$30 Million Suit Against Village Dismissed

Posted on 14 January 2011

By Kathryn G. Menu

For close to a year and a half, the Village of Sag Harbor has had a $30 million weight on its shoulders, and this week that weight was lifted.

Before the Sag Harbor Village Board of Trustees meeting on Tuesday night, village attorney Fred W. Thiele, Jr. informed Mayor Brian Gilbride that a federal lawsuit seeking $30 million in damages from the village, its attorneys and consultants had been dismissed by United States Eastern District Court Judge Leonard D. Wexler.

The suit was filed in September of 2009 by East End Ventures, a company that successfully gained approval to build the 21 West Water Street condominiums, but failed to win support for a myriad of condominium plans at 1, 3 and 5 Ferry Road, adjacent to the Lance Corporal Haerter Veterans Memorial Bridge.

The parcel was purchased by condominium developers Michael Maidan and Emil Talel in 2005, and a year later the developers, under the limited liability company East End Ventures, began meeting with village boards about condominiums at the site, although the number of units and design of the architecture changed several times as project sponsors tried to gain both public support and board approval.

In 2009, final plans for a three-story, 18-unit condo project featuring 18-accessory boat slips was before the Sag Harbor Village Planning Board when the village’s zoning code changed, drastically reducing the number of allowed condominium units on the property.

In the damages suit, and in a second Article 78 lawsuit yet to be decided, East End Ventures claimed they were led to believe the project would be exempt from the new code, similar to the approved condominium project at the former Bulova Watchcase Factory.

They alleged that the village’s new code was designed specifically to thwart their project and prevent East End Ventures from being able to sell the property to any buyer other than the Village of Sag Harbor. They also claim the village’s application process was flawed, not giving the company a timely and effective method of having their project reviewed — a violation of their rights under due process.

However, Judge Wexler, in his January 6 decision, notes that in order for those rights to be violated, East End Ventures must show a clear entitlement of approval for their project by the village, which they fail to do.

Moreover, Wexler adds that any issue of whether or not the village stalled the planning process for East End Ventures while re-writing its zoning code is a matter that should be decided in state court through an Article 78 proceeding, like the one East End Ventures has already filed, rather than through a federal court.

As for a second claim that East End Ventures’ equal protection rights were violated in that their project was similar to the approved 65-unit condominium project at the former Bulova Watchcase Factory, Wexler states beyond the fact that the Bulova project was exempt from the new code, East End Ventures fails “to present factual allegations that would suggest a high degree of similarity between the two projects.”

While the motion to dismiss with prejudice applies to all aspects of the suit, Wexler in his decision does allow East End Ventures 30 days to replead this last aspect of their claim in an attempt to show significant similarities between the two projects.

East End Ventures also has the right to appeal Wexler’s decision, said Thiele.

“This is quite honestly not a surprise,” said Gilbride at Tuesday’s meeting. “All the advice we have had is that this was the direction the case would go. Now, I look forward to moving forward with a project on that property that is good for the village.”

“This shows the village did everything right,” added Deputy Mayor Tim Culver. “Now I would like to see us move away from litigation regarding this project and towards something positive happening down at that site.”

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2 Responses to “$30 Million Suit Against Village Dismissed”

  1. Joy Lewis says:

    Congratulations to the village! It is so heartening to read about this development and to dare have hope that the good of the village will prevail.

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