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.

In our July 18th post, we discussed the North Shore Helicopter Route and its fast-approaching expiration date.  In that post, we noted that the Federal Aviation Administration (the “FAA”) had not yet decided what to do about the route and told you we would keep you apprised of future developments.  Here’s that update.  In the Monday, July 25, 2016, edition of the Federal Register, the FAA announced a final rule that extends the North Shore Helicopter Route for four more years.  The new expiration date is August 6, 2020.

th3MRVYBS8In the Federal Register notice, the FAA notes that the original purpose of the route was to ameliorate noise from helicopters operating over Long Island.  When it originally adopted the rule in 2012, the FAA gave the rule a two-year duration to obtain data on pilot compliance and whether the route improved the noise situation.  The FAA extended the rule in 2014 for another two years to allow it more time to consider whether to make the rule permanent.  Since the 2014 extension, the FAA has undertaken a variety of helicopter research initiatives that will allow it to model helicopter noise and identify noise-abatement procedures.  These research projects are on-going and some aspects of the research are not expected to be completed until 2017.

The FAA will need time to consider the results of the research projects and thereafter determine the appropriate action to take.  As a result, the FAA determined that extending the North Shore Helicopter Route rule for another four years is the best way to “avoid disruption of the current operating environment.”

So for at least the next four years, helicopters will continue to fly over Long Island Sound, about a mile off-shore, before they cross over land at Riverhead, Southold, and Shelter Island to head south to the Hamptons.

 

 

 

thECI3BDWXPicture it – another hot and humid summer afternoon on Long Island. There you are, you master of the universe, sipping a margarita or perhaps a frozen daiquiri, or both, as you lounge on the patio of your beachfront home enjoying another weekend in the Hamptons. Not a care in the world. And then you hear that the Federal Aviation Administration (the “FAA”) has not extended the North Shore Helicopter Route rule, which will expire on August 6th. You start to tremble. What will happen on August 7th with no North Shore Helicopter Route rule? Will you be forced to travel in bumper-to-bumper traffic on the Long Island Expressway, take a bus or the Long Island Rail Road? Yikes. Take another sip of your frozen concoction and relax. Commuting by helicopter to and from the East End will not end even if the rule is not extended. Moreover, the FAA is actively involved with stakeholders on this issue and is considering various actions.

20140527__-Long-Island-Helo-offshore-route-map-by-NewsdayPrior to 2008, helicopters transporting folks between New York City and the Hamptons used three common flight paths: (1) the northern route, flying along the northern coast of Long Island; (2) the southern route, flying along the southern coast of Long Island; and (3) the LIE route, flying above that famous highway. Helicopter pilots preferred the northern route because it was faster and was less prone to weather delays than the southern route. Residents on the north shore were less enthusiastic as the summer helicopter traffic over their homes rapidly expanded as did the level of noise they incurred at all hours of the day and night.

As a result, in 2008, the FAA added the North Shore Helicopter Route to its flight charts as a voluntary means of diverting helicopter traffic flying overhead along the northern coast line, placing the route about a mile off the coast over the Long Island Sound. The North Shore Helicopter Route starts off of Huntington, (about 20 miles east of New York City) and continues to the end of Orient Point on the North Fork.

The North Shore Helicopter Route was made mandatory in 2012 by the FAA. The rule mandating the off-shore northern route was initially enacted for a two-year period. It was extended for an additional two years in 2014 and will expire on August 6, 2016, absent a further extension.

The North Shore Helicopter Route rule is codified at 14 CFR Part 93 and requires helicopters to fly at least 2,500 feet above sea level along the route over the Long Island Sound. The rule does not contain “waypoints,” which means that helicopters do not have to pass over specific points along the route. Also, there are no specific transiting points along the route, meaning that helicopter pilots are free to choose where they turn toward the south. In addition, a helicopter pilot can deviate from the route at any point for safety reasons or because of weather conditions or when transitioning to or from a point of landing. Typically, helicopters cross over land at Riverhead, Southold and Shelter Island to head south to the Hamptons.

There has been some talk about changes to the North Shore Helicopter Route, such as requiring helicopters to fly around Orient Point and Plum Island before heading south. An off-shore South Shore Helicopter Route is also a possibility. We’ll keep you posted of further developments.