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.

shutterstock_637510813On April 25, 2017, the Southold Town Board adopted Local Law No. 5 of 2017, which amends the Town’s Zoning Code as it relates to agricultural uses. Specifically, the local law amends and adds certain definitions to the Code in recognition of the changes in modern farm operations. The changes are also consistent with the expanded definitions of agriculture found in New York State’s Agriculture and Markets Law.

The new law broadens the scope of agricultural practices by adding several definitions, including those for agriculture, agricultural production, agricultural processing, farm operations, farmhouses, processed agricultural product and on-farm operation direct marketing.  These changes expand agricultural practices beyond the growing of crops and raising of livestock and will allow farmers to process their crops and other agricultural products onsite and market them for sale, much like vineyards that make wine on their properties. Such processed agricultural products include jams, jellies, cheeses, potato chips, jerkies, meats, fowl, fish, breads and baked goods, beer, wine and distilled alcoholic and non-alcoholic beverages.

Farmers will also be allowed to sell their processed agricultural products directly to consumers from within buildings constructed on the farm for the purpose of marketing their products.  The law even allows non-farmers to sell home grown fruits, vegetables or plants to the general public from a “roadside stand,” which is defined as a display area that is less than 100 square feet in size located on the same parcel where the products are grown.

According to Chris Baiz, the chairman of the Southold Agricultural Advisory Committee and a fourth-generation farmer, the high cost of land requires farmers to achieve greater cash flows in order to operate successfully.  These new changes should help local farmers realize more income from their lands by allowing them to process and market value-added products from within their operations.

The Town of Southampton recently held several public hearings to consider a local law requiring an updated certificate of occupancy prior to all property transfers. Specifically, the local law proposed amending Town Code §123-16, Certificate of Occupancy, to state that “upon any change in ownership of a property, an updated certificate of occupancy shall be obtained.” After consideration at several meetings, starting in December of 2016 and ending in March of 2017, the Town Board determined not to proceed with the amendment.

Many East End villages already require an updated certificate of occupancy prior to transfers of property, [1] however East Hampton, Southampton and Southold towns do not. During its public hearing process, the Town Board of the Town of Southampton waded through the many issues raised with regard to the impacts of requiring an updated certificate of occupancy upon both property owners and the Town Building Department. The Town considered allowing exceptions for those transfers conducted for estate purposes only and those transfers between individuals and corporations, limited liability companies, trusts or other entities where the majority shareholder would be the same as the prior fee title owners. Additionally, the Town was asked to consider those properties that cannot obtain an updated certificate of occupancy upon transfer due to over-clearing where compliance requires significant re-vegetation of the property and in certain circumstances Planning or Conservation Board approvals. Obviously re-vegetation cannot occur during the winter months and there is no temporary certificate of occupancy provision in the Town of Southampton’s code potentially putting property owners in a hurry to sell in a difficult situation.

The Appellate Division, Second Department, addressed an updated certificate of occupancy code provision in Lazy S Group I, v. Gomez, et al., 60 A.D. 3d 999, 876 N.Y.S.2d 473 (2d Dept. 2009). This case involved an action for specific performance of a contract for the sale of real property in the City of Peekskill where the contract required the seller to deliver a valid certificate of occupancy authorizing the use of the premises as a four-family dwelling. At closing, the parties learned that the certificate of occupancy for the premises permitted its use as a “three-plus” family dwelling but not as a four family dwelling and title did not close. Litigation followed and during that time period the City of Peekskill enacted a new provision of the Code of the City of Peekskill requiring that an updated certificate of occupancy be obtained before any improved real property that is transferred may be used or occupied. The code imposed the burden of obtaining the certificate of occupancy upon the seller “unless the parties agree otherwise in their contract of sale.” (Peekskill City Code §300-48A(3)). The Supreme Court granted the seller’s motion for summary judgment dismissing the complaint and directing the delivery of the down payment to the seller as liquidated damages. The Appellate Division reversed noting that while the City Code imposed the burden of obtaining an updated certificate of occupancy on the Seller unless the contract stated otherwise, the contract in this case was silent with respect to which party must obtain the updated certificate of occupancy. Thus, the Court found that triable issues of fact existed as to whether the communications between the parties and conduct of the parties at closing constituted any agreement with regard to the updated certificate of occupancy and whether there was a breach and if so, which party was in breach of contract. This case illustrates issues that arise when updated certificates of occupancy are required by municipalities and further illustrates the benefit of addressing such matters with specificity in the contract of sale. Indeed, most real estate attorneys require updated certificates of occupancy in their riders to the contract and are successful in obtaining same unless the property is being sold “as is” or there are existing illegal structures that would take a significant amount of time and village/town approvals to cure (as in the case of those over-cleared properties that require costly re-vegetation and further town approvals).

Requiring updated certificates of occupancy for real property transfers burdens homeowners with legalizing all structures on their property and necessarily can delay real estate transactions to the chagrin of real estate brokers. However, the law would obviate any need for protracted and often difficult negotiations regarding properties that do not comply with the law or have existing, illegal structures and would therefore be welcomed by most attorneys. Regardless, for real property transfers in the East End towns, attorneys must continue to resolve such matters through contract negotiations.

[1] See Village of Quogue; Village of Sag Harbor Code §300-17.3(B); Village of Southampton Code §A119-8(A); Village of North Haven Code §55-7(A); Village of Westhampton Beach Code §197-64(C); & Village of East Hampton Code §104-11(A), among others.