In Peyton v. New York City Bd. of Standards and Appeals, (2018 N.Y. 06870, 166 A.D.3d 120 (1st Dept 2018), Petitioners-community residents (“Petitioners”) commenced a proceeding to challenge the City of New York (“City”) Board of Standards and Appeals’s (“Board”) resolution upholding the City Department of Buildings’s (“DOB”) decision to grant a permit for the construction of a twenty-story nursing home (“Project”) on the Upper West Side.  The main issue is the City’s “open space” mandate (“Open Space Law”) and whether the Project provides enough open space to suffice the requirement.  The Court rulings and the Project’s viability hinged entirely upon how to calculate compliance with the Open Space Law.

At the outset, it is crucial to note the difference between a building-by-building calculation for open space and an open space calculation in the aggregate.  The former calculates the required open space with respect to each individual building within a zoning lot, whereas the latter considers the open space requirement for all buildings existing on an entire zoning lot together.  This distinction is at the heart of the dispute.

Procedurally, as relevant herein, the DOB made its open space calculation for the Project based upon a “building-by-building” methodology and decided to issue the construction permit.  One or more of the Petitioners appealed the DOB’s decision to the Board.  The Board resolved to uphold the issuance of the permit and the calculation methodology, which resolution the Petitioners challenged in this proceeding.  The Supreme Court, New York County, denied the petition and affirmed the Board’s resolution.  Petitioners appealed and the Appellate Division, First Department, reversed.

The Project site is within a “superblock” zoning lot known as “Park West Village” comprising 308,475 square feet, or 7 acres (“Zoning Lot”) (between 97th and 100th Streets and Columbus and Amsterdam Avenues; the complex extends to Central Park, but that portion is not at issue).  The complex on the Zoning Lot was built in the 1950s and 1960s as part of a federally subsidized middle-income urban renewal project and includes residential buildings, a school, a church, a public library, a health center and commercial buildings.  There are four residential buildings: three original sixteen-story buildings and a more recently constructed twenty-nine-story mixed commercial and residential building (“Fourth Building”).

A forty-year deed restriction had prohibited construction on the Zoning Lot through 2006 and the present owner (“Owner”) acquired the land shortly before the prohibition expired.  Approving and constructing the Fourth Building was the center of controversy between Petitioners, Owner, the City and others, which controversy also revolved around the City’s open space requirements.

Since its inception in 1961, and despite amendments in 1977, the Open Space Law had no particular design or mode to address zoning lots improved with multiple buildings.  With respect to the Fourth Building, there was a disagreement over whether its rooftop open space could count towards the open space requirement for the entire Zoning Lot.  The Fourth Building’s rooftop space included a 42,500 square feet garden, with a mosaic tile saltwater pool, sundeck and lawn.  However, the rooftop garden provided access only to residents of the Fourth Building and did not allow access to occupants of other buildings within the Zoning Lot.  If the Fourth Building’s rooftop garden was included in the open space calculation, then the project met the requirements; if not, then the project would fail.

The DOB performed a building-by-building analysis for the Zoning Lot, included the rooftop garden in its calculation and issued a building permit in 2007.  Residents of Park West Village and others challenged the DOB’s approval based upon the fact that the Fourth Building’s rooftop garden did not provide access to all residents of the Zoning Lot and, thus, could not be included in the open space calculation.

In 2009, the Board resolved to affirm the DOB’s decision (“2009 Resolution”), wherein the Board noted that the Open Space Law’s language requires open space with respect to a “building,” not the zoning lot as a whole; therefore, open space among multiple buildings need not be common, centralized space shared by all occupants of the zoning lot, and the building-by-building methodology for calculating open space suffices.  The 2009 Resolution utilized the building-by-building methodology for the first time and stated: “as each of the buildings is allocated the amount of space that is in excess of that which would be required…if they were located on separate zoning lots, it cannot be seen how those residents would be deprived of an equitable share of open space by the proposed building.”  The Board’s resolution was challenged, but the challenge was settled out of court and the Fourth Building was completed.

Two years later, in February 2011, the City amended the Open Space Law (“2011 Amendments”).  The definition of “open space” has always been: “that part of a zoning lot, including courts or yards, which is open and unobstructed from its lowest level to the sky and is accessible to and usable by all persons occupying a dwelling unit or a rooming unit on the zoning lot.”  The 2011 Amendments modified several other provisions of the Open Space Law (e.g. “open space ratio,” “minimum open space,” etc.) by substituting the words “zoning lot” and “all zoning lots” for the words “building” and “any buildings,” focusing the law and its analysis upon the actual zoning lots – as opposed to individual buildings.

After the City enacted the 2011 Amendments, the Owner sought to utilize a former parking lot within the Zoning Lot, which Park West Village residents previously used.  The Owner entered into an exchange agreement with the Project’s developer (“Developer”) to swap the parking lot for another parcel of land located north of the Zoning Lot and owned by the Developer (“New Parcel”).  The New Parcel was large enough for the Owner to construct another luxury apartment building.  The Owner agreed to pay the Developer $35,000,000 and the Developer promised to complete the project on the former parking lot.  However, this exchange was contingent upon, among other things, the Developer obtaining a permit from the DOB for construction of the Project.

In March 2011, the Developer made its applications to the DOB, which expressly noted that the open space within the Project would be accessible to all persons occupying a dwelling unit on the Zoning Lot.  Developer’s open space calculations for the Project included all of the open space on the zoning lot, including the Fourth Building’s rooftop garden.  Petitioners objected and argued that, based upon the 2011 Amendments to the Open Space Law, the Fourth Building’s rooftop garden no longer counted towards the open space calculation for the Zoning Lot (due to restricted access) and that the building-by-building methodology was invalid.

The DOB disagreed and granted a building permit for the Project.  Petitioners appealed to the Board and the Board resolved to affirm (“2011 Resolution”), relying upon the 2009 Resolution: “in the case of a multi-building zoning lot, the open space definition could be read to allow some open space to be reserved for the residents of a single building as long as the residents of each building on the zoning lot have access to at least the amount of space that would be required…if each building were on separate zoning lots.”  The Board also noted that the 2011 Amendments did not dictate a change in the DOB’s or Board’s building-by-building methodology or open space analysis.

Petitioners challenged the Board’s 2011 Resolution by commencing this proceeding and argued that, even though the Fourth Building’s rooftop garden was arguably within the meaning of open space when it was constructed in 2009, it presently was not open space by virtue of the 2011 Amendments.  These changes to the Open Space Law eliminated any ambiguity as to how to calculate open space and the Fourth Building’s rooftop garden cannot be included because the area is not available to all occupants of the Zoning Lot.

It was undisputed that the Project sufficed the open space requirement with the inclusion of the Fourth Building’s rooftop garden.  It was also undisputed that the Project failed to provide adequate open space without the rooftop garden.  The Board’s main argument was that the City’s Open Space Law is ambiguous and, therefore, the DOB and the Board have discretion to construe it.  In particular, the Board argued that the definition of open space (with accessibility and usability for all residents within a zoning lot) is irreconcilable with the definition of “zoning lot,” which contemplated multiple buildings on a single lot.  Therefore, the Open Space Law was ambiguous and the DOB and the Board were free to interpret and reconcile this ambiguity, i.e. by utilizing the building-by-building methodology.  The Supreme Court denied Petitioner’s petition and dismissed the proceeding. Petitioners appealed and the Appellate Division reversed and annulled the 2011 Resolution.

On appeal, the Appellate Division disagreed with the Board and adopted the Petitioners’ argument that the 2011 Amendments removed the contextual basis upon which the Board relied.  Judicial deference should be given to an agency’s interpretation of a statute it is charged with implementing, unless the interpretation is unreasonable or irrational.  However, where the question is one of pure statutory interpretation, an agency’s interpretation is accorded much less weight and Courts are free to ascertain the proper interpretation from the statutory language and legislative intent.  Here, resolving the dispute concerning the 2011 Amendments does not implicate the expertise of the DOB or the Board as the implementing administrative agencies; instead, the resolution is one of pure statutory analysis and does not require deference to the agencies.

The Appellate Division held that the definition of “open space” is clear and unambiguous, requiring open space to be accessible to all residents of any residential building on the zoning lot – not only the building containing the open space in question.  The Court noted this clarity is further bolstered by the 2011 Amendments, which eliminated all references to “building” and replaced the term with “zoning lot” in the relevant Open Space Law provisions.  Therefore, any space, including a rooftop, that is to be considered “open space” for purpose of satisfying the requirement must be accessible and usable by all residents of the zoning lot.  In addition, the Court expressly invalidated the building-by-building methodology: “Lest there be any doubt, we find that the 2011 [A]mendments now preclude use of [this] methodology, which has been an exception to this clear statutory import.”

The Court also noted that absence of legislative history did not evidence an intent to accept the building-by-building methodology.  Rather, the 2011 Amendments replacement of the word “building” was an unmistakable rejection of the use of this formula.  Notably, one of the four Judges dissented, which may lead the case to the Court of Appeals.

In 1999, the Greenport Group, LLP (“Greenport Group”) acquired a 31 acre parcel of land located on the east side of Chapel Lane and the north side of the Main Road in Greenport in the Town of Southold. The southerly portion of the property was zoned “Limited Business” and the northerly portion was zoned “Hamlet Density”. When purchased, there were four buildings on the property, each containing two residential units that were part of a larger project to build multi-residence senior citizen housing, which had been approved for an additional 140 units. The Planning Board and Zoning Board of Appeals granted a conditional site plan and special exception approval for the construction of the multiple residence complex in or about 1976, with certificates of occupancy being issued for the four buildings on the property in 1984. The additional units were never built and no further construction took place on site.

On September 12, 2000, the Town Board of the Town of Southold adopted a local law, Local Law 20 of 2000, changing the zoning of the property to Residential Low Density, R-80. The R-80 designation increased the minimum lot size permitted on the property from 10,000 square feet to 80,000 square feet. The local law was filed with the Secretary of State on October 2, 2000. Thereafter, the Greenport Group filed a hybrid Article 78 proceeding and Declaratory Judgment action in Supreme Court on February 2, 2001, entitled Greenport Group, LLP and Adrienne Solof v. The Town Board of the Town of Southold, Index No. 01-2730, seeking a judgment declaring that the local law up-zoning the property was null and void. Greenport Group alleged that the Town Board’s actions were arbitrary and capricious, that the re-zoning subjected their property to disparate treatment and constituted reverse spot zoning, that they had vested rights in the prior zoning designations, that the rezoning was inconsistent with the goals of the Town Comprehensive Plan, and the rezoning constituted a regulatory taking of the property without just compensation. In response, the Town Board moved for summary judgment.

The Supreme Court, Suffolk County, by decision dated June 17, 2015, granted summary judgment in part, dismissing the Greenport Group’s claims that (i) the Town failed to comply with the notice requirements rendering the local law adoption invalid since plaintiff actually participated in the local law hearing, (ii) the Town’s adoption of the local law changing the zoning constituted impermissible spot zoning where Greenport Group failed to allege or offer evidence that the change was “for the benefit of the owner to the detriment of other owners”, (iii) that Greenport Group had vested property rights in the prior zoning of the property when no construction was performed on site in connection with the development prior to the zone change, and (iv) the re-zoning constitutes a taking without just compensation since Greenport Group citing an 80% diminution of the property’s value was deemed insufficient and failed to prove that the property was incapable of producing a reasonable return or that the economic value of the property was destroyed by the zone change.

The Supreme Court denied the Town’s motion for summary judgment relative to the second and fifth causes of action asserted by Greenport Group. The second and fifth causes of action asserted by the Greenport Group alleged that the Town Board’s adoption was arbitrary and capricious representing an unconstitutional abuse of the Town Board’s zoning authority, and that the re-zoning was unjustified and failed to achieve the purported goals of the local law and land use plans. Here, the Court found that Greenport Group had raised triable issues of fact as to whether the Town Board’s stated intent of the re-zoning was the actual purpose for re-zoning Greenport Group’s property. The Supreme Court stated, “[p]arenthetically, since the re-zoning was enacted approximately 14 years ago, the witnesses’ recollection as to the zoning classification was legitimately less than ideal. Although the Town Board’s decision appears to be supported by the CR48 Land Use Study… and tremendous deference is given to the local municipality’s decision-making process and its authority, the Court will not simply rubberstamp a local municipality’s assertion that it was following the advice of its own consultant. Instead, the Court must examine the record, including the adopted legislation, to determine whether the legislation was reasonable and enacted in accordance with the municipality’s land use plan. Here, notwithstanding the documentary evidence supporting the Town Board’s claim, plaintiffs raise questions of fact concerning similarly situated properties included within the CCG studies but treated differently by the Town Board.” Therefore, the Supreme Court denied the Town’s motion for summary judgment with respect to these two causes of action.

The parties cross-appealed the matter and the Appellate Division, Second Department, in its decision entitled Greenport Group, LLC et al., v. Town Board of the Town of Southold, dated December 5, 2018, remitted the matter to the Supreme Court for “severance” of the causes of action asserted by Greenport Group and the entry of judgment declaring the Local Law that changed the zoning classification was valid. The Appellate Division reviewed and affirmed the lower court’s dismissal of each of Greenport Groups causes of action. However, the Court found that the Supreme Court should have granted the Town Board’s motion for summary judgement with respect to the second and fifth causes asserting that the rezoning of the property was arbitrary and inconsistent with the comprehensive plan. The Appellate Division cited the “heavy burden of countering the strong presumption of validity accorded the enactment [of local laws]” and further stated that “if the validity of the legislative classification for zoning purposes is even ‘fairly debatable,’ the classification must be sustained upon judicial review (citing, Matter of Town of Bedford v. Village of Mount Kisco, 33 NY2d at 186).” The Appellate Division also found that Greenport Group failed to raise a triable issue of fact, contrary to the Supreme Court’s findings, regarding the purpose and intent of the re-zoning stating, “[w]hile the courts must satisfy themselves that the rezoning meets the statutory requirement that zoning be in accordance with the comprehensive plan of the community, this does not entail examining the motives of local officials (Udell v. Haas, 21 NY2d 463, 471).” Ultimately, the Appellate Division found that the local law changing the zoning classification of the Greenport Group’s property was valid and remitted the matter to the Supreme Court for appropriate judgment.

 

 

In a decision dated October 30, 2018, Supreme Court Judge Joseph Pastoressa remanded a decision made by the Southampton Village Architectural and Historic Board (BARHP) for further consideration. Manger et al. v. Board of Architectural Review and Historic Review of the Village of Southampton.

 The property owner in Manger applied to the BARHP for a certificate of appropriateness to construct a single family dwelling and accessory structures on two separate lots in the Village of Southampton. The lots are in a Historic District which requires a Certificate of Appropriateness as a condition precedent to issuing a building permit.

During the public hearing process that resulted in an approval of the application, the Board stated that it could not consider the size of the house in its review of the proposed construction. The Board took this position because the house as proposed fully complied with the Zoning Code of the Village of Southampton. That position was supported by Board precedent and a prior decision in Ferrara v. Board of Architectural Review.

Immediate neighbors of the property brought the Article 78 proceeding and argued that scale and size were different measurements and the Board could consider the scale of houses and any corresponding impact on the neighboring properties. Alternatively, the property owner and Village argued that if a house complied with Zoning then the BARHP was powerless to require a reduction in size. Ultimately, Judge Pastoressa rejected that argument and sent the matter back to the Board for re-consideration.

This case highlights the tension between the Zoning Code and the Historic and Landmark Preservation Code. Historically, zoning was enacted to protect light and air between properties. This protection is accomplished through setbacks and the restrictions on the size of a structure. One of the stated considerations of the Historic and Landmark Preservation Law is the impact of new construction on the character of nearby properties.

As held by Judge Pastoressa, the BARHP now may consider the impact of new construction on surrounding properties. But, that consideration still must include an analysis of the new construction under Zoning Code provisions.

Since the Declaration of Purposes of the Zoning Code (§116-1) and the Legislative Findings and Intent (§65-1) in the Historic and Landmark Preservation Law share many common core goals, compliance with the Zoning Code is certainly compelling if not overwhelming evidence that the mass and scale of new construction is appropriate.  So, while the option to reduce the size of a structure is seemingly available to the BAHRP, it must show that the Zoning Code somehow failed to achieve one of its basic goals. There must be significant evidence showing an impact not addressed by the Zoning Code for the BARHP to reduce the size of a structure under that which is allowed by Zoning.

Ultimately, this leaves a potential purchaser of real property in a bind. Any advice by counsel to a purchaser must be given with a caveat that the BAHRP has final say and compliance with the Zoning Code does not guarantee approval.

 

A use variance is arguably one of the most difficult zoning approvals to obtain and is rarely granted.  Petitioners in 54 Marion Ave., LLC v. City of Saratoga Springs, 2018 N.Y. Slip Op. 04611, 162 A.D.3d 1341 (3d Dep’t 2018),  commenced a hybrid proceeding/action to challenge and annul a determination of the Zoning Board of Appeals (“ZBA“) of City of Saratoga Spring (“City”) to deny  a use variance application to allow commercial use of residential property and for Section 1983 damages based upon the theory of regulatory taking. The Respondents moved to dismiss and the Supreme Court, Saratoga County (“Motion Court“), granted the motion. Petitioners appealed and the Appellate Division, Third Department (“Appeals Court“), reversed in part and affirmed in part, and found hardship which was not self-created.

Petitioner 54 Marion Avenue, LLC (“Owner“) owns a vacant parcel of real property situated in the City’s Urban Residential-2 District, where single-family residences are permitted as of right, where other uses are allowed with a special use permit and site plan review and where commercial uses are generally prohibited. Petitioner Maple Shade Corners, LLC (“Purchaser“) contracted to purchase the subject parcel contingent upon obtaining a use variance to allow a dental practice to operate thereon. An application was made to the ZBA for a use variance to allow the dental practice in Urban Residential-2 and the ZBA denied the application because the alleged hardship was not unique and was self-created. Petitioners brought this litigation to annul the ZBA’s decision denying the use variance and to seek damages for regulatory taking. Respondents moved to dismiss based upon Petitioners’ failure to state a cause of action, which the Motion Court granted.

In order to qualify for a use variance, an applicant must meet the very difficult task of demonstrating the following four elements: (i) it cannot realize a reasonable return if the property is used for a permitted purpose; (ii) the hardship results from unique characteristics of the property; (iii) the proposed use will not alter the essential character of the neighborhood; and (iv) the hardship has not been self-created. The ZBA found that the Petitioner met the first and third elements, but failed to meet the second and fourth elements – that the hardship was unique and was not self-created. On appeal, the Appeals Court reversed the Motion Court as to the hardship issues.

In its review of the ZBA’s determination, the Appeals Court noted that the subject property lies next to the intersection of a major thoroughfare and a side street. Petitioners substantiated their claim that this location imposes a unique financial hardship because of the commercial development and increasing traffic along the thoroughfare (occurring over the prior 30 years) with statements from prior owners and real estate professionals.  These statements recounted previous failed attempts to sell the subject parcel for permitted residential use and opined its location rendered it unmarketable for residential use, among other things. In light of this proof, the Appeals Court found that the need for a use variance was not self-created because it only arose after the property was acquired and due to the gradual shift in the character of the area, which rendered the residential use requirement onerous and obsolete. Moreover, the Appeals Court noted that even the ZBA agreed the location of the parcel on the corner might impact its value; the ZBA’s ultimate conclusion that the financial hardship was not unique was contrary to that observation. On a motion to dismiss, Courts must accept the allegations presented as true and, based upon the foregoing, the Appeals Court held that Petitioners set forth a viable challenge to the ZBA’s denial and reversed the Motion Court.

With respect to the regulatory taking claim, the Appellate Division affirmed dismissal. In order for a taking claim to be ripe, a claimant must demonstrate that it has received a final decision regarding the application of the challenged regulations to the subject property from the governing entity and that it has sought compensation through the appropriate state procedures. Although the ZBA’s denial of the use variance satisfied the final decision prong, the Appeals Court found that there is no indication the Petitioners sought compensation under State law.

In Real Estate Bd. of New York, Inc. v. City of New York, Petitioner-Plaintiff Real Estate Board of New York, Inc. (“REBNY”) commenced a hybrid article 78 proceeding and plenary action against the City of New York (“City”) challenging the City’s adoption of Local Law No. 50 of 2015 (“Local Law”), which placed a moratorium on the conversion of hotel rooms to residential units.

REBNY’s article 78 claims sought to annul the Local Law and permanently enjoin the City from enacting similar legislation unless it complied with the City Charter’s Uniform Land Use Review Process (“ULURP”) and the State Environmental Quality Review Act (“SEQRA”). REBNY’s plenary claims sought compensation for taking and for due process and equal protection violations under the State and Federal constitutions.

The City moved to dismiss REBNY’s claims based on standing, among other things. The Supreme Court, New York County (“Motion Court“), granted the City’s motion and dismissed all of REBNY’s claims for lack of standing.  On appeal, the Appellate Division, First Department (“Appeals Court“) effectively reversed the Motion Court’s decision.  The Appeals Court held that REBNY had standing to bring its article 78 claims, except under SEQRA.  The Appeals Court also held that REBNY had standing to assert its plenary causes of action, but held that REBNY abandoned its claims under 42 U.S.C. 1983 because REBNY did not address them on appeal.

The City enacted the Local Law in June 2015 to allow for the study of the effect of the conversion of hotel rooms from transient guest spaces to full-time residential units on the City’s economy. Its legislative findings asserted that large hotels are essential to vacation and business travelers, important generators of well-paying jobs and anchors for surrounding economic activity. The findings also expressed concern that the conversions are occurring quickly and may be irreversible. In addition, the legislative intent noted the current market conditions, the profitability of conversions and the City’s developers’ rush to convert.

The Local Law placed a two-year moratorium (extended to four years, i.e. June 2019) on the conversion of Manhattan hotel rooms to residential units. More specifically, the Local Law applied to hotels with at least 150 units and prohibited the conversion of more than 20% of hotel rooms. The Local Law provided an exemption for conversions begun in the two years preceding its effective date and allowed owners to seek a waiver from the City’s Board of Standards and Appeals (“BSA”), which waiver was not as-of-right.

REBNY, a non-profit corporation comprised of 17,000 members (property owners, developers, lenders, managers, architects, designers, appraisers, attorneys and brokers), asserted that 175 hotels, including 29 REBNY members, were affected by the Local Law. REBNY argued that by restricting the rights of affected hotels, the Local Law reduced the value of the properties, among other things.

The City moved to dismiss on the basis that REBNY lacked organizational standing.  To have organizational standing to challenge the enactment of the Local Law, REBNY must satisfy three elements : (i) one or more of its members must have standing; (ii) the interest it asserts must be germane to its purpose; and, (iii) neither the claim asserted nor the relief sought requires the individual members’ participation (ensuring the organization is the proper petitioner/plaintiff). Standing requires injury-in-fact which falls within the zone of interests and which is different in kind or degree from the public at-large.

The Appeals Court ultimately held that REBNY sufficed the injury requirement. Owners of property subject to new zoning restrictions are presumptively affected by the change. REBNY member hotels were negatively affected by the Local Law, including but not limited to, the diminution of property value and the costs associated with applying for a waiver. These negative effects satisfied the injury-in-fact requirement.

One of the bases cited for this finding was the Local Law’s own legislative intent, which noted that the Local Law would not be necessary if conversions were not so profitable. Thus, with respect to first part of the three-prong test for organizational standing, the Appeals Court held one or more member’s sustained sufficient injury-in-fact within the zone of interests and different in kind from the public at-large.

However, REBNY satisfied the second and third prongs for organizational standing on only some its claims.  Pertinently, with respect to the article 78 claims, the Appeals Court held REBNY had standing for all claims, except under SEQRA. REBNY focuses on the economic and political health of the real estate industry. The Court rejected REBNY’s argument that it sought to protect its member’s environmental interests in air quality and traffic. REBNY’s only “environmental” focus is on the economic environment.  Economic interests – alone – are insufficient to confer SEQRA’s zone of interests. While economic interests are germane to REBNY’s purpose to the extent it is a real estate industry advocacy group, environmental interests are not.  Therefore, REBNY is only a proper petitioner for the non-SEQRA claims.

Notably, the sole dissenting Judge opined, among other things, that REBNY did not have standing for any claim. The dissent argued that REBNY’s allegations of potential future economic harm were amorphous and did not suffice an injury-in-fact. REBNY’s members have neither attempted to convert nor sought exemption by waiver form the BSA. REBNY did not provide competent proof, e.g. appraisals, evaluations, etc. Additionally, the waiver application fee is de minimis and does not constitute an injury.

Given the complex zoning regulations that govern development of vacant land, in recent years, it has become uniquely challenging to develop smaller tracts of vacant land that do not conform to the current zoning code.  Further, the doctrines of merger and single and separate add to the complications.  Unless a buyer is absolutely certain that the land for purchase is single and separate from an adjoining parcel and has not merged by common ownership with an adjoining parcel, the results can be less than desirable.

In a recent case, Harn Food LLC v DeChance, the Second Department upheld the Town of Brookhaven’s Board of Zoning Appeals (“BZA”) decision denying a request to construct two houses on what was contended to be two single and separate vacant undersized parcels joined only at the rear property line and each fronting on it’s own adjacent parallel road.  Lots configured in this manner are also referred to as through lots.

In upholding the BZA’s decision, the Court rejected petitioner’s argument that the two tax lots were single and separate because they shared only a rear lot line thereby allowing one house to be constructed on each lot.  Instead, the Court adopted the BZA’s position that since 1948, the two lots were held in common ownership.  The significance of holding or purchasing adjoining vacant lots in common ownership cannot be minimized.  Under most zoning codes and as interpreted by many courts, holding vacant lots, that are undersized or non-conforming to the minimum zoning requirements, creates a merger of the parcels and defeats any argument that the lots were held in single and separate status.

In this case, even though the two tax lots at issue were not side by side lots, but instead, they were back to back lots, the Court determined that the common ownership since 1948 rendered the lots merged.  Additionally, in weighing the five-factor test set forth in Town Law 267-b(3)(b), the Court relied on a prior denial in 2007 by the BZA of an identical application in the immediate area, together with evidence at the hearing that the proposal set forth did “not conform to the surrounding development pattern, in that only 5 lots (12%) of the 42 improved lots in the area conform to the lot area requested in the application, and only 7 lots (17%) conform to the lot frontage.”

The Court further noted that the buyer was charged with knowledge of the zoning code when the property was purchased.  Given that the vacant land is still suitable to construct one dwelling, the Court determined that a feasible alternative existed and that the petitioner was not so aggrieved.

This case is just one more reminder that land use attorneys and real estate attorneys must work together to insure that properties are purchased in uncommon ownership unless otherwise discussed and affirmatively agreed to be held in common ownership.  Further, vacant land should never be purchased absent a single and separate search with confirmation from the relevant municipality that the vacant land in question meets the test for single and separate and that no merger with adjoining parcel ever occurred.

 

 

 

 

 

 

 

 

In opposing Crossroad Ventures, LLC’s (“Crossroad Ventures“) endeavor to construct a vacation resort partially within the Town of Shandaken, (“Town“), grassroots preservation organization Catskill Heritage Alliance, Inc. (“Alliance“) commenced two consecutive Article 78 proceedings challenging certain approvals.  The Court addressed multiple appeals from both proceedings in Catskill Heritage Alliance, Inc. v. Crossroads Ventures, LLC, et al., 161 A.D.3d 1413 (3d Dep’t 2018).  In its opinion, the Court reinforced the principle that a board of appeals is the sole interpreter of its ordinance and that interpretations by other boards or bodies may be fatal to municipal approvals and determinations.

In this case, the Town’s zoning ordinance allowed a resort with a special permit and site plan approval from the Town Planning Board (“Planning Board“).  However, the ordinance did not define “Vacation Resort.” In 2000, Crossroads Ventures requested an interpretation and definition of the term to determine what uses are allowed as part of a resort. The Town Zoning Board of Appeals (“Zoning Board“) responded to the request by analogizing a vacation resort to a hotel, motel or lodge development and determined the term included all uses integral to the hotel, motel or lodge development and clearly accessory to it, as well as other uses allowed in the area, either as of right or by permission. After receiving the interpretation, Crossroads Ventures undertook a prolonged environmental review and developed a plan for the resort: two hotels, a conference center, community centers and additional lodging scattered among several duplexes and multiple unit buildings.

In 2013, towards the end of its environmental review, Crossroads Ventures made an application to the Planning Board for a special permit and site plan approval. The Planning Board issued the special permit and conditionally approved the site plan. The Alliance commenced its first Article 78 proceeding challenging these determinations. The Supreme Court, Ulster County, issued a decision in October 2016 denying Crossroad Venture’s motion to dismiss and granting the Alliance’s petition, in part. The Court found that, although the Planning Board properly determined that non-habitational structures fell within the clear definition of permissible accessory uses to the resort, it improperly resolved an ambiguity in the ordinance as to whether detached duplexes and multiple unit buildings were permitted uses in the area. Accordingly, the Court annulled the determinations and remitted the matter to the Zoning Board to address the propriety of residential structures. The parties appealed the October 2016 decision.

On remittal, the Zoning Board interpreted the ordinance and clarified that detached residential units were permitted “lodges.” Thereafter, the Planning Board, again, granted Crossroads Ventures’ application, issued a special permit and conditionally approved the site plan. The Alliance commenced its second Article 78 proceeding challenging both the Zoning Board’s interpretation and the latest Planning Board approvals. The Supreme Court dismissed the petition by decision dated July 2017 and the Alliance appealed.

On appeal, the Appellate Division, Third Department, decided both appeals. With respect to the October 2016 decision, the appellate Court affirmed both the denial of the motion to dismiss and the granting of the petition, in part. The Court noted that zoning boards of appeals are the bodies with the authority to interpret ordinances – not planning boards. To the extent any ambiguities exist in the pertinent ordinance, a planning board must request an interpretation thereof from its board of appeals. In 2000, the Zoning Board interpreted the “Vacation Resort” term to include conference centers and community centers as integral, accessory uses, but it did not opine on detached duplexes and multiple-unit buildings. This was problematic because the latter structures are habitations and could be viewed either as permitted lodges or as new multifamily dwellings prohibited under the ordinance affecting the project area. The Planning Board should have requested another interpretation from the Zoning Board, rather than resolving the ambiguity itself. Therefore, the appeals Court affirmed the lower Court’s October 2016 decision to annul the Planning Board’s approvals for the resort and to remit the issue to the Zoning Board.

Next, the appeals Court reviewed the July 2017 decision. This later decision addressed both the Zoning Board’s interpretation of the duplexes and multiple-unit buildings and the Planning Board’s subsequent (second set of) approvals. The appeals Court found the Zoning Board’s interpretation deserved deference because it was not a purely legal interpretation – it was rendered upon the facts of Crossroads Ventures’ proposal. The Town ordinance defined “multiple dwellings” as structures within three or more dwelling units, but stated that rooms in a boardinghouse, dormitory, motel, inn or other similar building do not constitute dwelling units. Although the Town ordinance did not define the term “lodge,” the Zoning Board noted that a lodge is commonly defined as a transient residence, such as an inn or similar building having rooms that are excluded from the ordinance’s definition of dwelling unit. Ultimately, the permanence of residency was determinative.

The Zoning Board concluded that a lodge includes structures containing one or more units of lodging and sleeping accommodations for transient occupancy in connection with the special permitted use of a hotel, lodge development or vacation resort held under common ownership – so long as the users had primary residence elsewhere. And, the Zoning Board determined that the proposed structures at the resort were intended for transient occupancy, as rentals or timeshares; therefore, these were permitted lodges, as opposed to prohibited new multifamily dwellings. The Court found this interpretation to be rational. The Court also found that the Planning Board, relying upon the Zoning Board’s 2000 and 2017 valid interpretations, rationally determined to issue the special permit and conditional site plan approval for the resort. Therefore, the Court affirmed the July 2017 decision.

In the Matter of 278, LLC v. Zoning Board of Appeals of the Town of East Hampton et al., dated March 21, 2018, the Appellate Division, Second Department upheld East Hampton Town Zoning Board of Appeal’s (“ZBA”) decision denying a natural resources special permit (“NRSP”) for two parallel 762 linear feet walls built without a permit by Ron Baron (hereinafter “Petitioner”) on his oceanfront property located at 278 Further Lane, East Hampton New York. Petitioner owns two additional, improved properties adjacent to 278 Further Lane, which is vacant. In September 2008, Petitioner built two parallel walls approximately four feet apart consisting of 762 linear feet along the southerly border of its property and continuing along a portion of the easterly border of 278 Further Lane. In response, in 2009 the Town of East Hampton issued citations alleging that the walls were constructed in violation of the Town Code because Petitioner failed to obtain an NRSP from the ZBA, a building permit and/or certificate of occupancy prior to constructing the walls. As part of a settlement agreement, Petitioner removed portions of the walls and submitted an application to the ZBA.

Petitioner made an application to the Chief Building Inspector in April 2010, questioning the limit of NRSP jurisdiction over the walls. By letter dated April 13, 2012, the Building Inspector determined that a “substantial portion of the wall was constructed in a location containing dune land/beach vegetation” and would require an NRSP prior to the issuance of a building permit. Petitioner appealed that determination to the ZBA, requested an NRSP and sought a variance for the accessory structures to remain on the property where there was no principal structure. The ZBA upheld the Building Inspector’s determination and found that an NRSP was required for the walls prior to the issuance of the Building Permit, denied Petitioner’s request for an NRSP, and held that since the NRSP was denied, the application for the variance for the accessory structure was rendered academic.

Petitioner commenced an Article 78 proceeding, seeking to annul the ZBA determination. The Supreme Court denied the petition and dismissed the proceeding, remanding the matter back to the ZBA for further proceedings to determine whether any variances were needed regarding the construction of the walls. Petitioner appealed; and the Appellate Division, Second Department held that the ZBA determination requiring an NRSP had a rational basis, was not arbitrary and capricious, and there was sufficient evidence in the record to support the determination. The Court stated, “petitioner failed to demonstrate that the retaining walls were erected in conformance with the conditions imposed (see Town Code §§255-4-40, 255-5-51).  Since the petitioner, which erected the retaining walls prior to obtaining any permits failed to request a lot inspection by the Town prior to construction and failed to sufficiently document preexisting conditions, the ZBA had to rely on expert testimony to ascertain the conditions in the area prior to construction Its decision to rely on the conclusions of its experts rather than the conflicting testimony of petitioner’s expert did not render its determination arbitrary, capricious, or lacking in a rational basis…” The Court overturned that portion of the Supreme Court decision, remitting the matter back to the ZBA.  The ZBA found the entire wall required an NRSP, confirming that the request for a variance for an accessory structure was academic.

Obtaining an NRSP in East Hampton Town is no small matter.   NRSP applications are regulated under four separate sections in the East Hampton Town Code:

  1. §255-1-11 “Purposes”- General Purposes for Zoning Code requires compliance with applicable sections A through M;
  2. §255-5-40 “General Standards”- General Standards for Special Permits requires compliance with sections A through M;
  3. §255-4-10 “Purposes of Article”- requires compliance with sections A through E, General Purposes for the Protection of Natural Resources; and
  4. §255-5-51 “Specific Standards”- requires compliance with sections A through K, Specific Standards and Safeguards for Natural Resources Special Permit.

Given the number of standards with which an applicant must comply to obtain this special permit, it is never surprising when an application for an NRSP is denied. It is even understandable that Petitioner constructed the walls (provided they were not greater than four feet) without permits, given an initial reading of Town Code §255-11-38 , Fences and Walls, which states, “the following regulations shall apply to all fences and walls in all districts unless otherwise indicated: A. Building permits. The erection, enlargement, alteration or removal of the following types of fences and walls shall require a building permit: (1) A fence or wall greater than four feet in height and located within the required front yard area of any lot; (2) A fence or wall over six feet in height, in any location; (3) Any fence or wall for which site plan approval is required.”  Considering the outcome of this case, however, Petitioner would have been better served making an application to the Town before constructing the walls.

 

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 the Village of Bayville, New York (“Village”), a landowner wished to enclose and protect private property (“Lot 18”) , including the roadway thereon, against trespassers and traffic.  The landowner sought to erect crash gates on both sides of its property and across the roadway to prevent public access.  The road upon Lot 18 forms a part of Shore Road (connecting the public part of the roadway north of Lot 18 with Godfrey Avenue farther to the south).  Notably, Lot 18 abuts Mill Neck Creek and preventing traffic and access across the portion of Shore Road located upon Lot 18 may provide unfettered access to the water.

In the summer of 2013, the landowner made applications to the building inspector for a fence permit to construct two twelve-foot wide crash gates across Shore Road at the north and south sides of Lot 18.  The building inspector denied the applications and the landowner appealed to the Zoning Board of Appeals (“Board”).  The Board denied the landowner’s appeal and the landowner commenced a hybrid Article 78 proceeding/action in the Supreme Court against the building inspector and the Board.

In addition to seeking a reversal of the denials and demanding issuance of the building permit for the fences, the landowner sought damages for inverse condemnation.  The landowner argued that the Village had exercised a taking by allowing public access through the private property and upon the private roadway (especially because the building inspector and the Board denied the landowner’s rights to prevent such access).

The trial court issued an initial decision of June 2014, inter alia,  (i) denying the landowner’s petition to reverse the denials and (ii) granting the building inspector’s and the Board’s motions to dismiss, including for failure to state a cause of action for inverse condemnation.  Afterwards, however, the trial court granted the landowner’s application for leave to reargue.  Upon reargument, the trial court’s later decision of December 2014, as clarified by its order of March 2015, affirmed its initial decision – except it denied the motion to dismiss the landowner’s claim for inverse condemnation.  The building inspector and the Board appealed the March 2015 clarification order.

Last month, the Appellate Division, Second Department, affirmed the trial court’s March 2015 clarification order.  The appeals court noted that “[t]he cause of action [for inverse condemnation] should not have been dismissed since [sic], inter alia, it stated a cause of action to recover for damages . . . .”  Accordingly, the landowner can pursue its cause of action for inverse condemnation against the Village where public access upon and across private property is sanctioned by denial of the ability to enclose and protect it.