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Scott E. Mollen Scott E. Mollen

Developer Plausibly Alleged Opposition to Low-Income Housing Project was Based on Racial Animus—Fair Housing Act, Breach of Contract and Tortious Interference Claims Sufficiently Stated—Breach of Implied Covenant of Good Faith and Fair Dealing and Fraudulent and Negligent Misrepresentation Claims Dismissed—New City Administration Allegedly Sabotaged Project Approved by Prior Administration

A plaintiff developer (developer) sued the City of Newburgh (City) and its city manager under the federal Fair Housing Act (FHA) and several New York state laws. The suit arose from the developer’s “failed attempt to build a mixed-use commercial and residential building for low-income residents….” The defendants moved to dismiss pursuant to the Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The court granted and denied parts of the motion.

In 2011, the City solicited proposals from developers to redevelop an abandoned city property. The property consisted of 17 city owned parcels and 1 privately owned parcel. After submitting a proposal which included affordable housing, developer was designated by the City as its “preferred developer” for the project. The developer and the City thereafter entered into a development agreement (agreement).

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