In this post, which is the third and final segment of a three-part series, we look at real property recording and related fees, which have increased significantly in Nassau and Suffolk Counties in recent years. Like illegal impact fees and excessive administrative review fees, fees related to the recording of legal instruments are being used by both Nassau and Suffolk Counties as another revenue-generating measure to help balance their budgets. Since many of these ever-increasing fees appear to have no correlation to the cost of the services being performed to record the documents, they are viewed by many as being tantamount to another unauthorized and illegal tax.

Document Recording Process

Documents that relate to interests in real property in New York, such as deeds, leases, easements, restrictive covenants, mortgages and subdivision plats, are typically recorded in order to provide the public with constructive notice of these interests and to assist in determining ownership rights and other claims. In most cases, these documents are recorded in the county where the property is located and maintained by the county clerk.

Prior to recording, each document is generally proofread to ensure that the important details of the instrument are correct. Each document is then given book and page numbers, or in the case of subdivision plats a map number, which are useful to individuals who want to look up or research the recorded documents. Thereafter, each document is electronically imaged and the original is returned to the party indicated on the document.

Document Recording and Related Fees

The document recording process is an important county clerk function requiring a large staff and equipment that are not without cost. To offset the cost of the document recording process, county clerks typically charge a base fee for the recording service, as well as a per page fee to record a particular document. In recent years, the total cost to record a document has increased dramatically, while the process for doing so has remained largely static.

For instance, a person wishing to record a real estate document in Suffolk County must first now pay a Real Property Tax Service Verification Fee of $200 for each tax lot that the instrument is to be recorded against, plus a $20 handling fee, a $5 per page fee, a $5 Commissioner of Education Fee and a $15 Cultural Education Fund fee. Effective January 1, 2017, persons wishing to record a mortgage in Suffolk County must also pay a $300 Mortgage Verification Fee.

In Nassau County, in order to a record a real estate document, a person must pay a $300 block recording fee, a base recording fee of $40, and a $5 per page fee. In 2009, the block recording fee was just $10. However, within just one year the block recording fee was increased by 1,400% to $150. It doubled again in 2015 to its current amount. In Nassau County these same fees apply to a person who wishes to record a satisfaction of mortgage. In addition to these fees, the Nassau County Department of Assessment implemented a Tax Map Certification requirement in 2015 for all deeds, mortgages, satisfactions, assignments and consolidations. This process requires that each document have its Nassau County Tax Map Number verified with the Department of Assessment before it can be presented for recording in the Clerk’s office. Documents presented without the Department of Assessment certification page cannot be accepted for recording. The charge for this service was originally $75, but within just a few short years was increased by nearly 400% to the current fee of $355 per tax map verification letter (“TMVL”).

According to a Newsday report written at about the same time when the new real estate fees and fee increases went into effect, these fees were estimated to generate $35.6 million in revenue for the County government, but will make Nassau’s closing costs among the highest in the State. These new and increased fees often add thousands of dollars to the cost of buying and selling a property in Nassau County, particularly where a mortgage is involved. And, if there are any errors in the recorded documents that need to be corrected, the County requires payment of recording fee for a second time.

Nassau County Legislator Howard Kopel, a critic of the fee increases, and the only legislator to vote against the increases, argued that they were not justified because fees are supposed to correlate to the County’s cost to provide the service. Some lawmakers who voted in favor of the increases shifted the blame for the increased fees to the Nassau County Interim Finance Authority (NIFA), which allegedly demanded that the County budget include additional revenue.

Since the law does not require a deed or other instrument to be recorded, those who cannot afford the exorbitant recording fees may be forced to forego the recording process altogether. They may also choose not to take action to correct known defects or errors in recorded documents. The failure to record original and corrected documents will compromise the integrity of the county recording systems by making the information they maintain less reliable. This will undoubtedly lead to disputes over property ownership and other interests in real property and cause rightful owners to lose their property interests to bona fide purchasers who did not have constructive notice of the rightful owner’s interest. Thus, the excessive recording fees being charged may actually lead to the very problems that our recording systems are designed to avoid.

Regardless of who is responsible for the increased real estate fees, the steep trajectory of the increases makes it highly unlikely that the recording fees being charged in both Nassau and Suffolk counties are commensurate with the actual cost of recording a document. Moreover, because the recording fees are actually generating revenue in both counties, those who claim such fees are actually an illegal tax appear to be justified in their position.

 

Petitioners, residents and nearby occupants (“Petitioners”), commenced a hybrid Article 78 proceeding and declaratory judgment action against the Planning Board of the Village of Tuckahoe (“Board”) and others in Murphy v. Planning Board of Tuckahoe (Sup. Ct. Westchester County 2017), to annul a negative declaration issued by the Board. The Board initially issued a conditional negative declaration (“CND“) for a project to construct a hotel, restaurant and parking lot (“Project”) at a former marble quarry and dump site (“Site”). Petitioners filed suit after the Board amended its CND to a negative declaration.

The Site had been a quarry from the late 1800s until the 1930s, after which private entities and municipalities used the Site for dumping. In 2014, the project’s developer, Bilwin Development Affiliates, LLC (“Developer”), conducted environmental testing which revealed concentrations of volatile organic compounds, semi-volatile organic compounds and inorganic compounds at the Site. The Developer applied for admission into the New York State Brownfield Cleanup Program (“BCP”), which the New York State Department of Environmental Conservation (“DEC”) accepted. During plan preparation for the BCP, the Developer submitted an application to the Board for site plan approval for the Project; and the Board declared itself lead agency for SEQRA review.

In July 2015, after its review, the Board issued a draft conditional negative declaration (“CND”) with time for notice and comment. The Board ultimately adopted the CND in September 2015, categorizing the Project as an unlisted action with the condition that the Developer meet all DEC and Department of Health requirements.

Before and after issuance of the CND, the Developer – in conjunction with the DEC and the Board – performed additional Site investigations and prepared plans for remediation and containment. The final plans for the Project included remediation specifications for the contaminated soil, a community air monitoring plan and construction of a hotel and parking lot as a Site cap. The DEC determined that the remediation plan would eliminate or mitigate all significant threats to public health and the environment presented by contamination.

In October 2016, after a number of public meetings and comments, the Board amended the CND to a negative declaration based upon the DEC’s determination, the remediation plans and other documents in the record. This amendment occurred over a year after the issuance of the draft CND (July 2015). Petitioners sued to annul this decision claiming, among other things, that: (1) SEQRA regulations do not allow the amendment or rescission of a CND unless the lead agency later determines a positive declaration is appropriate; and, (2) the lead agency failed to take a “hard look” at evaluating the environmental impact of the methods to be used in removing contaminated soil and monitoring contaminants. Petitioners also challenged the issuance of the CND.

First, although SEQRA regulations require rescission of a negative declaration or CND if new substantive information or changes cause the lead agency to determine a significant adverse environmental impact may result, the regulations do not prohibit amendments to a CND that remove conditions. 6 NYCRR § 617.7(d)(2), (f)(1). Moreover, SEQRA regulations permit a lead agency, at its discretion, to amend a negative declaration (a CND is a type of negative declaration) at any time prior to the decision to approve an action. 6 NYCRR § 617.7(e). Therefore, the Board was allowed to amend or rescind the CND.

Second, with respect to excavating the contaminants, Petitioners argued that the proposed methods to remediate and monitor were unsafe. Notably, Petitioners did not argue that the proposed methods would have an adverse environmental impact. Petitioners cited their experts’ methods and opinions, which the Board already reviewed during the comment period. The Court held that, at best, Petitioners merely indicated a disagreement between Petitioners’ experts and the Board as to the preferred methods to remediate and monitor – which is not grounds to overturn the Board’s decision to issue the negative declaration.

Lastly, the Court held that Petitioners’ challenge to the underlying CND was untimely. The draft CND was published on July 21, 2015, the period of limitations began to run thirty (30) days later on August 20, 2015, and expired four (4) months later on December 20, 2015. Petitioners could not attack the underlying CND eleven (11) months past the period of limitations by virtue of seeking to annul a later amendment to that CND.

Based upon the foregoing, and other reasons, the Court dismissed these challenges.

On July 7, 2017, Judge William G. Ford issued a decision in the case Matter of 7-Eleven, Inc. v. Town of Babylon, Supreme Court, Suffolk County, 2017 NY Slip Op 31467(U) , in which the Town was excoriated for its mishandling of a site plan approval and building permit application. Although the applicant prevailed in court, it took five years to get there, during which the site remained vacant and unproductive. Here’s how it unfolded.

The Facts

In July 2012, 7-Eleven applied for a building permit and certificate of occupancy for a site in Wyandanch. The property contained a defunct automobile repair shop, garage and canopies for an abandoned gasoline service station. 7-Eleven proposed to tear down this eyesore and improve it with a 24-hour 7-Eleven store, a use it contended was as-of-right. The Town, however, had other ideas. The Town’s Building Division initially provided comments in July 2012, which were followed by comments from other Town divisions, including traffic safety, engineering, the fire marshal, environmental control, highways and planning that were issued from July to October 2012.

The Town’s Traffic Division issued comments in October 2012 in which it objected to the project on the grounds that there was insufficient on-site customer truck parking, an inadequate truck loading zone, and inadequate setbacks for trash enclosure and mechanical equipment, which it claimed were too close to residential dwellings. It also raised concerns about an existing 7-Eleven, located within ½ mile of the project. It had issues about ingress and egress that it believed would cause increased traffic and parking on nearby residential streets.

7-Eleven responded to these various comments in February 2013, when it submitted architectural drawings and a revised site plan as well as comments prepared by its expert engineering consultant. This submittal addressed the issues raised by the Town Traffic Division. 7-Eleven included three customer truck parking spaces and a dedicated delivery truck loading zone. 7-Eleven proposed to limit all deliveries to box trucks and modified the trash enclosure and loading zone to decrease noise and lessen visual impacts.

The Town responded with further comments which were provided to 7-Eleven in December 2013.   In particular, the Town’s Traffic Division objected to the revised site plan.

The Town Planning Board then held a public hearing at which further revisions to the site plan were requested. These revisions concerned traffic flow and several covenants and restrictions that would (1) prohibit tractor trailer truck deliveries, (2) limit delivery hours, (3) prohibit truck parking on residential streets, (4) limit hours of operation, and (5) require a security protocol. 7-Eleven agreed to all the covenants and restrictions except it would not agree to limit the hours of operation. The public hearing was left open for the receipt of a traffic study. That study determined that vehicle traffic would be relegated to the major thoroughfare (Straight Path) and would not have a major impact on pedestrian or bus stop safety.

The general public also weighed in on the proposal, via written comments, petitions and letters, objecting to the project.  These opponents were concerned with increased traffic and crime and decreased residential property values and public safety. The operator of the other 7-Eleven, located ½ mile away, also submitted comments, which the court noted “would later loom large” in the Town’s subsequent handling of the application. This operator contended that siting the store so close to his existing store would oversaturate the market and lead to increased competition. He also noted that his donation of surplus food to local charities would decrease and also questioned enforcement of the tractor trailer prohibition.

Although 7-Eleven objected, the public record was held open. During this extended comment period, the Town’s Traffic Division raised concerns about truck parking and traffic. It announced in February 2014 that it would not take any further action to review the application unless and until 7-Eleven undertook further site plan revisions to address its concerns.

In response, 7-Eleven made additional revisions to its site plan. These were shared with the Traffic Division in April 2014 and formally filed with the Town in May 2014. Among other things, 7-Eleven confirmed its commitment to limit deliveries to box trucks, and modified its customer parking and loading zone. It also closed off access from certain streets and proposed to install fencing that would reduce vehicle headlights shining into residential areas. It relocated the trash enclosure and mechanical equipment further away from residential neighbors and eliminated a pedestrian walkway near a residential street.

In July 2014, the Town Traffic Division issued another memo, this time finding fault with the dedicated customer truck parking stall.

7-Eleven filed its final site plan in May 2015.   It also filed engineered drawings,traffic and planning studies, and an appraisal, all dated in April 2015. 7-Eleven also filed an affidavit from its senior regional director and requested that the hearing be finally closed. The affidavit rebutted the comments of the operator of the other 7-Eleven.   It also submitted an affidavit from its engineer in which it contended that its proposed use was superior to seven other similarly-situated commercial uses approved by the Town in the preceding two years.

In September 2015, the Planning Board held a meeting and adjourned the applications. Thereafter, in February 2016, additional comments were issued by the Town’s Traffic Division in which it noted its agreement with the operator of the other 7-Eleven and rejected the opinion of 7-Eleven’s regional director about truck traffic, parking and impacts on the adjacent residential neighborhood. But that was not the end of the Town’s Traffic Division’s comments. Two months later, in April 2016, the Town’s Traffic Division issued a memo to the effect that the proposed covenants and restrictions were insufficient. As a result, the Town requested that 7-Eleven submit yet another revised site plan.

At this point, 7-Eleven had had it; and in June 2016, it sent a demand letter to the Town calling for an up or down determination on its application. In August 2016, the Planning Board denied the application. The rationale given for the denial was the safety of the residential neighborhoods that abutted the site on two sides, the adverse impact on traffic and parking, and public safety concerns.

Not surprisingly, 7-Eleven sued.

The Lawsuit

The Town claimed its decision should be upheld by the Court on the grounds it was rational and based on substantial evidence. The Town also contended its decision was not final, contending that 7-Eleven’s lawsuit was not ripe because it failed to apply to the Zoning Board of Appeals for variance relief. The Court didn’t buy these arguments.

The Court first discussed the ripeness issue. It noted that a land use and zoning matter is final when the “development plan has been submitted, considered and rejected by the governmental entity with the power to implement zoning regulations” but that an applicant “will be excused from obtaining a final decision if pursuing an appeal to a zoning board of appeals or seeking a variance would be futile.” Thus, resort to a zoning board of appeals is unnecessary if it “lacks discretion to grant variances or dug in its heels and made clear that all such applications will be denied.” The Court noted that 7-Eleven sought site plan review and a building permit to demolish existing structures and to construct a new building. Neither was granted by the Town, essentially stymying the project. Moreover, since the application was as-of-right, and the setbacks the Town claimed were applicable did not apply to this corner lot, there is no variance that it needed from the Town Zoning Board of Appeals.

The Court then took aim at the Town’s discretion argument. In rejecting it, the Court noted that the Town gave into public pressure about traffic, crime and property values plummeting. The Court found that the Town improperly ignored the concessions made by 7-Eleven to ameliorate the supposed impacts. It also focused on the multiple revisions and the lack of evidence in the record supporting the Town’s decision.

Conclusion

7-Eleven has the financial wherewithal to see a project through, despite the years it takes to get it approved on Long Island. Other applicants may not have the ability to withstand such an extended and expensive proposition to open a business, redevelop a blighted site and revitalize a neighborhood.

In Miranda Holdings v. Town Board of Town of Orchard Park, ____ N.Y.S. 3d, ____, 2017 WL 2884633 (4th Dept. July 7, 2017), Petitioner, Miranda, proposed a commercial structure that included a restaurant with a drive-through window. The Town Board was not happy.  Not only did the Board improperly declare the proposed restaurant with a drive-through as a Type I action under SEQRA, but also it required a full-blown EIS.  Further,  the Town enacted a local law specifically declaring that, going forward, all restaurants with a drive-through would be categorized as Type I actions.

Although the Appellate Division upheld the trial court’s determination that that law does not allow the Town to reclassify actions in a manner that is contrary to the DEC classification, the Court, without any real explanation, remitted the matter back to the Town for further findings consistent with its opinion.

In Miranda’s favor, the Appellate Division upheld the trial court’s decision to invalidate the local law, which reclassified all restaurants with a drive-through as Type I actions wholly inconsistent with the DEC’s Type II designation.

The Town’s Actions

At first, the Town determined that the project was an Unlisted action under the State Environmental Quality Review Act (“SEQRA”) and SEQRA Regulations. See, 6 NYCRR Part 617. The Town issued a “positive declaration” requiring that Miranda prepare an Environmental Impact Statement (“EIS”). A full-blown EIS is difficult, time consuming and expensive. Unsurprisingly, Miranda claimed that the proposed project was a Type II action under the regulations and, therefore, was exempt from all environmental review and from preparing an EIS. In response, the Town passed a resolution making a drive-through restaurant project a Type I action, so that it was presumed to require an EIS. Miranda sued, arguing that the Town (1) was out of bounds, (2) was not allowed to make the project a Type I action because by its nature, it is a Type II action and (3) could not require that Miranda prepare an EIS.

What a mess! The Court’s decision does not add a lot of clarity.

The Trial Court Decision and SEQRA

Like ancient Gaul, all SEQRA actions are divided into three parts – Type I, Type II and Unlisted. A Type I action “carries with it the presumption that it is likely to have a significant adverse impact on the environment and may require an EIS. Type II actions are just the opposite – they are exempt from environmental review under SEQRA and thus not only is an EIS not required, but no review is technically required. “Unlisted” actions are everything that is neither Type I nor Type II, thus allowing latitude in what additional review is necessary.

Most Type I and Type II projects are defined in the NY Dept. of Environmental Conservation (“DEC”) Regulations. For example, all permits and variances regarding single-family homes are Type II actions. However, municipalities may also adopt their own lists of Type I and Type II actions, so long as they do not conflict with the DEC’s lists. In particular, a municipality “may not designate as Type I any action identified as a Type II” in the DEC Regulations.

One of the actions identified as a Type II under the DEC Regulations is a commercial facility (or extension) of up to 4,000 sq. ft., which otherwise meets zoning, such as use restrictions, setbacks or height limits. When the Town initially determined that the proposed drive-through restaurant was “Unlisted,” the developer argued that this 4000-sq. ft. commercial facility provision made the project a defacto Type II action exempt from SEQRA. The Town’s reaction in passing the local law was to make all drive-through facilities into Type I actions – spurring the developer’s lawsuit, claiming that the Town could not convert a Type II action into a Type I action.

The trial court decided in Miranda’s favor, holding that because a drive-through facility was a Type II action under SEQRA, the Town could not automatically make it a Type I action.

The Court acknowledged that the Regulations do not specifically list drive-through facilities as Type II actions. However, the SEQRA Handbook published by the DEC does mention fast food facilities as being within the contemplation of the 4,000 sq. ft. Type II and also gives as an example of a Type II, the expansion of a commercial restaurant where the project is less than 4,000 sq. ft. The Court also noted that the Final Generic Environmental Impact Study prepared by DEC in connection with the 1995 adoption of proposed amendments to the Regulations – including the 4,000 sq. ft. commercial project as a Type II – directly referenced a “drive-through window” as part of the commercial expansion that would be exempted if the 4,000 sq. ft. limitation were met. Therefore, the Court concluded that the DEC “contemplated restaurants with drive-through windows as Type II actions.”

The Appellate Division Determination

However – and here is the mystery – the Appellate Division held that the Supreme Court should not have found that the proposed restaurant was a “4,000 sq. ft.” Type II – without “a revised review” by the Town. What is there to review?

The Appellate Division may have had some empathy with the Town’s concerns and afforded it the opportunity to look more closely at the proposed project. More fundamentally, the “4,000 sq. ft.” Type II is very broad and can easily include projects that pose potential for significant impacts, like traffic and air quality. Despite the fact that the DEC determined that projects of this limited size “do not rise to the level of significance envisioned by [SEQRA] as requiring an EIS,” perhaps other aspects of the proposed development needed further review by the Town.

What the Appellate Division did unequivocally declare is that a municipality cannot reclassify a project from a Type II to a Type I, as this is prohibited under SEQRA.  Invalidation of the local law was upheld.

The bottom line lesson is that municipalities should address planning and zoning concerns for their ordinary development through zoning and planning; not by a short cut in trying to stretch environmental review beyond the DEC regulations specific to each project.

 

In People Theatres of N.Y. Inc. v. City of New York, 2017 N.Y. Slip Op. 04385, various owners of adult businesses (“Plaintiffs”) brought separate actions against the City of New York (“City”) based upon First Amendment challenges seeking relief against zoning ordinances that bar adult establishments from operating in, among other areas, all residential districts and most commercial and manufacturing districts (“Ordinance“). The cases were consolidated; and after the trial court’s initial determination, the cases experienced a complex procedural history, having been appealed to the Court of Appeals twice over the course of fifteen (15) years.  A comprehensive discussion of this case and its lengthy history can be found in this extended blog post.

Here, the Ordinance at issue sought to combat negative secondary impacts relating to sexually focused businesses, which impacts were  demonstrated in a 1994 study conducted by the City.  Whether and how the Ordinance applied to particular adult businesses was the impetus for prior litigation in 1995.  In 1998, the City created the so-called 60/40 rule.  Under this rule, any commercial establishment with at least 40% of its customer-accessible floor/cellar area or stock-in-trade used for adult purposes qualified as an “adult establishment” covered by the Ordinance.  Plaintiffs modified their businesses to comply with the 60/40 rule.   The City, however, believed that while many operators were achieving “technical compliance” with the rule, their compliance was a sham. According to the City, the businesses still primarily focused on sexually explicit activities or materials; and their non-explicit materials were an afterthought that did not generate sales.  To shore up enforcement, the City amended the Ordinance in 2001 to effectively eliminate the 60/40 rule (“2001 Amendments”).

The main issue in this case was the relationship between (1) the standard that applies to First Amendment challenges in the context of ordinances affecting adult uses, and (2) the burden of proof a municipality must meet in order to sustain such ordinances. The Court held that “intermediate scrutiny” applies in this type of First Amendment adult use zoning context, which requires that an ordinance be narrowly tailored to the municipality’s justified purpose and assure reasonable alternative avenues of communication.  When applying intermediate scrutiny, a court must balance the interests at stake while assessing a municipality’s factual judgments.  The burden of proof relative to the municipality’s factual judgments is “modest” (no pun intended) and akin to substantial evidence, which is accorded more deference than that given to administrative agencies.

As such, the standard of review in this case is intermediate scrutiny, while the burden of proof is similar to substantial evidence.

The governing legal precedent is set forth in Los Angeles v. Alameda Books, Inc., 535 U.S. 425 (2002), wherein the Supreme Court set forth the three-part burden shifting test, which describes a municipality’s burden of proof to sustain its laws in the face of a First Amendment challenge.   First, the municipality must “fairly support” its rationale for the ordinance. Second, a challenger must cast direct doubt upon the rationale – either by (I) demonstrating the municipality’s evidence does not support the rationale, or (ii) furnishing evidence disputing the municipality’s factual findings. If the challenger cannot cast doubt, then the municipality wins. If the challenger is able to cast doubt, then the third step comes into play; and the burden shifts back to the municipality to supplement the record with evidence renewing support to justify the ordinance.

Here, after applying the Alameda three-prong test, the Court reversed the Appellate Division holding that  the lower court’s mechanical approach was improper and confused the ultimate standard of review (intermediate scrutiny) with the evidentiary burden (similar to substantial evidence) borne by the City. Because the third step of the Alameda analysis obliges a modest burden of proof akin to substantial evidence, it was an error for the lower courts to determine that the City failed to meet its burden.  In this instance, the City met its burden of showing continued focus on sexually explicit activities and materials by the Plaintiffs’ businesses – despite any 60/40 compliance. Therefore, the Appellate Division was reversed and the Ordinance was sustained.

In Matter of Avella v. City of New York, 2017 NY Slip Op 04383 (June 6, 2017), the New York Court of Appeals reviewed a decision by the City of New York approving a proposal by Queens Development Group, LLC (“QDG”) which sought to construct a large-scale retail, restaurant and movie theater complex known as “Willets West,” on the portion of Flushing Meadows Park where Shea Stadium once stood – currently, the parking lot for Citi Field.  The development was part of QDG’s larger redevelopment plan for Willets Point, a blighted area adjacent to Citi Field.  QDG included Willets West in the development proposal under the theory that “the creation of a retail and entertainment center at Willets West w[ould] spur a critical perception change of Willets Point, establishing a sense of place and making it a destination where people want to live, work, and visit.”

After the City approved QDG’s proposal, a state senator, not-for-profit organizations, businesses, taxpayers, and users of Flushing Meadows Park brought an action seeking to enjoin the proposed development.  They claimed that because the Willets West development was located within designated parkland, the public trust doctrine required legislative authorization, which had not been granted.

The Supreme Court, New York County, denied the petition and dismissed the proceeding. The Appellate Division, First Department, unanimously reversed and granted the petition to the extent of declaring that construction of Willets West on City parkland “without the authorization of the state legislature” violated the public trust doctrine, and enjoined further construction.  The Court of Appeals granted QDG leave to appeal and affirmed the Appellate Division’s ruling.

The Court began its analysis by discussing the public trust doctrine from Brooklyn Park Commrs. v. Armstrong, 45 N.Y. 234 (1871) – a decision it issued nearly 150 years ago – where the Court held that, when a municipality has taken land “for the public use as a park,” it must hold that property “in trust for that purpose” and may not convey it without the sanction of the legislature.  The Court also held that the legislature’s authorization to alienate land held in public trust must be “plainly conferred” by its “direct and specific approval.”

Applying these principles, the Court examined whether the State legislature had authorized construction at Willets West, on property that the petitioners contended was City parkland. To address that inquiry, the Court reviewed the legislation the State legislature had enacted in 1961 authorizing the development of a sports stadium on City parkland that came to be known as Shea Stadium. The Court ruled that, since a shopping mall and movie theater were not consistent with typical uses of a stadium, the statute did not authorize the Willets West development.

The Court also considered the legislative history of the statute and ruled that it too demonstrated that the legislature had only authorized the land to be rented for public stadium use, not for private business purposes.

The Court concluded that the legislative authorization to rent the stadium and its grounds to private parties could not “under our longstanding construction of the public trust doctrine, constitute legislative authorization to build a shopping mall or movie theater.”

Interestingly, the Court acknowledged that the remediation of Willets Point was “a laudable goal” and that QDG’s Willets West development would immensely benefit the people of New York City by transforming a blighted area into a new, vibrant community.  Nonetheless, it pointed out that those contentions had no place in its consideration of whether the legislature had granted authorization for the Willets West development on City parkland that was held in the public trust.  Of course, it concluded, the legislature was free to alienate all or part of the parkland for whatever purposes it were to see fit, provided that it does so through direct and specific legislation that expressly authorizes the desired alienation.

While the Court’s ruling does not impact the mixed-use redevelopment proposed for Willets East, QDG is reportedly evaluating its next steps for the project.

The New York State Uniform Fire Prevention and Building Code (“Uniform Code”) sets forth uniform building and fire prevention standards for New York State.  Article 18 of the NYS Executive Law requires municipalities within the State to administer and enforce the Uniform Code within their boundaries. Executive Law §379(3) states, “…no municipality shall have the power to supersede, void, repeal or make more or less restrictive any provisions of this article or of rules or regulations made pursuant to [the Uniform Code].”

However, a municipality may adopt more stringent local standards provided it petitions the NYS Code Council for a determination of whether such local laws or ordinances are reasonably necessary because of special conditions prevailing within the local government and that such standards conform with accepted engineering and fire prevention practices and the purposes of the Uniform Code. Executive Law §383. The adoption of more stringent laws that have successfully petitioned the NYS Code Council are available at https://www.dos.ny.gov/dcea/mrls.html (the majority of which relate to sprinklers or fire prevention codes).

Whether a particular local law or regulation is superseded depends upon whether it is inconsistent or in conflict with provisions of the Uniform Code. Local laws enacted pursuant to other municipal powers for example, under zoning or wetlands protection, are recognized as legitimate areas for government regulation and may also regulate the construction and use of buildings in municipalities.

Not so subtle conflicts between zoning laws and the uniform code exist in many municipalities requiring that these laws be considered and applied together. For the most part, courts reject arguments claiming local laws are preempted by the Uniform Code or invalid based upon a failure of the municipality to appeal the local law to the NYS Code Council. Brockport Sweden Property Owners Ass’n v. Village of Brockport, 81 A.D.3d 1416, 917 N.Y.S.2d 481 (4th Dept. 2011)(rejecting that local law was preempted by Uniform Code); Catskill Regional Off-Track Betting Corp. v. Village of Suffern, 65 A.D.3d 1340, 886 N.Y.S.2d 214 (2d Dept. 2009)(finding OTB failed to establish that Village Code improperly superseded the Uniform Code); People v. Robles, 22 Misc.3d 140 (A), 881 N.Y.S.2d 366 (Sup.Ct. App. Term 2009)(rejecting claim that Uniform Code preempted the City of Glen Cove code on the merits, finding an expressed interest in statewide uniformity rather than an implied statement of preemption); People v. Oceanside Institutional Industries, Inc., 15 Misc. 3d 22, 833 N.Y.S.2d 350 (Sup. Ct. App Term 2007)(finding that Uniform Code and Nassau County Fire Prevention Ordinance can coexist and applying more stringent sections of codes in conflict).

With the advent of Airbnb and like services, short term rental regulation has become a hot topic on the East End. A review of the occupancy standards in local rental codes and the Uniform Code for single family residences provides a noteworthy example of the local municipality/state regulation inconsistency.

Municipalities use the definition of “family” to limit the number of occupants permitted in single family residences and thereby control the use of homes in residential zoning districts. On the East End, Southampton and East Hampton Towns have used the definition of family to limit the number of persons occupying a rental property under their rental codes. See Southampton Town Code Chapter 270 and East Hampton Town Code Chapter 199  limiting the definition of family to include five or less unrelated persons living together (Southampton) or four or less living together as a single housekeeping unit (East Hampton).   Alternatively, both codes allow an unlimited number of persons that are related by blood, marriage, or legal adoption to reside together provided they live as a single housekeeping unit.

In addition to Town regulations addressing and limiting single family residence occupancy, the New York State Property Maintenance Code regulates occupancy by limiting the number of occupants per square foot per bedroom. Specifically, Property Maintenance Code §404.4.1 requires that “every bedroom occupied by one person shall contain at least 70 square feet of floor area, and every bedroom occupied by more than one person shall contain at least 50 square feet of floor area for each occupant thereof.”

The Property Maintenance Code does not define family but only references occupant which is defined as “an individual living or sleeping in a building.” Therefore, even if the group of persons renting a home in Southampton or East Hampton qualify as family and are not limited under the rental code definitions, compliance with the Property Maintenance Code is still required (notably, East Hampton and Southampton eventually codified the same restrictions). This section of the property maintenance code specifically addresses overcrowding issues. To that end, the Property Maintenance Code also prevents a bedroom from being used as the only means of access or egress to another bedroom; each bedroom must have access to a bathroom without passing through another bedroom; and bedrooms must comply with the requirements for light, ventilation, room area, ceiling height, room widths etc.

Other examples of perceived conflicts include occupancy standards set forth for commercial structures and restaurants in the County Health Department Codes, Uniform Code and local laws; third stories or mezzanine laws and restrictions; standards for bedrooms in basements; and new energy codes including LEED, Energy Star or other ratings systems embraced in local laws that could require higher standards than the Uniform Code. Upon adoption of such local laws, petitions to the NYS Code Council for approval are recommended. See 3 N.Y. Zoning Law and Practice §32A:35, State Preemption of Local Laws, Patricia E. Salkin, November 2016 update.

Ultimately, the Uniform Code and local municipal codes must be read and applied together to ensure compliance.

On June 28, 2017, the Appellate Division, Second Department, held that a tenant has standing to challenge the definition of “Family” as set forth in the Freeport Village Code.

In Tomasulo v. Village of Freeport, ___A.D.3d___, the Village commenced a criminal proceeding against non-party property owner, William Goodhue, Jr. (owner), alleging that the tenancy between Tomasulo (tenant) and the owner violated sections 171-1 and 210-3 of the Freeport Village Code. The tenant had resided in a single family home with the owner of the home and two other non-related persons. This arrangement violated the definition of “Family” in the Village Code. As a result of the criminal proceeding, the owner commenced an eviction proceeding against Tomasulo.

In response to the eviction proceeding, Tomasulo commenced an Article 78 proceeding against the Village challenging the constitutionality of the definition of “Family” contained in Village Code sections 171-1 and 210-3.  The trial court converted the Article 78 proceeding to a complaint and granted the Village’s motion for summary judgment holding that Tomasulo lacked standing to seek a declaration as to the “constitutionality of the disputed portions of the Village Code” because Tomasulo had “not been injured or threatened with injury as a result of those provisions . . . and [Tomasulo] failed to adequately allege the existence of a justiciable controversy.”

In reversing the trial court, the Second Department stated that Tomasulo “demonstrated a ‘threatened injury to [his] protected right’ to his tenancy in the owner’s house . . . such that he has adequately shown ‘an interest sufficient to constitute standing to maintain the action.'”

Finding that Tomasulo’s pending eviction proceeding demonstrated a “present, rather than hypothetical, contingent or remote, prejudice to [him] . . . [the Court declared that the] Village did not establish, prima facie, its entitlement to judgment as a matter of law.”

 

According to the American Planning Association, a “floating zone” is a zoning district that “delineates conditions” rather than the more traditional use classifications that are typically found on zoning maps. While a floating zone is contained in a zoning code, it is only added to the zoning map after a project seeking that designation is approved. Thus, it “floats” in the zoning code until it is used for a particular project.

floating

Lindenhurst’s Downtown Redevelopment District Floating Zone

The Village of Lindenhurst Board of Trustees approved a new local law at its June 6, 2017 meeting that creates a Downtown Redevelopment District Floating Zone. The purpose of this Floating Zone is to use Smart Growth principles to encourage development of the downtown area. The Village Trustees believe this new zone will foster mixed-use redevelopment, including pleasant and attractive residential developments within walking distance of the Lindenhurst Long Island Rail Road station and the central business district.

The Process

The local law contains a two-step process for changing a site to the Floating Zone designation. First, a conceptual development plan and reclassification of specific parcels will need to be approved by the Board of Trustees. The second step will entail an approval of a detailed site development plan, and subdivision plat, if applicable, by the Board of Trustees.

The change of zone application to a Floating Zone needs to include a statement describing the nature of the project and how it advances the purpose of the Floating Zone. It also needs to describe adjoining and surrounding properties, the availability of community facilities and utilities, and anticipated traffic generation. The applicant also has to discuss open spaces proposed for the development.

The conceptual development plan needs to be drawn to scale and indicate the approximate location and conceptual design of all buildings, parking areas and access drives. It also needs to show the neighboring streets and properties and include the names of the owners of property located within 200 feet of the site. A traffic study can be requested by the Board of Trustees.

The local law provides that if the Board of Trustees entertains an application to change zoning to the Floating Zone, it will hold a public hearing. The local law also provides that if the Board of Trustees decides not to entertain such an application, it can do so with or without a public hearing and with or without SEQRA review.

The Criteria 

The local law provides criteria for the Board of Trustees to consider for Floating Zone applications. These include: (1) the location of the proposed development and its proximity to the railroad station and central business district; (2) minimum site size, dimensions and topography; (3) ownership of the parcels; (4) permitted uses; (5) height of structures, which is limited to 53 feet; (6) maximum density, which is limited to 37 units per acre; (7) maximum occupancy for residential units, which is set at two for studio units and the number of bedrooms plus two for all other units; (8) minimum floor area of any residential unit, which is set at 580 square feet; (9) minimum building setbacks, which are set at  ten feet for front and rear yards, side yard setbacks are ten feet for one side yard and twenty feet total for side yards; (10) parking minimums for retail and office use is one space per 250 square feet; multi-family residential use is based on the types of units – studios require 1.15 parking spots per unit, one-bedroom units require 1.30 spots per unit, two-bedroom units require 1.75 spots per unit and three or more bedroom units require 2.0 spots per unit; (11) basements and cellars are not allowed to be used for living, sleeping or habitable space; and (12) each building must have security and fire alarms.

It will be interesting to see if this new zoning classification helps Lindenhurst revitalize its downtown.

 

The State liquor law preempts  local municipalities from restricting hours of operation for businesses selling alcoholic beverages for on-premises consumption.   Accordingly, local municipalities should use caution when imposing conditions upon establishments regulated by the State Liquor Authority and would be wise to consider alternative ways to manage late hours accompanied by public imbibing.

shutterstock_542466670In February 2017, the United States District Court for the Western District of New York issued a decision in Obsession Sports Bar & Grill, Inc. v. City of Rochester  (“Obsession“) involving State law preemption of local laws limiting hours of operation for certain businesses such as bars and restaurants.  The federal Obsession case involved section 1983s  claims following successful litigation in State Court. Although the federal Obsession case addressed constitutional claims only,  the decision casted stark attention upon the legal precedent set forth in the underlying State Court case, wherein the Fourth Department upheld the trial court’s holding that the State’s liquor laws preempted the City of Rochester (“City“) from restricting Obsession’s hours of operation.  Id.

In August 2011, Obsession obtained a liquor license from the State Liquor Authority authorizing the retail sale of alcoholic beverages for on-premises consumption of alcoholic beverages at its bar and grill.  Under the State Alcoholic Beverages Control Law (“ABC Law“), as amended by Monroe County local law, persons holding liquor licenses are permitted to sell alcohol, on-premises, Monday through Saturday from 8:00 a.m. until 2:00 a.m. and Sunday from 10:00 a.m. to 2:00 a.m.  In addition, these establishments may remain open an additional one-half hour to permit customers to consume their beverages, i.e. until 2:30 a.m.

Obsession’s business was located in the City’s C-1 zoning district, which permits small-scale commercial uses and restricts evening hours of operation for restaurants and bars to 11:00 p.m.  Although the City partially granted Obsession’s variance by permitting the establishment to remain open until 12:00 a.m. Monday through Thursday and until 2:00 a.m. on Friday and Saturday, the City’s local laws still forced Obsession  to close several hours earlier than required by the ABC Law, as well as earlier than similar businesses located in neighboring zoning districts.

In November 2012, Obsession commenced a state court Article 78 proceeding against the City alleging that the ABC Law preempted the local ordinance vis-à-vis hours of operations.   The City argued  that the State law did not preempt the ordinance because the ordinance did not directly address the sale or consumption of alcoholic beverages.  The trial court found in favor of Obsession holding that the City’s local ordinance was an impermissible exercise of municipal zoning power and null and void in the face of the ABC Law’s conflicting and preemptive provisions.  The Fourth Department unanimously affirmed; and in 2014, leave to appeal to the Court of Appeals was denied.

Although Obsession may have prevailed in the State court with respect to the pre-emption question,  the federal court ultimately concluded that the City did not violate Obsession’s constitutional rights because Obsession did not show that the City’s actions were arbitrary, conscience-shocking or oppressive in the constitutional sense.  Despite this holding, the Court did note that the City may have been negligent. The Court opined that municipalities could and should consider alternative means to address the potential adverse effects of bars and restaurants that operate in the later evening hours.  To placate opposition to development, redevelopment and applications of the like, municipalities should consider alternative regulations, including but not limited to outdoor seating restrictions, light pollution, kitchen hour limitations and parking limits.