The Village of Atlantic Beach — touted as the “New Hamptons” — is scrambling to settle a federal suit accusing town leaders of trying to block a Lubavitcher Jewish sect called Chabad of the Beaches from getting property in the hot little hamlet, The Post has learned.

The religious discrimination lawsuit has stunned even longtime residents, who note a significant number of Atlantic Beach’s 1,800 year-round residents and summer homeowners are Jewish.

The only house of worship in the village is a synagogue — the Jewish Center of Atlantic Beach — serving a growing number of modern orthodox congregants

The Chabad of the Beaches bought vacant land on 2025 Park Street in November 2021 for $950,000, aiming to offer religious services, education, and programming to the broader Jewish community.

The site is one of the first buildings people see coming into the village from the Atlantic Beach Bridge — and used to serve as a Capital One bank before it became vacant two years ago. 

Village leaders hurriedly announced plans to block the Chabad of the Beaches acquisition by moving to take the property through eminent domain and build a community center of its own to house lifeguard operations.

That triggered Chabad in June to file a federal suit in Eastern District Court, alleging Atlantic Beach’s takeover smacked of religious discrimination — citing the First, Fifth, and 14th Amendments, as well as the Religious Land Use and Institutionalized Persons Act.

The Chabad also recruited heavyweight legal eagles known for defending religious freedom — including the Texas-based First Liberty Institute and Harvard Law School’s Religious Freedom Clinic along with the Washington, DC-based firm Sidney Austin.

A day after the Chabad complaint was filed, US District Court Judge Joanna Seybert issued a temporary restraining order stopping the Village from proceeding with the takeover.

And in September, she issued a preliminary injunction against the Village’s claim of eminent domain, saying “Defendants’ decision to acquire the Property by eminent domain will burden Chabad’s religious exercise by curtailing its outreach mission to the Jewish community.”

The village has become a desirable location for “Wall Street bros” who want access to a beautiful beach town that borders Queens — a much closer getaway than the Hamptons and just 25 miles from Manhattan

Atlantic Beach is on Long Beach Barrier Island, which it shares with Long Beach, East Atlantic Beach, Lido Beach, and Point Lookout, the southernmost point of Nassau County.

The Atlantic Beach Bridge connects the village to Far Rockaway.

Parties from both sides told The Post there’s a tentative settlement that would allow Chabad of the Beaches to operate community programming and religious services on Park Street in the village.

“There’s a settlement in principle,” said Jeremy Dys of First Liberty Institute, a co-counsel for the Chabad of the Beach.

“We’re just trying to wrap up the final little details,” he said, adding the agreement will allow Chabad on the Beaches to be members of the Atlantic Beach community.

Atlantic Beach Mayor George Pappas declared “nothing is final yet,” but asserted: “We’re working on a draft settlement.”

He denied that the legal fight over the property was motivated by discrimination against a Jewish sect. 

“It has nothing to do with [religious discrimination]. It was a tactic to get the property. We have a good relationship with the Atlantic Beach Jewish Center,” Pappas insisted.

A longtime resident said the village has run up at least $225,000 in legal costs on the issue.

Pappas declined to comment on legal costs.

Chabad of the Beaches director Rabbi Eli Goodman had warned village trustees during a Jan. 10, 2022, public hearing on the proposed eminent domain plan that the tactic against the Chabad would be problematic — and would be grounds for a religious discrimination case.

“There are a lot of religious liberties, there’s court procedures — the thing is a number of people, pro bono lawyers have said this is antisemitism,” Goodman said, according to the transcript of the hearing attached to the lawsuit.

“This is clearly something that we don’t even want to talk about and, therefore, this could go for many, many years in the courts,” he said.