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The city wants a judge to overturn a lawsuit that seeks to have city officials do a more thorough review of environmental issues related to the construction of an 11,000-square-foot Eckerd drugstore in the downtown business district.

In a response filed Wednesday, the city claims the suit, brought by residents to have a judge review the July 6 action taken by the Planning Board, was filed because members of the Chamber of Commerce of Olean and Vicinity, Inc. are dissatisfied with the Planning Board's decision.

The Chamber was formed about a year ago to represent about 140 local businesses, and several of its members, as well as the Chamber itself, have had to move out of buildings slated for demolition to make way for the drugstore.

The Chamber claims the Planning Board did not follow state law as it pertains to environmental issues. But in court documents, the city lists a number of environmental impacts reviewed by the board.

Some of those impacts -- aesthetics, community growth and neighborhood character, and the elimination of historic structures -- were not considered important enough by the board to justify an environmental impact study from Eckerd's representative, Benderson Development Co.

An Aug. 17 Planning Board decision concludes that the drugstore is allowed in the City Center Use District and is "not substantially contiguous" to the nearby Oak Hill Park Historic District.

Documents also show the 80-year-old Palace Theater, which would be demolished in the project, was ruled dangerous in 1996, a term city officials state is synonymous with "condemned."

Neither Benderson, nor its lawyer, Harold Halpern, have been available to answer questions about the case. According to Linda Shaw, attorney for the Chamber group, the response from Benderson was similar to the city's answer.

"We think we have a strong case," she said.

Ms. Shaw said she will produce evidence Monday showing that in the spring of this year the city's code enforcement officer certified that the Palace was structurally sound. In addition, minutes of the Planning Board's July 6 meeting also show the Planning Board was confused about the status of the building's code violations.

The city did not hold a public condemnation hearing or take other measures, including a requirement to notify tenants and neighbors that the building was dangerous and condemnation was under way, she said.

Mayor James P. Griffin said residents overwhelmingly support the Eckerd proposal and warned that the Chamber's dissent sends the wrong message to other potential developers.

"We need to do these projects and eliminate dilapidated buildings that can't command adequate rent. They are ruining the economy of this community," he said Thursday.

One resident, former Planning Board Chairwoman Carol Horowitz who runs a private planning/consulting business, disagrees and resigned from the board Thursday morning.

"Unfortunately, over the past months, I have come to the conclusion that you favor any new development, regardless of the cost to the neighborhood in which it occurs," said Ms. Horowitz in her resignation letter.

She stated "responsible developers" are willing to make reasonable changes to their projects, but said the mayor's attitude stifling full discussion of the issues will, in the long term, be detrimental to the interests of the city.

In response to Mrs. Horowitz resignation, Griffin said the board must put in place policies set by elected officials and should sometimes refrain from making changes in a project. He added he personally negotiated major changes to the Eckerd proposal prior to the Planning Board's review and final decision which made it acceptable.

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