While the Town of Halfmoon (“Town”) in Saratoga County, New York, may be far from any given reader, the issues in Micklas v. Town of Halfmoon Planning Board, 170 A.D.3d 1483 (3d Dep’t 2019), are close to the heart: whether a golf course may brew beer on-site for its patrons, and does such a brewery constitute an accessory use or a separate commercial business. The Appellate Division, Third Department, heard appeals from both an order and a judgment of the Supreme Court, Saratoga County, which denied a preliminary injunction and dismissed a petition to annul the site plan amendment and special use permit for the brewpub.
The Golf Course, Plans for the Brewpub and the Opposition
The Fairways of Halfmoon, LLC (“Fairways”) operates a golf course with a clubhouse, pro shop, restaurant, bar and banquet house on property zoned within the Town’s Agriculture-Residence zoning district (“ARD”). In 1999, Fairways obtained site plan approval and a special use permit for the improvements on the property. Eighteen years later, in 2017, Fairways sought a site plan amendment and special use permit to, among other things, build an addition to the existing bar and restaurant to brew beer for patrons’ purchase and consumption. Two neighbors opposed the application and argued the brewpub was not a permitted use in the ARD and would negatively affect the character of the neighborhood.
The Town’s engineer characterized the brewpub as a Type II Action under the State Environmental Quality Review Act (“SEQRA”), for which no environmental review is required. The Town Planning Board (“Planning Board“) used the same characterization throughout the application review process. However, in its May 2017 resolution amending the site plan (with conditions) and granting the permit, the Planning Board inexplicably denoted the brewpub as an Unlisted Action (which requires environmental review under SEQRA) and issued a negative declaration (finding no significant environmental impact). The neighbors argued that these inconsistent project classifications and analyses, among other things, constitute noncompliance with SEQRA, and therefore the approvals must be annulled.
One of the neighbors submitted an interpretation request to the Town’s Director of Code Enforcement (“Director”) asking whether a brewpub could be built within the ARD and in conformance with the Town Code. The Director issued a responsive letter concluding the Town Code did not speak to where a building could be constructed. In addition, the Director issued a second letter advising that the Town’s Code Enforcement Office does not address zoning issues and that such questions must be directed to the Planning Board. The neighbor appealed the Director’s determinations to the Town Zoning Board of Appeals (“ZBA”), which upheld them in a September 2017 decision.
The Challenges, the Case and the Resolution
The neighbors commenced two Article 78 proceedings; the first challenged the Planning Board’s decision to amend the site plan and issue the special permit and alleged SEQRA violations, and the second challenged the ZBA’s decision to uphold the Director’s determinations. These two cases were consolidated. In addition, the neighbors sought a preliminary injunction barring construction of the brewpub during the pendency of litigation.
The Supreme Court issued an order (“Order“) denying the preliminary injunction. Fairways proceeded with construction of the brewpub throughout the litigation and, during appeal, would argue the challenges should be dismissed on the grounds of mootness and laches because the brewpub was substantially complete. Ultimately, the Supreme Court issued a final judgment (“Judgment“) dismissing the consolidated proceedings. The neighbors appealed from both the Order and the Judgment.
The Appellate Division dismissed the appeal from the Order denying the preliminary injunction because no appeal lies as-of-right from a non-final order in an Article 78 proceeding. The appeals court noted that the neighbors could have raised the denial of injunctive relief on their appeal from the Judgment, but they failed to brief those issues on appeal from the Judgment, so these issues were abandoned.
Substantial Completion Does Not Necessarily Moot a Claim; No Laches
Regarding the appeal from the Judgment, Fairways argued they had substantially completed the brewpub, and so the appeal was moot. The Appellate Division rejected Fairways’s mootness argument because: (i) substantial completion does not necessarily render an appeal moot; (ii) the brewpub addition could be razed or the brewing operations enjoined within it; (iii) the neighbors promptly challenged the approvals and moved for preliminary injunctive relief; and (iv) the Supreme Court made clear that injunctive relief remained a possibility and Fairways should be incentivized to limit construction activity in the meantime. Accordingly, Fairways was on notice that its construction of the brewpub was at its own risk and the appeal was not moot. The Appellate Division also denied Fairways’s claim of laches, finding that there was no prejudicial neglect in the neighbors promptly asserting their claims.
Turning to the merits, the Appellate Division addressed: (i) the Planning Board’s SEQRA review; (ii) the Planning Board’s approval of the brewpub; and (iii) the ZBA’s decision to uphold the Director’s determinations.
SEQRA Sufficed by Substance over Form
With respect to SEQRA, the Planning Board proffered clerical error as their excuse for the inconsistent SEQRA nomenclature and process – having characterized the brewpub project as a Type II Action throughout review, yet resolving to classify the brewpub as an Unlisted Action and issuing a negative declaration. The appeals court held that, even if there was no clerical error, the Planning Board’s review sufficed SEQRA for purposes of reviewing an Unlisted Action. The short form environmental assessment form gave no reason for concern. The Town’s engineer opined that no further environmental review was necessary. And, the Planning Board solicited input from the community, public safety officials and interested agencies.
The review process established the brewpub project was limited in scope and confined to already disturbed areas around the clubhouse. Furthermore, the conditions imposed upon the amended site plan addressed the few potential environmental impacts, i.e. parking, ingress/egress and disposal of brew byproducts. The Appellate Division concluded:
“[A]lthough it might have been better for the Planning Board to set forth a more reasoned elaboration for the basis of its determinations, this particular record is adequate for us to exercise our supervisory review to determine that the Planning Board strictly complied with SEQRA procedures applicable to unlisted actions, and the negative declaration it made is supported by a rational basis in the record.”
Limited Brewing is Attendant to the Operations of the Golf Course
Next, the Appellate Division addressed whether the Planning Board’s approvals were arbitrary and capricious. The ARD permits “private or public recreation or playground areas, golf clubs, country clubs or other open recreation uses” as special uses, but does not permit “commercial facilities or amusement parks.” Fairways held a special permit for a restaurant, bar and banquet house attendant to its golf club since the 1990s, and sought to add the brewpub as an extension of the bar and restaurant (with additional space for it). Fairways represented its brewer’s license limited retail beer sales to customers on-site and would not exceed 400 kegs per year. The appeals court concluded:
“Inasmuch as the clubhouse bar selling alcohol to customers is a permissible special use [in the ARD] as an attendant use to a golf club, the Planning Board had no obligation to, sua sponte, refer the matter to the ZBA for a superfluous interpretation as to whether an affiliated brewpub making similar sales of its own beer at the same site under the same liquor license was a prohibited commercial facility.”
The Planning Board reviewed the requisite factors set forth in the Town Code and allowed the brewpub – with conditions intended to minimize its negative impacts on neighbors and to ensure its functionality as a permitted amenity to the golf club, rather than a stand-alone business. This determination is rational.
Vague Inquiries to Code Enforcement and the ZBA Do No Warrant Judicial Review
Lastly, the Appellate Division considered the challenge to the ZBA’s decision to uphold the Director’s determinations, which the Supreme Court declined to rule on. The Appellate Division found that the challenged decision arose from a vague question posed by the neighbor to the Director, i.e. as to whether a generic brewpub could ever be built within the ARD in accordance with the zoning ordinance. It also noted that the ZBA agreed with the Director’s determinations. Because the ZBA’s decision had no connection to either the Planning Board’s approvals for the brewpub or the issuance of the building permit for the same, addressing this claim would have no immediate and practical consequence for the parties and would effectively be an advisory opinion. Therefore, the Supreme Court properly declined to consider it.
The Hank Hudson Brewing Co., founded by two high school teachers, opened at the golf course in the fall of 2018. Cheers.