$3.75M settlement reached in 14-year lawsuit over thwarted Chester housing project
The town of Chester and its insurers have agreed to pay $3.75 million to settle a marathon court case over claims that town officials effectively killed a big housing project and left its developer broke by delaying and obstructing the proposal for years.
Under an agreement set to be approved by the Chester Town Board on Wednesday, the town would pay the late developer's widow $1.75 million in installments over 10 years, and two insurance companies would pay her $2 million. The federal lawsuit has lingered in court so long that the developer who sued the town in 2008 has now been dead for nine years.
Chester Supervisor Robert Valentine, who took office long after the development conflict, said Monday that the settlement was the best possible outcome for the town, given the unpredictability of a trial and the insurers' resistance to covering developer Steve Sherman's losses. The case initially had sought $31 million in damages for the thwarted Chester Golf plans, which began in 2000 with a proposal for 397 homes, a golf course and an equestrian center.
"It's a hard call, but I have to end it somehow," Valentine said of the settlement.
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The suit contended that town officials derailed the project with a development moratorium, zoning changes and other steps that ultimately caused Sherman to lose the 398-acre property through a bank foreclosure. He had changed his plans four times and cut the number of proposed homes to 227, but ran out of money with the project's environmental review nearly completed, according to the lawsuit.
Sherman contended in his ensuing suit that town officials and residents opposed his project at least partly out of fear that his development would become a Hasidic community.
Michael Diederich, the Stony Point attorney who brought that case and represented the Shermans throughout the litigation, said Monday that the developer had proposed a project that met local zoning rules and yet he was "stymied for over a decade thru regulatory abuse, losing his entire investment in the process."
"For the sake of Mr. Sherman’s widow and family, I am happy that we were finally able to reach a settlement with the Town, as the economic and emotional toll on Mr. Sherman’s family was terrible," Diederich said.
T.D. Bank seized the property shortly before Sherman died from cancer and sold it for $3.1 million in 2014 to the nonprofit Open Space Institute, which then sold it to the Palisades Interstate Park Commission. The undeveloped tract has been part of Goosepond State Park for six years.
Nancy Sherman took her husband's place as plaintiff after his death. Under the settlement, Selective Insurance Company of New York and Selective Way Insurance Company each will pay her $1 million, and the town must pay her $87,500 every six months until March 2032.
Sherman will share the proceeds with Laroe Estates, a Monsey developer that has said it contracted with Sherman in 2003 to take over his project after the town approved it, and gave him $2.5 million to support the plans. The agreement didn't disclose how much of the settlement Laroe would get.
Laroe had won a separate lawsuit to intervene in the Sherman case as an aggrieved party. That side litigation, which made its way to the U.S. Supreme Court in 2017, was one of several reasons the Sherman case took so long to resolve.
Chris McKenna covers government and politics for the Times Herald-Record and USA Today Network. Reach him at cmckenna@th-record.com.
This article originally appeared on Times Herald-Record: Chester reaches $3.75M settlement in Sherman development case
