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Developer Philip Pilevsky Planning a "Destination Resort"
 in City of Long Beach, New York

By William Murphy, Newsday, Melville, N.Y.McClatchy-Tribune Business News

Oct. 29, 2006 - --A private developer is scheduled to take title tomorrow to a six-acre "superblock" site in Long Beach and break ground next year for a beachfront hotel and luxury condominium project facing the Atlantic Ocean.

The project has been two decades in the making, has included three different developers, went through six different city managers and two changes of political control of the City Council, and was scaled down as costs continued to soar.

Back in 1988, after the development was first proposed, Crain's New York Business exercised some prescience when it noted that "final details haven't been worked out yet."

A softening real estate market in the wake of the stock market crash of 1987 forced the pullout of a consortium led by Manhattan developer Robert Kremer.

City officials think the project is on track now, especially because the city already has received and allocated $3 million of the $4.5 million it expects from the sale of an unused strip of Shore Road that juts into the site.

And the city has condemned the six acres of vacant privately owned land under eminent domain, meaning it will be liable for the $26 million cost of the land if the project falls through this time.

"What happens if the [real estate] market turns sour? What happens?" city manager Edwin Eaton said last week in response to a question. "What happens is the city shuts down."

Eaton said that was one of the issues he considered in June when he was again offered the job of city manager, a post he had held for 20 years until his first retirement in 1999.

"This better be real this time," he said. Eaton also returned for a 10-month stint as city manager in 2001 as the City Council went through five other city managers since he first retired.

The current lead developer, Philip Pilevsky, said in a brief interview last week that he was closing on the property tomorrow and did not want to discuss details of his plans.

The previous developer, The Parkoff Group of Great Neck, was chosen by the City Council in 1998, but it was dropped by the city and lost a $150,000 down payment when it could not secure $50 million in financing.

In 2001, the council designated Philips International Realty, a firm associated with Pilevsky, as the developer.

That proposal, now estimated to cost $150 million to build, was in the pipeline in 2004 when Republicans took control of the City Council, long dominated by Democrats.

The council and its new president, James Hennessy, renegotiated the deal to reduce the size of the project to two 10-story towers rather than three, and to have the developer assume a greater share of the land-acquisition costs.

The council, which reverted to Democratic control in January, fine-tuned the project on Oct. 17 to include more hotel rooms. It now calls for 325 condominium units and 100 hotel rooms. The occupants of up to 75 condos would have the option to purchase hotel services.

The project also will have a health club/spa, meeting rooms and restaurants. People strolling on the beachfront boardwalk will be able to walk into the complex, and the towers will be separated by a wide public space that runs from the boardwalk to the rest of the city.

Eaton said it was his understanding that Pilevsky's group wants to create a "destination-type" hotel, where people would come for long weekends or vacations -- similar to Gurney's Inn in Montauk.

Larry Benowitz, 69, a civic activist who attends most City Council meetings, said he was disappointed at the large scope of the project but realized the need to raise revenue some way besides increasing property taxes, which went up 25 percent this year.

Various city estimates of the annual benefit to the city range widely, from $600,000 to $2.3 million.

"Doing nothing is not an option, and we've been doing nothing for 20 years," Benowitz said in an interview last week.

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Copyright (c) 2006, Newsday, Melville, N.Y.

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