ATLANTIC CITY - For a city constantly shelling out money in lawsuit settlements, this victory is big on several levels.
City-hired attorneys recently managed to turn the tide of a lawsuit against the resort through threats of a countersuit, leading a Ventnor-based developer to not only drop its lawsuit, but pay the city to avoid further litigation.
The developer, Prestigious Homes, sued the city late last year after city officials fought to regain control of its two vacant blocks in the city's South Inlet. The city argued the developer broke its agreement with the city after consistently missing development deadlines.
Along with retaining the land, the city is scheduled to receive $330,000 from Prestigious Homes. The city will get most of the money, while $30,000 will go to the Atlantic City Housing Authority, according to a news release issued by the law firm of DeCotiis, Fitzpatrick, Cole and Wisler, which is contracted by the city.
The Housing Authority and City Council approved Prestigious Homes in August 2005 over three other developers for a tract bounded by Delaware, Atlantic, Connecticut and Pacific avenues. The developer offered just more than $14 million for the Housing Authority-owned land to build a luxury development of 92 townhouses and 160 condos.
A 2006 purchase agreement required Prestigious to close title with the authority by June 3, 2008. That deadline, along with previous financing and permit deadlines in April and May, was not met, officials say.
Members of the authority tried to extend the developer's deadline to the start of 2009, but council fought the move.
"We ... were frustrated with the changes to density and setbacks that were considerably different from the initial planning," said Councilman Bruce Ward, who also is a member of the city's Planning Board. "They felt they could come after us, but obviously we were right on track."
Officials with Prestigious Homes could not be reached Monday.
The Uptown Urban Renewal Plan has its roots in slum-clearance projects undertaken by the authority in the late 1960s. The authority leveled much of the South Inlet neighborhood in anticipation of new, upscale development.
But the development did not come for years, and the land - nicknamed "Pauline's Prairie" after former authority Executive Director Pauline Hill - languished. The urban renewal plan was apparently changed when first the Showboat Casino Hotel and then the Taj Mahal were built on part of the land in the 1980s. But other promised developments never came to fruition, and most of the oceanfront land remains vacant.
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