Settlement paves way for Long Beach condos, apartments

Long Beach City Council members approved a settlement Tuesday night to dismiss a $105 million lawsuit against the city by a former developer and end a decadeslong stalemate for construction of oceanfront condos and apartments.

The city’s settlement with Manhattan developer iStar Inc. dismisses iStar’s lawsuit and gives Engel Burman — the new developer and future owner of the Superblock property — a $2.5 million credit that iStar had already paid for building fees.

Long Beach City Council members also reached an agreement with Engel Burman to complete more than $3 million in sewer and water improvements and pay an additional $425,000 to cover the city’s on-site stormwater requirements from Nassau County.

"If there is one thing people take away, it is that the $100 million lawsuit against the city goes away," Long Beach City Council president John Bendo said. "Right now, every man woman and child in the city is on the hook for a $100 million lawsuit, or $3,000 each, if this lawsuit goes against us. That goes away at no cost to the taxpayers. We are potentially dodging a major bullet here."

City officials said they could not publicly disclose the agreements until it was ratified and approved by the city council. The city had filed to dismiss the case in Nassau Supreme Court, pending the settlement.

A Jericho attorney for iStar, David Heymann, said he could not disclose terms of the sale, but said he expected the sale of the property to Engel Burman would be completed this spring with the settlement.

The project has been locked in various litigation with different developers for the past 40 years while the blighted overgrown lot facing the boardwalk sat vacant.

The lawsuit by iStar was filed in 2018 seeking damages for lost revenue and blaming the city for not supporting its bid for up to $129 million in tax breaks through the Nassau County Industrial Development Agency to build two 15-story towers and 522 oceanfront apartments facing the boardwalk.

The Long Beach Zoning Board of Appeals rescinded iStar’s building permit three years ago after developers failed to obtain all permits and start construction within the first year.

Uniondale developer Engel Burman entered into contract with iStar to buy the six-acre lot between Riverside and Long Beach boulevards.

Engel Burman plans to build a $369 million project, including two nine-story condo buildings and one 10-story apartment building with 438 units and 6,500 square feet of boardwalk-level retail and a restaurant. The first two levels of the project will include 1,100 parking spaces.

The Nassau County IDA approved $49 million in tax breaks for Engel Burman last year for the next 25 years.

The settlement calls for iStar to transfer the $2.5 million it invested in building fees to Engel Burman for the project.

Engel Burman and city officials said they expect to start construction by this summer.

"Engel Burman is ready to build the project once this lawsuit is behind everyone," the city’s outside counsel Robert Spolzino said. "It will be three to four months before you see a shovel in the ground."

By John Asbury

john.asbury@newsday.comJohnAsbury

John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.