Town settles federal bias lawsuit by developers of 431-home Greens at Chester project

Times Herald-Record (Middletown, NY)

Feb. 2—CHESTER — Town officials and developers of the 431-home Greens at Chester project have struck a deal that ends a federal discrimination lawsuit against the town and allows construction to continue with limits on home sizes and other prescribed terms.

The 32-page settlement, posted with related documents on the Town of Chester website, is set to be approved by the Town Board on Tuesday and brought before a judge on Thursday. After months of negotiations, the agreement offers the developers assurances they can proceed without interference while sparing the town any damages and granting concessions such as the size restrictions.

"I think we've done the best that we can do for the town, and we're getting out of the litigation," Chester Supervisor Robert Valentine said on Monday.

Livy Schwartz, one of the project's developers, said he and his partners accomplished their goal by clearing a path for them to build and begin realizing a return on their investment. In doing so, they accepted the size limits and dropped the damages they had sought for what they alleged were unwarranted demands by the town and delays.

"It was never about money," he said. "We didn't want to stick the town residents with a bill for mistakes that other people made."

The developers had sued both the town and Orange County in 2019, alleging that officials denied permits and posed other obstacles to block a fully approved development plan because they believed it would spur an influx of Hasidic families. The original complaint stretched for 101 pages and was filled with quotes from residents and officials at public meetings to support the bigotry claims.

State Attorney General Letitia James, concurring with those allegations, intervened in the case in 2019 on the developers' behalf and remains a party to the case. Her office is negotiating its own settlement with town officials and their attorneys.

Orange County settled with the developers in November by agreeing to defer any decisions about the quality and adequacy of the development's wells to two state agencies, without influencing that evaluation.

Neither the town nor county acknowledged wrongdoing or paid damages under their deals with the developers, who had sought $100 million in compensatory and punitive damages. Their case alleged the town and county had violated the Constitution, federal Fair Housing Act and state laws.

Eighteen homes — all of them semi-attached units in nine duplex buildings — already are under construction. The town began issuing permits for those homes in September, saying then that the designs complied with the town's approvals and didn't raise the size disputes that plans for fully detached units had done. The developers also had satisfied another objection by posting a bond for future infrastructure.

Under a decision in October in a separate lawsuit, the town's previous insurer must cover the town's legal bills for the Greens at Chester case, estimated to total about $375,000. The insurance company — Allied World Assurance Co. — has appealed that ruling, and the town has sued the insurer to force it to pay those bills while the appeal is pending.

The development site takes up 113 acres off West Avenue and Conklingtown Road, next to the Whispering Hills condominium complex. Schwartz said he expects the entire project to take four to five years to complete, with the first units ready for occupancy by the end of this summer.

One concession for the town was that the developers agreed to sign a statement supporting the town's plan to impose a tax on property sales to raise funds for open space preservation. Their lawsuit had described that effort as a tactic to stop new housing for Hasidic families — and Gov. Andrew Cuomo then invoked that allegation when he vetoed a bill in 2019 that would have allowed the tax.

In the settlement, the developers pledged to support preserving open space through various means, including "the judicious and non-discriminatorily applied use of public tax revenue to purchase open land to be preserved for public use."

Another concession was that the developers agreed to try to replace 32 homes in the project with a commercial development, without specifying what that would be or guaranteeing it would come to fruition. Town officials wanted a business component to generate property tax revenue.

Schwartz said the deal enables his team to build homes that are large enough to be profitable and provides security against official interference. It details each step in the project to leave no doubt, requires both sides to act in good faith and retains the court's jurisdiction to settle any disputes that may arise over the terms.

"We tried to specify as much as we can," he said.

He said he and his partners accepted size restrictions that they felt were not part of the town's approvals but that they could accommodate in their business plan.

Valentine said the agreement that detached homes take up no more than 36 percent of each building lot on average was a sharp drop from the roughly 80 percent lot coverage the developers had proposed. The result will be an average home size of 2,700 square feet, he said.

Town officials had denied any discriminatory motives from the outset of the case, saying they had denied permits strictly because the proposed homes were larger than approved and all infrastructure work needed to be done first.

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