On September 21, 2020, the Supreme Court, Nassau County in Town of Oyster Bay v. 120 Westend LLC, Supreme Court, Suffolk County, Index No. 608065/2020 granted a preliminary injunction to the Town of Oyster Bay (“Town”) halting the use of an existing hotel as an emergency homeless shelter stating that there is no pre-emption by the State of New York that allows a property owner to convert a facility to a potential non-conforming use without local review and approval.  This is a cautionary tale relating to the risks associated with multi-jurisdictional approvals.

Formerly a Howard Johnson’s and then a Hampton Inn hotel, the subject property is located at 120 Jericho Turnpike, Jericho, New York, and has been used continuously as a hotel/motel by special permit issued by the Town since 1965.  On July 6, 2020, the Defendant entered into a 10-year lease with non-party, Community Housing Innovations (“CHI”), a state and federally funded non-for-profit corporation, which operates and provides emergency housing assistance to homeless families and individuals. Having operated for decades in Nassau County, CHI obtained permission from the Nassau County Department of Social Services (“NCDSS”) to utilized the subject property as a homeless shelter as part of a 2017 Memorandum of Understanding (“MOU”).  As part of the contract with NCDSS, the existing facility passed a health and safety inspection performed by Nassau County and New York State.

On July 23, 2020, Defendants disclosed at a school board meeting, its intention to convert the hotel to a homeless shelter.  Following this meeting, the Town issued various summons and stop-work orders.  The Town then sought and obtained a temporary restraining order (“TRO”) in August of 2020.

In opposition to the Town’s preliminary injunction motion, the  Defendant’s main arguments focused on the alleged preemption of Article 7 of the New York’s Social Services Law, which comprehensively regulates residential care facilities so as to prohibit a local municipality from imposing conditions on their operations.  The Court found that although the State has the authority to license and to grant operating certificates for homeless shelters, as well as the regulation of such operations, this licensing authority cannot be stretched to preclude a local government from requiring that a proposed facility comply with local zoning laws.  The Court stated that Article 7 of Social Services Law, “while extremely comprehensive, does not make any reference, nor can it be reasonably read to imply such authority.”

Turning to the pre-emption caselaw relied upon by the Defendant, the Court found controlling the distinction that the proposed operations had no operating history at the location.  Because there was no homeless shelter currently operations at the subject property, the court determined that the Town was not attempting to control the operations of the potential shelter, but merely seeking to determine whether such a use is permitted under its building code.  Additionally, in defeating Defendant’s reliance on its prior approval by the State and contract with Nassau County, the Court found the language in various documents requiring “local approvals” as confirmation that the State had not occupied the field.

Although the Court acknowledged the State’s interest in preventing local municipalities from interfering with the day-to-day operations of homeless facilities, it found no authority to support Defendant’s argument that the State’s Social Services Law allows a facility operator to locate a facility anywhere it obtains a contract to operate without complying with local zoning and land use laws.  As a result, the Court found there is no pre-emption by the State of New York that allows a property owner to convert a hotel to an emergency homeless facility without local review and approval.