Early this year, the Supreme Court of New York, Richmond County issued a comprehensive opinion in Galarza v. City of New York, 58 Misc.3d 1210(A), reaffirming and clarifying the nuances of condemnation, takings and just compensation principles as they relate to wetlands restrictions.  The court held that the owner of a 21,000 square-foot vacant lot (“Property”) condemned by the City of New York (“City”) as wetlands was entitled to just compensation in the amount of $669,000, where the fair market value of the undevelopable land was approximately $200,000.

In awarding upwards of 335% of the Property’s apparent value, the court found that the owner was entitled to an incremental increase in just compensation.  This finding was based upon the nature of the wetlands restrictions vis-à-vis takings precedent.  And, it is significant that the court awarded the higher value despite the owner having purchased the Property after it was already designated as wetlands and known to be undevelopable.  This decision follows a late-2017 decision of the Appellate Division in In re New Creek Bluebelt Phase 3 (Baycrest Manor), 156 A.D.3d 163 (2d Dep’t 2017), where the Second Department affirmed, as modified, an increased award as just compensation for wetlands condemnation.

Claimant Ivan Galarza (“Owner”) purchased the Property at a tax lien foreclosure auction in 2003.  At the time the Owner purchased the Property at auction, the Property was already designated as wetlands.  The City later acquired the Property by condemnation as part of its New Creek Bluebelt Phase 4 project.  The Owner and the City both agreed that the wetlands designation precluded the Owner from obtaining a permit to improve the Property and that the highest and best use of the Property, as regulated, would be to remain vacant.  The parties disagreed, however, as to whether the wetlands restrictions constituted a regulatory taking.  The regulatory taking issue is relevant and forms the crux of this entire case because it is precisely the finding of a “reasonable probability of success” in bringing a hypothetical regulatory taking claim to challenge regulations, e.g. wetlands restrictions, that entitles a property owner to the incremental increase in just compensation.

The Threshold Question: Whether the Regulation Is a Background Principle of New York State Law on Property and Nuisance

First, the court addressed the threshold issue of whether the Owner was barred from bringing a takings claim in the first place, because the Owner purchased the Property subject to the wetlands designation.  Relying on Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), Galarza stated that the “logically antecedent inquiry” into a takings claim is whether “the proscribed use was part of the title to begin with.”  Thus, before any owner can claim deprivation of economically beneficial uses of property, courts must first determine whether the right to use the property in the manner prohibited was actually part of the “bundle of rights” acquired with title.

In Lucas, the U.S. Supreme Court held that in order for a regulation not to constitute a taking where it prohibits all economically beneficial use of land, the regulation cannot be newly legislated or decreed, but must inhere in the title itself; the restriction must be a background principle of a state’s law of property and nuisance – already placed upon the ownership of property.  After Lucas, the New York Court of Appeals issued four opinions simultaneously in 1997 known as the “takings quartet.”[1]  These four cases established the “notice rule” in New York, whereby any owner who took title after the enactment of a restriction was barred from challenging the restriction as a taking because the use prohibited was not part of the bundle of rights acquired with title by a buyer.

Almost a decade after Lucas, the U.S. Supreme Court’s decision in Palazzolo v. Rhode Island, 533 U.S. 600 (2001), up-ended New York’s “notice rule.”  The high Court held that a per se notice rule was untenable and altered the nature of property because an owner would be deprived of the right to transfer an interest acquired with title (prior to the regulation).  Moreover, the Court held that simply because an owner acquired property after the enactment of regulations does not transform those regulations into background principles of state law on property and nuisance.

In determining whether New York State’s wetlands restrictions affecting the Property are part of the background principles of New York’s law on property and nuisance, the Galarza court answered in the negative.  Interestingly, the City argued, among other things, that protection of wetlands was grounded in common law and cited to medieval England’s use of wetlands restrictions.  The court noted, however, that these restrictions pre-dated the creation of fee estates and that as individual ownership rights began to take shape, wetlands regulations were abandoned in favor of development.

In addition, the Galarza court distinguished the Palazzolo decision issued by Rhode Island Superior Court after remand from the U.S. Supreme Court.  The Superior Court found that wetlands designations were part of the background principles of Rhode Island’s state law.  Conversely, the Galarza decision found that “[w]hile development of wetlands constitutes a nuisance under Rhode Island law, development of wetlands was not a nuisance under New York law.”  The court chronicled the filling and draining of wetlands and the history and treatment of land development in the City from its inception until the 1970s, at which time conserving wetlands became a concern.  “Given this history, it is clear the New York wetlands regulations did not simply make explicit a prohibition on activity that was always unlawful, and therefore the wetlands regulations are not part of New York property and nuisance law.”

The Galarza court also distinguished a 2016 Second Department ruling in Monroe Eqs. LLC v. State of New York, 145 A.D.3d 680, which held watershed regulations constituted background principles of New York law.  Unlike wetlands regulations, watershed regulations prohibit a nuisance by preventing poisoning and pollution of water supplies and drinking water.  Based upon this analysis, the court found the Owner in Galarza was not barred from bringing a takings claim.

The Regulatory Takings Analysis: Per Se, Partial or Not at All

After having found the Owner’s regulatory taking claims were not barred, the court proceeded to the crux of the case: whether there was a reasonable probability that the wetlands regulations constituted a regulatory taking.  If not, the Owner’s just compensation is limited to the value of the Property as regulated.  If so, then the Owner is entitled to an incremental increase in value as just compensation, i.e. the value of the land as restricted plus an increment.  The increment reflects the premium a hypothetical buyer would pay for the Property in light of the probable success on a takings challenge.  (In other words, the Property would be worth more and, thus, entitled to greater value as just compensation for condemnation.)  To show a reasonable probability of success on a takings claim, the claimant must demonstrate that the regulation renders the property “unsuitable for any economic or private use, and destroy[s] all but a bare residue of its value.”

To determine whether there was a reasonable probability of a successful regulatory takings claim, the court considered Lucas, Tahoe-Sierra Preserv. Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002) and Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978).  Under Lucas, a regulation constitutes a taking per se “only in the extraordinary circumstance where no economically beneficial use of the land is permitted and the regulations have extinguished all of the property’s value.”  In this scenario, no further analysis is necessary.  Galarza highlighted the distinction between “economic use” (returns from actual use or development) and a “property’s value” (market value as regulated or otherwise), but noted that Lucas used these terms interchangeably.  Later, the U.S. Supreme Court clarified Lucas in Tahoe-Sierra : “compensation is required when a regulation deprives the owner of all economically beneficial uses of his land…[and] is limited to the extraordinary circumstance when no productive or economic beneficial use of land is permitted.”  Anything short of 100% loss of value is not a regulatory taking per se and requires additional analysis by the factors enumerated in Penn Central.

Specifically in Galarza, the Property had value as regulated because there is a market for wetlands in Staten Island (discussed below), but the Property had no economic beneficial use.  The court considered two other cases in this respect, namely Lost Tree Vill. Corp. v. United States, 787 F.3d 1111 (Fed. Cir. 2015), and Florida Rock Indus., Inc. v. United States, 18 F.3d 1560 (Fed. Cir. 1994), to determine whether having value without any beneficial or economic use(s) precludes a taking per se.  The court in Lost Tree, on the one hand, held that residual non-economic value (i.e. market value) does not preclude a per se taking because there are no longer any underlying economic uses and the market value (selling the property) is not an underlying economic use.  Florida Rock, on the other hand, held that the value of property as a speculative investment is a proper consideration and that the associated market value precludes finding per se taking.[2]

The court in Galarza agreed with Florida Rock, holding that there is an established market for wetlands in Staten Island (for reasons that are not entirely clear) and that these parcels are bought and sold with an expectation that the restrictions may eventually be changed, waived or modified, or that the parcels might be sold at a profit.  Regardless of the motives and intentions, this market exists for parcels without permissible uses and this market must be considered in the takings analysis.  The Property was found to have a market value of $200,000.  Accordingly, because the Property has value in this market, the wetlands designation does not deprive the Property of all of its economic value (although it does deprive economic use entirely).  Therefore, it cannot qualify as a regulatory taking per se under Lucas.

Having failed to meet the Lucas test, the court then turned to a partial regulatory takings analysis under Penn Central.  This analysis is an “ad hoc, factual inquiry” and considers three factors: (1) the regulations’ economic impact upon the claimant, (2) the extent of interference with “reasonable” investment-backed expectations and (3) the character of the regulation as governmental action.

Penn Central Test Part 1: Economic Impact

First, in evaluating the economic impact, courts must compare the value that the regulation has taken from the property with the value that remains with the property.  Here, the court analyzed precedent set by four previous Second Department cases in wetlands taking cases (ranging from 1984 through 2017).[3]  Based upon these cases, the Galarza court found there was a reasonable probability of a successful regulatory takings challenge where regulations deprived the claimant of all rewarding uses of the property, e.g. development prohibition, and reduced the property’s value upwards of 80-90%.

In contrast, the court cited two other Second Department cases: Adrian v. Town of Yorktown, 83 A.D.3d 746 (2d Dep’t 2011), and Putnam County Nat’l Bank v. City of New York, 37 A.D.3d 575 (2d Dep’t 2007).  In Adrian, the court did not find a regulatory taking where the property value was reduced by a 64% reduction and the claimant sold the 15-acre parcel for $3,600,000, although contended it was worth $10,000,000.  In Putnam County Nat’l Bank, the court also did not find a regulatory taking.  There, watershed regulations reduced the value by 80%, and although the claimant was denied a building permit for a 36-lot subdivision because a sewer could not be built within the watershed, approval was granted for an alternative 17-lot subdivision.  The property was ultimately sold for $1,400,000.  That court found this realization was a “reasonable return”, and the economic impact of the watershed restrictions was not sufficient to constitute a taking.

Here, after various arguments and evidence presented by the parties, the court found the Property to have the following set of values: $200,000 as regulated and undeveloped and $1,701,000 as fully developed.  The court also found that it would cost $469,507 to develop the Property and, when the costs are deducted from the fully developed value ($1,701,000 less $469,507), the value of the return would be $1,231,493.  The difference, then, between the regulated value ($200,000) and the developed value, after costs ($1,231,493), is $1,031,493.  This figure is 84% of the fully developed value.  Another way to view the calculation is that the regulated value ($200,000) is 16% of the fully developed value.  Accordingly, the regulations reduce the Property’s value by 84%.

Penn Central Test Part 2: Extent of Interference with Expectations

Penn Central’s second factor is the extent of interference with investment-backed expectations.  Initially, courts must determine whose expectation to use.  In the regulatory takings context, the expectation of the owner is used because it is his or her land that suffers from the restraint.  To determine just compensation in the condemnation context, the expectation of the hypothetical buyer is used because this perspective determines the owner’s realization upon a sale.

Considering the hypothetical buyer’s expectations, the court must view the reasonableness of the expectation as an objective test: whether the regulation embodied a background principle of New York property and nuisance law.  This is the same consideration in determining whether a regulatory claiming is barred at the outset.  Essentially, it is unreasonable to expect to use property in such a manner prohibited as a background principle of law.  Finding guidance from the U.S. Supreme Court in Palazzolo, Galarza concluded it is reasonable to expect to utilize property as if the regulations did not exist – unless the regulations are background principles, the analysis cannot begin by limiting expectations to only those uses allowed by the regulation if the regulation is not a background principle.

As noted above, the Staten Island wetlands market exists and contemplates that regulations may be changed, waived or modified in favor of future development.  The court here ultimately determined it is not unreasonable for a hypothetical buyer to expect to develop the Property at some future date because, among other things, the wetlands restrictions are not background principles of law.  Accordingly, because any development was totally prohibited by the wetlands designations, then the regulations substantially interfered with reasonable expectations to develop the Property.

Penn Central Test Part 3: Character of the Regulation

The third factor under Penn Central is the character of the regulation.  Courts consider whether it amounts to a physical invasion or, instead, merely affects property interests.  Additionally, courts consider “reciprocity of advantage,” i.e. whether the regulation is part of a general scheme that provides some benefit to the regulated parcel, like a comprehensive zoning plan.  The singling-out of a parcel with a disproportionate burden is indicative of a taking.  The Galarza court found that while wetlands restrictions provide a benefit to the public in general, their burden falls disproportionately on a small group of owners, especially those whose entire parcels are classified as wetlands (as opposed to portions of parcels or parcels that are wetlands adjacent).  Here, the wetlands regulations approach a physical taking because they prohibit development entirely and force the Owner to leave the Property vacant.

Concluding Penn Central

In concluding its Penn Central analysis, Galarza found: (1) the wetlands regulations diminished the value of the Property by 84%, (2) interfered with the reasonable expectations of the Owner or a hypothetical buyer to develop the Property and (3) the character of the regulations is disproportionately burdensome and prohibits all economic use of the Property.  Moreover, the court found that the diminution of value was so great and the prohibitive character so invasive that, even if a hypothetical buyer did not have an expectation to develop, the regulations themselves “nearly approximate a physical appropriation as to constitute a taking under a Penn Central analysis.”

Therefore, the court held just compensation valuation must include the regulated value plus the incremental value to reflect the hypothetical buyer’s likelihood of successfully challenging the wetlands regulations as a regulatory taking.  This increment is a portion of the difference of the valuation over-and-above the regulated value.  Here, the regulated value was $200,000 and the developed value, after costs was $1,231,493; the difference between these figures is $1,031,493, and the increment is a portion of this difference.  (The Owner already receives the regulated, fair-market value as just compensation, so this value is not included in increment calculation).

In determining the actual incremental value, courts consider the time, effort and expense in “de-regulating” the affected land, including without limitation exhausting administrative remedies, prosecuting the takings challenge and the financial cost of “carrying” the affected property.  Here, the court found that the deregulation costs would be $391,882 and deducted these costs from $1,031,493, resulting in a “present day value” figure of $639,611.  The present day value figure must be discounted for inflation and opportunity costs, among other things.  The court determined that the present day value after the applied discount was $469,380 – and this is the incremental value to be applied.  Finally, the court completed its calculation for its award of just compensation: it added the regulated value ($200,000) together with the increment ($469,380), resulting in an award of $669,380 (rounded to $669,000).


[1] The four cases are as follows: Gazza v. New York State Dep’t of Envt’l Conserv., 89 N.Y.2d 603 (1997), Basile v. Town of Southampton, 89 N.Y.2d 974 (1997), Anello v. Zoning Bd. of Appeals, 89 N.Y.2d 535 (1997), and Kim v. City of New York, 90 N.Y.2d 1 (1997).  Gazza and Basile addressed wetlands restrictions.In determining the actual incremental value, courts consider the time, effort and expense in “de-regulating” the affected land, including without limitation exhausting administrative remedies, prosecuting the takings challenge and the financial cost of “carrying” the affected property.  Here, the court found that the deregulation costs would be $391,882 and deducted these costs from $1,031,493, resulting in a “present day value” figure of $639,611.  The present day value figure must be discounted for inflation and opportunity costs, among other things.  The court determined that the present day value after the applied discount was $469,380 – and this is the incremental value to be applied.  Finally, the court completed its calculation for its award of just compensation: it added the regulated value ($200,000) together with the increment ($469,380), resulting in an award of $669,380 (rounded to $669,000).

[2] The court addressed the nuances of speculation:

The cases that hold that one cannot consider speculative uses in valuing property in condemnation cases refer to non-current uses where it is not probable that the property would be put to such a use in the reasonable near future.  This is different from investors who speculate in property by purchasing it on the possibility of expectation that it will increase in value at some point in the future.  In this [latter] sense, speculative purchases represent investment backed expectation.

In addition, the court noted that dollars are fungible and that the land-speculation market provides owners with monetary compensation the same way as any other market.  Moreover, the key inquiry for purposes of just compensation for condemnation is whether there was a reasonable probability of successfully bringing a takings challenge as of the date of vesting – not whether any expectations of future value might be met.

[3] The cases are as follows: Chase Manhattan Bank v. State of New York, 103 A.D.2d 211 (2d Dep’t 1984), Baycrest Manor, Matter of New Creek Bluebelt, Phase 4 (Paolella), 122 A.D.3d 859 (2d Dep’t 2014), and Friedenburg v. State of New York, 3 A.D.3d 86 (2d Dep’t 2003).

On January 24, 2018 the Appellate Division, Second Department affirmed in part, and reversed in part, a trial court order granting Defendant, Bay Ridge Methodist’s counterclaim that certain cladding and a drip edge (a system used to deflect water) installed by the Plaintiff, David S. Kimball, along a party wall shared by the parties constituted a trespass.  See, Kimball v. Bay Ridge United Methodist Church, 2017-03575, Jan. 24, 2018.

In upholding the trespass, the Court stated that Kimball “failed to raise a triable issue of fact regarding whether the cladding and drip edge encroached onto the [Church’s} property.”  As such, the trial court’s trespass finding against Kimball, in favor of the Church, was upheld. However, the trial court’s finding that the trespass must be removed was reversed.

In reversing, the Court stated that “RPAPL 871(1) provides that an ‘action may be maintained by the owner of any legal estate in land for an injunction directing the removal of a structure encroaching on such land.  Nothing herein contained shall be construed as limiting the power of the court in such an action to award damages in an appropriate case in lieu of an injunction or to render such other judgments as the facts may justify.'” (emphasis added)

Finding that the Church failed to demonstrate the absence of any triable issues of fact concerning whether the balance of equities weighed in its favor, the Appellate Division vacated the injunction directing Kimball to remove the cladding and drip edge from the shared wall holding that “[i]n order to obtain injunctive relief pursuant to RPAPL 871(1), a party is ‘required to demonstrate not only the existence of [an] encroachment, but that the benefit to be gained by compelling its removal would outweigh the harm that world result.”

Consequently, since the Church did not prove that the benefit gained by the Church in compelling Kimball to remove the cladding and drip edge would outweigh the harm that would result to Kimball if removed, the Court remitted the matter back to the Supreme Court, Kings County for further proceedings.

Under RPAPL 871(1), and upon the trespass finding, the party trespassed upon became the party with the burden to prove that the benefit of removal of the trespass outweighed the harm to the trespassing party.  It is not enough for injunctive relief that a trespass exists.  The trespassed upon party is tasked with the burden to prove that its damages outweigh those damages that the trespassing party may incur upon removal.

It is interesting to note that, RPAPL 871(2) specifically states that “[t]his section shall not be deemed to repeal or modify any existing statute or local law relating to encroaching structures.”  It would be interesting to know whether a common law trespass claim was asserted in this action, or whether another statute or local law was available that could have resulted in a different and more favorable outcome for the Church.

At its December 5, 2017 meeting, the Town Board of the Town of Southold (“Town Board”) was hit with a tidal wave of opposition to changes the Board was considering to the Town’s Zoning Code with respect to wineries. The proposed changes would have modified §280-13A(4) and §280-13C(10) of the Town Zoning Code. After a five-hour public hearing, the Town Board unanimously withdrew the proposal.

Opponents of the proposal used social media to get the word out about the public hearing, and Town Hall was packed with these folks on the hearing date. Perhaps the Town Board should have taken a cue from that and used social media, including the Town’s website, to explain in advance why they were proposing these changes, who would be affected, and encouraging residents who supported the proposal to attend the public hearing.

The proposed changes were aimed at five zoning districts; namely the Agricultural-Conservation District, Residential Low-Density District R-80, Residential Low-Density District R-120, Residential Low-Density District R-200, and Residential Low-Density District R-400. These proposed changes were not applicable to other zoning districts where wineries are also permitted, such as the Limited Business District.

The existing provisions of §280-13A set forth the permitted uses in these five zoning districts. Subsection 4 applies to wineries and lists the standards applicable to that use in these districts. These include: (a) the winery must “be a place or premises on which wine made from primarily Long Island grapes is produced and sold;” (b) the winery must “be on a parcel on which at least 10 acres are devoted to vineyard or other agricultural purposes, and which is owned by the winery owner;” (c) the winery structures are required to “be set back a minimum of 100 feet from a major road;” and (d) the winery needs to have site plan approval.

The proposed changes to §280-13A would have required: (a) that the wine be “produced, processed and sold” at the winery, which wine had to be made from grapes “of which at least 80% are grown on the premises or other land owned by the winery owner;” (b) the winery must be on a parcel where a minimum of “10 acres are devoted to the growing of wine grapes” and which is owned by the winery owner;” and (c) the 10 acres devoted to growing grapes are in addition to land on which structures are located. No changes to the set back and site plan approval provisions were proposed.

The existing provisions of §280-13C set forth the accessory uses. Subsection 10 applies to wineries. That subsection states that a winery “may have an accessory gift shop on the premises which may sell items accessory to wine, such as corkscrews, wine glasses, decanters, items for the storage and display of wine, books on winemaking and the region and nonspecific items bearing the insignia of the winery.” The subsection also states that a winery “may not have a commercial kitchen as an accessory use but may have a noncommercial kitchen facility for private use by the employees.”

The proposed changes to §280-13C(10) changed the “accessory gift shop” to a “retail gift shop” with the same limitation on the type of merchandise that could be offered. In addition, the proposed changes required that the wine be made on the parcel and permitted 20% of the wine sold at a winery to be from other Long Island wineries. No change was made to the kitchen limitations.

The packed house of opponents described the proposal as “anti-farming” or “overly restrictive.” Farmers who grow grapes for sale to wineries they do not own claimed that the proposal would put them out of business. Some opponents stated that the proposal would be the death-knell to new wineries, which would be unable to make any money while their vines matured over several growing seasons. Others were concerned that natural disasters could wipe out a portion of their crops, and that if they bought grapes elsewhere to replace their damaged crops, they would be in violation of the proposed changes.

The Town Supervisor indicated that the Town Board would go back to the drawing board and reconsider the proposal. Whether the Town Board can come up with a proposal that will not be met with similar opposition is uncertain.

By letter dated November 24, 2009, the Town of Riverhead’s Building Department Administrator provided that the docks, bulkheaded structures, commercial oyster operation, and six summer rental cottages were legal pre-existing nonconforming uses of the property at 28 Whites Lane, on Reeves Creek, Aquebogue NY (“subject property”). The subject property is owned by John and Sandra Reeves, hereinafter the “Respondents”. The Petitioners, neighbors of the subject property, appealed this determination to the Zoning Board of Appeals (“ZBA”) which rendered a decision sustaining the November 24, 2009 letter. The Petitioners challenged the ZBA’s determination in an article 78 proceeding, Matter of Andes v. Zoning Board of Appeals of the Town of Riverhead, John Reeve et al. Supreme Court, Suffolk Co. Index No. 10-27305, April 8, 2013. The Supreme Court annulled the ZBA’s decision and remitted the matter back to the ZBA citing that the ZBA decision “contained no independent factual findings supporting this determination.”

The ZBA reheard the matter on June 23, 2016. By decision dated August 11, 2016, the ZBA again sustained the November 24, 2009 letter as to the pre-existing nonconforming uses on the property. This time, however, the ZBA’s record was replete with factual findings in support of its determination.

The Town of Riverhead first adopted its zoning code in 1959. Several zoning amendments were made throughout the years, rendering the different uses of the subject property nonconforming at different times. [1]    The ZBA considered testimony from numerous sources establishing the continuing pre-existing nonconforming uses and structures on the subject property. For example, with regard to the shellfish operation, Robert E. White, the son of Washington White, testified at the July 23, 2009 ZBA hearing that his family purchased the property in the 1930’s and that it was used for a shellfish operation which was continued by his brother Benjamin White. He further submitted that the “underwater property” was purchased by the Lessard family in the 1990’s who “continued the operation.” David Lessard testified that he continued the commercial shellfish operation to the present day.  The ZBA made further findings, sustained in part by similar testimonial evidence, supporting the pre-existing nonconforming summer cottages and marina uses.  Ultimately, the ZBA upheld the November 24, 2009 Building Department Administrator letter once again.

The neighbors challenged this ZBA determination in a second article 78 proceeding entitled Matter of Andes v. Zoning Board of Appeal of Town of Riverhead et al., Sup. Ct. Suffolk Co., Index No. 16-8742, December 15, 2017.

Petitioners argued that (i) the Respondents failed to provide business records to corroborate the continuance of the marina or commercial oyster operation, (ii) the commercial oyster operation was run without the proper shell-fishing permits, (iii) the marina structures were not completed until 2008, and (iv) the basin where the shellfish operation took place had non-functional bulkheading and required dredging to be operational during the time periods they were claimed to be in use, among others. Notably, Petitioners alleged that the majority of the evidence relied upon by the ZBA was based on the testimony of Respondents, the Reeves, and their primary witnesses who Petitioners argued were “town insiders” since they worked for the Town of Riverhead.

The Court reviewed the evidence considered and findings made by the ZBA in its decision and held that the ZBA decision was rational and not arbitrary and capricious. The Court set forth the standard of review for pre-existing nonconforming uses and restated the long-standing legal principle that a court cannot substitute its judgment for that of the board. Petitioners clearly wanted the Court to weigh the value of the evidence relied upon by the ZBA; however, the Court stated:

Here, it cannot be said that the Zoning Board’s decision lacks evidentiary support in the record; that the nature of the evidence relied on by the Zoning Board is almost entirely testimonial is of no consequence for purposes of this analysis (see Town of Ithaca v Hull, 174 AD2d 911,571 NYS2d 609 [1991]). Likewise, while the court is sensitive to the implication of the petitioners’ claim that the Zoning Board discredited their proof in favor of the affidavits and hearing testimony of “insiders,” i.e., the Reeves and “their friends,” it remains constrained by the limited scope of review afforded in article 78 proceedings, particularly absent proof of actual bias or favoritism. The court also rejects the petitioners’ implicit claim that judicial review of a zoning board’s determination requires some kind of comparative analysis of the quality and quantity of the evidence adduced in support of and in opposition to an application. A court may not weigh the evidence or reject the choice made by the board where the evidence is conflicting and room for choice exists (Matter of Toys “R” Us v Silva, supra). Even to the extent it has been held that a board’s determination must be supported by “substantial evidence,” a court need only decide whether the record contains sufficient evidence to support the rationality of the board’s determination (Matter of Sasso v Osgood, 86 NY2d 374,633 NYS2d 259 r1995J; Matter of Slonim v Town of E. Hampton Zoning Bd. of Appeals, 119 AD3d 699, 988 NYS2d 890 [2014]. lv denied 26 NY3d 915, 23 NYS3d 641 [2015]) (emphasis added).

 As to the petitioners’ claim that the Reeves failed to sustain their “high” burden of persuasion, the court notes that this standard applies only to a matter before a municipal officer or board and not to a judicial proceeding; it bears repeating that the scope of judicial review of a zoning board’s determination is limited to an examination of whether the determination has a rational basis, even when that determination involves an application to establish or certify a prior conforming use (e.g. Matter of Keller v Haller supra; Matter of Watral v Scheyer, 223 AD2d 711, 637 NYS2d 431 [1996]). Whether, as the petitioners further contend, the Reeves lacked the necessary permits, certificates, and approvals to operate a marina on the property until the new docks and bulkheading were constructed and completed in 2008, or whether the Lessards did not have shellfish diggers permits from 1994 through 1997 so they could not have lawfully been using the Reeves’ property for that purpose during that time, is largely irrelevant.

Ultimately, the Court upheld the ZBAs determination affirming the Building Department Administrator’s letter; the petition was denied and the proceeding dismissed. Given that the matter has been an issue before the Town of Riverhead since 2003 and the Court since 2010, it is not surprising that Petitioners filed a notice of appeal.

[1] In 1959 with the first enactment of zoning, Riverhead Town rendered the commercial oyster operation on the property a preexisting nonconforming use. The six cottages became pre-existing nonconforming in September 1970 when the Town of Riverhead amended the zoning code definition of Marina Resort to exclude summer cottages. In 2004, the Town re-zoned the property to RB-40, eliminating marinas as permitted uses rendering the marina use, docks and bulkheading on-site nonconforming. Additionally, Riverhead Town Code §301-222(C) provides that a nonconforming use may not be reestablished “where such nonconforming use has been discontinued for a period of one year.”

In 2014, the New York State Legislature enacted a significant amendment to the Environmental Conservation Law (ECL) reducing setbacks required to discharge a long bow in the lawful act of hunting from 500 feet to 150 feet from occupied buildings and public places.  ECL11-0931(2).  This created a ripple effect in many Long Island municipalities that previously codified the State’s regulation of 500-feet.  For example, the Town of Smithtown still maintains a local law requiring a 500-foot setback, which now conflicts with the State’s 2014 150-foot setback requirement.

The question now becomes whether New York’s preemption doctrine prevents municipalities from maintaining local laws conflicting with State law.  In this case, can the Town of Smithtown maintain its 500-foot setback for the discharge of a long bow as opposed to the State’s 150-foot setback?

Some would say that the State occupies the field of hunting, because it declared title to the wildlife in its sovereign capacity for the benefit of all the people (ECL 11-0105). Consequently, hunting the State’s wildlife is regulated by the New York State Department of Environmental Conservation (NYSDEC) ECL Title 7.

However, the State also provided municipalities broad latitude to regulate themselves through the Municipal Home Rule Law (MHR).  MHR confers on local governments the authority to adopt laws for, among other things, the protection of health, safety and welfare, to the extent they are not inconsistent with either the State Constitution or any other State law. MHR 10(1)(ii).

In DJI Restaurant v City of New York , the Court of Appeals explained the two ways State law preempts local laws as follows: (1) where an express conflict exists between State and local law (conflict preemption) and (2) where the State has evidenced its intent to occupy the field (field preemption).

Field preemption exists when a local law regulating the same subject matter is deemed inconsistent with the State law.  In this situation, the local law must yield, because it thwarts the State’s overriding policy for State-wide uniformity. See, Matter of Chwick v. Mulvey, (state law regarding firearm licenses preempted a Nassau County ordinance against “deceptively colored” handguns where comprehensive regulations by the State demonstrate the Legislature’s intent to occupy the field”).

Presently, New York has not expressly preempted the regulation of hunting; and there does not appear to be any case directly on point for conflict preemption.  However, the State’s intent to “occupy the field” of hunting appears evidenced by comprehensive ECL statutes, the framework of NYSDEC regulations and strict licensing requirements. See, ECL Title 11.

Moreover,  given the purpose and scope of the State’s legislative scheme, including the need for statewide uniformity, the State need not expressly state that it is preempting local municipalities in the area of hunting. See generally, Albany Area Blders v. Town of Guiderland,  However, in the case of Smithtown, it appears the State may have to take a more explicit position or risk the balkanization of hunting regulations on Long Island and possibly other parts of the State.  This seems particularly counterintuitive when dealing with the State’s wildlife.

On January 18,  2018, the Appellate Division, Second Department, upheld a decision denying an application for a religious real property tax exemption on the grounds that the property owner’s use of the main structure as a dormitory and living quarters for 20 students ran contrary to the one family dwelling Certificate of Occupancy issued for the premises and thus violated the Town of Ramapo’s zoning laws.  See, Congregation Ateres Yisroel v Town of Ramapo, 2014-09194.  

In Congregation Ateres Yisroel, plaintiff claimed and received a religious real property tax exemption for the years 2008-2011.  In 2012, plaintiff sought to renew its religious tax exemption by submitting a renewal application stating that no changes had been made to the property’s ownership or use from 2011 to 2012.    The Town denied the request on the grounds that plaintiff erected two trailers on the premises without seeking permits or approvals and that plaintiff used the main structure to house 20 students in dormitory style living quarters all in contravention to a 1954 Certificate of Occupancy stating the premises is certified as a “one family dwelling.”

Without any discussion or analysis of whether the students being housed at the property were engaged in conduct of a religious nature, the Second Department, agreed with the trial court that use of the premises for dormitory style living contravenes the “one family dwelling” Certificate of Occupancy and as a result, denial of the religious real property tax exemption was upheld.

Now, this decision is not particularly shocking or even interesting for that matter.  However, this decision caught my attention because not long ago, we published a blog post entitled “Court Supports an Expansive View of What Constitutes a Religious Use.”  In that post, the Third Department reinstated a decision of the City of Albany’s Zoning Board holding that a church’s partnership with a not-for-profit entity to house 14 homeless individuals at the church parsonage was a permissible use for a house of worship.  The Court agreed that assisting the homeless is consistent with the mission and actions of a house of worship.   See, Matter of Sullivan v Board of Zoning Appeals of City of Albany.

Although Sullivan did not involve a real property tax exemption, it is quite likely that the house of worship in the Sullivan case continues to receive a religious real property tax exemption despite the fact that the church is housing 14 homeless people in a single family zoning district.  To the contrary, Congregation Ateres Yisroel’s lost its religious real property tax exemption based on its use of its premises to house 20 students.  Both religious uses are in single family zoning districts, and both religious uses are housing multiple people.

The question perhaps becomes – Why is sheltering the homeless more in line with a religious purpose than housing 20 students?  The facts in Congregation Ateres Yisroel are silent as to why the students were being housed at the property and whether their housing was in furtherance of a religious purpose.  If Congregation Ateres Yisroel could establish that the student housing had some connection to its religious purpose, perhaps the result of this case would be different.    At a minimum, we may have a possible split in the Departments as to what types of uses constitute “religious uses” and where and how do we draw the line?   Perhaps our next update on this topic will be the result of a decision by our State’s highest court.  Tune in each Monday for the latest news.

It is well established that zoning codes and regulations are in derogation of property owners’ rights in and to the use of their property. Zoning restricts the use of land which was otherwise free of restrictions.  An owner’s rights in use of land are among the oldest and enjoy the most protection under common law and state and federal constitutions. Therefore, the courts of New York have regularly and consistently held that (1) any such codes and regulations must be strictly construed and (2) any ambiguity must be construed against the municipality and in favor of the property owner:

“Since zoning regulations are in derogation of the common law, they must be strictly construed against the municipality which has enacted and seeks to enforce them. Any ambiguity in the language used in such regulations must be resolved in favor of the property owner.”

Because of the heightened scrutiny of zoning regulations for ambiguity, they are difficult to draft and often subject to litigation – which can get deep into the weeds of statutory construction and even grammar. For example, where a zoning code required site plan review for “any new construction or any addition thereto in excess of 2000 sq. ft.,” the Zoning Board found that the limitation of 2,000 sq. ft. applied only to “any addition” and not to “any new construction.” The Third Department reversed, in part because there was no comma between “thereto” and “in excess of.” Your high school English (or Latin) teacher would rejoice at the deconstructive analysis.

Other examples: Does prohibition of car storage prohibit a parking garage, where there is no definition of “storage” in the code? (Answer = No; parking garage is OK) Is a code validly applied which does not allow an owner to “store” a boat in the front yard, where there is, again, no definition of how long a boat must be in the front yard to be deemed to be “stored” there? (Answer = Code not valid because of ambiguity.) Can a code require building permits for all construction “other than ordinary repairs that are not structural?” (Answer = No; code invalidly applied because there was no definition of what constitutes “ordinary” or “not structural” repairs.) Is a helicopter pad an “airport” which is defined as a landing area that is used “regularly?” (Answer = Yes; it was used frequently enough to be deemed “regular.”)

A recent code amendment in an East End municipality requires that driveway gates must have a “setback to the street” of no less than 20 feet or 40 feet (depending on lot size). What is the “street?” The paved roadway? The lot line dividing the private property from the municipality’s right-of-way for the road? The difference could be 10 or 15 feet or more of unpaved verge or shoulder between the pavement and the lot line.

The difficulty in drafting is highlighted by these cases which pit the purportedly “obvious” reading of the code against the rule of strict construction – resolving any ambiguity in favor of the property owner. The burden on the municipality is especially acute where municipal officials come up with different interpretations. The statute is certainly vague and ambiguous when reasonable municipal minds differ – when “reasonable enforcement officers could come to different conclusions” – and they actually did.

Moreover, the New York courts have rejected the argument that Zoning Boards have the authority to remove the ambiguity by choosing the interpretation that the Board prefers. Rather, the courts recognize that while a board’s interpretation is entitled to deference in most situations, where the statute is ambiguous the question becomes a matter of law and the usual deference does not apply.

In a recent Zoning Board case, the same beneficial owners had a residence on one lot and a tennis court, without a home, on another immediately adjacent lot. There was no dispute that the tennis court was a valid subordinate use to the adjacent residence. However, the municipality would not approve a certificate of occupancy for the tennis court because there was no residence on the court property. There was no direct prohibition in the zoning code of an accessory use on a lot without a principal use. The municipality relied solely and entirely on the code’s definition of accessory use as:

“A subordinate use, building or structure customarily incidental to and located on the same lot occupied by the main use, building or structure. The term . . .”accessory structure” may include a . . . tennis court. . . .” (Emphasis added)

The owners sought relief in two separate ways. First, they argued for an interpretation that the code did not require that the tennis court and the dwelling be on the same lot because the word “customarily” modified both “incidental to” and “located on the same lot.” Therefore, an accessory structure is defined as only customarily located on the same lot as the main use. “Customarily” does not mean “always” or “required.” At the very least, the code was ambiguous on this point and, they argued, could not be used by the municipality to deny the owners the right to maintain the tennis court on the lot by itself.

The owners also sought a variance to allow the stand-alone tennis court in the event that the Zoning Board rejected their ambiguity argument. The Zoning Board rejected the argument that the ambiguity of the code section made it unenforceable, finding that they had regularly interpreted the code against the owners’ position. However, the Zoning Board granted the variance allowing the tennis court to exist without a main use on the same lot. A court might have overturned the Board’s contention that it had the right to interpret the ambiguous language in favor of the municipality, since that issue is a matter of law and the interpretation must be in favor of the property owner. But the bottom line is that the applicants got their tennis court and probably don’t care that it was by variance and not by voiding or interpreting an ambiguous code provision – and an Article 78 was averted.

And therein lies the point of this blog: The “ambiguity” rule can be difficult for applicants because courts can, and do, find that the code is not so ambiguous after all. On the other hand, zoning and planning Boards – and, especially, their counsel – know that the “ambiguity” rule is deep-rooted in New York law and that the courts do not hesitate to apply the rule as a matter of law, without deference to the boards. The bottom line is that making a legitimate “ambiguity rule” argument at the municipal board level can be successful in itself, but it is perhaps most important as a prod to the board to grant a variance or site plan or other municipal approval.

A not-so-clear code provision can be very helpful in obtaining a municipal approval!





Last week we wrote about a United States Supreme Court case Murr v. Wisconsin and its impact locally. Since that post, the Petitioner, Donna Murr, contacted the author to provide us with an update to her family’s situation.

After the Supreme Court decision in June, legislation was introduced in both the Wisconsin State Senate and the Wisconsin State Assembly. This legislation – among other things – sought to prohibit a state, county, town or village agency from merging a substandard lot with another lot without the consent of the affected property owner.

We are pleased to report that the Wisconsin State Assembly and Senate both passed the legislation in early November, and on November 27, 2017 Governor Scott Walker – with Donna Murr by his side – signed the bill into law. As a result, the Murr’s lots can be developed separately. As Ms. Murr noted in her email “We spent 10 years in the courts and 4 months in the Wisconsin legislature! Crazy right?”

On another note, Aram Terchunian of First Costal Corporation contacted the author and provided a note of caution. Mr. Terchurian rightly pointed out that Tidal Wetlands – Land Use Regulations contains an automatic merger provision for substandard lots. Indeed, at 6 CRR-NY 661.6 (b) the regulation addresses lots within the wetland jurisdiction that are substandard. Under §661.6 (a)(5) the minimum lot area for lots connected to a community sewage system is 20,000 square feet, and 40,000 square feet is required for lots not connected to a community sewage system. According to the Regulations, substandard lots as defined above “in the same ownership may be treated together as one lot”.

So know that while a property might not merge because of zoning regulations, it may merge because of wetland regulations.

Thank you to both Donna and Aram for their contributions to this blog.

In 2009, Scenic Development, LLC (“Scenic”) sought a zone change for the property formerly known as the “Patrick Farm” located in the Town of Ramapo to permit the development of multi-family housing. In three determinations adopted January 25, 2010, the Town Board resolved to (i) approve a findings statement pursuant to the State Environmental Quality Review Act (“SEQRA”) for the proposed zone change, (ii) amend the Comprehensive Plan to allow for the zone change, and (iii) approve the zone change. The Town’s determinations have led to a series of cases challenging these decisions, with three recent decisions discussed below.

Scenic purchased the property in 2001.  The underlying zoning of the property was R-80 when Scenic purchased the property and was subsequently changed to R-40, or one house per 40,000 square feet, when the Town adopted its 2004 Comprehensive Plan. In 2009, when it sought the zone change, Scenic proposed to build 479 housing units on 197 acres of the former farm along the Route 202/306 corridor outside Pomona. Therefore, the zone change would have dramatically increased the density permitted on the property.

Although the project still has not come to fruition, with some additional environmental review as discussed below, the project may still be viable.

Youngewirth v. Town Board of Ramapo

In Matter of Youngewirth v. Town of Ramapo Town Board et al., decided November 8, 2017, the Appellate Division, Second Department reversed the Supreme Court’s, May 8, 2013 determination which denied the petition and dismissed the proceeding. The appellate court annulled the determinations of the Town Board and remitted the matter back to the Town Board for further proceedings consistent with the decision. Specifically, the Court found that the Town Board did not take the requisite “hard look” pursuant to SEQRA because of its (i) failure to review the environmental impact of the proposed development in close proximity to the existing Columbia Natural Gas Pipeline, (ii) failure to consider the combined impact of the development and pipeline on the environment, (iii) failure to list Columbia Gas as an “interested agency” pursuant to SEQRA, and (iv) failure to make a “reasoned elaboration” for the basis of its determination regarding this issue by not mentioning the potential impacts in its FEIS or findings statement.

The Court, however, sided with the Town on petitioner’s claim that the zone change was in conflict with the Comprehensive Plan and found that petitioner failed to establish a clear conflict with the Comprehensive Plan. The Court also found that petitioner failed to establish that the zone change constituted impermissible spot zoning. The Court further noted that requiring a certain number of affordable housing units was consistent with the Comprehensive Plan and was a reasonable condition related to and incidental to the property. However, because the Court found that the approval for the findings statement pursuant to SEQRA was required prior to amending the Comprehensive Plan or granting the proposed zone change, the annulment of the resolution approving the SEQRA findings statement required the annulment of the determinations regarding the Comprehensive Plan and proposed zone change.   Ultimately, the Court remitted the matter back to the Town Board for preparation of a Supplemental Environmental Impact Statement (“SEIS”) to consider the issues related to the gas pipeline.

Shapiro v. Ramapo Planning Board

In the related case of Matter of Shapiro v. Planning Board of Town of Ramapo et al., decided November 8, 2017, the Appellate Division, Second Department likewise annulled the Supreme Court’s determinations and remitted the matter back to the Planning Board for further review consistent with its decision.  The Planning Board approved Scenic’s three separate applications for final subdivision and site plan approval of three housing projects as part of Scenic’s proposed development of the property.  Here, petitioner alleged that a SEIS was required in connection with the SEQRA review conducted for the proposed development because the applicant, Scenic, failed to obtain a jurisdictional determination from the United States Army Corps of Engineers (“ACOE”) validating the delineation of wetlands on the property. The Court outlined that a lead agency’s determination whether to require an SEIS is discretionary. Specifically, SEQRA in section 6 NYCRR 617.9(a)(7(ii) provides, “the lead agency may require a supplemental EIS limited to the specific adverse environmental impacts not addressed or inadequately addressed in the EIS that arise from (a) changes proposed for the project, (b) newly discovered information, or (c) a change in circumstances related to the project”. Here, petitioners alleged that the Planning Board failed to consider newly discovered information having received a letter indicating that the ACOE reviewed the development plans but not the wetlands delineation. The applicant was required to obtain the ACOE’s jurisdictional wetlands delineation and the Planning Board was required to rely on the ACOE’s federal wetland delineation since wetlands were excluded in part from the yield calculations related to the proposed development. Thus the Court found that the Planning Board failed to take the requisite hard look pursuant to SEQRA and remitted the matter back to the Board for the preparation of an SEIS regarding the presence of wetlands on the property.

Village of Pomona v. Town of Ramapo

The neighboring Village of Pomona also sued the Town Board and Planning Board of Ramapo in two separate actions in which the Supreme Court denied the petitions and dismissed the proceedings. On November 8, 2017, The Appellate Division, Second Department reversed these determinations related to the Scenic proposal as well in Village of Pomona v. Town of Ramapo et al. Here, although the Court found that the Town of Ramapo adequately considered the effect of the proposed development on community character and complied with General Municipal Law §239-m(3) by providing a point-by-point response to the Village’s comments on the application, the Court determined that the lower court should have granted the Village’s petition based on the reasons stated in the Youngewirth decision referenced above.

In all, there have been approximately ten challenges over the years related to the Town of Ramapo’s approvals of Scenic’s proposed development. Although the local land preservation groups claim the recent court decisions as a total win, the Appellate Division made significant findings in support of the Town of Ramapo’s review and reversed the Supreme Court’s determinations on very specific grounds, which, if addressed correctly by the Town, could result in the multi-family development being built.



A recent decision by the Appellate Division decided that a village zoning code was inapplicable to a water district. As a result, the water district was able to proceed with replacement of one of its massive elevated water storage tanks and the village was powerless to use its zoning powers to either stop the construction or impose restrictions on the structure.

The case, Incorporated Village of Munsey Park v Manhasset-Lakeville Water District, 57 NY3d 154 [2d Dep’t 2017], involved a special district located within the Town of North Hempstead. The special district, the Manhasset-Lakeville Water District, supplies potable water to consumers located within the district’s boundaries. The water district uses its elevated water storage tanks to store water and maintain water pressure. One of the district’s storage tanks is on property owned by the water district that is located within the boundaries of the Village of Munsey Park (“Village”).

The elevated water storage tank in question was built in 1929. The water district determined it was in need of replacement in 2014. The water district developed a plan to replace the 1929 storage tank and held two public hearings about its proposal. Village officials participated in these public hearings. The district revised the plan after the public hearings, partly to accommodate concerns of the Village and Village residents elicited at the hearings.

The finalized plan called for the replacement of the 1929 storage tank with a new tank that would hold 250,000 gallons more than the 1929 tank. In addition, an antennae was proposed to be installed on the new tank to facilitate wireless communication between the district facilities, its employees, and volunteer firemen. The water district determined that the proposed construction plan was immune from the Village zoning code, based upon the principles enumerated in Matter of County of Monroe (City of Rochester), 533 NY 2d 702 [1988].

The Village sued. It sought a declaratory judgment and permanent injunction to prevent the demolition of the 1929 tank and construction of the replacement tank, claiming that the 30 foot height restriction contained in the Village zoning code would be violated by this structure. The trial court ruled in favor of the water district, a finding that was affirmed by the Second Department.

The appellate court discussed the City of Monroe case, in which the Court of Appeals dealt with the applicability of a local zoning code where two governmental entities are in conflict over a proposed project. The Court of Appeals set forth a balancing test in that case to determine if there is immunity from the local zoning code for the other governmental entity. These factors include: (1) the nature and scope of the governmental entity seeking immunity from the local zoning code, (2) the type of zoning restriction involved, (3) the extent of the public interest served by the local zoning code, (4) the effect that the local zoning code would have on the other governmental entity, and (5) the impact on local interests.

Using this balancing test, the Second Department determined that the water district was immune from the Village zoning code. The court further noted that the Village failed to set forth any basis for the Village’s contention that the Village had the exclusive right to evaluate the factors and make this immunity determination.

One other note. The water district  also determined that the project was a Type II action under the State Environmental Quality Review Act (“SEQRA”) and, thus, not subject to review under SEQRA. This finding was upheld by the trial and appellate courts. The Second Department explained that since the project involved the “replacement, rehabilitation or reconstruction of a structure or facility, in kind,” it was a Type II action under 6 NYCRR § 617.5[c][2], even though it was going to hold 250,000 more gallons than the 1929 tank.

Because of the essential service at issue in this case, the provision of a safe and reliable source of potable water, it is understandable why the courts would favor the water district over a height restriction in a local zoning code.  If the project involved something less vital, the result may have been different.