Development

Wetlands Designation Constitutes Compensable Taking

Matter of Friedenburg v. State Department of Environmental Conservation (DEC)

NYLJ 12/2/03, p. 18, col. 1

AppDiv, Second Dept

(Opinion by S. Miller, J.)

Landowner brought an article 78 proceeding for a determination annulling a DEC determination and directing issuance of a wetlands permit or, in the alternative, for a ruling that DEC's determination worked an unconstitutional taking. On DEC's appeal from Supreme Court's judgment holding that DEC's determination worked a taking, the Appellate Division affirmed, holding that landowner was entitled to compensation for the 95% loss in value caused by DEC's determination.

The subject parcel consists of 2.5 acres of land located in the Village of Southampton on the south shore of Shinnecock Bay. Current owner is the estate of Londino, who purchased the parcel in 1962, at a time when there were no restrictions to prohibit construction of a single-family home. In 1973, the state legislature enacted the Tidal Wetlands Act, and DEC subsequently determined that the subject parcel should be designated as tidal wetlands. In 1987, landowner applied for a tidal wetlands permit for construction of a single-family home. After 8 years of delay, DEC denied the application in 1995 because the septic system of the home would cause the release of sewage into the waters of the bay and nearby wetlands.

Without a permit from DEC, the village could not authorize construction of the home. Landowner then brought this proceeding. During the pendency of the proceeding, DEC issued a letter indicating that it would permit a variety of activities on the property, including installation of a catwalk and pier, a pervious parking area, a storage shed, or mooring of a houseboat. Trial testimony established that the market value of the parcel in 1995 was $665,000. Even the DEC's appraiser testified that after the regulation, the market value of the property never exceeded $50,000, but the trial court concluded that the property's residual value was $31,500, because many of the uses authorized by DEC would not be approved by the village zoning authorities. As a result, Supreme Court concluded that the DEC's wetlands determination constituted a compensable taking.

In affirming, the Appellate Division started by concluding that the wetlands regulation did not work a per se taking because the regulations did permit some use of the property – here representing at least 5% of the parcel's residual value. As a result, whether the regulations constituted a taking required evaluation of the balancing test established by the Supreme Court in Penn Central Transp. Co. v. City of New York, 438 US 104. Here, that test requires compensation to the landowner, because the regulation confers no reciprocity of advantage on landowner, and causes an almost total loss of value. This was not, in the court's view, a simple adjustment of the benefits and burdens of economic life. The court rejected DEC's argument that because it had a legitimate reason for regulating tidal wetlands, no compensation was due. Finally, the court held that if DEC chooses to acquire the property under its powers of eminent domain (its only option other than granting the permit), then further proceedings should be conducted in the Court of Claims.

Failure to Make Findings of Fact Requires Annulment of Variance Denial

Shari Lyn Leasing Corp. v. Mammina

NYLJ 12/10/03, p. 19, col. 3

Supreme Ct., Nassau Cty

(Winslow, J.)

In an article 78 proceeding, landowner sought to annul denial of a conditional use permit and variances. The court granted the petition, holding that the town's failure to make findings of fact required that the town's denials be annulled.

Landowner operates an automobile leasing business on the subject premises, which is located in a Business A zoning district. In 2001, landowner received a notice of violation from the town building department stating that landowner's use violated the town code. Landowner then applied to legalize the existing use, but the building department denied the application, citing a code requirement of a conditional use permit for parking, storage, and sales of motor vehicles. The denial also cited a prohibition on storage of automobiles in a front yard and a requirement of a landscaped area adjoining the rear residence district. Landowner then applied for a conditional permit and a variance. After a public hearing, the zoning board of appeals denied both applications, and landowner brought this article 78 proceeding, alleging that the board's determination was not supported by any duly adopted findings of fact.

In granting the petition, the court started by noting the town's position that findings of fact need not be adopted contemporaneously with the board's decision, so long as such findings are provided with the town's answer and return to the article 78 petition. Landowner, by contrast, argued that this practice was inconsistent with section 267-a(2) and 267-a(9) of the Town Law, which require every determination of the board of appeals to be filed in the office of the town clerk within 5 days after it is rendered. The court found it unnecessary to resolve the dispute, because the court noted that the findings of fact the town had attached to its return in this proceeding were unsigned and undated, and the return does not include the minutes of a board meeting at which the findings were supposedly adopted. As a result, the court granted the petition, but granted the board leave to reargue.

Procurement of Correction Deed Does Not Require Board to Reconsider Variance Denial

Matter of Lee v. Zoning Board of Appeals

NYLJ 12/1/03, p. 32, col. 2

AppDiv, Second Dept

(memorandum opinion)

In landowner's article 78 proceeding to challenge a determination not to reconsider his application for an area variance, the town appealed from a Supreme Court judgment granting the petition. The Appellate Division reversed, holding that the board's refusal was not illegal arbitrary, or an abuse of discretion.

Landowner purchased a substandard parcel adjacent to his own parcel. Because he took title with his wife, in the same way that he held title to his own parcel, the two parcels merged into a single by operation of the town zoning ordinance. As a result, landowner was not entitled to develop the substandard lot. To avoid the problem, landowner prepared a “correction deed,” conveying the substandard lot from himself and his wife to himself alone. He then filed an application for an area variance. The zoning board of appeals determined that the purported correction deed was ineffective, and that landowner had not met the criteria for an area variance. At the public hearing preceding the denial, one board member had suggested that landowner obtain a correction deed from seller, while the board chairman suggested that even that would be ineffective' instead, landowner would have to seek a subdivision and then an area variance. Landowner then obtained a correction deed from the original grantor, and applied again for an area variance. The board denied the application, concluding that landowner had paid additional consideration for the correction deed, and that in any event a correction deed could not vacate the merger. The board's determination declined to consider landowner's application on the ground that it was barred by res judicata. Landowner then brought an article 78 proceeding, and Supreme Court granted the petition, requiring the board to consider the variance application on the merits. The town appealed.

In reversing, the Appellate Division noted that a board's interpretation of the local zoning ordinance is entitled to great deference. Here, it was within the board's province to determine that a correction deed from the original grantor would not suffice to vacate the merger of the two parcels. Because the board made that determination, the board could reasonably determine that landowner's second application did not present changed circumstances warranting reconsideration of its prior denial. Moreover, the court noted that the record also supported the determination that the correction deed was procured through payment of consideration, which would justify the board in refusing to consider it.

Wetlands Designation Constitutes Compensable Taking

Matter of Friedenburg v. State Department of Environmental Conservation (DEC)

NYLJ 12/2/03, p. 18, col. 1

AppDiv, Second Dept

(Opinion by S. Miller, J.)

Landowner brought an article 78 proceeding for a determination annulling a DEC determination and directing issuance of a wetlands permit or, in the alternative, for a ruling that DEC's determination worked an unconstitutional taking. On DEC's appeal from Supreme Court's judgment holding that DEC's determination worked a taking, the Appellate Division affirmed, holding that landowner was entitled to compensation for the 95% loss in value caused by DEC's determination.

The subject parcel consists of 2.5 acres of land located in the Village of Southampton on the south shore of Shinnecock Bay. Current owner is the estate of Londino, who purchased the parcel in 1962, at a time when there were no restrictions to prohibit construction of a single-family home. In 1973, the state legislature enacted the Tidal Wetlands Act, and DEC subsequently determined that the subject parcel should be designated as tidal wetlands. In 1987, landowner applied for a tidal wetlands permit for construction of a single-family home. After 8 years of delay, DEC denied the application in 1995 because the septic system of the home would cause the release of sewage into the waters of the bay and nearby wetlands.

Without a permit from DEC, the village could not authorize construction of the home. Landowner then brought this proceeding. During the pendency of the proceeding, DEC issued a letter indicating that it would permit a variety of activities on the property, including installation of a catwalk and pier, a pervious parking area, a storage shed, or mooring of a houseboat. Trial testimony established that the market value of the parcel in 1995 was $665,000. Even the DEC's appraiser testified that after the regulation, the market value of the property never exceeded $50,000, but the trial court concluded that the property's residual value was $31,500, because many of the uses authorized by DEC would not be approved by the village zoning authorities. As a result, Supreme Court concluded that the DEC's wetlands determination constituted a compensable taking.

In affirming, the Appellate Division started by concluding that the wetlands regulation did not work a per se taking because the regulations did permit some use of the property – here representing at least 5% of the parcel's residual value. As a result, whether the regulations constituted a taking required evaluation of the balancing test established by the Supreme Court in Penn Central Transp. Co. v. City of New York , 438 US 104. Here, that test requires compensation to the landowner, because the regulation confers no reciprocity of advantage on landowner, and causes an almost total loss of value. This was not, in the court's view, a simple adjustment of the benefits and burdens of economic life. The court rejected DEC's argument that because it had a legitimate reason for regulating tidal wetlands, no compensation was due. Finally, the court held that if DEC chooses to acquire the property under its powers of eminent domain (its only option other than granting the permit), then further proceedings should be conducted in the Court of Claims.

Failure to Make Findings of Fact Requires Annulment of Variance Denial

Shari Lyn Leasing Corp. v. Mammina

NYLJ 12/10/03, p. 19, col. 3

Supreme Ct., Nassau Cty

(Winslow, J.)

In an article 78 proceeding, landowner sought to annul denial of a conditional use permit and variances. The court granted the petition, holding that the town's failure to make findings of fact required that the town's denials be annulled.

Landowner operates an automobile leasing business on the subject premises, which is located in a Business A zoning district. In 2001, landowner received a notice of violation from the town building department stating that landowner's use violated the town code. Landowner then applied to legalize the existing use, but the building department denied the application, citing a code requirement of a conditional use permit for parking, storage, and sales of motor vehicles. The denial also cited a prohibition on storage of automobiles in a front yard and a requirement of a landscaped area adjoining the rear residence district. Landowner then applied for a conditional permit and a variance. After a public hearing, the zoning board of appeals denied both applications, and landowner brought this article 78 proceeding, alleging that the board's determination was not supported by any duly adopted findings of fact.

In granting the petition, the court started by noting the town's position that findings of fact need not be adopted contemporaneously with the board's decision, so long as such findings are provided with the town's answer and return to the article 78 petition. Landowner, by contrast, argued that this practice was inconsistent with section 267-a(2) and 267-a(9) of the Town Law, which require every determination of the board of appeals to be filed in the office of the town clerk within 5 days after it is rendered. The court found it unnecessary to resolve the dispute, because the court noted that the findings of fact the town had attached to its return in this proceeding were unsigned and undated, and the return does not include the minutes of a board meeting at which the findings were supposedly adopted. As a result, the court granted the petition, but granted the board leave to reargue.

Procurement of Correction Deed Does Not Require Board to Reconsider Variance Denial

Matter of Lee v. Zoning Board of Appeals

NYLJ 12/1/03, p. 32, col. 2

AppDiv, Second Dept

(memorandum opinion)

In landowner's article 78 proceeding to challenge a determination not to reconsider his application for an area variance, the town appealed from a Supreme Court judgment granting the petition. The Appellate Division reversed, holding that the board's refusal was not illegal arbitrary, or an abuse of discretion.

Landowner purchased a substandard parcel adjacent to his own parcel. Because he took title with his wife, in the same way that he held title to his own parcel, the two parcels merged into a single by operation of the town zoning ordinance. As a result, landowner was not entitled to develop the substandard lot. To avoid the problem, landowner prepared a “correction deed,” conveying the substandard lot from himself and his wife to himself alone. He then filed an application for an area variance. The zoning board of appeals determined that the purported correction deed was ineffective, and that landowner had not met the criteria for an area variance. At the public hearing preceding the denial, one board member had suggested that landowner obtain a correction deed from seller, while the board chairman suggested that even that would be ineffective' instead, landowner would have to seek a subdivision and then an area variance. Landowner then obtained a correction deed from the original grantor, and applied again for an area variance. The board denied the application, concluding that landowner had paid additional consideration for the correction deed, and that in any event a correction deed could not vacate the merger. The board's determination declined to consider landowner's application on the ground that it was barred by res judicata. Landowner then brought an article 78 proceeding, and Supreme Court granted the petition, requiring the board to consider the variance application on the merits. The town appealed.

In reversing, the Appellate Division noted that a board's interpretation of the local zoning ordinance is entitled to great deference. Here, it was within the board's province to determine that a correction deed from the original grantor would not suffice to vacate the merger of the two parcels. Because the board made that determination, the board could reasonably determine that landowner's second application did not present changed circumstances warranting reconsideration of its prior denial. Moreover, the court noted that the record also supported the determination that the correction deed was procured through payment of consideration, which would justify the board in refusing to consider it.