In 2015 the Village of East Hampton enacted five local laws reducing the maximum allowable gross floor area for residences, reducing the maximum permitted coverage for all structures,  reducing the maximum allowable gross floor area for accessory buildings, amending the definition of “story” and amending the definition of “cellar”. The petitioner/plaintiffs (“petitioners”) own real property in the Village and commenced a hybrid Article 78 proceeding and Declaratory Judgment action entitled Bonacker Property, LLC v. Village of East Hampton Board of Trustees et al., Supreme Court, Suffolk County, Index No. 15-12506, September 2, 2016, challenging the enactment of the local laws. Petitioners sought to annul the Board of Trustee’s adoption of a negative declaration under the State Environmental Quality Review Act (“SEQRA”) and claimed that (i) the local laws were not in accordance with the Village Comprehensive Plan, (ii) the Board of Trustees improperly relied upon recommendations from the Planning and Zoning Committee, and (iii) the Board of Trustees failed to comply with SEQRA. The petition also sought declaratory relief. The Supreme Court denied the petition, dismissed the proceeding/action and declared the local laws constitutional and valid. The petitioners appealed.

The Appellate Division, Second Department upheld the Supreme Court’s determination in Matter of Bonacker Property, LLC et al, v. Village of East Hampton Board of Trustees, et al., dated January 23, 2019. The Court noted that New York State Village Law §7-722(11)(a) requires that where a village has adopted a comprehensive plan, the village’s zoning decisions must be in accordance with the plan. However, the Court went on to recognize the presumption of validity afforded to the legislative act of enacting zoning laws. The Court quoted Matter of Town of Bedford v. Village of Mount Kisco, 33 N.Y.2d 178, 186, stating “[e]ven if the validity of a provision is fairly debatable, the municipality’s judgment as to its necessity must control.”   Ultimately, the Court found the enactments limiting gross floor area and coverage “entirely consistent with the comprehensive plan.”

The Court also found that the Village Board of Trustees complied with the requirements of SEQRA stating the Board identified the relevant areas of environmental concern, took the requisite “hard look” at them and made a reasoned elaboration in its negative declaration. The Court stated, “[g]iven the nature of the proposed action here, which would have only beneficial environmental effect, and the focus of the assessment form, which is to identify negative environmental effects of the proposed action, the rapid review and completion of the environmental assessment form was not arbitrary or capricious.”

Moreover, the Court found that the record supported the Supreme Court’s determination that the Planning and Zoning Committee was advisory in nature, did not perform governmental functions and it was proper for the Board of Trustees to rely on the committee’s advice pertaining to the enactment of the local laws.

Ultimately, the Court upheld the Supreme Court’s determination with regard to the Article 78 claims however remanded the declaratory judgment claims back to the Supreme Court since the Supreme Court improperly employed the summary procedure applicable to an Article 78 proceeding to dispose causes of action to recover damages or seeking declaratory judgment. The Court noted, “where no party makes a request for a summary determination of the causes of action which seek to recover damages or declaratory relief, it is error for the Supreme Court to summarily dispose of those causes of action.” Thus, the Court remitted the matter back to the Supreme court for further proceedings on those causes of action for damages and declaratory judgment. Finally, the Court expressed no opinion as to the merits of those claims.

Last month, the Appellate Division, Second Department, issued four decisions[1] in a series of hybrid proceedings challenging local laws in the Town of Riverhead (“Riverhead”). Plaintiff/Petitioner Calverton Manor, LLC (“Calverton Manor”), in connection with a site plan application, sought to annul several resolutions adopted by Defendant/Respondent Riverhead Town Board (“Town Board”). These resolutions: (1) established a new comprehensive plan; (2) implemented a new agricultural protection zoning district (“Agricultural District”); (3) implemented a new rural corridor district (“Rural District”); and (4) enacted a new transfer of development rights law (“TDR Law”). Each of the challenges was based upon the Town Board’s failure to comply with N.Y. General Municipal Law Section 239-m (“Section 239-m”), among other things. In addition, Calverton Manor argued that the “special facts exception” required Riverhead to apply the preceding zoning district laws to its application, rather than the new Agricultural District and Rural District laws.

In these cases, the Court held that some circumstances allow revisions to be made to proposed laws or actions referred to the county planning agency pursuant to Section 239-m even after the referral is made. As the Court analyzed Calverton Manor’s Section 239-m challenges to the various Town Board resolutions, its holdings illustrate the distinction between valid post-referral modifications and invalid modifications which violate Section 239-m and render the entire act void. Additionally, the Court analyzed the special facts exception in light of Riverhead’s treatment of Calverton Manor’s application.

Calverton Manor’s Site Plan Application versus a New Comprehensive Plan

Calverton Manor owns an undeveloped parcel of land (“Property”) in Riverhead and submitted a site plan application in 2001 to construct numerous commercial and residential buildings thereon (“Application”). For approximately two years, Calverton Manor worked with Riverhead on its Application to satisfy the applicable zoning laws in effect at the time. Riverhead, however, had been developing a new comprehensive plan since 1997. The new comprehensive plan sought to protect open space and farmland, while concentrating development into certain specified areas. Riverhead’s new comprehensive plan also proposed eliminating certain permitted uses on the Property that were crucial to the Application.

Calverton Manor submitted the last revised Application in September 2003. The Town Board adopted the new comprehensive plan on November 3, 2003. The new comprehensive plan derailed the Application and development of the Property. Calverton Manor brought its challenges in Suffolk County Supreme Court. Calverton Manor was largely unsuccessful and appealed; the Town Board cross-appealed concerning the special facts exemption.

Amendments Subsequent to a Section 239-m Referral: Embraced in the Original

With respect to Calverton Manor’s Section 239-m challenge to the Town Board’s resolutions enacting the comprehensive plan, the Agricultural District and the Rural District, the trial court denied the petition, dismissed the proceeding and declared theses local laws legal and valid.[2] Section 239-m, in many instances, requires a municipality to submit to the county planning agency a “full statement” of the proposed action. In pertinent part, the trial court found that the Town Board made the appropriate Section 239-m referrals. Calverton Manor appealed and the Second Department affirmed. The Court held that despite changes made to the comprehensive plan, Agricultural District and Rural District after the Town Board referred these local laws to the Suffolk County Planning Commission (“Commission”), the revisions were “embraced within the original referral” such that the Town Board did not fail to refer a full statement of its proposed action.

Calverton Manor also presented a Section 239-m challenge to Riverhead’s new TDR Law. Transfer development rights allow landowners whose development rights have been adversely affected or limited in one place to transfer these rights to another place and build in excess of certain limitations in that other, buildable place. The parcel from which rights are transferred is the “sending parcel” and the parcel to which rights are transferred is the “receiving parcel.” Riverhead’s new TDR Law designated the Property as a “sending parcel” so that development rights could only be transferred away from it, as opposed to towards it.

With respect to this challenge, the trial court also denied Calverton Manor’s Section 239-m challenge to the TDR Law based upon the same rationale. The Second Department, however, reversed the trial court, granted the motion for summary judgment and declared the TDR Law void for failure to comply with Section 239-m. The Town Board’s submission of the TDR Law to the Commission was effectively rejected because it was missing the complete text of the law. The Commission, upon receipt of the proposed law, advised the Town Board by letter that it would not review the TDR Law until it received a complete revised text of the amendment. And, nothing in the record contradicted the Commission’s position that it did not receive a complete text of the law. Therefore, the Court found that the Town Board failed to refer a “full statement” of the proposed TDR Law to the Commission prior to enacting the same in violation of Section 239-m.

The Town Board sought the same “embraced within the original” protection the Court applied to the other local laws. Specifically, the Town Board argued its referral of prior drafts of the TDR Law sufficed Section 239-m and obviated the need for the subsequent referral. The appeals court disagreed. A new referral is not required only if “the particulars of the [changes] were embraced within the original referral.” Unlike the changes made to the comprehensive plan, Agricultural District and Rural District, subsequent to their referrals, the amendments to the TDR Law were not embraced within the referred version.

The TDR Law ultimately passed by the Town Board, among other things, mapped the sending and receiving districts and specified the degree to which density limitations could be exceeded. The prior versions of the TDR Law reserved these details for future consideration. Highlighting the significance of the changes made to the TDR Law post-referral, the Town Board’s own resolution declared that the final TDR Law contained “significant modifications” from the prior versions. In addition, the Town Board even prepared a supplemental generic environmental impact statement over the course of several months to evaluate the changes in the final TDR Law. Accordingly, the Court held that the Town Board failed to comply with Section 239-m, the adoption of the resolution enacting the TDR Law was of no effect and the TDR Law is void and unenforceable.

Special Facts Exception Permits “Grandfathering” Site Plan Applications

In addition to its Section 239-m, Calverton Manor argued “special facts” required that the zoning district laws preceding the Agricultural District and Rural District apply to its Application. Ordinarily, courts apply the current zoning laws in effect when they render decisions. Under the special facts exception, however, courts may apply the law in effect at the time the application was made. This exception applies where the landowner “establishes entitlement as a matter of right to the underlying land use application [and] extensive delay indicative of bad faith….unjustifiable actions by municipal officials…or abuse of administrative procedures.”

The Town Board sought to dismiss this claim, but the trial court held triable issues of fact existed sufficient to permit the claim to proceed. The Town Board cross-appealed and the Second Department denied its appeal.[3] The Court found that triable issues of fact exist as to whether special facts warranted the application of the prior zoning laws to Calverton Manor’s Application.

The record contained inconsistencies as to whether Calverton Manor’s last revised Application was “complete” in September 2003. On the one hand, evidence in the record showed that Calverton Manor needed to make further revisions before the Application could be deemed completed under Riverhead’s rules. In this scenario, Calverton Manor is not entitled to the exception. On the other hand, evidence also showed that the Town Board determined the Application was “completed” upon submission in September 2003. This latter circumstance indicates the Town Board may have delayed processing the Application in bad faith until the new laws went into effect. Because triable issues of fact exist, summary judgment on this claim was inappropriate.

—ENDNOTES—

[1] Calverton Manor, LLC v. Town of Riverhead, 160 AD3d 829 (2d Dept 2018); Calverton Manor, LLC v. Town of Riverhead, 160 AD3d 833 (2d Dept 2018); Calverton Manor, LLC v. Town of Riverhead, 160 AD3d 838 (2d Dept 2018); Calverton Manor, LLC v. Town of Riverhead, 160 AD3d 842 (2d Dept 2018).

[2] Although these are hybrid proceedings, for the purposes of simplicity, the petition/complaint will be referred to as the petition and the proceeding/action will be referred to as the proceeding.

[3] The Town Board cross-appealed “from so much of the order as did not search the record and award them summary judgment and, in effect, make a declaration in their favor” on Calverton Manor’s special facts exception claim. The Second Department “dismissed” the cross appeal based upon the premise that the Town Board was not entitled to make such an appeal because it was technically not aggrieved. The Court noted that a party is not aggrieved by an order which does not grant relief that the party did not request. Here, apparently, the Town Board did not ask the trial court to award summary judgment on the special exceptions claim. Therefore, it cannot be aggrieved by this aspect of the order and is not entitled to appeal it. Despite having “dismissed” the cross-appeal, the Second Department heard, analyzed and denied the Town Board’s arguments seeking summary judgment on the special facts exception.