Developer sues Westhampton Beach for $25 million in civil rights lawsuit

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The Village of Westhampton Beach has been served with a $25 million civil rights lawsuit filed by a developer who claims that his plans to build a 39-unit multifamily housing complex on Old Riverhead Road were illegally held up by village officials for almost three years.

Robert Muchnick, a Blue Point-based developer, filed his lawsuit in federal court on April 10—one day before a filing deadline—charging that Westhampton Beach Village officials repeatedly delayed approving his application by enacting a construction moratorium that targeted only certain areas of the municipality.

The lawsuit also charges that village officials threatened to require Mr. Muchnick to complete a lengthy environmental review, expected to cost at least $300,000, if he did not hire Village Planner Kyle Collins to create a new design for his project.

“I don’t know how much I’ve spent so far on this lawsuit,” Mr. Muchnick said this week. “But I have spent a lot more time than I should have. This should have been approved two years ago, when the market was great. In the interim, the market [has] gone down tremendously.”

All five members of the Westhampton Beach Planning Board, as well as Village Attorney Bo Bishop, declined to review or comment on Mr. Muchnick’s application for the complex at last Thursday night’s Planning Board work session, although it was listed on the agenda. Both the application and lawsuit were filed by Westhampton Beach Associates LLC, the firm owned by Mr. Muchnick.

As of earlier this week the village had not yet received official notice of the federal lawsuit, though there is record of the litigation on file in U.S. District Court for the Eastern District of New York in Central Islip.

Westhampton Beach Mayor Conrad Teller said he was surprised to learn of the lawsuit. “I was not expecting this lawsuit,” he said. “I thought we were down to the final wire and finally done with this application other than [Suffolk County] Health Department approval.”

Mr. Teller declined to comment, citing the lawsuit, but maintained that the 15-month building moratorium, which expired in July 2006 and targeted Old Riverhead Road and other areas, was a legal move taken by the village.

Village officials declined to say whether or not they would still review Mr. Muchnick’s application, originally submitted three years ago, now that he has filed a lawsuit. Since Mr. Bishop, the village attorney, is named as a plaintiff in the lawsuit, the Village Board, during a special meeting last Wednesday, April 23, hired Southampton attorney Wayne Bruyn to advise the Planning Board as it reviews the Westhampton Beach Associates application.

The Smithtown-based law firm Devitt Spellman Barrett LLP is representing Westhampton Beach in the suit filed by Mr. Muchnick. Jeltje DeJong, an attorney with the firm, could not be reached for comment this week.

After last week’s Planning Board meeting, Mr. Muchnick said he wasn’t surprised that board members had declined to discuss his application. He has enlisted attorney Andrew Campanelli, of Mineola-based Perry and Campanelli LLC, to represent him in his suit against the village.

Mr. Campanelli estimated that Mr. Muchnick has had to appear before various village boards between 50 and 75 times—a possible record for one applicant, he suggested—in the past three years in order to have his application processed. “Based on a personal whim alone, the village decided it would not allow my clients to develop their property,” Mr. Campanelli said.

He is the same attorney representing Rocco Lettieri, the developer who filed a $25 million federal rights lawsuit against the Village of Quogue last year after officials there indicated that they would not approve his development plans in that municipality. Last week, Mr. Lettieri and Quogue officials reached a tentative agreement that will allow the developer to build five single-family homes on Quogue Street and complete renovations to the Weathervane, an historic house that is part of the Inn at Quogue complex. That federal lawsuit has not yet been withdrawn.

Mr. Muchnick’s suit names current members of the Westhampton Beach Village Board, including Mayor Teller, Deputy Mayor Jim Kametler, and trustees Joan Levan and Toni-Jo Birk, as well as former Mayor Robert Strebel and former trustee Tim Laube as defendants. It also targets Mr. Bishop, Richard Haefeli, who served as village attorney for about 14 years until July 2006, and other past and present village officials.

Trustee Hank Tucker is the only current Village Board member not listed as a defendant. Mr. Tucker said he thinks he was not listed because he wasn’t in office when the moratorium was adopted.

Mr. Muchnick charges in his lawsuit that the previous Village Board—which included Mr. Strebel, Mr. Kametler, Mr. Laube, Mr. Teller when he was a trustee, and former board member Ridgie Barnett—illegally held up his application by enacting a moratorium that lasted from April 2005 until July 2006. The moratorium was extended twice, once in October 2005 for six months, and then in April 2006 for three additional months. The suit alleges that members of the current Village Board, excluding Mr. Tucker, continued to prevent his application from progressing.

The suit also alleges that village officials threatened to have Mr. Muchnick complete a lengthy environmental review of the project if he did not hire the village planner, Kyle Collins, to create a new design for the project. The extended review would have cost him $300,000 and at least a year of delay, according to the suit.

Mr. Collins could not be reached for comment.

Mr. Haefeli, who served as the village attorney until July 2006, said the lawsuit is a “frivolous action” and “not worth the paper it’s written on.”

“There is no factual basis as it relates to me that can support the claim that it’s a violation of civil rights,” Mr. Haefeli said.

According to the lawsuit, Mr. Muchnick began purchasing adjoining properties on the west side of Old Riverhead Road in August 2004 with the intention of constructing a multifamily residential development. Mr. Muchnick noted that he bought six parcels, totaling 6.6 acres, over a period of six months.

The suit further states that Mr. Muchnick’s civil rights were first violated on April 11, 2005, when the village imposed a moratorium to “‘take a breath’ and to undertake ‘a good study’ of the possibility of connecting a sewer line from an existing sewage treatment plant at Gabreski Airport to downtown Westhampton Beach Village.”

The moratorium lasted for 15 months and targeted parcels on the west side of Old Riverhead Road, the east side of Depot Road, and the north side of Montauk Highway. Mr. Muchnick argues in his suit that the ban targeted only his project because his application was the only one filed with the village at the time.

Mr. Campanelli said Mr. Muchnick’s First Amendment right to petition the government for the redress of grievances was violated numerous times by the village.

“In the realm of real property, if there are zoning restrictions, property owners have a right to apply for exemptions in the form of building permits or variances,” Mr. Campanelli explained. “Those are petitions seeking the redress of grievances.”

Mr. Muchnick’s application to obtain an exemption from the construction moratorium—a petition to the village that was denied—is one such example of the village violating Mr. Muchnick’s right to redress a grievance, according to Mr. Campanelli.

Mr. Muchnick was exempted from having to provide affordable housing in his complex following a recent change in the village’s multifamily zoning law, approved in April. The updated law gives developers incentives if they agree to offer affordable housing as part of a multi-unit development. The lawsuit describes the new affordable housing law, which allows developers to build up to six units per acre as long as they sell at least one at an affordable rate, as “yet another tool with which to delay and ultimately defeat [Mr. Muchnick’s] project.”

Paul Houlihan, the building administrator for the village, said Mr. Muchnick’s project would be exempt from the law. Mr. Houlihan declined to comment further due to the lawsuit.

The suit alleges that the village demanded that Mr. Muchnick post a $1.4 million performance bond before starting his project. A performance bond is money that the village holds to ensure that all items in an application filed with the Planning Board are completed. Mr. Houlihan said Mr. Muchnick has not yet posted a performance bond.

The lawsuit alleges that village code mandates performance bonds only if an applicant needs to subdivide property, and Mr. Muchnick’s property did not require any subdivision permits. “There is no provision in the code to do a performance bond for a site plan, which is what I have,” Mr. Muchnick said.

Mr. Houlihan said the village always requires such a bond for such projects. “It’s common on any multifamily application,” he said.

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