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In Abbatiello v Town of North Hempstead, 164 A.D.3d 785 [2d Dept. 2018], the Second Department recently reversed Supreme Court, Nassau County and granted the petitioner’s CPLR Article 78 challenge to the Town of North Hempstead Board of Zoning Appeals (“Board”) denial of a use variance.  In finding that the house was a “legal nonconforming” 2-family residence, the Appellate Division ordered the Town to issue the requested  use variance.

A legal nonconforming use, commonly referred to as “grandfathered”, is a use of property which lawfully existed prior to the enactment of a zoning ordinance which now prohibits it.  The “legal nonconforming” use doctrine is a fact sensitive inquiry that protects property rights, which is directly at odds with a municipality’s comprehensive plan for an area.

The courts are routinely the venue used to protect legal nonconforming uses property rights.   In Abbatiello, when the petitioner purchased the property in 1977, he believed that the house was a legal two-family residence.  Since he purchased the property, the petitioner has been renting out the two units, and he has obtained various permits from the Town allowing him to do so.  In October 2013, the petitioner applied for a variance to permit him to continue using the property as a two-family dwelling.  The Town rejected the application, and the petitioner appealed to the Board, which ultimately denied the petitioner.  The Supreme Court affirmed the Board’s denial.

In reversing the Supreme Court, the Appellate Division found that the property owner was entitled to the use variance permitting him to use the property as two-family dwelling for rental purposes.  The owner presented evidence, including affidavits from neighbors and others who had lived in community for many years, which was sufficient to establish that property was legal two-family residence prior to amendments to the town zoning code, and there was no evidence presented to demonstrated that property had been converted into two-family dwelling after amendments.  As the Court noted, critical to establishing a legal nonconforming use, a property owner must demonstrate that the allegedly preexisting use was legal prior to the enactment of the zoning ordinance that purportedly rendered it nonconforming.  Id.

If you are facing zoning challenges to a use that is “grandfathered” you may be able to use the “legal nonconforming” doctrine to protect your property right(s).

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.

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 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.

 

Local zoning ordinances throughout New York State incorporate the flexible “accessory use” component so as not to unnecessarily restrict one’s use of property.  Accessory uses are incidental and customary to the principal use of property. Determining whether a use is actually “accessory,” however, is often debated – especially where the use is not specifically enumerated as such or where the ordinance does not define the use.

Recently, in Brophy v. Town of Olive Zoning Board of Appeals, 2018 N.Y. Slip Op. 07388 (3d Dept), the accessory use debate engaged the Appellate Division, Third Department.  Ashokan Dreams, a bed-and-breakfast on 28-acres in the Town of Olive (“Town“), began operating in 1998.  Ashokan Dreams was zoned “residential-rural-3A,” which permitted, among other uses, “tourist homes,” “boardinghouses” and “commercial recreation.”

The proprietors of the bed-and-breakfast first sought and obtained site plan approval, without conditions, from the Town Planning Board (“Planning Board“) for a single guest bedroom bread-and-breakfast operation in 1998.  Almost two-decades later, and without further approvals, Ashokan Dreams had expanded to three guest rooms and offered weddings – upwards of 12 each year – with limited lodging.  In 2015, the Town Zoning Enforcement Officer (“ZEO“) advised Ashokan Dreams in writing that site plan review was required because the weddings had grown to affect the health, safety and welfare of the neighbors and that site plan review would be a proper remedy via the imposition of certain limitations.

Ashokan Dreams submitted a site plan application to the Planning Board, which referred the matter to the ZEO and the Town Zoning Board (“ZBA“).  After a public hearing, the ZBA determined that the weddings were a “permitted special use to a bed-and-breakfast” requiring site plan review and remitted the matter back to the Planning Board.  Notably, the ZBA also reasoned that periodic seasonal events, including weddings, could be an “accessory use” at the site.  Neighboring property owners and a neighborhood association (collectively “Neighbors“) commenced an Article 78 proceeding seeking to annul the ZBA’s determination.  The Supreme Court, Ulster County, partially granted and partially dismissed the Neighbor’s petition, holding: the ZBA correctly determined weddings were an accessory use, but erred by legislating a “new use subject to a special permit requirement.”  The Neighbors appealed challenging, inter alia, the accessory use finding and the Appellate Division affirmed.

The Third Department noted that, generally, a zoning board’s interpretation of local zoning ordinance is afforded deference and will only be disturbed if it is unreasonable or irrational.   This deferential standard was applicable “because [determining] whether a proposed accessory use is incidental and customarily found in connection with the principal use of property is, to a great extent, fact-based.  Resolution of the accessory use question depends upon an analysis of the nature and character of the principal use of the land in question in relation to the accessory use, taking into consideration the over-all character of the particular area in question.”[1]

In its analysis of whether the wedding venue accessory use was customary and incidental to the bed-and-breakfast, the Court considered the character of the use and the area in question.  The district permitted “tourist homes,” “boardinghouses” and “commercial recreation.”  Tourist homes are dwellings which offer up to four rooms for transient guests.  Boardinghouses are dwellings occupied by one family and three or more lodgers.  Each of these uses permit the provision of services of a temporary residence.  Commercial recreation is defined as making use of mountain land, including resort hotels, seasonal commercial camps resort ranches, resort lodges and bungalow colonies.  Notably, another bed-and-breakfast in the same district offered similar weddings services.  The Court found held that the ZBA’s determination was not irrational or unreasonable and its reliance, in part, on the fact that another bed-and-breakfast within the same district also offered wedding services was not in error.

[1] The Town ordinance defined “accessory use” as one that is customarily incidental and subordinate to the principal use of the premises. And, for all residential districts, the Town ordinance authorized any other accessory buildings or use considered by the ZBA to be customarily incidental to any related principal use therein.

The Second Department recently reversed a Suffolk County Supreme Court decision granting a use variance for a mother-daughter residence in the Village of Patchogue (the “Village”), in spite of statements made on the record by the Zoning Board of Appeals (“ZBA”) Chairman implying prior precedent approving such applications.

In June 2014, the petitioner applied to the Village seeking the conversion of her two-car garage into an apartment for her 81 year old mother of limited financial means.  Unfortunately, Patchogue’s zoning code does not define “mother-daughter” or permit an  “accessory apartment” in its single-family residential zone.  As a result, because such use is prohibited, the petitioner was required to appeal that decision to the ZBA for a use variance pursuant to Village Law 7-712-b(2).

At the public hearing before the ZBA, no one opposed the application, and one neighbor spoke in favor of it.  However, as an apparent precursor to denial, the Chairman stated on the record that “[n]ot many [such applications] have been granted at all.”  Not surprisingly, the ZBA denied petitioner’s application to convert her two-car garage into living space.

The petitioner subsequently commenced an Article 78 to annul the ZBA’s decision as arbitrary and capricious.  The Chairman’s statement later became the focal point for petitioner’s argument that prior alleged precedent effectively mandated the ZBA approve petitioner’s garage conversion.

Later that year, the Supreme Court annulled the ZBA’s denial as arbitrary and capricious for failing to follow its own precedent.  See Gray v Village of Patchogue Zoning Board of Appeals.  In its decision, the Supreme Court incorrectly implemented the balancing test for an area variance instead of a use variance.  The court appeared to rest its decision heavily on an implied prior precedent based on the Chairman’s above quoted statement.  Based on that statement, the lower court constrained the ZBA to grant the garage conversion, holding that “administrative due process prohibits inconsistent treatment of similarly situated properties”.  Id.

In reversing the Supreme Court’s decision, the Second Department clarified that petitioner’s application was for a use variance.   See Gray v Village of Patchogue Zoning Board of Appeals, 164 AD3d 587 [2d Dept 2018].  The Appellate Division affirmed the ZBA’s denial because the petitioner had failed to satisfy the more onerous “unnecessary hardship” element required for a use variance.   More importantly, the Appellate Division determined that there was no evidence that the ZBA failed to adhere to prior precedent.  Contrary to the petitioner’s contention, the Board provided a rational explanation for reaching a different result.

Accordingly, this decision should serve as a cautionary tale for applicants and practitioners to not place too much stock on prior approvals by municipal boards.  Although precedent is important, each property is different and may yield a different result.

 

 

On October 17, 2018, the Supreme Court, Appellate Division, Second Department (“Second Department”) issued two (2) companion decisions arising out of three different attempts by Petitioners, Kleinknechts (“Petitioners”)  to construct a dock at their waterfront property.  Each of the attempts resulted in a Supreme Court litigation.  As we blog about these cases today, no dock has been constructed despite a directive in 2013 that a permit be issued upon submission of the proper application!

In the first matter, the Second Department upheld a decision of the Village of Lloyd Harbor’s Zoning Board of Appeals (“ZBA”) denying certain variances requested by Petitioners to construct a dock along their waterfront property finding that the ZBA properly applied the five-factor test set forth in Village Law 7-712-b(3).  Further,  Petitioners’ expert testified that he had prepared an alternative completely code compliant plan.  Since a code compliant dock plan provided a reasonable alternative for Petitioners to explore, the Second Department upheld the trial court’s dismissal of the underlying Article 78 proceeding stating that the “need” for the variances was self-created.  In light of the ZBA’s proper application of Village Law, the ZBA’s denial was not arbitrary or capricious.  See, Kleinknecht v. Brogan, 2018 WL 5020285 (Oct. 17, 2018)

In the second matter, and following denial of the above-mentioned variance application, the Appellate Division vacated a 2013 directive to the Building Inspector requiring the Building Inspector to issue a building permit to Petitioners for the alternative code compliant dock permit application.  The Second Department stated “[m]andamus . . . is an extraordinary remedy that, by definition, is available only in limited circumstances.”  “A party seeking mandamus must show a ‘clear legal right’ to [the] relief [requested]'”  Here, no clear legal right existed.  See, Kleinknecht v. Siino, 2018 WL 5020282 (2018).

Prior to 2013, Petitioners’ property was subject to an open space easement precluding construction of a dock at the property.  Petitioners commenced an action seeking to have the open space easement extinguished.  The trial court issued a judgment holding that the open space easement was no longer necessary and directed that the Building Inspector issue a building permit to Petitioners upon submission of the “required” application.  The Village did not appeal the judgment.

As such, upon submission of a code compliant building permit application (as noted above an application for variances was denied and upheld), Petitioners sought an approved building permit.  Although the Second Department held that the Building Inspector had no basis to deny issuing the permit based on the existence of the open space easement, the Second Department did vacate the 2013 trial court directive to issue a permit upon submission of the “required” application stating that the Village Code requires every Village building permit application be referred to the “Site and Building Permit Review Board” (“Review Board”).  Finding that the trial court’s directive to the Building Inspector bypassed a necessary referral step to the Review Board, the Second Department ordered the Building Inspector to refer Petitioners’ application to the Review Board.   The Second Department did not then direct the Building Inspector to issue a building permit to Petitioners if the Review Board approves that application..

Instead, the Second Department decision states “[t]he Building Inspector may issue a building permit only upon approval by the” Review Board.  As a litigation and land use attorney,  it has become painfully apparent that courts do not always weigh the import of the language used when crafting relief for the parties.   Maybe it is of little consequence that the Second Department said that the Building Inspector “may” approve the building permit if approved by the Review Board.  However, it would  provide the Petitioners, and their attorney(s), greater comfort and certainty if the chosen words were “must” approve the building permit, instead of “may” approve the building permit.

 

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.

The Breakers Motel has been a fixture in Montauk since the 1950’s. Situated at 769 Old Montauk Highway, Montauk New York, the motel has 26 units, a pool and restaurant and is located across the street from the ocean.

In 2015 a building permit was issued by the Town of East Hampton Building Department approving renovations to the existing restaurant inside the motel, including an updated dining area, adding a bar, improving the kitchen facilities and more. The neighboring property owner, a revocable trust, unsuccessfully appealed the Building Department’s determination to issue the April 27, 2015 building permit to the Town of East Hampton Zoning Board of Appeals.

In an Article 78 petition and plenary action entitled Jane H. Concannon Revocable Trust v. The Building Department of the Town of East Hampton, Town of East Hampton Zoning Board of Appels, and Breakers Motel, Inc., Index No. 4297/2016, dated February 5, 2018, the revocable trust (“Petitioner”) appealed the Zoning Board of Appeal’s determination to the Supreme Court.

At the Zoning Board of Appeals, Petitioner argued that because a restaurant had not operated on site since the 1970’s, an application for a special permit under the current Town Code was required before the building permit for renovations could have been issued. The Breakers Motel argued that the restaurant has always been a permitted use and was in place prior to the current Town Code provisions requiring special permits.

Breakers submitted that the restaurant fixtures had never been removed from the site, and a prior Certificate of Occupancy issued in 2005 and Site Plan approval issued in 2010 both referenced and approved the restaurant. All parties conceded that the restaurant was never pre-existing nonconforming and was, in fact, always permitted.

Prior to 1984, the subject property was zoned Multiple Residence District (“MD”), which permitted a restaurant as accessory to a motel. After 1984, the zoning was amended to Resort District (“RS”), which permitted restaurants pursuant to a special permit. The Zoning Board of Appeals denied petitioner’s appeal and declined to consider the merits of petitioner’s appeal, finding that the appeal was untimely pursuant to the 60 day statute of limitations set forth in NYS Town Law §267-a and East Hampton Town Code §255-8-35(A).

Petitioner brought the above referenced proceeding by order to show cause seeking a judgment annulling the Zoning Board of Appeals decision, revoking the building permit and imposing a permanent injunction enjoining further renovations to the restaurant without a special permit.

The Court held that a special permit was not required for the restaurant use, since the use had been in place prior to the 1984 adoption of the RS Zoning District. The Court stated,

“Simply stated, the concept of “use” in the context of zoning regulations is not the equivalent of “in use” or “used” as is made clear in the following definitions in the East Hampton Town Code sections 255-1-14(G) and (H)…” The Court further found that the East Hampton Town definitions of use were consistent with “what is generally accepted in New York zoning law,” stating,

“USE: The specific purpose for which land or a building is designed, arranged, intended, or for which it is or may be occupied or maintained. The term “permitted use,” or its equivalent, shall not be deemed to include any nonconforming use. USE: The purposes for which a structure or premises, or part thereof is occupied, designed, arranged or intended,” citing, Salkin, N.Y. Zoning Law and Prac., 3d Edition §38:05, Sample definition.

The Court relied upon the fact that the restaurant configuration on site was never changed; and the kitchen fixtures and equipment had remained in place since the 1970’s, stating, “the area in question was designed, arranged and intended to be a restaurant; i.e., the use continued even though it was not “used” as a restaurant.”

The Court went on to distinguish the special permit restaurant use from pre-existing nonconforming uses that can be abandoned after time since the special permit use was not rendered illegal after the zone change to RS. Relying on Town Code §255-5-25, which states in relevant part that “special permit uses which either lawfully exist on the effective date of this article…shall, in all respects, constitute lawful and conforming uses under this chapter,” the Court held that the Breakers Motel restaurant use was legal, even under the new RS zoning, and did not require a special permit to be maintained or altered.

The Court denied the request for the permanent injunction and dismissed the proceeding. Petitioner submitted a Notice of Appeal to the Appellate Division, Second Department, while patrons of the Breakers Motel enjoyed the newly renovated restaurant and bar.

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.