Developer sues town for stalling $154M TOD project

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A Long Island developer has filed a lawsuit against the Town of Hempstead for not acting on its application to build a $154 million transit-oriented mixed-use building in Inwood. 

Two affiliates of Commack-based Heatherwood Communities LLC filed the Article 78 lawsuit last week in Nassau County State Supreme Court citing the town’s failure to comply with the process established in the Transit-Oriented Development District that Hempstead Town enacted in May 2019 for areas of North Lawrence and Inwood. 

Enabled by the town’s rezoning, Heatherwood has invested more than $30 million in property acquisitions and other costs since the end of 2021 towards its proposed project that would bring a five-story, 391,241-square-foot building to a 5.3-acre site on Lawrence Avenue between Wanser Avenue and Bayview Avenue, less than 100 feet from the Lawrence Long Island Rail Road station. 

The Heatherwood project, which would replace a school bus depot, aims to bring 309 rental apartments over about 20,900 square feet of ground floor commercial space and a garage parking lot to accommodate 427 vehicles.  

The town’s TOD District covers about 11.7 acres near the Lawrence LIRR station and about 9 acres near the Inwood LIRR station. The zoning allowed for the redevelopment of light industrial and manufacturing uses in the area to encourage a “mix of housing and commercial uses” that will “sustain vibrant flourishing hamlet centers,” according to the town’s plan. The TOD District also required that 20 percent of the housing be priced affordably for people making up to 60 percent of the area median income and rents no higher than 30 percent of a renter’s income, to which the Heatherwood project adheres. 

The Town of Hempstead Industrial Development Agency approved economic incentives for Heatherwood’s Inwood project in Dec. 2021. But even though the town’s IDA supported the plan and Heatherwood submitted its building permit application in Feb. 2022, the developer says the town still refused to act on it. In addition, the town failed to form the Design Review Committee that was supposed to review and fast track projects that complied with the new zoning. 

Instead, the Hempstead Town Board enacted a temporary building moratorium for the new Inwood and North Lawrence zoning areas in Sept. 2022 and extended it twice.  

The town board cited concerns that the requisite environmental impact statements conducted to establish the new zoning districts, and previously accepted by the town, failed to take a “hard look” at potential negative impacts on infrastructure, transportation, public safety and special districts. The board said the moratorium would give it time to consider “potential amendments and/or alternatives” to the zoning districts, according to the resolution, to “insure the health, safety and welfare” of the town’s residents. 

Though the moratorium, which wound up lasting 20 months, finally ended in June 2024, the Heatherwood application has yet to advance. In fact, as the moratorium expired, the town board introduced a resolution that would rescind all the new zoning districts it had created for Inwood and North Lawrence five years ago. That resolution is still pending. 

A town spokesman has yet to respond to requests for comment. 

Meanwhile, Heatherwood’s lawsuit claims that the town’s “delays and dilatory tactics” have caused the developer tremendous financial hardship. The lawsuit, filed by attorney Daniel Shapiro of Uniondale-based Ruskin Moscou Faltischek, who represents the petitioner, seeks to compel the town to form the Design Review Committee to review Heatherwood’s application and issue a building permit for the project. 

“Heatherwood fully expects that the court will compel the town to form the Design Review Committee and act on our long pending, fully compliant, applications, thereby unlocking new housing stock and the long-awaited revitalization around the LIRR station in Lawrence,” the developer said in a written statement.