Anti-Hasidic bias claimed in suit over 2,600-home Lost Lake project

Posted By on January 2, 2023

A standoff over permits to start a massive housing project in the Catskills has erupted into a federal discrimination case, with the developer accusing town officials of conspiring to stop an influx of Hasidic families.

The lawsuit was filed by a group that spent $9.5 million in 2020 to buy the land and fully approved plans for Lost Lake Resort, a 2,627-home community that sputtered to a halt before any houses had been built. The development site takes up 3.3 square miles in Forestburgh, a rural Sullivan County town with only about 800 residents.

The suit follows Forestburgh's denial of several building permits for initial homes and a 10-month review of that decision by the town's Zoning Board of Appeals, which ultimately upheld it with a 35-page ruling on Nov. 15. Property owners Lost Lake Holdings LLC and Michconos Mazah LLC sued Forestburgh officials in U.S. District Court in White Plains on Dec. 16.

Standoff:Forestburgh officials and developer clash over permits to start 2,600-home project

Land sale:Developers buy Sullivan County land with approved plans for 2,600-home gated community

The inception:Developer plans Forestburgh resort

In their 90-page filing, attorneys allege the town is trying to thwart a once-welcomed project out of hostility to the Hasidic Jews likely to buy homes there. They denounced the zoning board review as a "sham" in which lawyers from the same firm represented both the town officials and the board that was weighing their permit denial.

"Plaintiffs were repeatedly denied a fair and impartial review of their appeal," attorneys Eric Treene and Steven Barshov wrote.

Town officials contend they denied permits because the new owners changed the nature of the project, which was envisioned as an upscale resort community in which many of the homes would be vacation getaways, not year-round dwellings.

In its ruling, the zoning board said that the developer proposed extensive changes and that "the totality of the changes is strong evidence that the housing development Applicant intends to build is materially different than the Resort Project that was approved."

The developer's attorneys counter that the town is grasping for excuses and that the project will be built as approved, including the 18-home golf course.

The case demands the town fairly review the permit applications and seeks an unspecified amount in damages. It alleges violations of the federal Fair Housing Act, the U.S. and New York constitutions and other state laws.

"In America no government may tell people where they are welcome to live and where they are not based on their religion, Treene said in a statement about the case. This has become an all-too-familiar experience for Orthodox Jews in many New York communities, and it must end.

The project was granted a zoning change in 2011 and consisted of 2,557 single-family houses, 30 cottages and 40 condominiums, along with an 18-hole golf course and other amenities. The community was to be built in seven phases with 400 homes and the first nine holes of the golf course in the first phase, approved in 2014.

Town officials cheered the development's start at a ribbon-cutting ceremony that year. The Dallas-based developer, Double Diamond Companies, spent millions building roads and installing miles of water and sewer pipes and drainage systems, according to the lawsuit. But after selling only about 150 housing lots, Double Diamond abandoned the project and put the property up for sale.

Mordechai Halberstam, a Rockland County builder, told the Times Herald-Record in 2020 he and his family had bought the Lost Lake property and planned to carry out the approved plans. He said they spent $13.3 million in all for the land and related assets, including mortgages Double Diamond held on 60 undeveloped housing lots that it had sold.

Barshov, one of the attorneys in the lawsuit, said in a statement that the developer had bought the project because all approvals were in place and building permits for the first phase could be issued at any time.

The only reason home construction is not occurring is because Town officials have made it crystal clear: Hasidic Orthodox Jewish developers and homeowners are not welcome in Forestburgh, he said.

Chris McKenna covers government and politics for the Times Herald-Record and USA Today Network. Reach him at cmckenna@th-record.com.

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Anti-Hasidic bias claimed in suit over 2,600-home Lost Lake project

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