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Developer alleges anti-Hasidic bias in permit dispute

Sullivan County town approved 2,600 homes, but won’t allow construction

974 Cold Spring Road (Zillow, Getty)
974 Cold Spring Road (Zillow, Getty)

A Rockland County developer is alleging religious discrimination was the reason a Sullivan County town denied it permits for a large housing project.

The entities behind the Lost Lake Resort project in the Catskills filed a federal lawsuit against the tiny town of Forestburgh, the Times Herald-Record reported. The land is owned by Mordechai Halberstam, who bought it and related assets for $13.3 million in 2020.

The lawsuit seeks a fair review from the town for permit applications and unspecified damages. It also alleges violations of the Fair Housing Act and other national and state laws.

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Plans have already been fully approved for 2,627 homes at the site, which is more than three square miles. But after selling 150 housing lots, the previous developer, Double Diamond Companies, abandoned the project without building any.

Double Diamond put the property on the market in 2019 for $22 million but settled for just $9.5 million from Halberstam.

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The town denied several building permits for the community’s initial homes. The Zoning Board of Appeals upheld the decision in November after a 10-month review, according to the Times Herald-Record.

The lawsuit claimed the rejection of building permits stemmed from a bias against Hasidic Jews, who the developer believes would likely buy the homes. The lawsuit also objects to the fact that the same law firm represents both the town and the zoning board.

Town officials said they denied the permits because the nature of the project changed. While Double Diamond planned an upscale resort community, Halberstam’s would be a year-round enclave, one that would drastically increase the population of the 800-person town.

Attorneys for the developers said the project will be the same one that was approved, including 2,577 home lots, 30 cottages, 40 condo units and an 18-hole golf course.

There would also be a boat dock, a 1,000-acre wildlife preserve, private access to rivers and streams, a clubhouse, a restaurant and bar, an 8,000-square-foot conference center, a spa and fitness center, a pool and bathhouse and tennis courts.

The plans for the site represent one of the largest subdivisions ever approved in the state.

— Holden Walter-Warner

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CatskillsDiscriminationReal Estate Lawsuits