$70 million Hempstead Harbor Island project to proceed after court ruling

Hempstead, NY A recent decision by the Appellate Division, Second Department of the New York Supreme Court ruled that the town’s 2013 restrictive covenant against the Harbor Island development project is “invalid and unenforceable.” The Appellate decision removes one of the final hurdles for Blue Island Development, LLC and Posillico Development Company at Harbor Island Inc. to remediate the 11-acre site and build 172 residences.

“The lengthy legal proceedings finally have come to a conclusion and now we can begin to work with the town officials and develop our property and boost the local economy,” said Posillico Development president Michael Posillico. “Although the town’s legal actions have caused unnecessary delays, we’re ready to remediate and develop the site to the highest standards that will bring in new tax revenue and enhance the whole community.”

In 2007, Blue Island Development, and Posillico Development at Harbor Island Inc. applied to the town board to develop a $70 million, 172-unit residential waterfront project. In March 2008, the town granted petitioners’ application, however, such grant was subject to several restrictive covenants, including one that required all 172 units in the project to be sold as condominiums only.

The developers applied to the town to modify the Restrictive Covenant in 2010 and again in 2013, to allow for rental units as well as condominium units, on the ground that the Restrictive Covenant rendered the waterfront project economically unfeasible in the wake of the 2008 stock market crash, but the town refused.  Over the following three years, the Supreme Court, Nassau County and the Appellate Division, Second Department both ruled against the town.

In its ruling, the Appellate Division noted that the developers had demonstrated that Hempstead’s restrictive covenant was “of no actual and substantial benefit to the town,” and officials had “offered no explanation to rebut this showing.”

“This decision will allow a Brownfield to be transformed from a blighted eyesore into a magnificent residential project,” said Mitchell Pally, CEO of the Long Island Builders Institute.  “The Long Island Builders Institute urges the Town to work with the developer and move this project with all expediency.”

The developers intend to fully proceed to build their high-end, luxury waterfront project at Harbor Island and will work in cooperation with the town to secure additional approvals – including a height variance, site plan approval, and building permits – as may be required to bring the entire waterfront development to fruition.

Before construction of the development can proceed, the property must be remediated to the standard set forth in the project’s Remedial Action Work Plan as approved by the State Department of Environmental Conservation’s “Brownfield Cleanup Program.” 

The deadline to meet the cleanup obligations is December 31, 2017.

“The residents around Harbor Island have had to live next to this eyesore for over fifty years,” said Angelo Balbo, who lives directly across from Harbor Island.  “I’m glad that this luxury development will finally move forward without delay.”

The developer has spent much time and effort over the past two decades to work with town officials and bring about the cleanup and restoration of the site. 

“I look forward to sitting down with the town supervisor and council members to discuss the timeframe for site remediation and construction,” said Posillico. “This project is long overdue.”