In The Committee for Environmentally Sound Development v. Amsterdam Avenue Development Associates, LLC, 2019 WL 1206357, 2019 N.Y. Slip Op. 30621(U), Index No. 153819 (Sup. Ct. New York Co., March 14, 2019), the Supreme Court, New York County, granted a petition to annul a resolution upholding the issuance of a building permit (“Permit”) for the construction of a 55-story mixed commercial-residential tower (“Project”) because the interpretation of the applicable zoning resolution had changed after forty years. The Project site is comprised of 110,794 square-feet and is located at 200 Amsterdam Avenue, New York, New York (“Property”), within a zoning block bounded by Amsterdam Avenue, West 66th Street, West End Avenue and West 70th Street (“Block”).
The Block was originally a single, large zoning lot containing the Lincoln Towers condominium buildings. In 1977, the Block was subdivided into two separate zoning lots: one zoning lot contained the Lincoln Towers (“Lincoln Lot”) and the other zoning lot would ultimately, in effect, become the Property. Zoning lots and tax lots are two distinct concepts, and the distinctions and interpretations thereof under New York City’s (“City”) zoning resolution form the basis of the challenge and annulment of the Permit.
Amsterdam Avenue Redevelopment Associates, LLC (“Amsterdam”) sought to develop the Project, and the initial challenge claimed violations of the zoning resolution’s open space requirements. (We discussed the City’s Open Space law recently in a January 2019 Blog.) In May 2017, the City’s Department of Buildings (“City DOB”) concluded the Project satisfied the open space requirements, approved the proposed zoning diagram and issued the Permit (“May 2017 Approval”). The Committee for Environmentally Sound Development (“CESD”) appealed the May 2017 Approval to the City DOB’s Manhattan Borough Commissioner, who issued a notice of objections and intent to revoke the Permit. The City DOB noted it would verify the open space ratio and the proper formation of the zoning lot. In September 2017, the City DOB determined the Project complied with the zoning resolution, lifted the notice to revoke and reissued the Permit (“September 2017 Approval”).
CESD challenged the September 2017 Approval by appealing to the City’s Board of Standards and Appeals (“City BSA”), seeking an interpretation of the zoning resolution pertaining to whether the Property complies with the definition of a “zoning lot.” Specifically, CESD claimed that the Property, made up of parts of several tax lots, was not valid under the City’s zoning resolution and this noncompliance invalidates the Permit. Ultimately, in July 2018, the City BSA denied the appeal and upheld the Permit (“BSA Resolution”). CESD and the Municipal Arts Society of New York (“MASNY”) commenced an Article 78 proceeding seeking to annul the BSA Resolution, revoke the Permit and halt the Project’s construction.
CESD and MASNY argued the BSA Resolution should be annulled and the Permit invalidated because the 39-sided zoning lot comprising the Property is not a proper zoning lot within the meaning of the zoning resolution, i.e. it is comprised of several partial tax lots and, so, it is neither unsubdivided nor consists of two or more lots of record. Amsterdam argued the Permit was properly granted as per the historical interpretation of “zoning lot” under the City’s zoning resolution. In pertinent part, Amsterdam relied upon a City DOB Departmental Memorandum of Acting Commissioner Irving Minkin from 1978 (“Minkin Memorandum”), which summarizes a number of amendments to the definition of “zoning lot” at the time, and concluded that a single zoning lot may consist of one or more tax lots or parts of tax lots.
However, during the appeal before the City BSA, the City DOB’s Assistant General Counsel submitted a letter (“DOB Letter”) in which he agreed with CESD’s and MASNY’s interpretation of the definition of “zoning lot,” and admitted the Minkin Memorandum was incorrect. The DOB Letter also indicated that the City DOB began writing a departmental bulletin to clarify the proper procedures and forms required to create and verify proper formation of a zoning lot: “[i]n the context of the subject appeal, the Minkin Memo[randum’s] incorrect interpretation…came to light.” The correct interpretation does not permit a “zoning lot” to consist of parts of tax lots.
Despite this, the DOB Letter requested that the City BSA affirm the September 2017 Approval based upon the Minkin Memorandum because: (i) the Minkin Memorandum is not unreasonable (albeit incorrect); (ii) the September 2017 Approval is based upon a 40-year longstanding interpretation of the zoning resolution; and (iii) the Minkin Memorandum was not yet rescinded.
The Supreme Court granted the petition and annulled the BSA Resolution, which upheld the Permit, based upon the DOB Letter, among other things. The Court held the BSA Resolution is unreasonable because it failed to address the merits of CESD’s appeal of the Permit, i.e. interpreting a “zoning lot,” and it ignores the City DOB’s determination that the Minkin Memorandum is flawed, thus leaving the issue unresolved. Moreover, the BSA Resolution is inconsistent with the zoning resolution as interpreted by the City DOB. The City DOB stated that the Minkin Memorandum was incorrect at the time of CESD’s appeal, but the City DOB chose not to act on its draft bulletin and planned to hold the same in abeyance until the resolution of the issues herein. The City BSA’s decision to adhere to an admittedly wrong historical interpretation on the basis that it has not formally rescinded or superseded is erroneous. “[B]y publicly correcting its interpretation of [the zoning resolution] during [the appeal before the City BSA], the [City] DOB undermined the statutory basis for its issuance of the Permit in the first instance.”
The Court remanded the matter back to the City BSA and instructed the City BSA to review the Permit in accordance with the plain language of the zoning resolution and in accordance with its decision. The ruling follows the well-settled principle that, absent narrow exceptions (e.g. bad faith), the present interpretation or effect of the law at the time of the review of a determination applies – not the interpretation or effect at the time the challenged determination was made.
 The Lincoln Lot consisted of portions of tax lots 1, 30, 70 and 80 and the entirety of tax lot 90; the other lot consisted of portions of tax lots 1, 30, 70 and 80 and the entirety of tax lots 10, 12 and 65 (“Other Lot”). In 2005, tax lots 1, 30, 70 and 80 became condominium lots 7501, 7505, 7502 and 7503, respectively. In 2007, tax lots 133 and 134 merged into the Other Lot. (At one point or another, tax lot 12 was reapportioned into tax lots 12 and 18). In 2012, tax lot 65 became condominium lot 7506 and merged with the Other Lot. Lastly, in 2015, tax lots 10, 12, 18 and portions of condominium lots 7501 and 7505 were subdivided out of the Other Lot. Thus, the Other Lot ultimately consists of portions of condominium lots 7501, 7505, 7502 and 7503, the entirety of condominium lot 7506 and tax lots 133 and 134, and these comprise the Property.