Village Passes on Ferry Road Settlement

Posted on 19 January 2012

The Village of Sag Harbor has turned down a proposal to settle a $30 million federal lawsuit it has been fighting for several years against a property owner who is in the midst of foreclosure proceedings.

The suit was brought in 2009 by condominium developers East End Ventures, who have argued for several years now that the village changed its zoning code to thwart what was an unpopular development project at 1, 3 and 5 Ferry Road, otherwise known as the former Diner property.

According to attorney David Arntsen of Devitt Spellman Barrett – the firm hired to represent the village in the Ferry Road case – East End Venture’s attorney Sam Israel did approach him with a proposal, although Arntsen said he would not disclose the terms discussed between himself and Israel.

While Israel did not immediately return calls for comment, East End Ventures principal Emil Talel said on Tuesday while he did not know the specifics of the discussion it likely revolved around the village allowing his firm to build under the old village code and assurances the project could move forward.

Arntsen said there were questions raised about the proposal Israel made, specifically the status of the East End Ventures application before the village.

According to village attorney Fred W. Thiele, Jr., Israel has alleged the condominium project was two to three weeks away from village approval when a new village code was passed that reduced what was possible on the site.

However, according to records Thiele accessed from the village’s building department, the application’s draft environmental impact statement had yet to even be vetted in a public hearing. The project would have also been subject to the review of the village’s harbor committee, historic preservation and architectural review board and zoning board of appeals, none of which heard the final formal application for the condominium project.

“The idea that this was close to approval is fiction,” said Thiele.

Thiele said based on his municipal experience it would have been nine months to a year, after a public hearing, before the project would have been ready for approval.

According to Arntsen, the case will now move into depositions, with Talel the first to be deposed. While Israel has won the right to depose members of the village board who were involved in the code revision process, Arntsen said that the court order was “limited in scope” and that the judge did not give Israel “carte blanche” to question village board members on the philosophy behind the code revision.

“That is important because there are legislative privileges within the law that may still apply,” he said.

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