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Greenburgh Agrees To Pay Millions To Settle Property Dispute

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May 21, 2021

By Barrett Seaman–

A case involving an opportunistic real estate developer, a clerical error by the Town of Greenburgh, its insurance company and four cloistered nuns came to an end on Friday after all parties signed a settlement and a judge dismissed the remaining related court cases.

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Left holding the bag was the Town of Greenburgh, which agreed to pay the real estate company, S&R Development Estates, $9.5 million in compensation for lost capital, appreciation and sales proceeds. Separately, the court directed that National Union Fire Insurance Company pay Greenburgh $2,750,000, leaving the Town with a net bill of $6,750,000. Greenburgh has already paid out more than $4.2 million in legal costs in the case.

In its defense before the court of public opinion, the Town is pleading that it was acting on behalf of three constituents: supporters of the Greenburgh Nature Center, whose largely wooded 33-acre property abuts the contested lot, the Sisters of the Blessed Sacrament, a Catholic order whose sanctuary also borders the property, and residents of the unincorporated community of Edgemont, who feared the impact on their school district.

Link to this video in which the Town makes its case:

“Land use controversies are always difficult,” the Town Board explained in a public statement prepared in advance of the court’s final approval of the settlement. “Local governments try to balance the interests of residents who are concerned about quality of life and character of community with the rights of landowners. Most of the time we are able to reach a good compromise. Sometimes, we’re not.”

The controversy over the fate of 2.3 acres off Dromore Road flared up in 2006 when S&R purchased the property for $1.4 million, a price consistent with single family home zoning, and immediately announced they intended to build a 45-unit apartment complex. The company based its right to do so on what was a Town of Greenburgh clerical error: its zoning map incorrectly placed the property in a high-density zone the Town says was intended to have been single-family.

That did not sit well, either with the Town, which wanted to preserve what was left of the open land around the Nature Center, or with the four Sisters of the Blessed Sacrament, the last of a larger contemplative order living a cloistered life on 6.7 acres next door. While the nuns didn’t discover the development scheme until 2013, they filed a lawsuit to stop it, basing their claim on a century-old covenant that prohibited such development without the consent of the order.

S&R counter-sued the nuns for $26 million, claiming that the covenant was rendered void in 1980, when the 120-unit Scarsdale Woods condominium complex was built next door. They later offered to donate the land back to the Sisters—provided the Town concede that the property was zoned for high-density building. That would have brought the value of the land from $1.4 million all the way up to $10 million, giving the developer a whopping profit in the form of a tax break for the donation.

Meanwhile, S&R was in a legal battle with the Town of Greenburgh over the zoning error, which the Town attempted to correct ex post facto—a position the lower courts rejected. For most of the case’s history, the Town’s alliance with the nuns was its saving grace—until this past January, when the Catholic Diocese of New York, which oversees the Sisters, stepped in and accepted an undisclosed payment from S&R to settle their dispute.

Without the nuns, the Town entered into arbitration to settle the case. “Although we felt that we had a good case and would prevail in the end,” the Town said, “it became clear that the potential financial jeopardy to the town, should we have lost at trial, could have been significantly greater than the settlement, a risk that we felt we could not take.”

Meanwhile, S&R has sold the property to Wilder and Balter Properties of Chappaqua, a developer specializing in affordable and workforce housing developments, which is what they apparently plan to build on the site.

Eventually, the bill for this settlement will fall to Greenburgh taxpayers. But the Town Board has decided to limit the liability to residents of unincorporated Greenburgh and not the six villages, including the rivertowns. “Since this is a land use matter and the villages have their own land use boards,” said Supervisor Feiner, “I don’t think it would be fair to have the villages contribute.”

The loss was the second in a major zoning dispute for Greenburgh, which had to pay the Fortress Bible Church a net (after insurance) of $5.5 million for alleged religious discrimination in 2014 over a disputed attempt to build a 500-seat chapel and a school on Pomander Drive.

The timing of the S&R settlement is particularly unfortunate for Town Supervisor Paul Feiner, who faces a primary challenge from Tasha Young on June 22nd.

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