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SHELBOURNE THREATENS LAWSUIT AGAINST GREENBURGH BOARD FOR RENEGING ON BACKROOM DEAL TO APPROVE EDGEMONT ASSISTED LIVING PROJECT

First Fortress Bible, and the unprecedented $6.5 million settlement that taxpayers of unincorporated Greenburgh are now being required to pay.

Then Dromore, where because of the Town’s failure to correct errors in its zoning map, and then having compounded that error by acting in bad faith when it failed to comply with proper procedures to correct it, a litigation over a developer’s desire to capitalize on the Town’s mistakes and build multifamily housing where the Town never intended it to be permitted, is now entering its tenth year.

And Game On, in which town officials sided with an underfinanced startup company that wanted to build on the former Frank’s Nursery on Dobbs Ferry Road an eight story sports dome in a residential neighborhood over the opposition of area residents. There, town officials gave the developer one sweatheart deal after another – only to see the deal collapse because the Town failed to disclose the extent of environmental remediation required at the site

Now Shelbourne’s up at bat.

Formation Shelbourne, the billion dollar Philadelphia and Atlanta-based private equity fund that wants to build a 94-bed assisted living facility in a residential area of Edgemont this week threatened to sue
litigation-prone Greenburgh for rescinding certain environmental approvals it recently gave the project as part of an apparent backroom deal Shelbourne says it made three years ago with town officials to support its project so that it would get all the approvals needed.

Shelbourne did not say when it would sue, saying it would for now at least continue trying to get variances from the Zoning Board.  The implication is that if the Zoning Board denies the variances or if Shelbourne gets the impression that continuing to seek approval from the Zoning Board would be futile, it would file suit.

What sparked the latest threat to sue was the Town Board’s decision last month to rescind the so-called “negative declaration” it gave the project in early June. A negative declaration is a finding by a government body that the project will have no environmental consequences worthy of impact or further study.

The “negative declaration” had outraged hundreds of residents who live along the Underhill Road corridor in Edgemont who said the Town should have done more to study the impacts of noise, traffic safety on the hairpin curve along Underhill near the proposed site, and the anticipated burden on emergency medical vehicles that are expected to serve the site, which serves elderly residents with no onsite medical personnel — but despite repeated requests from residents that it do so, the Town never said it was rescinding the declaration for that reason.

The rescission came instead after Shelbourne agreed to withdraw an unusual lawsuit it brought in early July against the Zoning Board, the Edgemont Community Council, the Council of Greenburgh Civic Associations, and 17 individual residents after the Zoning Board ruled that Shelbourne needed to obtain zoning variances.

The Town Board said it was rescinding the “negative declaration” not because its original findings were wrong or politically motivated, which residents said they were, but because the Town Board felt the zoning board should be free to make its own findings as to environmental impact and not therefore be influenced by what the Town Board had said.  Residents criticized that action as well, saying that rescinding a “negative declaration” for political purposes was just as inconsistent with the state’s environmental laws as granting a “negative declaration” for political purposes.

The decision to rescind the “negative declaration” may have been made because Town Supervisor Paul Feiner thought if it were rescinded, he could finally get opponents of the project to negotiate with Shelbourne — and he may have informed Shelbourne that that was the reason rescission was needed.

But residents expressly warned Mr. Feiner in advance that there would be no such meeting at all if the Town Board did not rescind because the environmental findings the Town Board made dismissing their concerns were not adequately supported or factually researched.

Using the state’s environmental laws for political reasons as a pretext to try to kill a proposed project is what the Town Board was found guilty of doing in the federal Fortress Bible litigation, and playing fast and loose with state laws generally — for political reasons — was the basis for the finding that the Town Board acted in bad faith in the Dromore litigation.

Under the zoning code, assisted living facilities may be built in residential neighborhoods only if they were within 200 feet of a state or county right-of-way  and the site is at least four acres.  Here, the nearest such right-of-way is more than a mile away and the site is only 3.79 acres.

The civic groups and residents were sued only for having asked that the Zoning Code’s provisions be enforced.  Such as suit by Shelbourne appeared to be a violation of New York’s anti-SLAPP laws. SLAPP suits are “strategic lawsuits against public participation” and the anti-SLAPP laws protect civic groups and residents who exercise their First Amendment rights at public meetings from being sued by developers who object to their comments.

The original Shelbourne lawsuit against the Zoning Board was not ripe under New York law and would almost certainly have been dismissed in any event because no such lawsuit by Shelbourne could legally be filed anyway until the Zoning Board had ruled on Shelbourne’s requests for variances, which request were still pending before the board when the suit was filed.

Apparently as part of their backroom deal, and even though the lawsuit was baseless, Shelbourne said town officials were consulted in advance about the filing of that lawsuit against the civic groups and the individual residents, and thus knew all about it.

“We specifically asked our attorney to contact the Town and discuss whether filing of an Article 78] would in any way impact our ongoing efforts to get approval of our project,” said Jim Kane, the Shelbourne principal.

“We were told that everyone involved understood that it was a necessary step to protect our legal right and that it would not be a problem,” Mr. Kane said. “I don’t have to go into what happened because you all know. All Holy Hell broke loose,” he added.

The lawsuit was withdrawn after Bob Bernstein, president of the ECC, said he would file a countersuit on behalf of the civic groups and the 17 individual residents who were sued seeking damages against Shelbourne for violating New York anti-SLAPP laws. Mr. Bernstein did not know that town officials were complicit in the filing of the lawsuit.

“That lawsuit was not brought to protect any legal rights. It was brought only to threaten and intimate civic groups and residents who Shelbourne and the Town feared might appear before the Zoning Board and oppose the granting of these variances,” Mr. Bernstein said.  “This appears to have been part of a concerted strategy between Shelbourne and the Town to try to get those variances forced through.”

Their plan backfired when residents began complaining publicly about having been served over a weekend on shortened notice with massive sets of legal papers.

Mr. Feiner then took credit for getting the lawsuit dismissed, claiming he didn’t know about it until after it had been filed.

However, as Mr. Kane made clear Thursday night, that was not true.  Mr. Kane said town officials all knew the lawsuit would be filed and indeed Town Attorney Tim Lewis admitted several weeks ago that town officials were notified about it in advance.

Shelbourne then said it withdrew the lawsuit only after Mr. Feiner promised that the Town board would continue to support Shelbourne’s application for approval.

“After a conversation with the Supervisor where it was requested that we withdraw the Article 78 and where it was promised the Town Board would continue to support the project and our acquisition of Al and Heidi Krautter’s property, we decided to do so,” said Jim Kane, the Shelbourne principal who spoke.

“We consulted with our advisors and in light of the Supervisor’s promises we withdrew the Article 78 and thereby relinquished certain legal rights. We did this in the spirit of cooperation with the Town as requested. However, within 72 hours of our withdrawal of this filing, the Supervisor notified me that the Town Board would no longer be supporting the project and our efforts to acquire Al and Heidi Krautter’s property,” Mr. Kane said.

Mr. Feiner never disclosed publicly that the quid pro quo for Shelbourne withdrawing its lawsuit was that the Town Board would “continue to support the project.”

Town officials are supposed to make land use decisions based on the law and the record before them in public hearings.  Making land use decisions pursuant to backroom deals and, apparently, as a quid pro quo for supposedly getting a developer to withdraw litigation, is a risky practice that could undermine the legitimacy in Greenburgh of all land use decision-making – and expose taxpayers who are already paying millions of dollars for the Fortress Bible settlement to have to pay even more.

Shelbourne contends that the Town Board’s decision a few weeks ago to rescind the negative declaration was the last straw.

According to Mr. Kane, once the Zoning Board had determined that variances were required for the Shelbourne project, he expected Shelbourne to apply for the variances and hope to persuade the board to grant them.

What he did not ask for, he insists, was a “negative declaration” – but according to Mr. Kane, it was the Town that came up with the idea of doing the “negative declaration” – just as Shelbourne was preparing to present its case to the zoning board — as part of a plan by the Town – not Shelbourne — to try to influence the Zoning Board to grant the variances.

“We were told by the Town that because the Town Board was the lead agency and supported our project that they would begin the SEQRA review process,” Mr. Kane said. “Again, while we understood that this was something that eventually had to happen, it was not something that we sought at this time.”

That, however, does not appear to be true.  A letter from Shelbourne’s lawyer to the Town Board dated April 8, 2016 states, “Shelbourne respectfully requests that the Town Board, as lead agency, complete the SEQRA review process for Shelbourne’s application and issue a negative declaration for this project.”

The letter was written only three days after he sent a letter to the Zoning Board seeking variances.  Shelbourne filed and was given a case number before the Zoning Board issued its formal decision that variances were needed.

In any event, the “negative declaration” findings which the town eventually unanimously adopted in early June appear to have been drafted, at least initially, by Shelbourne’s counsel.

Mr. Kane said the granting of the “negative declaration” was a “good thing for our project.” Shelbourne presented the Town Board’s “negative declaration” findings to the Zoning Board at its meeting in June, and on the basis for those findings, argued that the board should grant its variances.

However, the board also heard testimony from residents opposed to the project. In addition, the board heard legal arguments from Mr. Bernstein that the type of variances needed here were “use” variances for which Shelbourne, even with the Town Board’s “negative declaration” findings, had not submitted the evidence required by state law to obtain such variances.

The Zoning Board continued the hearing for its meeting in late July, but when it came time for the hearing to resume, Shelbourne asked for a one-month adjournment on the ground that the Town Board had rescinded the “negative declaration” and Shelbourne needed additional time to decide what to do.

But Mr. Kane made clear Thursday night that he believes the Town Board’s rescission of the “negative declaration” was unlawful.

“Despite having approved the ‘neg dec’ with a unanimous vote, not more than one month later, the Town Board reversed course noted to rescind their approval of the Net Dec and change the SEQRA process from a coordinated review to an uncoordinated review,” Mr. Kane said.

“Apparently this is unprecedented! This was done without any new information being provided which is required to make a change and it was done without providing to us, the applicant, a sufficient amount of time to review this change in direction,” he said.

Mr. Kane then suggested the basis upon Shelbourne would file suit: the town acted unlawfully and in bad faith in order to kill the project.

“There are standards and protocols for a municipality to take such an action and Greenburgh has followed none of these. This rescission, we believe, also signals to everyone involved in and aware of our project and intent to acquire Al and Heidi Krautter’s property that the Town Board no longer supports this project. This is after three years of telling us what a great idea this is and after telling the Krautters that the best use for this site is a senior housing community.”

Mr. Kane added that he was very concerned “about whether the deck is now stacked against the Krautters and FSP and will make it very difficult to see the project to a successful conclusion.”

However, rather than withdraw its application, Mr. Kane said Shelbourne would continue to seek variances before the Zoning Board, but in addition, “we are also considering all of our options.”

“There is an old saying that we are all familiar with, ‘Fool me once, shame on you. Fool me twice, shame on me.’ We do not intend to be fooled a second time,” he added.

The next hearing before the Zoning Board is August 11.

After Mr. Kane spoke, Mr. Feiner said some of the statement made were “inaccurate” but he didn’t say which ones.

If a legal proceeding is brought, and Mr. Feiner is required to testify, Shelbourne’s lawyers will probably make the court aware of the findings in Fortress Bible that Mr. Feiner was unable on repeated occasions to testify “credibly” – so much so, in fact, that his lawyer had to be instructed to explain to Mr. Feiner what it means to testify truthfully under oath.

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