean McLean on Wednesday acknowledged a breakdown in communication but said he remains optimistic.

"We continue to be that positive on the future for the village," he said. "We welcome any invitation to sit down and clear up the misunderstandings."

Representatives of RXR and UrbanAmerica did not respond to requests for comment.

Ryan said he did not know if the village will ultimately sue the developers.

"The goal is actually to get them to the table and see if we can work together," he said.

Cooperation has largely eluded the project's stakeholders in recent years.

RXR sued Renaissance in 2018, alleging Renaissance unilaterally funded a “misguided political strategy” in the village's 2017 mayoral race that involved "backing the losing candidate and denigrating the candidate who won," a legal complaint reads. Ryan was elected in 2017. Renaissance countered in another legal filing that RXR “rode the coattails” of Renaissance “with little to no work required on its part.” The litigation is ongoing. 

Ryan himself led an unsuccessful lawsuit to prevent the developers from receiving tax breaks for a mixed-use apartment building downtown. His skepticism about such tax breaks was central to his successful mayoral campaign in 2017. 

The Renaissance proposal has also faced pushback from a vocal contingent of community members, who say the village already has too much housing and see the exchange of the municipal parking lots as a giveaway to the builders.

Hempstead transferred ownership of the parking lots in 2015 to the master developer, who in turn was ultimately to pay the village $8 million. The village says the developer is $1.5 million behind on payments, which Renaissance disputes.

The proposal has exposed divisions among Hempstead's elected leaders as well.

Trustees Waylyn Hobbs and Jeffery Daniels, who voted against the measure Tuesday, expressed concern that legal action could prove counterproductive.

"There is significant liability potentially here for all involved," Daniels said from the dais before the vote.

Hobbs said after the meeting he'd like to see more diplomacy first.

It is not "necessary to vote to even initiate a possibility of a lawsuit before we have dialogue and conversation with the developer," he said.