The Long Island Central Pine Barrens Protection Act (“Act”), enacted in 1993, created the Central Pine Barrens  Joint Planning & Policy Commission (“Commission”) which implements the Comprehensive Land Use Plan (“Plan”).  Pursuant to the Act, a five-member Credit Clearinghouse Board (“Clearinghouse”) oversees a transfer of development rights program designed to maintain value in lands by providing for use and allocation of pine barrens credits (“PBC”).

A PBC represents the development potential that can be transferred from a privately-owned parcel of property within the core preservation area of the Central Pine Barrens (“Core”), or other sensitive area identified in the Plan, to a parcel in designated areas outside the Core. Landowners agreeing to receive such transfers may be eligible for additional density or increased sanity flow.

The Clearinghouse issues Letters of Interpretation (“LOI”) based on an application for PBCs.  The LOI determines the number of PBCs a parcel of land generates based on yield formulas and existing uses on a site.  After the LOI is issued, a landowner may request a PBC Certificate which is a transferable document for sale or use to increase density or sanitary flow.  After filing  a conservation easement in favor of the Commission, which sterilizes the property from future development, a PBC Certificate is issued to the landowner.  The PBC Certificate allocates the number of PBCs (development rights) severed from the parcel and can be sold on the open market in the range of $75,000.00 to $100,000.00 per credit.

Recently, the methodology of how PBC allocations were arrived at was the subject of an Article 78 litigation.  In Equine Facilities LLC, v Central Pine Barrens Joint Planning & Policy Commission et al., a horse farm that had received several LOIs in the past challenged the density methodology of the Clearinghouse and the Commission.  In 1997, the prior owner of the 34-acre horse farm located in the Core area of the Town of Brookhaven zoned A Residence with a Horse Farm Residence overlay sought and received a LOI allocating 4.48 PBCs.  The number of PBCs was determined by utilizing a yield factor of 0.16 PBCs per acre with one PBC eliminate because of an existing residence on site.  The Horse Farm Residence zoning district provides 10 acre per residence, while the A Residence only required a minimum lot size of 30,000 square feet.  The Clearinghouse’s LOI determination was not appealed to the Commission.  A new owner purchased the subject property in 2004.

In 2012, the Plan was amended and reduced the yield factor to 0.10 PBC per acre for nonresidential properties.  In 2012, the horse farm applied for a LOI, which because of the lower yield factor and other property improvements, resulted in a negative PBC allocation that the Clearinghouse assigned a value of zero.  This determination was also not appealed to the Commission.

In 2016, the horse farm owner applied for yet another LOI.  The Clearinghouse again considered the PBC yield to be zero, however, the Petitioner argued it was entitled to 49.68 PBC because the parcel could be developed with multiple single family homes.  The Clearinghouse disagreed, based on the theory that lot yield was based on permitted lot size (10-acres) not permitted uses (single-family residences).  The Petitioner appealed to the Commission arguing that the horse farm was entitled to 49.68 PBCs if the property was divided into multiple single family lots or alternatively, 41.1 PBCs based on a yield factor of 1.2 PBC per acre based on the underlying zoning of A Residence District.  The Commission reined in the Petitioner and granted the horse farm 4.48 PBCs, because that had been previously allocated in 1997 and reliance upon such a prior determination was considered an important factor.

Although the Supreme Court found the Clearinghouse determination of zero PBC’s to be technically accurate, it considered the Commissions allowance of 4.48 PBC’s to be rationally based and dismissed the Article 78.   Thus, unless found to be arbitrary and capricious, LOI determinations by the Commission will withstand legal challenges, and it this particular case, it might be best not to look the proverbial gift horse in the mouth.