Opposing Municipal Approvals– Proximity Matters

Land Use

Two recent decisions from the Appellate Division, Second Department have sent a clear message to individuals and organizations who seek to annul local municipal approvals: Proximity matters.

In Radow v. Board of Appeals of Town of Hempstead, the petitioners, who lived .69 miles away from the subject beach club, sought to annul a determination of the Board of Appeals issuing certain variances to the beach club owner Atlantic Beach Land Company LLC, arguing that the proposed construction would lead to overcrowding and congestion. 989 N.Y.S. 2d 914 (2d Dept. 2014). In Riverhead Neighborhood Preservation Coalition, Inc. v. Town of Riverhead Town Board, the petitioners, who resided at distances ranging from approximately .25 – .38 miles from the subject project, challenged the proposed construction of a regional shopping mall located in the Town of Riverhead based on traffic and environmental concerns stemming from the development. 2013 WL 801040 (2d Dept. 2013).

In both cases, the Second Department affirmed dismissal of the proceedings holding that the petitioners in each case lacked standing to challenge the approvals.  In order to establish standing, a petitioner must show that “he or she would suffer direct injury different from that suffered by the public at large”.  See Radow.  “Injury-in-fact” may be presumed by demonstrating close proximity to the subject property.  In the absence of such a showing, the petitioner must demonstrate the existence of an actual and specific injury which is distinguishable from the injury suffered by the community at large.

The petitioners in both cases failed to establish an “injury-in-fact” and the court found they lacked standing to challenge the municipal approvals.  In Radow, the petitioners were not entitled to a presumption of injury because they lived more than a half mile away from the subject property (which was not visible from their residence) and the court found their overcrowding and congestion concerns to be purely speculative and not specific or distinguishable from the concerns of the community at large.  In Riverhead Neighborhood Preservation Coalition, the individual petitioners resided slightly closer to the proposed development (.25 – .38 miles away), but the Second Department still held that they did not live close enough to be afforded a presumption of “injury-in-fact” since the proposed mall would not be visible from their homes.  Furthermore, the petitioners in both cases failed to prove that the traffic and environmental impacts from the proposed developments would cause them a specific injury distinguishable from those suffered by the community at large.

The question becomes, how can a petitioner satisfy the presumption of “injury-in-fact”, based on proximity alone?  The Second Department has held that living across the street from a proposed site is sufficient to grant the presumption, as is a 700 foot distance where the two lots border one another. Village of Chestnut Ridge v. Town of Ramapo, 45 A.D.3d 741 90 (2d Dept. 2007); Gaona v. Town of Huntington Zoning Board of Appeals, 106 A.D.2d 638, 638-39 (2d Dept. 1984).  The Third Department however has held that 530 feet is too remote to grant a presumption of “injury-in-fact”.  Oates v. Village of Watkins Glen, 290 A.D.2d 758, 760 (3d Dept. 2002).

Unfortunately, there is no bright-line rule or magical distance a petitioner must be located from a proposed development to have standing to challenge municipal approvals.  However, we do know that in Radow and Riverhead Neighborhood Prevention Coalition the Second Department was particularly concerned with the subject projects not being visible from the petitioners’ homes, as well as the absence of any injuries specific to the petitioners (e.g. safety, noise, traffic, pollution, or decreases in property value). Furthermore, even if a petitioner is able to establish an “injury-in-fact” and is found to have standing, this merely serves as “the admission ticket to judicial review” and does not guarantee success on the merits of petitioner’s claim.    Sun-Brite Car Wash, Inc. v. Board of Zoning and Appeals of the Town of North Hempstead; Allen Avionics v. Universal Broadcasting Corp., 69 N.Y.2d 406, 416.  Thus, after a petitioner has cleared the standing hurdle, they must also be able to show that the approval granted by the agency was arbitrary, capricious, or is affected by some other legal infirmity in order to have it set aside.

The author acknowledges Michael J. Barone, Jr., J.D., for his contribution to this article.

Posted by Nick Cappadora

Court of Appeals Redefines what Constitutes a License – Potential Benefits for Owners of Commercial Property

Land Use

For at least 150 years, New York law has defined a license as “the authority to enter on the land of another, and do a particular act or series of acts, without possessing any interest in the land.” See Dolittle v. Eddy, 7 Barb. 74 (Supreme Court, New York County, 1849). That all changed when earlier this year, in Union Square Park Community Coalition v. New York City Department of Parks and Recreation, the Court of Appeals expanded what constitutes a license agreement.

Unlike a tenant, who obtains the exclusive right to use and occupy the leased premises in exchange for the payment of rent, a licensee obtains no interest in the land, only a revocable privilege to use another’s land temporarily for a specified fee. In Union Square, the court approved an agreement between the City Parks Department (the “Department) and a private corporation permitting the corporation to operate a seasonal restaurant in the Union Square Park pavilion. The agreement was for a 15 year term with an annual “license fee” of $300,000.00 in the first year, increasing to about $450,000.00 in the final year, or 10% of the annual gross receipts, whichever amount was greater. The agreement also obligated the corporation to make capital improvements totaling $700,000.00.

In holding that the agreement constituted a license, and not a lease, the court relied upon the following factors: (1) the Department retained significant control over the daily operations of the restaurant including the months and hours of operation, staffing plan, work schedules and menu prices, (2) use of the premises would only be seasonal and not exclusive as the restaurant was required to make outdoor seating available to the public during the summer months, and most importantly, (3) the agreement broadly allowed the Department to terminate the license at will, as long as the termination was not arbitrary and capricious.

The court’s ruling in Union Square conflicts with its earlier precedent in Miller v. City of New York, a case with facts very similar to Union Square.  In Miller, the court held that a purported license agreement between the City of New York and a private corporation, allowing the corporation to construct a golf-driving range with accessory shops and a parking lot on public park land was, in fact, a lease. The agreement required the company to pay a license fee to the city based on a percentage of gross receipts for a 20 year term and the Parks Commissioner held certain “revocable” termination rights. Based on these facts, the Miller court held that the purported license agreement was “as a matter of law and on its face…a lease and not a mere revocable license.”

Contrary to the holding in Union Square, the Miller court held that controls such as “price, hours of operation and choice of employees, etc… are no more than what would be reasonably demanded by a careful owner against a lessee for such a business and for so long a term.” The Miller court also held that a termination clause which is not revocable at the licensors pleasure is not truly exercisable “at will.”

In Union Square, the restaurant’s occupancy is exclusive with respect to the kitchen and bar facilities (the only exception to exclusivity being certain outdoor seating in the summertime), and, as noted in Miller, controls over the restaurants hours of operation, prices and staffing do not necessarily turn a lease into a license. Finally, as in Miller, the agreement with the restaurant in Union Square is not truly terminable “at will,” as the agreement forbids any termination by the City of New York that is “arbitrary and capricious.” Thus, any decision by the city to revoke the restaurant’s license would be subject to judicial review and possibly require the city to pay damages if such revocation is found to be arbitrary or capricious.

Commercial property owners may stand to benefit immensely from the court’s ruling in Union Square as it provides the authority to grant licensees (a) more exclusive use and possession of the licensed premises without granting licensees an interest in the property, (b) lengthier terms than typically granted to licensees before Union Square, and (c) charge license fees that more closely resemble rental payments in a lease agreement. Another potential benefit to property owners is that license agreements give owners the right to remove undesirable licensees without resort to the lengthy, costly, and often frustrating litigation required to evict a tenant in a typical landlord/tenant dispute.

Unless the Union Square decision is limited to its particular facts, the Court of Appeals may have inadvertently changed the landscape in which real estate attorneys draft and negotiate licenses for the use of commercial property.

To read the decision in its entirety click here.

 

Posted by Nick Cappadora

A Cure for the Plight of Blight – The Land Banks Community Revitalization Initiative

Land Use

The New York State Attorney General’s office is now accepting applications for $20 million in grants which will be made available to carry out a range of vital community development projects including the demolition of blighted, vacant, and abandoned properties statewide.  Funds are only available to legally designated Land Banks, formed under the New York State Land Banks Act of 2011 (the “Act”)

The Act was promulgated under a new article 16 to the not for profit corporation law and it allows municipalities to establish land banks for the purpose of acquiring real property that is tax delinquent, foreclosed, vacant, or abandoned.  Once a municipality has established a land bank, they can design, develop, construct, demolish, reconstruct, rehabilitate and otherwise improve upon banked real property.

As stated in the Act, “there is an overriding public need to confront the problems caused by vacant, abandoned and tax-delinquent properties,” that resulted in large measure from the mortgage foreclosure crisis.  Through the grants available from the Attorney General’s office, communities can use land banks as a tool to facilitate the return of vacant, abandoned, and tax-delinquent properties to productive use, which benefits the public and the State as a whole.

The massive spike in foreclosure filings in the wake of the mortgage crisis has left local municipalities footing the bill for maintaining deteriorating properties. When condemned buildings become so dilapidated that they endanger public safety, local Towns and Villages often bear substantial legal fees and demolition costs to raze them.  Municipalities dealing with these ballooning line items in their budgets should strongly consider applying to secure funds they can use to acquire abandoned, vacant and/or blighted properties and redevelop them in ways that benefit the surrounding community.

In total, the Community Revitalization Initiative will provide Land Banks in New York State with $33 million in grants to promote these community revitalization efforts.  Applications are now being accepted for the second round of funding, and must be submitted electronically to the Attorney General’s Office by 4 p.m. on September 19, 2014.

A mandatory conference call hosted by the Attorney General will be held for all applicants on August 20, 2014.  For more information on the application process click here.

For more information on the New York Land Bank’s Act click here.

 

Posted by Nick Cappadora

Landmark Preservation Commission Approves Park Avenue Historic District

Land Use

After lengthy public hearings on the proposed Park Avenue Historic District in Manhattan’s Upper East Side, an interesting coalition of supporters came together to preserve sixty-four (64) buildings in a district which  runs up Park Avenue from the northeast corner of 79th Street to 91st Street.  Among the likely supporters of the initiative were various preservationist and landmark conservation associations along with the American Institute of Architects, members of the New York City Council, Community Boards, and several religious organizations located within the district.

An unlikely proponent of the historic designation is Toll Brothers, a prominent real-estate development firm which recently demolished two pre Civil War era homes located within the Historic District to make way for a new development located at 1110 Park Avenue.  The razing of the two historic homes sparked outrage within the community and rallied bastions of support for the recently designated Park Avenue Historic District.  Rising from the rubble where the two historic homes once stood is Toll Brothers’ sixteen story building containing luxury condominiums which will reportedly fetch a total value asking price of $176 million.  Ironically, Tolls Brothers now stands to gain the most from the creation of the historic district.

Oddly enough, preservationists say that developers often come to embrace the creation of historic districts as long as their economic interests are secure.  Approximately 27.7% of Manhattan’s buildings are located within historic districts. Proposals to alter or develop buildings located within historic districts fall within the jurisdiction of the Landmark Preservation Commission (the “LPC”) and are subject to the LPC’s approval.  Once a building falls within a historic district, the LPC may impose restrictions and limitations to any proposed development or alteration.  This could seriously limit potential profits from development and can create uncertainty as to the future potential of existing buildings.

On the flip side, being located within a historic district could give recently completed developments, like 1110 Park Avenue, a massive leg up on the competition.  Future developments within the Park Avenue Historic District are subject to the LPC’s rules and approval, making it significantly more difficult to redevelop properties within the district.

Where and when the next historic district will be created in New York City is uncertain.  What is certain is that the historical designation of property affects its present and future values.

Follow our blog for updates on these matters and contact us if you would benefit from learning more about the zoning designation of your property.

 

Posted by Nick Cappadora

When Technical Expertise is Required to Respond to A Freedom of Information Law Request

Municipal Law

A municipality or public agency’s lack of technical expertise is not a valid reason for denying of a Freedom of Information Law request.  Instead, such municipality or agency is required to seek the services of a third party having such expertise in order to produce a response.  See  Matter of County of Suffolk v. Long Island Power Authority, 2014 NY Slip Op 05540 (2d Dept.).  This principle comports with the public policy behind Freedom of Information Law (Public Officers Law Art.6; hereinafter “FOIL”)  that ”‘government is the public’s business and that the public, individually and collectively and represented by a free press, should have access to the records of government in accordance with the provisions of this article’ [citations omitted].”  Suffolk v. LIPA, 2014 NY Slip Op 05540.

In 2011, Suffolk County filed a FOIL Request with Long Island Power Authority (LIPA) seeking certain electronically stored documents and records.  Id. LIPA denied the request, stating that “to the extent that any relevant records existed, they could not be accessed with reasonable effort, as LIPA no longer had the technology to retrieve them.”  Id.

Thereafter, Suffolk County commenced an Article 78 Proceeding to review LIPA’s denial of its request.  In that proceeding, LIPA asserted that “the requested documents were stored on back-up tapes that had been created using now-outdated technology . . . [;] [and further,] that restoration of the documents would entail a long and tedious process that could potentially close down LIPA’s computer operations.”  Id. In response, Suffolk County stated that “technology existed to retrieve the requested documents, and that outside service providers could be hired to perform the task if LIPA did not have the technical ability to do so.”  Id. Agreeing that LIPA’s denial of the request was proper, the Supreme Court dismissed the petition.

On appeal, the Appellate Division found that “[while] FOIL does not ‘require any entity to prepare any record not possessed or maintained by such entity’ [citations omitted] . . . , ‘[a]ny programming necessary to retrieve a record maintained in a computer storage system and to transfer that record to the medium requested by a person or to allow the transferred record to be read or printed shall not be deemed to be the preparation or creation of a new record’ (Public Officers Law § 89[3][a]).”  Suffolk v. LIPA, 2014 NY Slip Op 05540.  Further, the Court stated that “[a]n agency may not deny a request because it was too voluminous or burdensome if the request could be satisfied by engaging an outside service (see Public Officers Law § 89[3][a])[emphasis added]. Moreover, an agency may recover the costs of engaging an outside service from the person or entity making such a request (see Public Officers Law § 89[3][a]).”  Suffolk v. LIPA, 2014 NY Slip Op 05540.

Based on this analysis, the Appellate Division reversed the Supreme Court’s dismissal of the petition, holding that further proceedings were required to resolve the factual issues of “whether the petitioner requested data or records that could be retrieved or extracted with reasonable effort, whether the requests required the creation of new records, and whether the cost of the retrieval could be passed on to the petitioner.”  Id.

In practice, when a municipality receives a FOIL request, it must make diligent efforts to locate and produce the requested documents.  Even if a municipality lacks the technical expertise to respond to a FOIL request, it is required to make a reasonable effort to locate an outside service that could produce the requested information.  If a municipality does deny a FOIL Request, and that denial is challenged in court, the burden of proving that such denial was proper rests solely on the municipality.  As a cautionary note, if a court finds that a municipality improperly denied a FOIL request, the law provides that municipality may be ordered to pay the costs and attorney’s fees of the individual or entity that made the request.  See Public Officers Law § 89(4)(b).

 

Posted by John Christopher

Court of Appeals Upholds Local Municipalities’ Ability to Ban Hydrofracking under their Zoning Powers

Land Use

In a 5-2 Decision, the New York State Court of Appeals in the matters of Wallach v. Town of Dryden and Cooperstown Holstein Corporation v. Town of Middlefield, upheld two upstate municipalities’ bans of hydrofracking under their respective zoning regulations. Hydrofracking is the process of extracting natural gas from shale deposits through the use drilling and high pressurized fluids.

Specifically, the Towns of Dryden and Middlefield (the “Towns”) enacted zoning regulations banning the practice of hydrofracking. Certain energy companies brought suit asserting that the Towns did not have the authority to prohibit “natural gas exploration and extraction activities” under their zoning laws, because such powers had been preempted by New York State laws governing mineral resource extraction.

The Court of Appeals undertook a thorough analysis of the rights of local municipalities to adopt and enforce zoning regulations under the New York Constitution and Statutes, and the State’s concomitant power to preempt local land use controls. In upholding the Towns’ bans on hydrofracking, the Court found that the State, through the implementation of its mineral resource laws, did not intend to preempt municipalities’ rights to ban hydrofracking through local zoning regulations, since the State legislation makes “no mention of zoning at all, much less evince an intent to take away local land use powers.” In concluding, the Court stated:

“At the heart of these cases lies the relationship between the State and its local government subdivisions, and their respective exercise of legislative power. These appeals are not about whether hydrofracking is beneficial or detrimental to the economy, environment or energy needs of New York. These are major policy questions for the coordinate branches of government to resolve.”

It will be interesting to follow how fracking cases progress throughout the State. The Court narrowed its opinion only to the question “whether the State Legislature eliminated the home rule capacity of municipalities to pass zoning laws that exclude oil, gas and hydrofracking activities in order to preserve the existing character of their communities.” In the wake of this decision, will other municipalities follow suit in banning the practice? Can individual property owners bring constitutional “regulatory taking” claims based upon the banning of hydrofracking by local municipalities under their zoning regulations, especially if all or substantially all of the value of their real property is from the existence of natural gas? Follow us as we continue to monitor this ongoing controversy.

Posted by admin

Second Department Issues Ruling in Standing Case

Land Use

Case: In the Matter of Riverhead Neighborhood Preservation Coalition, Inc., et al. v. Town of Riverhead Town Board, 112 A.D.3d 944 (2nd Dept., December 26, 2013)

In the recent decision of In the Matter of Riverhead Neighborhood Preservation Coalition, Inc., et al. v. Town of Riverhead Town Board, 112 A.D.3d 944 (2nd Dept., December 26, 2013), the Appellate Division, Second Department, reaffirmed the long standing legal principle that in order to possess proper standing to challenge a municipal land use decision, the petitioner must demonstrate that it has suffered injury in fact that is different than the injury allegedly sustained by the public community as a whole.

Standing is defined as “[a] party’s right to make a legal claim or seek judicial enforcement of a duty or right.” BLACK’S LAW DICTIONARY (9th ed. 2009). In order for a petitioner to establish standing, the party must “show that it would suffer direct injury different from that suffered by the public at large, and that the injury asserted falls within the zone of interests or concerns sought to be promoted or protected by the statutory provision under which the agency has acted.” Riverhead PGC, LLC v. Town of Riverhead, 73 A.D.3d 931, 933 (2nd Dept. 2010), citing Society of Plastics Indus. V. County of Suffolk, 77 N.Y.2d 761, 773-74 (1991).

The decision in Riverhead Neighborhood Preservation Coalition resulted from the review of an Article 78 proceeding filed by the plaintiff-petitioners (a group of local residents and the Riverhead Neighborhood Preservation Coalition, Inc.) to contest the proposed construction of a regional shopping mall in Wading River. 112 A.D.3d at 944. According to the petitioners, the primary entrance to the mall was located across Sound Avenue from Fairway Drive, the only road leading to the petitioner’s cul-de-sac community just north of Sound Avenue. The petitioner’s homes on Fairway Drive were located anywhere from 1,300 to 2,000 feet away from the site of the proposed construction. After considering these facts, the Supreme Court of Suffolk County granted the defendant-respondent’s motion to dismiss on the basis that the petitioners lacked standing for failing to sufficiently establish an injury in fact different then the harm suffered by the general public (decision available here: RiverheadvNeighborhoodPresCoal). Id.

On review, the Second Department affirmed the decision after explaining that the Supreme Court was supported by substantial case law. The court started its analysis by setting forth the requirements for standing in land use matters: “ ‘ . . . the plaintiff[s] . . . must show that [they] would suffer direct harm, injury that is in some way different from that of the public at large.’ ” Id. (quoting Matter of Save the Pine Bush, Inc. v. Common Council of City of Albany, 13 N.Y.3d 297, 304 (2009), quoting Society of Plastics Indus., 77 N.Y.2d at 774 (1991)). Beyond the presence of the mall’s entrance across the street from Fairway Drive and the general proximity of the site, the petitioners had failed to assert any arguments to establish injury at all. Id. at 945.

According to the facts on record, the Second Department found that the petitioners had failed to establish anything more than a generalized complaint, noting in particular that Fairway Drive was also used for entrance and egress from a local golf course. Id. at 945. Furthermore, the court noted that none of the petitioners could actually see the mall or its entrance from their home, nor were they within close enough proximity to the project, therefore, denying petitioners a presumption of injury in fact. Id.; see Matter of Harris v. Town Bd. of Town of Riverhead, 73 A.D.3d 922, 924 (2nd Dept. 2010) (“The individual petitioners do not live close enough to the site to be afforded any presumption of injury-in-fact on the basis of proximity alone.”); see Matter of Oates v. Village of Watkins Glen, 290 A.D.2d 758, 761 (3rd Dept. 2002) (“The test is whether the neighbor is close enough to suffer some harm other than that experienced by the public generally . . . ”); c.f. Matter of Barret v. Dutchess County Legislature, 38 A.D.3d 651, 654 (2nd Dept. 2007) (standing established where petitioner’s property directly abutted the planned site and the petitioners had a direct view of the planned construction from 1,200 feet). The lack of standing for the individual petitioners, as determined by the court, was, therefore, fatal to the Riverhead Neighborhood Preservation Coalition. 112 A.D.3d at 945; see Society of Plastics Indus., 77 N.Y.2d at 775.

The author acknowledges Michael Barone, Jr., J.D. Candidate 2014, for his contribution to this article.

Posted by Adam H. Koblenz

Posted by admin

ENVIRONMENTAL REVIEW FOR PHYSICAL CULTURE OR HEALTH ESTABLISHMENTS OF LESS THAN 20,000 GROSS SQUARE FEET ELIMINATED FROM BSA SPECIAL PERMIT APPLICATION

Land Use

 

Pursuant to the New York City Zoning Resolution, before opening a physical culture or health establishment (“PCE”), a special permit is required from the Board of Standards and Appeals (“BSA”).  A PCE includes a health club, gym, or any other business offering physical exercise, massage or use of steam rooms and saunas.  The City has made a change to the environmental review process for special permit applications for PCEs by eliminating the need for the environmental review for PCEs under 20,000 gross square feet. This will save many PCE special permit applicants time and money. Read the rest of this entry »

Posted by Daniel Braff

NYU CORE PROJECT HITS SNAG

Land Use

 

In a blog released in June of 2012, we discussed the City Planning Commission’s approval of New York University’s Core proposal (a/k/a NYU 2031) – a large redevelopment/expansion project in Greenwich Village.  The project was subsequently approved by the City Council with a vote of 44 to 1.   The redevelopment plan was fraught with opposition from local residents, community groups, preservationists, and even faculty and students of New York University.  Opponents of the project challenged the City’s approval in State Court. Read the rest of this entry »

Posted by Daniel Braff

East Midtown Rezoning Plan Withdrawn by Bloomberg Administration

Land Use

 

The Bloomberg Administration is withdrawing the proposed East Midtown Rezoning due to a lack of support at the NYC Council.  This was one of the Mayor’s last major initiatives before leaving office.   The rezoning was intended to stimulate the construction of a new generation of bigger, state-of-the-art skyscrapers, while at the same time raising hundreds of millions of dollars for transit improvements in the area. Read the rest of this entry »

Posted by Daniel Braff