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OYSTER BAY, NY-Seven months after the New York State Supreme Court ordered the town to issue a special use permit on the $500-million Mall at Oyster Bay, the court’s appellate division has reversed the decision. The court also upheld the town board’s demand for a supplemental environmental impact statement (SEIS) for a 750,000-square-foot mall. The developer, Bloomfield Hills, MI-based Taubman Centers, says it plans to appeal immediately.

“We are disappointed that the mall will continue to be delayed, especially during theseeconomic times when jobs are scarce and tax revenue is so desperately needed,” saysSteve Kieras, Taubman’s SVP of development, in a release. “All of the prior court decisions have affirmed that our environmental impact statement does not provide the Town with a legitimate basis for denying our application. We firmly believe that after years of having our position affirmed in the lower courts, this is clearly a flawed legal decision and we plan to promptly appeal this ruling to the New York State Court of Appeals.”

Attorney Joseph Giaimo, who represented the town board before the appellate court, tells GlobeSt.com, “We’re very pleased with the decision. It has finally been determined by the court that the town has been right all along.”

The dispute between Taubman and Oyster Bay, which began after the town board first denied a special permit for the project in 2001, has ended up in court several times before. In July 2002, the state Supreme Court vacated the town’s denial of a permit, and the appellate division affirmed the ’02 order in a March 2003 decision. Eight months later, the Supreme Court remitted the matter to the town board once again, only to have that decision reversed by the appellate court in a September 2005 ruling.

In June 2007, the state Supreme Court ruled that the town should consider Taubman’s proposal, a ruling that was followed a year later by the order to issue a permit. With the project once again on hold, Lisa Payne, Taubman’s vice chairman and CFO, says in a release that the developer is “evaluating the impact of this court decision on the company’s financial statements.”

Taubman has lined up anchors Neiman Marcus, Nordstrom and Barney’s New York for the mall, which would occupy the site of the former Cerro Wire factory and was scaled back from its original 860,000 square feet. The developer says it would be the first new major retail property on Long Island in more than 35 years.

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