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.

In Matter of HV Donuts, LLC v. Town of LaGrange Zoning Board of Appeals, the Second Department recently held that a property owner’s nonconforming use rights continue despite a temporary business interruption caused by a fuel truck accident and gasoline spill.

The property owner, Leemilt’s Petroleum, Inc. (the “Owner”), leased the subject property (the “Premises”) to a tenant who operated a gas station and a convenience store at the Premises. Both the gas station and the convenience store were legal nonconforming uses under the Town’s zoning regulations.

Under Section 240-29 of the Code of the Town of LaGrange (hereinafter the “Code”), a “nonconforming use . . . is one which existed lawfully” prior to the date that the Code or an amendment to the Code was enacted, which results in the failure of that prior use to conform to the Code (see Code § 240-29[B]). However, in order for such use to maintain its status as a nonconforming use, it must not be discontinued. The Code provides that a nonconforming use is deemed discontinued when “the nonconformity has ceased for a period of one year or more” (see Code § 240-29[F][4]).

The case arose out of an accident in June 2013, when a fuel delivery tanker hit a light pole, spilling approximately 3,000 gallons of gasoline on the Premises. This forced the gas station and the convenience store to temporarily cease business operations and begin remedial efforts. After the Owner completed the restoration work in October 2014, a leak was discovered in the gasoline pump system piping when it was tested in anticipation of reopening. This required additional remediation and further delayed the reopening.

Eventually, the Owner completed this additional work and thereafter sought approval from the Town’s building inspector to reopen the gas station. The Owner also applied for a building permit from the Town’s building inspector “to upgrade the convenience store building, which had not been damaged by the spill and remediation efforts.” Section 240-29(E) of the Code permits the “re-establishment of nonconforming uses after casualties,” under certain time conditions. Section 240-29(E) of the Code provides the following:

“If any nonconforming building or structure or any building or structure containing a nonconforming use shall be damaged or destroyed by fire or other casualty, such building or structure . . . may be restored and any such nonconforming use resumed to the extent that such building, structure or use existed at the time of the casualty, provided that a building permit for such restoration is obtained within a period of one year from such casualty and is diligently prosecuted to completion.”

Pursuant to that provision, the building inspector granted the Owner’s request, giving it one year from September 22, 2015—the date of the building inspector’s determination—to re-establish its nonconforming use.

A Dunkin Donuts franchise (the “Petitioner”) located across the street from the Premises appealed the building inspector’s determination to the Town’s Zoning Board of Appeals (the “ZBA”). The Petitioner contended that the nonconforming use had been lost and could not be re-established, citing Sections 240-29(E) and (F) of the Code.

The ZBA determined that “there was ‘more to maintaining a gasoline filling station than pumping gas,’” and that the “remediation of the petroleum spills amounted to a continuation of the nonconforming use.” Thus, there was no “discontinuation” within the meaning of Code Section 240-29(F)(4). Furthermore, the ZBA concluded that the building permit requirement of Code Section 240-29(E) did not apply to the convenience store because neither casualty affected the convenience store.

Ultimately, the Supreme Court rejected the Petitioner’s Article 78 challenge, holding that the ZBA’s determinations were rationally based and entitled to deference. The Second Department affirmed. Therefore, under HV Donuts, a nonconforming use may not be lost by remedial and restoration activities that temporarily shut down site operations, provided these activities are diligently pursued and completed.

The Appellate Division, Second Department, issued a decision on October 10, 2018, which rejected a town’s attempt to saddle an applicant with over $17,000 in consulting fees supposedly incurred by the town in reviewing special use permit and area variance applications for an antenna tower to be used by an amateur radio (a/k/a ham radio) hobbyist. The installation of the tower was expected to cost less than $1,000.

In Matter of Landstein v. Town of LaGrange, Myles Landstein, the owner of residential property located in the Town of LaGrange (“Town”) in Dutchess County, sought the special use permit and area variance to install a 100-foot antenna tower on his property for his personal use in connection with his ham radio station. The Town Code limits towers to 35 feet in height.

Mr. Landstein had already obtained a license for his ham radio station from the Federal Communications Commission (“FCC”). After receiving the FCC license, Mr. Landstein applied to the Town and paid the $250 filing fee. Although the applications clearly indicated that all costs incurred by the Town for the review of the applications were the sole responsibility of the applicant, Mr. Landstein added a comment to the application requesting that he be advised in advance of the review cost amount.

The applicant indicated that the 100-foot tower, which would be 18-inches by 18-inches in dimension, was needed to operate the ham radio station effectively and would be barely visible above the tree line. Town residents objected, contending the tower would be an eyesore and interfere with cellular and internet service.

The applications were discussed at 14 separate public meetings over the course of 2 years. The applicant even agreed to decrease the height of the tower to 70 feet. However, he would not agree to pay the ever-increasing legal fees that the Town sought to recover from him, which at one point exceeded $17,000. Mr. Landstein’s attorney wrote to the Town complaining that the fees were excessive in light of tower’s modest installation cost and violated an FCC regulation. Thereafter, the Town Board passed a resolution indicating that it would review and audit its consultant costs to determine if they were “reasonable and necessary.”

The audit revealed that the town attorney’s charges were not solely attributed to the specific area variance application before the Town Zoning Board of Appeals (“ZBA”) but were more generic. They included charges for: (1) attendance at the ZBA hearings, (2) travel time, (3) telephone calls with ZBA members, (4) internal conferences at the town attorney’s law firm, (5) drafting the ZBA agendas, (6) reviewing the applicant’s files, and (7) legal research. Upon completion of the audit, the Town Board passed a resolution reducing the legal fees from more than $17,000 to $5,874. The resolution also required the applicant to maintain a $1,000 minimum balance in an escrow fund for future costs incurred with the applications, which would need to be replenished as the balance fell below that amount. The resolution indicated that the applications would not be further reviewed absent the payment of the fees and the establishment of the escrow fund.

The applicant sued. The trial court denied the Article 78 proceeding, but the applicant prevailed at the Appellant Division. The appellate court found that the Town’s fee provision exceeded state statutory authority. The Appellate Division noted that such fees needed to be “reasonable and necessary.” The Court found that the definition of “reasonable” in the Town Code was appropriate as it required a reasonable relationship to customary charges of similar consultants in the region in connection with similar land use applications. The Town Code definition of “necessary,” however, was rejected by the Appellate Division as it was way too broad, and was out of step with established precedent. The Town Code defined necessary consulting fees as those required “to assist in the protection or promotion of the health, safety or welfare of the Town or its residents; to assist in the protection of public or private property or the environment from potential damage…to assure or assist in compliance with laws, regulations, standards or codes which govern land use and development; to assure or assist in the orderly development and sound planning of a land use or development;…or to promote such other interests that the Town may specify as relevant.” The Appellate Division found the “to assist” language particularly troubling. The Court was equally troubled by the actions of the Town, first insisting that it be paid in excess of $17,000 in legal consulting fees, and its later reduction to $5,874, which was achieved by the Town merely striking entries from the invoices, without regard to their content or connection to the applications. The Appellate Division noted that the Town imposed liability without making any attempt to determine if similar charges were imposed by other municipalities for similar applications.

The Appellate Division also took aim at the escrow fund with its minimum $1,000 balance. The Court found this perpetual replenishment fund to be an impermissible effort to avoid having the Town’s taxpayers shoulder their share of the cost of governmental functioning.

Municipalities would be wise to examine their own codes to make sure that they seek reimbursement of costs that are reasonable and necessary in light of the specific project at issue, and not use that provision to dissuade or discourage land use applicants or as a means of underwriting the cost of government.

New York State Town Law § 277(9) authorizes a town Planning Board to require a developer to provide a performance bond or other security covering the cost of installation of subdivision infrastructure and improvements in case the developer fails to finish the required work. Specifically, Town Law §277(9) states: “[a]s an alternative to the installation of infrastructure and improvements, as above . . . prior to planning board approval, a performance bond or other security sufficient to cover the full cost of the same, as estimated by the planning board or a town department designated by the planning board to make such estimate . . . shall be furnished to the town by the owner.”

On October 24, 2018, the Appellate Division, Second Department explored the extent of this enabling legislation in the case of Joy Builders Inc. v. Town of Clarkson.  In Joy Builders v. Town of Clarkson, Joy Builders was developing two subdivisions approved by the Planning Board; a 22 lot subdivision called Highland Vista Estates and a 55 lot subdivision called Little Tor Subdivision.  Both subdivisions were approved by the Planning Board with the condition that Joy Builders would build the infrastructure required for each one including roads, curbs, sidewalks, street signs, light poles and monuments. Joy Builders was required to post performance bonds for each subdivision pursuant to New York State Town Law §277(9).  Additionally, the Town of Clarkson had enacted Town Code §254-18B which authorized the Town to withhold the issuance of building permits for 10% of each subdivision until Joy Builders had completed the required infrastructure improvements. The enactment of this law was the Town’s effort to ensure that the required infrastructure work would be completed.

Specifically, Town Code §254-18B stated:  “Ten-percent restriction of building permits pending dedication of improvements in subdivisions.  Building permits shall be restricted, in accordance with the map note per §254-29B of this chapter, to footings, foundations and utilities only on 10% or one of the structures or dwelling units, whichever is greater, in each subdivision until all required improvements have been completed to the satisfaction of the Department of Environmental Control and shall have been dedicated to the town, unless waived by the Planning Board.”

In response to having Town Code §254-18B imposed, Joy Builders brought a declaratory judgement action against the Town seeking a judgment that the Town Code provision was null and void as ultra vires. The Supreme Court denied Joy Builder’s motion for summary judgement on the complaint, and Joy Builders appealed. The Appellate Division reviewed the enabling authority set forth in Town Law §277 and reversed the Supreme Court’s determination.

The Court stated: “[h]ere, a plain reading of Town Law § 277 establishes that (1) it has no express provision authorizing the Lot Holdback Provision set forth in Town Code § 254-18B, (2) pursuant to the rules of statutory construction, the express provisions of Town Law § 277 must be construed to exclude provisions such as those in Town Code § 254-18B which are not contained in § 277 (see Walker v Town of Hempstead, 84 NY2d 360, 367), and (3) it has no provision from which the Lot Holdback Provision of Town Code § 254-18B can be implied (see Matter of Gruber [New York City Dept. Of Personnel—Sweeney], 89 NY2d 225, 234; Matter of Webster Cent. School Dist. v Public Empl. Relations Bd. of State of N.Y., 75 NY2d 619, 627). Thus, Town Code § 254-18B is inconsistent with the plain language of Town Law § 277(9), which expressly sets forth the manner in which a developer can be required to provide financial security to ensure the completion of the installation of required infrastructure and other mandatory improvements.”

Since the matter was a declaratory judgment action, the Court remitted the matter back to the Supreme Court for the entry of a judgment declaring that Town Code §254-18 was null and void as ultra vires and that the conditions imposed on Joy Builders arising out of that Town Code section were also null and void.

 

On July 7, 2017, Judge William G. Ford issued a decision in the case Matter of 7-Eleven, Inc. v. Town of Babylon, Supreme Court, Suffolk County, 2017 NY Slip Op 31467(U) , in which the Town was excoriated for its mishandling of a site plan approval and building permit application. Although the applicant prevailed in court, it took five years to get there, during which the site remained vacant and unproductive. Here’s how it unfolded.

The Facts

In July 2012, 7-Eleven applied for a building permit and certificate of occupancy for a site in Wyandanch. The property contained a defunct automobile repair shop, garage and canopies for an abandoned gasoline service station. 7-Eleven proposed to tear down this eyesore and improve it with a 24-hour 7-Eleven store, a use it contended was as-of-right. The Town, however, had other ideas. The Town’s Building Division initially provided comments in July 2012, which were followed by comments from other Town divisions, including traffic safety, engineering, the fire marshal, environmental control, highways and planning that were issued from July to October 2012.

The Town’s Traffic Division issued comments in October 2012 in which it objected to the project on the grounds that there was insufficient on-site customer truck parking, an inadequate truck loading zone, and inadequate setbacks for trash enclosure and mechanical equipment, which it claimed were too close to residential dwellings. It also raised concerns about an existing 7-Eleven, located within ½ mile of the project. It had issues about ingress and egress that it believed would cause increased traffic and parking on nearby residential streets.

7-Eleven responded to these various comments in February 2013, when it submitted architectural drawings and a revised site plan as well as comments prepared by its expert engineering consultant. This submittal addressed the issues raised by the Town Traffic Division. 7-Eleven included three customer truck parking spaces and a dedicated delivery truck loading zone. 7-Eleven proposed to limit all deliveries to box trucks and modified the trash enclosure and loading zone to decrease noise and lessen visual impacts.

The Town responded with further comments which were provided to 7-Eleven in December 2013.   In particular, the Town’s Traffic Division objected to the revised site plan.

The Town Planning Board then held a public hearing at which further revisions to the site plan were requested. These revisions concerned traffic flow and several covenants and restrictions that would (1) prohibit tractor trailer truck deliveries, (2) limit delivery hours, (3) prohibit truck parking on residential streets, (4) limit hours of operation, and (5) require a security protocol. 7-Eleven agreed to all the covenants and restrictions except it would not agree to limit the hours of operation. The public hearing was left open for the receipt of a traffic study. That study determined that vehicle traffic would be relegated to the major thoroughfare (Straight Path) and would not have a major impact on pedestrian or bus stop safety.

The general public also weighed in on the proposal, via written comments, petitions and letters, objecting to the project.  These opponents were concerned with increased traffic and crime and decreased residential property values and public safety. The operator of the other 7-Eleven, located ½ mile away, also submitted comments, which the court noted “would later loom large” in the Town’s subsequent handling of the application. This operator contended that siting the store so close to his existing store would oversaturate the market and lead to increased competition. He also noted that his donation of surplus food to local charities would decrease and also questioned enforcement of the tractor trailer prohibition.

Although 7-Eleven objected, the public record was held open. During this extended comment period, the Town’s Traffic Division raised concerns about truck parking and traffic. It announced in February 2014 that it would not take any further action to review the application unless and until 7-Eleven undertook further site plan revisions to address its concerns.

In response, 7-Eleven made additional revisions to its site plan. These were shared with the Traffic Division in April 2014 and formally filed with the Town in May 2014. Among other things, 7-Eleven confirmed its commitment to limit deliveries to box trucks, and modified its customer parking and loading zone. It also closed off access from certain streets and proposed to install fencing that would reduce vehicle headlights shining into residential areas. It relocated the trash enclosure and mechanical equipment further away from residential neighbors and eliminated a pedestrian walkway near a residential street.

In July 2014, the Town Traffic Division issued another memo, this time finding fault with the dedicated customer truck parking stall.

7-Eleven filed its final site plan in May 2015.   It also filed engineered drawings,traffic and planning studies, and an appraisal, all dated in April 2015. 7-Eleven also filed an affidavit from its senior regional director and requested that the hearing be finally closed. The affidavit rebutted the comments of the operator of the other 7-Eleven.   It also submitted an affidavit from its engineer in which it contended that its proposed use was superior to seven other similarly-situated commercial uses approved by the Town in the preceding two years.

In September 2015, the Planning Board held a meeting and adjourned the applications. Thereafter, in February 2016, additional comments were issued by the Town’s Traffic Division in which it noted its agreement with the operator of the other 7-Eleven and rejected the opinion of 7-Eleven’s regional director about truck traffic, parking and impacts on the adjacent residential neighborhood. But that was not the end of the Town’s Traffic Division’s comments. Two months later, in April 2016, the Town’s Traffic Division issued a memo to the effect that the proposed covenants and restrictions were insufficient. As a result, the Town requested that 7-Eleven submit yet another revised site plan.

At this point, 7-Eleven had had it; and in June 2016, it sent a demand letter to the Town calling for an up or down determination on its application. In August 2016, the Planning Board denied the application. The rationale given for the denial was the safety of the residential neighborhoods that abutted the site on two sides, the adverse impact on traffic and parking, and public safety concerns.

Not surprisingly, 7-Eleven sued.

The Lawsuit

The Town claimed its decision should be upheld by the Court on the grounds it was rational and based on substantial evidence. The Town also contended its decision was not final, contending that 7-Eleven’s lawsuit was not ripe because it failed to apply to the Zoning Board of Appeals for variance relief. The Court didn’t buy these arguments.

The Court first discussed the ripeness issue. It noted that a land use and zoning matter is final when the “development plan has been submitted, considered and rejected by the governmental entity with the power to implement zoning regulations” but that an applicant “will be excused from obtaining a final decision if pursuing an appeal to a zoning board of appeals or seeking a variance would be futile.” Thus, resort to a zoning board of appeals is unnecessary if it “lacks discretion to grant variances or dug in its heels and made clear that all such applications will be denied.” The Court noted that 7-Eleven sought site plan review and a building permit to demolish existing structures and to construct a new building. Neither was granted by the Town, essentially stymying the project. Moreover, since the application was as-of-right, and the setbacks the Town claimed were applicable did not apply to this corner lot, there is no variance that it needed from the Town Zoning Board of Appeals.

The Court then took aim at the Town’s discretion argument. In rejecting it, the Court noted that the Town gave into public pressure about traffic, crime and property values plummeting. The Court found that the Town improperly ignored the concessions made by 7-Eleven to ameliorate the supposed impacts. It also focused on the multiple revisions and the lack of evidence in the record supporting the Town’s decision.

Conclusion

7-Eleven has the financial wherewithal to see a project through, despite the years it takes to get it approved on Long Island. Other applicants may not have the ability to withstand such an extended and expensive proposition to open a business, redevelop a blighted site and revitalize a neighborhood.

mosqueOn December 31, 2016, U.S. District Judge Michael Shipp of the District of New Jersey authored a 57-page opinion granting partial summary judgment to plaintiffs, The Islamic Society of Basking Ridge (“Islamic Society”) holding that defendants, the Township of Bernards (“Bernards”), violated Islamic Society’s rights under the Religious Land Use and Institutionalized Persons Act (“RLUIPA”).  The Bernards Planning Board denied Islamic Society’s site plan application seeking to construct a mosque in a residential zone on the basis that (1) a mosque is not considered a church under Bernards’ zoning code and (2)  Bernards’ parking ordinance was not adhered to.

FACTS

In November 2011, Islamic Society purchased property in a residential section of Bernards with the intention of constructing a 4,252 square foot mosque on the property.  The site plan called for 50 parking spaces based on estimated occupancy of 150 people.  The parking spaces provided were in compliance with Bernards’ parking ordinance applicable to churches at a ratio of 3:1 .

Over the course of three and a half years, Islamic Society’s site plan application underwent 39 meetings and was subjected to intense neighborhood opposition and scrutiny.    According to the decision, competing expert testimony was provided by parking experts and asserted that although Bernards does not, and has never, relied on the Institute of Transportation Engineers (“ITE”)  Parking Generation data,  Bernards required Islamic Society to apply the ITE data applicable to mosques, which estimated required parking spaces between 36 and 110.  Bernards compromised at 107 parking spaces, when in fact, only 50 were required under Bernards accepted church parking ratio of 3:1.

The rationale for the increased parking requirement rested on Bernards’ determination that a mosque is not a church, despite the fact that Bernards’ zoning code does not state that a mosque is not considered a church.  Bernards did not stop there.  Bernards went on to say that only Christian places of worship are considered  churches, and as a result thereof, not only was the 3:1 parking ratio not applicable to Islamic Society’s site plan application, but also, Bernards maintained discretion in reviewing Islamic Society’s application and essentially had unfettered discretion in determining parking requirements.

At the conclusion of all hearings and testimony, Bernards’ planning board denied the site plan application.  Islamic Society commenced an action in federal court alleging violations under RLUIPA.

DECISION

In granting partial summary judgment, the Court rejected Bernards’ position that mosques are not considered churches.   In fact, the Court specifically stated that a mosque or any place of religious worship, whether a church or not, is protected under RLUIPA.  Bernards’ unsupported determination that mosques are not considered churches violated Islamic Society’s rights under the Nondiscrimination Provision of RLUIPA.

Additionally, with respect to the increased parking, and Bernards’ position that it maintained unfettered discretion to determine parking requirements, the Court relied upon its determination that a mosque is entitled to the same protections as a church;  as such, the Bernard parking ordinance ratio of 3:1 should have been applied equally to Islamic Society as it had historically been applied to Christian and Baptist churches and synagogues that were previously approved in Bernards.  Further, the Christian, Baptist and Jewish places of worship were typically granted in less than six months, and in most instances, with less then four public hearings.

CONCLUSION

The decision in this 57-page case cannot be justly analyzed in a short blog post.  Given the state of our country at this time, when it comes to freedom of religion and the consequences that we suffer as a result of our differing beliefs, it would be a worthwhile allocation of any land use attorney’s time to read this decision.  If nothing else, it reminds us all that one of the basic tenets of our American freedoms is the freedom to be different and be accepted.

Yes, it’s true- the New York State Legislature has proposed legislation specifically designed to provide Towns, Villages and Cities with the authority to not only regulate, but to ban, all retail establishments which present a standardized branded marketing concept!

During the 2013-2014 Legislative Session, Legislative Bill S01771/A01216 was introduced for consideration by the New York State Legislature seeking to amend Town Law 261, Village Law 7-703 and General City Law 81 to specifically empower Towns, Villages and Cities to effectively “zone” out what the Legislature terms “Formula Retail Uses” on the basis that such retail establishments threaten communities across the state by eroding resources such as historic character, aesthetics, unique community character and commercial diversity by creating a sameness in design that destroys a communities identity.

“Formula Retail Uses” is defined in the pending legislation as a “retail sales establishment which, along with ten or more other retail sales establishments located in the United States, maintains two or more of the following features: “A standardized array of merchandise, a standardized façade, a standardized décor and color scheme, a uniform apparel, standardized signage, a trademark or a service mark.” Now, that’s comprehensive!  As I said, no more Prada, Kohl’s or Wal-Mart for sure.  But what about CVS, Walgreens, Stop-n-Shop, Hess Convenience Marts, AT & T stores, Verizon stores and dare I say, Apple stores?

I was immediately intrigued by this proposal because the term “Formula Retail Use” is not a land use term that is easily recognizable in the State of New York.  A comprehensive case law analysis of recent New York decisions confirms that the term “Formula Retail Use” is likewise not so popular.  Then why you might ask would the New York State Legislature offer this Bill for consideration?  Absent insider information, one can only surmise that a fairly recent Eleventh Circuit Florida Court of Appeals case, followed by a very recent 2012 Fourth Department New York State case are the source.

In Cachia v. Islamorada, 542 F.3d 839 consolidated with Island Silver & Spice, Inc. v. Islamorada, 542 F.3d 844 (11th Cir. Fla. 2008 en banc), the parties were engaged in hotly contested litigations arising from Islamorada Village’s adoption of local zoning ordinance 02-02 prohibiting formula restaurant[s] and limiting the size of formula retail establishments.  As a result of the Ordinance, plaintiff Cachia was unable to conclude the sale of his property to Starbucks despite a firm letter of intent to purchase and plaintiff Island Silver & Spice, Inc. was unable to conclude the negotiated sale of its property to Walgreens for $2,650,000.

In reversing the trial court, the Eleventh Circuit, en banc, held that not only did a violation of the dormant commerce clause exist, but also, that the Ordinance did not simply raise the costs of operating a formula restaurant or retail establishment in Islamorada, it entirely prohibited such businesses from opening.  As a result, a heightened level of scrutiny was applied and the Court concluded that the Ordinance served as an “explicit barrier” to the presence of national chain restaurants and retail establishments.  The Court further found that the Ordinance impermissibly prohibited establishments that operated “under the same name, trademark, menu, or style.”

In July 2012, the State of New York Appellate Division, Fourth Department, determined that a Village of Victor, Ontario County, local zoning ordinance prohibiting “formula fast food” restaurants in its Central Business District was constitutional.  In Mead Square Commons, LLC v. Village of Victor,  97 A.D.3d 1162 (4th Dept. 2012), the Fourth Department was precise in stating that the Ordinance was limited to a specific zoning district and that “plaintiff failed to preserve for our review any contention that there is no rational basis for distinguishing” between formula fast food restaurants and non-formula fast food restaurants in the Central Business District.  Id. at 1164.  The implication is clear that the Village of Victor ordinance survived only because the most favorable arguments were not advanced on appeal.

Given the clear pronouncement against severe restrictions or prohibitions against what has been termed “formula” retail establishments, why would the New York State Legislature seek to amend Town, Village and General City Law enabling the outright ban of these establishments?  Your guess is as good as mine.

The Bill is presently pending before the Local Government Section of the Legislature and is being advanced by a majority of downstate New York Members, including Senator LaValle and Assembly Members Thiele, Raia and Schimel  specifically representing Nassau and Suffolk Counties.