childrightslogoenSometimes called a “case of the race,” the common law doctrine of vested rights is “one of the most troublesome areas of land use regulation.”  Exeter Building Corp v Town of Newburgh, 114 AD3d 774 [2d Dept 2014].

In New York, the “vested rights” doctrine is equitable in nature and implicated when a property owner or developer seeks to continue the use of property in a way that was permissible before an  enactment or amendment of zoning regulations no longer permits it.   Town of Orangetown v. Magee, 88 NY2d 41 [1996].

Generally, an owner of real property can acquire common-law vested rights to develop property in accordance with the prior zoning regulations when (1) in reliance on a legally issued permit, the landowner (2) effects substantial changes and incurs substantial expenses to further the development and (3) the landowner’s actions relying on the valid permit(s) are so substantial that the municipal action results in serious loss rendering the improvements essentially valueless.  Id.  As a result, the “race” becomes whether the developer gets the project completed or at least substantially completed to satisfy the Magee test before the municipality get its zoning code in place.

Recently, in Exeter Building Corp v. Town of Newburgh, the Court of Appeals affirmed a determination by the Appellate Division holding that the developer had not vested a plan to build 136 townhouse units, because it could not have reasonably relied on valid permits when warned repeatedly of a rezoning by the Planning Board.  In Exeter, the Court of Appeals refined the reliance test in Magee, holding that is was not “reasonablefor the developer  to rely on a conditional  site  plan approval placing emphasis on the Town Planning Board’s repeated warnings of the proposed rezoning.

Now, not only must developers listen for the starting gun in a vested rights case, but they must also consider the reasonableness of a municipality’s warning. Such an additional qualifier seems to give the government a head start.

For a detailed discussion of vested rights and the underlying Appellate Division case, see one of our earlier blog posts, Appellate Court Rules on Common-Law Vested Rights.

 

mosqueOn December 31, 2016, U.S. District Judge Michael Shipp of the District of New Jersey authored a 57-page opinion granting partial summary judgment to plaintiffs, The Islamic Society of Basking Ridge (“Islamic Society”) holding that defendants, the Township of Bernards (“Bernards”), violated Islamic Society’s rights under the Religious Land Use and Institutionalized Persons Act (“RLUIPA”).  The Bernards Planning Board denied Islamic Society’s site plan application seeking to construct a mosque in a residential zone on the basis that (1) a mosque is not considered a church under Bernards’ zoning code and (2)  Bernards’ parking ordinance was not adhered to.

FACTS

In November 2011, Islamic Society purchased property in a residential section of Bernards with the intention of constructing a 4,252 square foot mosque on the property.  The site plan called for 50 parking spaces based on estimated occupancy of 150 people.  The parking spaces provided were in compliance with Bernards’ parking ordinance applicable to churches at a ratio of 3:1 .

Over the course of three and a half years, Islamic Society’s site plan application underwent 39 meetings and was subjected to intense neighborhood opposition and scrutiny.    According to the decision, competing expert testimony was provided by parking experts and asserted that although Bernards does not, and has never, relied on the Institute of Transportation Engineers (“ITE”)  Parking Generation data,  Bernards required Islamic Society to apply the ITE data applicable to mosques, which estimated required parking spaces between 36 and 110.  Bernards compromised at 107 parking spaces, when in fact, only 50 were required under Bernards accepted church parking ratio of 3:1.

The rationale for the increased parking requirement rested on Bernards’ determination that a mosque is not a church, despite the fact that Bernards’ zoning code does not state that a mosque is not considered a church.  Bernards did not stop there.  Bernards went on to say that only Christian places of worship are considered  churches, and as a result thereof, not only was the 3:1 parking ratio not applicable to Islamic Society’s site plan application, but also, Bernards maintained discretion in reviewing Islamic Society’s application and essentially had unfettered discretion in determining parking requirements.

At the conclusion of all hearings and testimony, Bernards’ planning board denied the site plan application.  Islamic Society commenced an action in federal court alleging violations under RLUIPA.

DECISION

In granting partial summary judgment, the Court rejected Bernards’ position that mosques are not considered churches.   In fact, the Court specifically stated that a mosque or any place of religious worship, whether a church or not, is protected under RLUIPA.  Bernards’ unsupported determination that mosques are not considered churches violated Islamic Society’s rights under the Nondiscrimination Provision of RLUIPA.

Additionally, with respect to the increased parking, and Bernards’ position that it maintained unfettered discretion to determine parking requirements, the Court relied upon its determination that a mosque is entitled to the same protections as a church;  as such, the Bernard parking ordinance ratio of 3:1 should have been applied equally to Islamic Society as it had historically been applied to Christian and Baptist churches and synagogues that were previously approved in Bernards.  Further, the Christian, Baptist and Jewish places of worship were typically granted in less than six months, and in most instances, with less then four public hearings.

CONCLUSION

The decision in this 57-page case cannot be justly analyzed in a short blog post.  Given the state of our country at this time, when it comes to freedom of religion and the consequences that we suffer as a result of our differing beliefs, it would be a worthwhile allocation of any land use attorney’s time to read this decision.  If nothing else, it reminds us all that one of the basic tenets of our American freedoms is the freedom to be different and be accepted.

We recently came across an interesting decision from a federal appeals court involving a town’s rescission of a 25-year-old negative declaration issued under the New York State Environmental Quality Review Act (SEQRA).  A “negative declaration” is a written determination by a lead agency that a proposed action will not result in significant adverse environmental impacts. Because of the convoluted history of the matter as it wound its way through both state and federal courts, we think you may find it interesting as well.

In Leonard, et al, v. Planning Board of the Town of Union Vale, __F.3d __ (2d Cir. September 2, 2016), the Second Circuit Court of Appeals ruled that the 2012 rescission of a 1987 negative declaration was not a final determination, requiring the applicant to complete the SEQRA review process before resorting to court.    Here’s the history.

The Planning Board Decision

In 1986, plaintiffs applied to have their 950-acre property, located in the Town of Union Vale in Dutchess County, designated as an “open development area” under Town Law § 280-a(4).  Town of Union ValeThe application was granted by the Town, which permitted the site to be subdivided into private lots with private roads.  In 1987, the Planning Board of the Town of Union Vale (Planning Board) issued a negative declaration with respect to the entire project.   The first section of the project was approved in 1987 and was developed with large single-family homes.  In 2009, plaintiffs applied for a subdivision of the next section.  Changes to the layout required by the Planning Board for this second phase would cause significantly more ground being disturbed than was initially planned.  In 2012, the Planning Board determined that the application was incomplete and decided a new SEQRA review was required because the 1987 negative declaration did not apply to the current application.

Plaintiffs Challenge The Planning Board’s Determination

Plaintiffs sued the Planning Board in state court in 2012, challenging the incompleteness determination. The state trial and appellate courts determined that the 2012 Planning Board incompleteness resolution was improper and annulled it. The courts further ruled that the Planning Board must consider the 2012 application on the basis of the 1987 negative declaration unless the Planning Board determines that the 1987 negative declaration should be amended or rescinded.  The Planning Board held a public hearing in June 2013.  It thereafter adopted a resolution rescinding the 1987 negative declaration on the grounds that the project, and the applicable regulations, had undergone substantial changes since 1987; and the project may result in significant adverse environmental impacts.  According to plaintiffs, no specifics about any such impacts were contained in the resolution.

Not surprisingly, plaintiffs sued again. In 2013, plaintiffs commenced another action in state court, alleging federal due process violations and state law violations. The defendants removed the case to the federal district court, which remanded the state claims back to the state court and dismissed the federal due process claims on the grounds that plaintiffs did not have a property right in the negative declaration. See Leonard et al., v. The Planning Board of the Town of Union Vale, 154 F.Supp.3d 59, 67-68 (SDNY 2016).

Plaintiffs appealed the federal district court’s dismissal of the federal due process claims.  Following the United States Supreme Court ruling in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City,  473 US 172 (1985), and the Second Circuit’s prior rulings  in Southview Associates,  Ltd., v. Bongartz, 980 F.2d 84 (2d Cir. 1992) and Kurtz v. Verizon New York, Inc., 758 F.3d 506 (2d Cir. 2014), the Second Circuit ruled that before plaintiffs can bring a federal due process challenge to a local land-use claim, the local agency must render a “final decision.”

The Second Circuit found the negative declaration rescission was not a final decision because plaintiffs’ application was still pending before the Planning Board, and the Town still needed to complete the project’s SEQRA review.  The Second Circuit noted that in rare exceptional cases, the finality requirement can be excused.  This requires a showing that the Planning Board already made up its mind and that further proceedings before the Planning Board were futile or that the board used unfair tactics to delay the approval process.  In this case, the Second Circuit found these futility criteria missing.  It also noted that the mere fact that plaintiffs would incur expenses to go through the SEQRA process was not a basis for finding futility.    See Leonard, et al, v. Planning Board of the Town of Union Vale, __F.3d __ (2d Cir. September 2, 2016).

In October 2015, the state court dismissed the remanded state claims, finding that the Planning Board’s rescission was not arbitrary or capricious and did not violate law. That decision is on appeal to the state appellate court.

The Outcome

Plaintiffs incurred a lot of legal fees and spent more than three years challenging the 2012 rescission in both federal and state courts and wound up back where they started – before the Planning Board going through the SEQRA process.

As New York State land use practitioners and those interested in land use development, we are all well aware of the perils of failing to refer a land use application to the governing county land use commission.  When discussing the referral process with my colleagues and those responsible for  General Municipal Law 239-m referrals, such as town and village zoning and planning boards, their board members and their support staff, the usual response is “We refer everything.”

building permitThis pervasive misunderstanding of what types of land use applications must be referred, and when they must be referred, leads not only to delays in processing applications for public hearings, but also overloads county land use commissions, leading to delays in land use decisions and diverting the county planning commissions from their role in evaluating projects of countywide concern.

What is General Municipal Law 239-m?

General Municipal Law 239-m states in relevant part:

(a) “[t]he following proposed actions shall be subject to the referral requirements of this section, if they apply to real property set forth in paragraph (b) of this subdivision:

(i) adoption or amendment of a comprehensive plan pursuant to section two hundred seventy-two-a of the town law, section 7-722 of the village law or section twenty-eight-a of the general city law;

(ii) adoption or amendment of a zoning ordinance or local law;

(iii) issuance of special use permits;

(iv) approval of site plans;

(v) granting of use or area variances;

(vi) other authorizations which a referring body may issue under the provisions of any zoning ordinance or local law.

(b) The proposed actions set forth in paragraph (a) of this subdivision shall be subject to the referral requirements of this section if they apply to real property within five hundred feet of the following:

(i) the boundary of any city, village or town; or

(ii) the boundary of any existing or proposed county or state park or any other recreation area; or

(iii) the right-of-way of any existing or proposed county or state parkway, thruway, expressway, road or highway; or

(iv) the existing or proposed right-of-way of any stream or drainage channel owned by the county or for which the county has established channel lines; or

(v) the existing or proposed boundary of any county or state owned land on which a public building or institution is situated; or

(vi) the boundary of a farm operation located in an agricultural district, as defined by article twenty-five-AA of the agriculture and markets law, except this subparagraph shall not apply to the granting of area variances.”  Id.

When Does General Municipal Law 239-m Apply?

When sections 239-m (a) and (b) are read in conjunction with each other, only specific actions must be referred, and only when said specific actions are located within 500 feet of designated boundaries.  Despite the clear language of the statute, it has become routine for towns and villages to refer all land use actions of any kind wherever located.

In an effort to combat unnecessary referrals, the Suffolk County Planning Commission adopted legislation providing towns and villages located in Suffolk County with an opportunity to enter into an Inter-Municipal Agreement (“IMA”) whereby specific types of land use applications are per se designated applications of local determination and do NOT require referral to the Suffolk County Planning Commission.

On September 3, 2008, the Suffolk County Planning Commission adopted legislation which specifically exempts the following land use applications from GML 239-m referral requirements:

1.  All area variances associated with single-family residences;

2.  Change of one permitted use to another with no changes in parking requirements (i.e. retail to office);

3. Minor additions less than 1,000 square feet with no change to use or occupancy;

4. Site plan applications proposing less than 5,000 square feet of new or renovated floor area or less than 10,000 square feet of land disturbance;

5. Exception:  Actions that have been given a Positive Declaration pursuant to SEQR or actions involving property abutting state or county parkland, the Atlantic Ocean, Long Island Sound, any bay in Suffolk County or estuary of any of the foregoing bodies of water shall be subject to the full review process.

Spreading the Word about Inter-Municipal Cooperation

Despite this clear exemption, and although the Towns of Babylon, Islip, Huntington, Riverhead and Southold have entered into IMAs with Suffolk County Planning, many other towns and villages have not.    When discussing the availability of the IMA option with colleagues and town and village officials, many are not even aware of this option.  This option is also available in Nassau County.

So, now that you are aware of the IMA option and how valuable this option can be in moving land use applications more quickly and without unnecessary municipal review, we land use practitioners must stick together and spread the word.  If you are a town or village official or a planning or zoning board member, please investigate this option with your governing county land use commission.

As land use attorneys and those participating in the development community know, the land use approval process is subject to many layers of oversight and review.  It is incumbent upon us to spread the word that one layer of review can  be eliminated by implementing an IMA with your specific county.  In so doing,  not only  will the overall time for a land use application decrease at the town and village level, but also, county planning commissions will be able to commit the necessary resources to evaluate projects of countywide concern, as they are specifically designed to do.

In 2000, Plaintiff Steven Sherman applied to the Town of Chester Planning Board for subdivision approval while in the process of purchasing nearly 400 acres for $2.7 million dollars. According to the Second Circuit Court of Appeals in its recent decision in Sherman v Town of Chester, 752 F3d 554 [2d Cir 2014], “[t]hat application marked the beginning of his journey through the Town’s ever-changing labyrinth of red tape.”

The short version of the more than a decade’s worth of red tape by the Town includes: a six-month moratorium on major subdivision approvals; extension of the moratorium by the Town which singularly affected the Plaintiff; litigation by the Plaintiff to end the moratorium; changes to the Town’s zoning regulations; amendments to Plaintiff’s application to satisfy the new requirements; additional changes to the Town’s zoning regulations; the Town Board’s refusal to entertain the application after Planning Board approval; and the Town amending its zoning regulations for a third, fourth and fifth time.

Additionally, because the application was originally filed in 2000, a Supplemental Draft Environmental Impact Statement (“DEIS”) was required with the resubmitted application.  Certain Town staff changed since the initial filing, including the Town Engineer.  The Plaintiff was charged the expense of having the new engineer review the entire project, although he had previously been charged to have the project reviewed by the earlier engineer.

Moreover, in September of 2009, and after the Plaintiff submitted two different versions of his earlier subdivision proposal, he learned that the Planning Board Chairman had been replaced with a new Chairman, who was known to be openly hostile to the project, and had, in fact, written letters to the Town in 2001 in opposition to the project.  The new Chairman requested $25,000.00 in consulting fees, required an additional “cluster plan” of the Plaintiff, and, lastly canceled the Plaintiff’s appearance at the Planning Board’s monthly meeting, demanding an additional $40,000 more in consultants’ fees.

In 2008, Sherman filed suit against the Town and other defendants in federal court, alleging, in part, a taking of his property by the Town.  Sherman voluntarily dismissed the first case, then filed another action seeking similar relief in state court.  The Town removed to federal court, and moved to dismiss on ripeness grounds.  The District Court for the Southern District in Sherman v Town of Chester, US Dist Ct, SD NY, 12 Civ 647, Ramos, J., 2013, dismissed some of his claims on the merits, and most because they were unripe.  The District Court concluded that Sherman had failed to show that seeking a final decision from the Town would be futile, applying the first prong of the two part test set forth in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 [1985], requiring that the state regulatory entity has rendered a “final decision” on the matter.

On May 16, 2014, the Second Circuit issued a decision that reversed the District Court’s holding and determined that Sherman’s takings claim was ripe.  The Court held that seeking a final decision from the Town would be futile because the Town had used unfair and repetitive procedures to avoid a final decision.

As set forth in the decision:

Every delay in zoning approval does not ripen into a federal claim.  Unfortunately, it is no simple task to distinguish procedures that are merely frustrating from those that are unfair or would be futile to pursue.  But when the government’s actions are so unreasonable, duplicative, or unjust as to make the conduct farcical, the high standard is met.

And it was met in this case.  Seeking a final decision would be futile because the Town used—and will in all likelihood continue to use—repetitive and unfair procedures, thereby avoiding a final decision.  Sherman is therefore not required to satisfy the first prong of Williamson County.  This conclusion is consistent with the principles behind Williamson County. The final decision requirement ensures that a court knows how far a regulation goes before it is asked to determine whether that regulation “goes too far.”  In this case, we are not dealing with any one regulation but the Town’s decade of obstruction. A final decision is not necessary to evaluate whether that obstruction was itself a taking.

Sherman v Town of Chester, 752 F3d at 563, emphasis added.  The Court thereafter considered a number of other issues, including the merits of the takings claim, and found that Sherman had stated a claim that the Town effected a taking.  The Court remanded the matter to the District Court for further proceedings consistent with its opinion.

By decision dated March 13, 2014, the Appellate Division, Second Department, upheld a trial court decision in Harbor Park Realty, LLC v. Modelewski, affirming certain relief granted by the Town of Huntington Zoning Board of Appeals (“ZBA”) to 1033 Fort Salonga, LLC, et al.  (hereinafter “1033”)  for a depth extension into a residential zone and parking, steep slope and retaining wall variances.  In upholding said relief and dismissing an Article 78 proceeding filed by  Harbor Park Realty, LLC, (“Harbor Park”), a nearby property owner, the Appellate Division  paved the way for 1033 to construct a commercial building to serve in relocating 1033’s Wine and Spirit’s business from Harbor Park’s Norwood shopping center to a nearby property.  Relocation of the Wine and Spirit’s store resulted in Harbor Park’s loss of its anchor tenant.

At first blush, the Appellate Division decision in Harbor Park resembles most Article 78 proceeding decisions involving the question of whether the decision of the ZBA was in keeping with the balancing test set forth in  Town Law 267-b(3)(b) and insuring that the decision of the ZBA was not illegal, arbitrary and capricious or an abuse of discretion.  In upholding the trial court decision, the Appellate Division stated that the “ZBA engaged in the balancing test prescribed by Town Law 267-b(3)(b), and properly found that the requested variances were not substantial, would not produce an undesirable change in the character of the neighborhood or a detriment to nearby properties, and would not have an adverse effect or impact on the physical or environmental conditions in the neighborhood.”  See, Matter of Pecoraro v. Board of Appeals of Town of Hempstead; Matter of Daneri v. Zoning Board of Appeals of the Town of Southold.  

However, upon review of several newly reported Appellate Division decisions, a second decision dated April 30, 2014, Harbor Park Realty, LLC v. Mandelik, caught my eye.  In Mandelik, the same property dispute was reviewed again. However, in Mandelik, petitioner Harbor Park sought review of site plan approval granted to 1033 by the Huntington Planning Board.  In upholding the site plan approval, the Appellate Division stated “[a] local planning board has broad discretion in deciding applications for site-plan approvals, and judicial review is limited to determining whether the board’s actions was illegal, arbitrary and capricious, or an abuse of discretion. See, Matter of Hejna v. Planning Board of Village of Amityville.  Finding that the decision of the “[P]lanning Board of the Town of Huntington had a rational basis, and was not illegal, arbitrary and capricious, or an abuse of discretion” the appeal was dismissed.

In light of the legal challenge to the decisions of both the ZBA and the Planning Board, I thought it worthy to give the trial court decision a read.  This is where the sour grapes ripened.  Harbor Park is the owner of a shopping center wherein 1033’s Wine and Spirits store is the anchor tenant.  1033 purchased an adjacent property and sought to relocate the Wine and Spirits business to the newly developed site.   The ZBA and the trial court both noted that Harbor Park benefitted from the same depth extension that 1033 sought.  Fairness and equity dictated that Harbor Park could not object to 1033’s request for the same relief that Harbor Park received.  Further, the trial court noted that “[t]he petitioner’s arguments directed at the lot and size variance, parking issues and the steep slope variance appear really concerned not with claims of arbitrariness or capricious conduct by the ZBA (especially in light of the steep slope issues and depth extension at the other commercial establishments in the area) but rather its own economic interest because a valued and ‘anchor’ tenant is leaving to occupy the adjoining property.”

When the facts of a land use case involve parties who enjoy a business relationship, joint economic interest or even business competition, a land use practitioner should be  prepared for a court’s potential skepticism regarding a land use challenge.  If it appears to the Court that the objector is most likely looking to protect its economic interest instead of challenge an arbitrary land use decision, it is unlikely that the objector will prevail.  As noted in Genovese Drug Stores, Inc. v. Town Board of the Town of Islip, wherein the Court dismissed an Article 78 proceeding commenced by Genovese when CVS sought to located across the street, the Court stated that “the only legitimate objection to the determination of the Board’s (site plan approval) by Genovese would be increased competition as a result of the construction of a CVS pharmacy, and zoning laws do not exist to insure limited business competition.”

As recently reported by John Callegari of Long Island Business News, the Town of Smithtown is considering the adoption of an overlay zoning district for the Hauppauge Industrial Park, which is home to some 1,300 companies.  The new zoning regulations would relax some of the existing Light Industrial zoning regulations that currently apply to buildings located in the industrial park, providing business owners with the opportunity to expand their facilities and operations.

Most notably, the proposed overlay district regulations would allow most buildings in the industrial park to increase their height from 35 feet to 50 feet, with buildings along Motor Parkway rising even higher.  The regulations would also permit outdoor storage, allow for increased signage and the use of shared parking lots.

The overlay district regulations will allow warehouse and manufacturing buildings to expand to the heights needed to accommodate taller racking and new equipment and machinery that they need to operate efficiently.  To encourage the creation of an office corridor that would compete with Melville’s Route 110 corridor, office buildings along Motor Parkway would be permitted to have a maximum height of 100 feet.

The new zoning regulations for the industrial park are being made possible by an $85 million dollar upgrade to the area’s sewer district that will include improvements to increase the capacity of the sewage treatment plant’s processing capacity from 300,000 gallons per day (gpd) to slightly more than 1 million gpd.  This increased capacity will be sufficient to allow all buildings in the industrial park to connect to the sewer district, even at the new building heights contemplated by the overlay regulations.  According to Suffolk County Department of Public Works Commissioner Gil Anderson, the additional sewage capacity may also stimulate economic development by allowing companies to utilize new processes that are not available to them due to existing restrictions on wastewater discharge.[1]

If adopted, these new zoning regulations have the potential to significantly increase the physical footprint of the industrial park, which is already one of the largest industrial parks in the nation.  However, for growing businesses that are in need of additional space, the new regulations will provide an alternative to relocation.  These businesses will now have the option of investing in the expansion of their existing facilities, which, in turn, is likely to create additional job opportunities.

According to the Town’s Planning Director, a draft of the overlay plan is complete and the Town Board may adopt the new regulations as early as this summer.

Farrell Fritz will continue to monitor the zoning amendments proposed for the Hauppauge Industrial Park, and our attorneys stand ready to assist local businesses that wish to take advantage of the expansion opportunities that will be created by the Town’s new zoning laws.

[1].  http://hauppauge.patch.com/articles/suffolk-obtains-land-for-industrial-park-sewage-expansion