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Scott Mollen

Development—City of Long Beach Ordered To Pay $131,292,386 Damages Based On Its Wrongful Revocation of Variances—City Allegedly Obstructed Development Since the Late 1980s—Breach of Contract—Due Process—Section 1983—Attorney Fees—Set Off Based on Settlement with Another Party—Damage Analysis

Litigation related to this matter has “lasted for 31 years so far.” The plaintiff developer had sued the City of Long Beach, its zoning board of appeals (ZBA) and its building commissioner in connection with disputes involving variances. The developer had contemplated building 432 residential units in four buildings. After one “tower,” (tower “A”), had been built, a dispute arose with respect to the other three towers. The developer’s suit was settled by a stipulation in 1989. The 1989 stipulation provided that the developer would apply for new variances to construct the remaining three buildings. The developer agreed to pay $200,000 to the city to fund related public improvements (utilities). The city agreed to begin construction of the utilities within two years after receiving the $200,000. The developer then had to apply for building permits (permits) within a certain time period.

The developer applied for the new variances. The ZBA granted them in 1989. The developer paid the aforementioned $200,000. However, the city did not install the utilities and asked for an extension of time. The developer granted the extension on condition that the developer’s time for applying for building permits was also extended. Those terms were embodied in an April 1992 letter. The corporation counsel, who represented all defendants, “consented and agreed to” the April 1992 letter and the letter was attached to a new stipulation, which was signed by counsel for all parties and “so ordered” by the Supreme Court.

During the next decade, the city did not install the utilities and the developer did not apply for permits. In 2002, the developer applied for a permit. In 2003, the city’s building department (DOB) issued the permit. However, the cooperative corporation (co-op) that acquired tower “A” opposed the new construction and asked the ZBA to revoke the permit. The ZBA revoked the permit, citing the developer’s failure to meet the schedule contained in the 1989 stipulation. The ZBA asserted that the deadline extensions in the April 1992 letter agreement were a “major change that…required a ratification by the ZBA after a public hearing.”

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