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Crystal Beach condo project spawns $10 million lawsuit

The developer who abandoned plans for a beachfront condominium tower in the Crystal Beach neighborhood has begun civil litigation against the Town of Fort Erie and four Town Council members, seeking $10 million in damages.

In its statement of claim – an early step in legal proceedings – the Molinaro Group contends that the four Council members impaired progress on its planned Crystal Beach Gateway tower, leading the Burlington, Ont.-based developer to drop the controversial project.

The redevelopment plan for the area dated from 2001, when the town bought a 4-acre parcel and tore down a group of run-down cottages there. In 2009, the town chose the Molinaro Group to develop the property, and the two parties signed an agreement of purchase and sale in 2010. But the proposal ran into fierce opposition from neighbors who objected to a 12-story, 87-unit tower in their neighborhood.

Molinaro Group Crystal Beach Waterfront Inc. filed the statement of claim in Ontario Superior Court of Justice, naming as defendants four individual Council members: Robert J. Steckley, John Hill, Donald Lubberts and Paul Collard. The town was also named as a defendant.

In court documents, the Molinaro Group contends that the four Council members caused “unyielding interference” with the project’s progress, and hurt sales of the condo units. The Molinaro Group said as of November 2013, it had sales agreements for only 16 units; the agreement with the town called for the developer to have commitments for at least 45 units by a Dec. 31, 2013 deadline.

The Molinaro Group sought an extension, but the Council rejected the idea by a 4-3 vote. The Molinaro Group contends that in doing so, the town breached its legal obligation to grant a “reasonable extension.” The developer dropped the project at the end of 2013, saying that it could not be assured the condominium tower would proceed while meeting its own financial obligations.

The Molinaro Group says that it “suffered millions of dollars in out-of-pocket expenses, as well as lost profits due to the Crystal Beach Gateway project being aborted.” The developer says that it will “provide particulars of its damages in advance of a trial,” contending that its reputation was damaged.