On Tuesday, I wrote a cliffs notes history of the (mis)development of the SUPERBLOCK, covering nearly 20 years. In there I talked about all the litigation the City has been, and still is, involved with. Further, I repeatedly cited a case filed by the City in February against the developer. I capped it all off by saying that the City and the taxpayer (you) could face a massive liability ($26 million) if lawsuits are not settled favorabaily for the City.
City Manager Theofan emailed me a nearly 500 word response that he began by saying I “didn’t get the story right.”
His first critique is as follows:
First and foremost the multi-million dollar claim against the City has nothing to do with the Super Block. This is the Haberman litigation involving the 300 block of Shore Road. In 2003 the Building Department issued a building permit to Haberman to start construction of the second of four buildings he had a variance to build (the first being Sea Point Towers). The variance to build 4 towers was issued in the1980s. In November 0f 2003, during a democratic administration, the Zoning Board, upon the application of Sea Point Towers, with Michael Zapson as their attorney, vacated the permit and the variance. This triggered Habermans multi-million litigation against the City….which we have been successfully defending. It has already been to NY’s highest court, and Haberman’s monetary claims have been dismissed, leaving a simple Article 78 claim against the Zoning Board.
Next, the City Manager explains the history of the SUPERBLOCK starting in 2005 and the February lawsuit:
As far as the Super Block is concerned, in 2005 the Coalition renegotiated the development agreement with Pilevsky only allowing 2 rather than 3 towers. The amended agreement provided for Mr. Pilevsky’s personal guarantee that the advance payment be made to the property owners upon the transfer of title to Shore Development (Mr. Pilevsk’s corporation), he was then supposed to post a letter of credit to fund any additional compensation the Court might award. Condemnation took place during the 2006-2007 democrat administration. The Habermans were the largest owners, about 3/4 of the property. They also had pending litigation stemming from a building moratorium imposed sometime in the 1990s. All of their claims, for the value of their property and the litigation were settled for 27 million dollars. That completely ended the Habermans involvement with the Super Block. Approximately 11 million dollars was divided between the other two property owners, who are making claims for additional compensation which are currently being litigated. Back when the condemnation occurred, the City never demanded the letter of credit that he was required to give. As such we have sued Mr. Pilevsky’s company and him personally as well as the new owner of the property…iStar. We have informed iStar that no one will be permitted to develop the property unless we are made whole and they pay whatever additional compensation might arise in the condemnation cases. They have indicated that they are amenable to doing so, and we are furthering those discussions. In the end whatever liability there may be it will not be paid by the City.
It is not my intention to point fingers, and this is the first time I have articulated who did and did not do what they were supposed to do; but I must respond to unjust criticism.
He finished off his email by saying that “This administration is successfully resolving very serious problems that were created during prior administrations.”
I’m really pleased that Mr. Theofan has weighed in on this issue that I know many people are interested in.
I’ve gone through my first post a number of times and can find only one fact that I incorrectly stated or presented that disagrees with Mr. Theofan’s account.
I wrote: That $26 million that was discussed in 2001, is now the liability the City faces in two civil suits against the City that have been confirmed by a third suit filed in February against the developers, just recently disclosed by Long Beach’s corporate counsel.
$26 million is in fact the liability the City currently faces according to court documents, but it is only coincidentally the same figure from the 2001 case. Meaning, it is not a carry over from the 2001 case, but a totally unconnected one.
The other possible confusion may be that I use SUPERBLOCK as an umbrella term to cover the greater SUPERBLOCK area. The majority of the complicated “who is suing who” bit is taken (and sourced) directly to the New York Times and the Real Deal.
Mr. Theofan’s bottom line in all this – the Long Beach taxpayer will not be on the hook for all this litigation.
I’ll update as I hear more.