In Joy Builders, Inc. v. Town of Clarkstown, 2018 N.Y. Slip Op. 07110, 165 A.D.3d 1084 (2d Dept 2018), a developer (“Developer”), in connection with the development of two subdivisions, challenged a provision of the Town Code of the Town of Clarkstown (“Town”) which authorized the Town to withhold the issuance of building permits for a subdivision until the applicant/owner has completed the requisite infrastructure and improvements and dedicated the same to the Town.  The Supreme Court, Rockland County, denied the Developer’s motion for summary judgment and the Developer appealed.  The Appellate Division, Second Department, reversed and declared the Town Code provision null void and struck the subdivision conditions affected by that provision.

With respect to the Developer’s projects, the Town Planning Board had approved two subdivisions of 22-lots and 55-lots, respectively.  The approvals contained a condition requiring the Developer to build certain infrastructure and post performance bonds for each project.  Town Code Section 254-18B authorized the Town to withhold the issuance of building permits for 10% of the lots of each subdivision until the Developer completed and dedicated the infrastructure and improvements.  The basis of the “holdback” was to ensure that applicants/owners complete the requisite work.  During construction, the Town relied upon the holdback provision and withheld the issuance of buildings permits for three lots in one subdivision and six in the other.  The Developer, then, commenced this action challenging the Town’s withholding and seeking a declaration that Section 254-18B was null and void.

The Appellate Division noted that towns and municipalities lack the inherent power to enact zoning or land use regulations – rather, they are creatures of statute.  As such, towns may only engage the powers conferred by the State Legislature.  The pertinent statute, Town Law Section 277(9) authorizes the Town to obtain enumerated forms of security in order to ensure the full cost of infrastructure and improvements in the event a developer abandons a project.  However, withholding the issuance of building permits is not among these.  The Court determined that Town Law Section 277 does not expressly authorized the holdback and no such authority can be implied.  Therefore, Town Code Section 254-18B was inconsistent with the Town Law and the Town does not have the power to withhold building permits to provide financial security for the completion of work.

The Court declared Section 254-18B void and struck the conditions of withholding. The Court’s ruling reaffirms strict adherence to the enumerated powers for municipalities in the land use and zoning context.

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.