In 1999, the Greenport Group, LLP (“Greenport Group”) acquired a 31 acre parcel of land located on the east side of Chapel Lane and the north side of the Main Road in Greenport in the Town of Southold. The southerly portion of the property was zoned “Limited Business” and the northerly portion was zoned “Hamlet Density”. When purchased, there were four buildings on the property, each containing two residential units that were part of a larger project to build multi-residence senior citizen housing, which had been approved for an additional 140 units. The Planning Board and Zoning Board of Appeals granted a conditional site plan and special exception approval for the construction of the multiple residence complex in or about 1976, with certificates of occupancy being issued for the four buildings on the property in 1984. The additional units were never built and no further construction took place on site.
On September 12, 2000, the Town Board of the Town of Southold adopted a local law, Local Law 20 of 2000, changing the zoning of the property to Residential Low Density, R-80. The R-80 designation increased the minimum lot size permitted on the property from 10,000 square feet to 80,000 square feet. The local law was filed with the Secretary of State on October 2, 2000. Thereafter, the Greenport Group filed a hybrid Article 78 proceeding and Declaratory Judgment action in Supreme Court on February 2, 2001, entitled Greenport Group, LLP and Adrienne Solof v. The Town Board of the Town of Southold, Index No. 01-2730, seeking a judgment declaring that the local law up-zoning the property was null and void. Greenport Group alleged that the Town Board’s actions were arbitrary and capricious, that the re-zoning subjected their property to disparate treatment and constituted reverse spot zoning, that they had vested rights in the prior zoning designations, that the rezoning was inconsistent with the goals of the Town Comprehensive Plan, and the rezoning constituted a regulatory taking of the property without just compensation. In response, the Town Board moved for summary judgment.
The Supreme Court, Suffolk County, by decision dated June 17, 2015, granted summary judgment in part, dismissing the Greenport Group’s claims that (i) the Town failed to comply with the notice requirements rendering the local law adoption invalid since plaintiff actually participated in the local law hearing, (ii) the Town’s adoption of the local law changing the zoning constituted impermissible spot zoning where Greenport Group failed to allege or offer evidence that the change was “for the benefit of the owner to the detriment of other owners”, (iii) that Greenport Group had vested property rights in the prior zoning of the property when no construction was performed on site in connection with the development prior to the zone change, and (iv) the re-zoning constitutes a taking without just compensation since Greenport Group citing an 80% diminution of the property’s value was deemed insufficient and failed to prove that the property was incapable of producing a reasonable return or that the economic value of the property was destroyed by the zone change.
The Supreme Court denied the Town’s motion for summary judgment relative to the second and fifth causes of action asserted by Greenport Group. The second and fifth causes of action asserted by the Greenport Group alleged that the Town Board’s adoption was arbitrary and capricious representing an unconstitutional abuse of the Town Board’s zoning authority, and that the re-zoning was unjustified and failed to achieve the purported goals of the local law and land use plans. Here, the Court found that Greenport Group had raised triable issues of fact as to whether the Town Board’s stated intent of the re-zoning was the actual purpose for re-zoning Greenport Group’s property. The Supreme Court stated, “[p]arenthetically, since the re-zoning was enacted approximately 14 years ago, the witnesses’ recollection as to the zoning classification was legitimately less than ideal. Although the Town Board’s decision appears to be supported by the CR48 Land Use Study… and tremendous deference is given to the local municipality’s decision-making process and its authority, the Court will not simply rubberstamp a local municipality’s assertion that it was following the advice of its own consultant. Instead, the Court must examine the record, including the adopted legislation, to determine whether the legislation was reasonable and enacted in accordance with the municipality’s land use plan. Here, notwithstanding the documentary evidence supporting the Town Board’s claim, plaintiffs raise questions of fact concerning similarly situated properties included within the CCG studies but treated differently by the Town Board.” Therefore, the Supreme Court denied the Town’s motion for summary judgment with respect to these two causes of action.
The parties cross-appealed the matter and the Appellate Division, Second Department, in its decision entitled Greenport Group, LLC et al., v. Town Board of the Town of Southold, dated December 5, 2018, remitted the matter to the Supreme Court for “severance” of the causes of action asserted by Greenport Group and the entry of judgment declaring the Local Law that changed the zoning classification was valid. The Appellate Division reviewed and affirmed the lower court’s dismissal of each of Greenport Groups causes of action. However, the Court found that the Supreme Court should have granted the Town Board’s motion for summary judgement with respect to the second and fifth causes asserting that the rezoning of the property was arbitrary and inconsistent with the comprehensive plan. The Appellate Division cited the “heavy burden of countering the strong presumption of validity accorded the enactment [of local laws]” and further stated that “if the validity of the legislative classification for zoning purposes is even ‘fairly debatable,’ the classification must be sustained upon judicial review (citing, Matter of Town of Bedford v. Village of Mount Kisco, 33 NY2d at 186).” The Appellate Division also found that Greenport Group failed to raise a triable issue of fact, contrary to the Supreme Court’s findings, regarding the purpose and intent of the re-zoning stating, “[w]hile the courts must satisfy themselves that the rezoning meets the statutory requirement that zoning be in accordance with the comprehensive plan of the community, this does not entail examining the motives of local officials (Udell v. Haas, 21 NY2d 463, 471).” Ultimately, the Appellate Division found that the local law changing the zoning classification of the Greenport Group’s property was valid and remitted the matter to the Supreme Court for appropriate judgment.