Atlantic Beach compelled to change local zoning law under federal settlement following Chabad Lubavitch of Beaches lawsuit

The Village of Atlantic Beach agreed to revise its zoning laws after the federal government determined the village considers proposals for religious assembly sites less fairly than those for secular community spaces, according to a settlement announced Wednesday by the Justice Department.

A federal investigation concluded that the village’s code "treats places of religious assembly on less than equal terms with nonreligious assembly uses, in violation of the Religious Land Use and Institutionalized Persons Act of 2000," the settlement said. The village "denies that conclusion," according to the settlement, but agreed to alter its code and train employees on compliance with the federal law to "avoid the expense and risks of litigation."

The settlement came after a yearslong legal battle between the municipality and Chabad Lubavitch of the Beaches. The Hasidic Jewish organization sought to create a community and educational center in the village at the site of a former Capital One Bank branch, which the group purchased nearly five years ago.

In November 2024, as the conflict continued, the village’s board of appeals denied Chabad’s application for a special exception permit required under village code because the shuttered bank property was not zoned for religious developments, Newsday previously reported. The board cited parking and traffic concerns and proposed exterior modifications as grounds for rejection.

The village now has 90 days, as per the settlement, to eliminate the special exception permit that it required for places of worship within the zoning district that "covers the majority of village properties," according to a news release from the office of U.S. Attorney for the Eastern District of New York Joseph Nocella. Under federal law, local municipalities are prohibited "from imposing land use regulations that place unfair or discriminatory barriers on religious groups as compared to secular assemblies," Nocella said in a statement.

The village must pay for the mayor, zoning board officials and other employees to receive federally approved training regarding federal religious land use law and create a procedure for addressing any complaints that it violated such laws, according to the settlement.

Soon after Chabad purchased the shuttered bank for $950,000 in November 2021, the village attempted to acquire the property through eminent domain, Newsday previously reported. The religious organization filed a lawsuit to block the property’s seizure the following summer. That suit was settled November 2023, when the village agreed to forfeit its effort to acquire the property, plus pay Chabad $400,000 over a four-year period.

The organization again sued the village the following year after the zoning board of appeals rejected its special permit request, Newsday previously reported. The discovery process in that suit revealed text messages and emails among village officials that Chabad characterized as "antisemitic." That lawsuit was settled on July 29, 2025.