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Would-be Seaside developer drops suit against Waterford P&Z member

Waterford — The developer who once held a contract to buy the historic Seaside property has dropped his suit against a Waterford Planning & Zoning Commission member, but the dispute between the two men may not be over.

In 2014, Mark Steiner proposed zoning regulations that would allow him to build an inn and other commercial developments on the 32-acre state-owned Seaside parcel, which once housed a tuberculosis sanatorium and then a center for the developmentally disabled.

Steiner had vied for 15 years to build on the property, and in 2010 signed his most recent contract with the state to purchase it for $8 million.

The latest proposal included a five-star resorts surrounded by a neighborhood of luxury condominiums.

But within weeks in September 2014, the Planning & Zoning Commission denied Steiner’s request for the zoning changes, Steiner filed an appeal of that decision in New London Superior Court, and Gov. Dannel P. Malloy announced that the state had terminated its contract to sell Seaside to Steiner.

Malloy said Sept. 30 that the property would remain in the state’s possession and be turned into a state park.

Planning & Zoning Commission member Dana Award, whose house abuts the Seaside property and whose wife was a plaintiff in previous litigation against Steiner, voted against the zoning changes at the Sept. 15, 2014, meeting along with one other member of the five-person board.

In August 2015 Steiner filed suit against Award in state court. Steiner argued in his suit that Award had a conflict of interest, and should have recused himself from the vote.

The case was moved to federal court the next month.

Seaside in Waterford LLC, which Steiner founded to develop the property, dropped its case against Award in federal court in a Dec. 21 filing.

But according to Lewis K. Wise, Steiner’s attorney, Steiner may file a new suit against Award soon.

“It was withdrawn only for strategic purposes,” Wise said Tuesday. “It may well get refiled.”

At the same time, Steiner’s appeal against the commission’s decision in state court is nearing an end.

Waterford Town Attorney Robert Avena filed a motion last month to dismiss the appeal, which has been pending in New London Superior Court since October 2014.

Because Steiner’s contract to buy the property was terminated, Avena argued, Steiner no longer has standing to pursue the appeal.

On Monday, Wise filed a response declining to object to Avena's motion.

“It will be dismissed. There’s no way we can oppose that,” Wise said Tuesday. “It is true that as a result of the termination of the contract, we no longer have standing.”

Another potential case, in which Steiner is seeking damages from the state for funds he spent on his development proposal and lost future profits, is still pending before the Office of the Claims Commissioner, Wise said.

Meanwhile, development of a master plan to develop the property as a state park is slowly moving forward, Department of Energy and Environmental Protection spokesman Dennis Schain said Tuesday.

The department’s work on the project, which currently consists of assessing the state of the site’s historic but crumbling buildings and clearing brush and vines off the property, will continue without regard for Steiner’s litigation, Schain said.

“Our charge from the governor was to take hold of this property and move forward, and make it available to the public and develop a plan for future,” he said. “We’ve just been continuing to do that.”

m.shanahan@theday.com

Twitter: @martha_shan

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