Battle over Syosset's Cerro Wire mall plan moves to courtroom

The 18-year battle over construction of a luxury mall on the former Cerro Wire property in Syosset has shifted from the court of public opinion to a courtroom in Riverhead.

Oyster Bay residents have approved the $32.5 million sale of the 54-acre town public works complex adjacent to the proposed mall site to Oyster Bay Realty LLC, a competitor of Cerro property owner and mall developer Taubman Centers Inc.

The next move is up to State Supreme Court Justice W. Gerard Asher, who is to rule soon on Taubman's challenge to the sale's legality.

While selling the adjacent town land technically has no bearing on the mall application, Taubman wants the additional property to make its proposal more palatable to town officials and the community, which have said they want a mixed-use development with only a small retail component on the former Cerro site. Oyster Bay Realty has pledged to build that kind of project.

Taubman attorney Ronald J. Rosenberg of Garden City contends that Oyster Bay "does not have the legal authority to sell any of its property that is not surplus. The property that the town is trying to sell is undeniably, at this point in time, not surplus" because Oyster Bay is using it and can continue to use it for as long as eight years under the sales contract.

Jonathan Sinnreich, the Central Islip attorney handling the case for Oyster Bay, argues that "the entire complex right now is surplus because it's obsolescent. It meets the definition of surplus property."

Rosenberg's second argument is that the town board "cannot bind by contract future governments to a particular course of action," such as relocating the departments now using the Syosset land.

Sinnreich countered: "There is no such law."

Rosenberg's third point is that the town made a secret sale without proper public notice.

Sinnreich replied, "There is no requirement that there be any kind of competitive process at all."

Appeals promised

In July, Justice Asher lifted a temporary restraining order blocking the sale and refused to impose a preliminary injunction requested by Taubman. He indicated his support for the town's position at the time by saying "it would appear to the court, at least on the surface, that the town acted in a lawful, appropriate and reasonable way. . . . It's the court's opinion that the likelihood of success [of Taubman's case] . . . is not great."

Both sides promise an appeal of an unfavorable ruling.

"We remain fully committed to redeveloping this obsolete industrial vacant property," Taubman chief operating officer Bill Taubman said in a statement after voters rebuffed the developer by a 2-1 margin in the Aug. 20 referendum.

Supervisor John Venditto said the last thing the town needs is another mall.

"Taubman's efforts to build a regional mega-shopping mall in the heart of the Town of Oyster Bay near an elementary school and a densely populated residential community -- with all of the attendant potential for crime, noise, pollution and traffic -- is totally unacceptable," Venditto said. "We will continue to fight it for as long as it takes."

Issue since 1998

The battle over the town land sale and the mall reflects a development debate that has played out across Long Island for years. Opponents argue the region is overbuilt, crowded and doesn't need projects that produce traffic, pollution and degrade the quality of life. Advocates say Long Island has a crucial need to generate economic activity, increase tax revenue and create jobs.

The initial round of court action began in January 1998, when Taubman applied for a special-use permit to build a 960,000-square-foot mall on 39 acres of industrial-zoned land.

In 2000, the developer reduced the project to 860,000 square feet. After a town hearing, Taubman reduced the size again, to 750,000 square feet. The town denied the permit in June 2001 and Taubman sued the next month.

The developer prevailed in four court rulings, but a four-judge appellate panel unanimously sided with the town in 2009. The court said the developer must comply with the town's demand for a supplemental environmental impact statement after reducing the size of the proposed mall to satisfy Oyster Bay's objections about traffic and environmental issues.

Taubman said the company is moving ahead to complete the impact statement. At the same time, the developer tried to acquire the town public works property. After negotiating with Taubman for nine months, the town chose in May to sell the land to Oyster Bay Realty LLC, a partnership that includes Indianapolis-based Simon Property Group, which owns the Roosevelt Field, Walt Whitman and Smith Haven malls and bills itself as the largest real estate company in the world.

While suing to block the sale, Taubman also collected signatures on a petition that forced the referendum.

Taubman, founded in 1950, is a real estate investment trust based in Bloomfield Hills, Mich., that owns 312 malls, outlet centers and other properties in 38 states and Puerto Rico, plus 14 outlets in Asia, Canada and Mexico. It owns, manages and leases 28 regional, super-regional and outlet shopping centers in the United States and Asia. It is developing malls in Sarasota, Fla.; San Juan; Honolulu; and China and South Korea.

CORRECTION: A previous version of this story misspelled the name of State Supreme Court Justice W. Gerard Asher.