Development

AppDiv, Second Dept.

(memorandum opinion)

In an article 78 proceeding to review the town planning board's imposition of a fee in lieu of parkland dedication, landowner appealed from the Supreme Court's partial denial of the petition. The Appellate Division affirmed, holding that the planning board was entitled to impose the fee as a condition of final plat approval.

Landowner obtained preliminary plat approval for a cluster development of 113 acres, which included 40 acres of open space. Later, the planning board gave final plat approval to the development, subject to a number of conditions including a $558,250 payment in lieu of parkland dedication pursuant to Town Law section 277(4). Landowner brought this article 78 proceeding challenging the condition, and the Supreme Court denied the petition in relevant part. Landowner appealed.

In affirming, the Appellate Division first rejected landowner's contention that the Planning Board lacked the authority to impose the fee as a condition of final plat approval when it given preliminary plat approval without making any finding of recreational need. The court then held that the planning board had given individualized consideration to the impact of the project on the town's recreational needs, and had established the required nexus between recreational needs and the fee imposed. The court held that the town had acted rationally in considering an independent report that assessed the town's recreational needs even though the report considered only recreational facilities owned by the town. The court held that this approach was rational because the town had no control over the future use of recreational facilities owned by other parties.

COMMENT

Although Town Law '277(4) does not specify at what stage a planning board can exercise its power to impose a recreational fee, the Second Department has held that a planning board may not impose a recreational fee at final subdivision approval if the board did not impose the fee at the preliminary stage. In Joseph v. Planning Board of Yorktown, 140 A.D.2d 670, the court granted developers' petition challenging the planning board's requirement, as a condition of final plat approval, that developer pay a recreational fee even though the board had granted preliminary plat approval without a finding of recreational need. The Appellate Division held that the grant of preliminary plat approval without imposition of a fee constituted a determination that developers had provided sufficient parkland on the parcel. Presumably, the court was concerned that developer relied on the preliminary determination in making further investment on the property ' investment that might not have been made if the developer had known that it would be required to pay a recreational fee. See also Legacy at Fairways v. McAdoo, 20 Misc3d. 1134A. (holding that a municipality may not impose a recreation fee as a condition for issuing a building permit after failing to impose a fee during the subdivision approval process).

A planning board can impose conditions at final approval that were not imposed at preliminary approval when doing so will not disturb the developer's reliance on preliminary approval. Thus, the municipality may impose conditions on final approval when the developer has notice that a condition may be imposed at final approval, or the condition could not have been foreseen at preliminary approval, or the condition is not overly burdensome. Thus, in Int'l Innovative Tech. Group Corp. v. Planning Bd. of Woodbury, 20 AD3d 531, the court upheld the planning board's imposition, at final plat approval, of conditions restricting the installation of lawn sprinkler systems and requiring the posting of a bond obligating the developer to investigate reported impacts on surrounding wells after development. The Appellate Division emphasized that the issues could not have been foreseen at the preliminary approval stage, and that the conditions were not overly burdensome. The court also pointed out that according to the record, during the subdivision approval process, the planning board had negotiated with the developer to formulate an appropriate subdivision design for the property and that the developer agreed to many of the conditions ultimately imposed.

In Joy Builders, the planning board could have recognized the need for recreational facilities at the preliminary approval stage, and the imposition of a $558,250 recreational fee did impose a more significant burden than the conditions imposed in Int'l Innovative Tech Group Corp. In Joy Builders, however, the court appeared to rely on developer's knowledge that a recreational fee might be imposed as a condition for final site plan approval The court emphasized that developers had sought a waiver of the fee after receiving preliminary approval ' suggesting that the fee was very much an issue in the mind of the developers. In light of that fact, their argument that they relied on preliminary approval without imposition of a fee appeared unpersuasive to the court.

Landmark Designation Upheld Despite Prior Rejection

Matter of Stahl York Avenue Co. LLC v. City of New York

NYLJ 9/29/08, p. 18, col. 1

Supreme Ct., N.Y. Cty

(Goodman, J.)

In an article 78 proceeding, landowner challenged the city's designation of two buildings as landmarks. The court denied the petition, concluding that the city's action was not arbitrary even though the city had rejected a landmark designation for the same building 17 years earlier.

Landowner owns two tenement buildings on York Avenue between 64th and 65th Streets. In 1990, the city's landmarks preservation commission (LPC) had designated the entire block as a landmark site because the buildings on the block represented an early example of “light court tenements,” which improved the housing conditions of the working poor at the turn of the 20th century. Most of the buildings on the block were designed by noted architect James Ware, but the two buildings now in dispute were designed and built somewhat later without Ware's involvement. At the same time, the LPC designated this block as a landmark site, it also designated another full-block complex of buildings between 78th and 79th Streets. The New York City Board of Estimate, in its last full session before its abolition, approved the designation of 13 buildings on the 64th-65th Street site, but disapproved the designation of landowner's two lots. Similarly, on the other site, the Board of Estimate approved the designation of 10 sites, but disapproved the designation of four others. Neighborhood groups challenged the exclusions sanctioned by the Board of Estimate, and the Board defended the exclusions as a “compromise” that would permit some development, thus enhancing the city's tax base. The Supreme Court dismissed the petitions, concluding that the Board of Estimate's action was quasi-legislative and not subject to judicial review. Neighborhood groups successfully appealed that determination with respect to the 78th-79th Street sites, but neighborhood groups did not appeal the determination with respect to landowner's sites. Landowner, however, did not build on the sites.

In 2004, landowner obtained permits for window replacements and facade work on the buildings. At that point, the local community board adopted a resolution supporting amendment of the landmark site to include landowner's buildings. The LPC then designated the two sites as landmark sites, and the City Council subsequently voted unanimously to amend the landmark site. Landowner then brought this article 78 proceeding.

In denying the petition, the court rejected landowner's argument that the building had no special architectural or historical significance because they were not designed by a noted architect and were built later than the other buildings on the block. The court noted that the LPC's power to designate landmarks is broader, and permits the LPC to designate a site whenever it has a special character or special historical or aesthetic interest or value. Here, the designation met that standard. The court also rejected landowner's argument that the designation was arbitrary because the City Council did not have or articulate reasonable grounds for departing from the earlier determination of the Board of Estimate. The court noted that facts had changed since the Board's original determination ' particularly the Appellate Division's decision overturning the Board of Estimate's determination with respect to the 78th-79th Street properties ' and also noted that the City Council members had expressed the view that they were acting to correct a mistake by the Board of Estimate. That, in the court's view, was sufficient to justify the City Council in amending the designation.

COMMENT

Generally, courts defer to a determination by a municipal board that deems a property a landmark. In Lutheran Church in America v. City of New York, 35 N.Y.2d 121, the court, in upholding designation of a restaurant as a landmark, indicated that landmark designations must be upheld if they have support in the record, a reasonable basis in the law, and are not arbitrary or capricious. When the landmark designation rests on expert testimony, courts do not treat the designation as arbitrary. For instance, in Matter of Snyder Development Co., Inc., v. Town of Amherst, 12 A.D.3d 1092 , the court upheld a landmark designation, holding that the designation was not arbitrary because the board had relied upon an expert report which found that the property had a unique historical significance.

Although courts usually defer to municipal landmark designations, they will overturn such designations where a board departs from a prior decision denying a landmark designation, and fails to explain its departure from the prior precedent. In Matter of L.S.O.F. CYNWYD, L.P. v. Town of North Hempstead, 298 A.D.2d 520, the court held that the Town Board's decision in 2000 designating the clubhouse and its surrounding property a landmark was arbitrary and capricious because in 1996, the Town Board had denied an application to give the same property landmark status. The court emphasized that the Town Board had not given a reason for its changed decision, and that no facts had changed since the earlier decision.

Matter of Stahl suggests that courts will not impose a heavy burden on a municipality to explain its reason from departing from a prior landmark application rejection.

Variance Grant Upheld Even Though Neighboring Parcels Suffered from
Similar Hardship

Matter of Vomero v. City of New York

NYLJ 10/6/08, p. 33, col. 2

AppDiv, Second Dept.

(3-2 decision; majority memorandum; dissenting memorandum by Lifson, J.)

In an article 78 proceeding brought by neighbors challenging the grant of a use variance by the Board of Standards and Appeals (BSA), landowner and the city appealed from the Supreme Court's grant of the petition. A divided Appellate Division reversed, emphasizing that the BSA enjoys broad discretion, and that its determination was not arbitrary or capricious.

In 2003, landowner purchased a lot zoned for residential purposes for $275,000. Landowner then demolished the existing house, and sought a use variance to permit construction of a two-story photography studio. Before the BSA, landowner argued that a five-foot widening line encumbrance, together with the irregular shape of the lot, would create practical difficulties or unnecessary hardship. Landowner submitted a map showing that of 56 corner lots in the area, only three remained in residential use, and also submitted evidence that the lot was less desirable for residential purposes because it was adjacent to a commercial area. Landowner alleged hardship because it operated a catering hall across the street and felt it necessary to add a photography component to the catering hall. On these facts, the BSA granted the variance, concluding that some other, similar properties in the area were plagued by unique physical conditions that would create practical difficulties for any conforming use, and concluded that landowner could not obtain a financially reasonable return if the land were put to for a conforming use. The Supreme Court annulled that determination, concluding that any hardship was self-created, and the city and the landowner appealed.

In reversing, the Appellate Division majority noted that purchase with knowledge of the restrictions did not make the hardship self-created, and concluded that the BSA's determinations had a rational basis in the record.

Justice Lifson, dissenting for himself and Justice Angiolillo, started by noting that the only appraisal of the land in the record indicated that the current value of the land with the zoning restriction in place was $375,000, negating any suggestion that landowner could not obtain a reasonable return without the variance. Justice Lifson also noted that any finding that landowner's lot was faced with unique conditions was belied by the record, which indicated that all of the other residential lots in the subject area were encumbered by the same five-foot widening easement. Moreover, he noted that the fact that the land was adjacent to a commercial area did not make the property unsuitable for residential use. Finally, he noted that the hardship alleged by landowner ' that it needed a studio adjacent to its catering hall ' was not a hardship unique to the subject land. He argued that a hardship unique to the landowner, rather than the parcel of land, does not entitle landowner to a variance. Because the dissenters concluded that the landowners had failed to establish several of the requisites for obtaining a use variance, they would have affirmed the Supreme Court's grant of the petition.

COMMENT

When a parcel's location on the boundary between residential and commercial districts creates a hardship, that hardship may not serve as the basis for a use variance because the hardship is not unique to the parcel. Thus, in Seinfeld v. Murdock, 259 AppDiv. 694., affd 258 N.Y. 718, the court held that landowner was not entitled to a use variance when the parcel constituted the dividing line between a business area to the north and a residential area to the south. Rejecting the owner's effort to obtain a greater return by renting the ground floor of his apartment to shop owners, the court upheld a variance denial since a “line of demarcation must be drawn at some point.” If a zoning board grants a use variance based on close proximity to a commercial district then the next property owner whose parcel is now the “line of demarcation” could receive a variance based on the same reason as the first applicant. Ultimately, the zoning board would be redrawing the zoning map.

The Second Department applied this basic principle to invalidate grant of a use variance in Shiner v. Board of Estimate of City of New York, 95 AD2d 831, a case involving the same street at issue in Vomero. In Shiner, the property was a corner lot fronting on heavily trafficked Hylan Boulevard, but the court found no unique circumstances warranting the grant of a variance. In upholding the variance in Vomero, the majority failed to distinguish Shiner and Seinfeld.

Fee in Lieu of Parkland Dedication Upheld

Matter of Joy Builders Inc. v. Town of Clarkstown

NYLJ 9/15/08, p. 33, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In an article 78 proceeding to review the town planning board's imposition of a fee in lieu of parkland dedication, landowner appealed from the Supreme Court's partial denial of the petition. The Appellate Division affirmed, holding that the planning board was entitled to impose the fee as a condition of final plat approval.

Landowner obtained preliminary plat approval for a cluster development of 113 acres, which included 40 acres of open space. Later, the planning board gave final plat approval to the development, subject to a number of conditions including a $558,250 payment in lieu of parkland dedication pursuant to Town Law section 277(4). Landowner brought this article 78 proceeding challenging the condition, and the Supreme Court denied the petition in relevant part. Landowner appealed.

In affirming, the Appellate Division first rejected landowner's contention that the Planning Board lacked the authority to impose the fee as a condition of final plat approval when it given preliminary plat approval without making any finding of recreational need. The court then held that the planning board had given individualized consideration to the impact of the project on the town's recreational needs, and had established the required nexus between recreational needs and the fee imposed. The court held that the town had acted rationally in considering an independent report that assessed the town's recreational needs even though the report considered only recreational facilities owned by the town. The court held that this approach was rational because the town had no control over the future use of recreational facilities owned by other parties.

COMMENT

Although Town Law '277(4) does not specify at what stage a planning board can exercise its power to impose a recreational fee, the Second Department has held that a planning board may not impose a recreational fee at final subdivision approval if the board did not impose the fee at the preliminary stage. In Joseph v. Planning Board of Yorktown, 140 A.D.2d 670, the court granted developers' petition challenging the planning board ' s requirement, as a condition of final plat approval, that developer pay a recreational fee even though the board had granted preliminary plat approval without a finding of recreational need. The Appellate Division held that the grant of preliminary plat approval without imposition of a fee constituted a determination that developers had provided sufficient parkland on the parcel. Presumably, the court was concerned that developer relied on the preliminary determination in making further investment on the property ' investment that might not have been made if the developer had known that it would be required to pay a recreational fee. See also Legacy at Fairways v. McAdoo, 20 Misc3d. 1134A. (holding that a municipality may not impose a recreation fee as a condition for issuing a building permit after failing to impose a fee during the subdivision approval process).

A planning board can impose conditions at final approval that were not imposed at preliminary approval when doing so will not disturb the developer's reliance on preliminary approval. Thus, the municipality may impose conditions on final approval when the developer has notice that a condition may be imposed at final approval, or the condition could not have been foreseen at preliminary approval, or the condition is not overly burdensome. Thus, in Int'l Innovative Tech. Group Corp. v. Planning Bd. of Woodbury, 20 AD3d 531, the court upheld the planning board's imposition, at final plat approval, of conditions restricting the installation of lawn sprinkler systems and requiring the posting of a bond obligating the developer to investigate reported impacts on surrounding wells after development. The Appellate Division emphasized that the issues could not have been foreseen at the preliminary approval stage, and that the conditions were not overly burdensome. The court also pointed out that according to the record, during the subdivision approval process, the planning board had negotiated with the developer to formulate an appropriate subdivision design for the property and that the developer agreed to many of the conditions ultimately imposed.

In Joy Builders, the planning board could have recognized the need for recreational facilities at the preliminary approval stage, and the imposition of a $558,250 recreational fee did impose a more significant burden than the conditions imposed in Int'l Innovative Tech Group Corp. In Joy Builders, however, the court appeared to rely on developer's knowledge that a recreational fee might be imposed as a condition for final site plan approval The court emphasized that developers had sought a waiver of the fee after receiving preliminary approval ' suggesting that the fee was very much an issue in the mind of the developers. In light of that fact, their argument that they relied on preliminary approval without imposition of a fee appeared unpersuasive to the court.

Landmark Designation Upheld Despite Prior Rejection

Matter of Stahl York Avenue Co. LLC v. City of New York

NYLJ 9/29/08, p. 18, col. 1

Supreme Ct., N.Y. Cty

(Goodman, J.)

In an article 78 proceeding, landowner challenged the city's designation of two buildings as landmarks. The court denied the petition, concluding that the city's action was not arbitrary even though the city had rejected a landmark designation for the same building 17 years earlier.

Landowner owns two tenement buildings on York Avenue between 64th and 65th Streets. In 1990, the city's landmarks preservation commission (LPC) had designated the entire block as a landmark site because the buildings on the block represented an early example of “light court tenements,” which improved the housing conditions of the working poor at the turn of the 20th century. Most of the buildings on the block were designed by noted architect James Ware, but the two buildings now in dispute were designed and built somewhat later without Ware's involvement. At the same time, the LPC designated this block as a landmark site, it also designated another full-block complex of buildings between 78th and 79th Streets. The New York City Board of Estimate, in its last full session before its abolition, approved the designation of 13 buildings on the 64th-65th Street site, but disapproved the designation of landowner's two lots. Similarly, on the other site, the Board of Estimate approved the designation of 10 sites, but disapproved the designation of four others. Neighborhood groups challenged the exclusions sanctioned by the Board of Estimate, and the Board defended the exclusions as a “compromise” that would permit some development, thus enhancing the city's tax base. The Supreme Court dismissed the petitions, concluding that the Board of Estimate's action was quasi-legislative and not subject to judicial review. Neighborhood groups successfully appealed that determination with respect to the 78th-79th Street sites, but neighborhood groups did not appeal the determination with respect to landowner's sites. Landowner, however, did not build on the sites.

In 2004, landowner obtained permits for window replacements and facade work on the buildings. At that point, the local community board adopted a resolution supporting amendment of the landmark site to include landowner's buildings. The LPC then designated the two sites as landmark sites, and the City Council subsequently voted unanimously to amend the landmark site. Landowner then brought this article 78 proceeding.

In denying the petition, the court rejected landowner's argument that the building had no special architectural or historical significance because they were not designed by a noted architect and were built later than the other buildings on the block. The court noted that the LPC's power to designate landmarks is broader, and permits the LPC to designate a site whenever it has a special character or special historical or aesthetic interest or value. Here, the designation met that standard. The court also rejected landowner's argument that the designation was arbitrary because the City Council did not have or articulate reasonable grounds for departing from the earlier determination of the Board of Estimate. The court noted that facts had changed since the Board's original determination ' particularly the Appellate Division's decision overturning the Board of Estimate's determination with respect to the 78th-79th Street properties ' and also noted that the City Council members had expressed the view that they were acting to correct a mistake by the Board of Estimate. That, in the court's view, was sufficient to justify the City Council in amending the designation.

COMMENT

Generally, courts defer to a determination by a municipal board that deems a property a landmark. In Lutheran Church in America v. City of New York, 35 N.Y.2d 121, the court, in upholding designation of a restaurant as a landmark, indicated that landmark designations must be upheld if they have support in the record, a reasonable basis in the law, and are not arbitrary or capricious. When the landmark designation rests on expert testimony, courts do not treat the designation as arbitrary. For instance, in Matter of Snyder Development Co., Inc., v. Town of Amherst, 12 A.D.3d 1092 , the court upheld a landmark designation, holding that the designation was not arbitrary because the board had relied upon an expert report which found that the property had a unique historical significance.

Although courts usually defer to municipal landmark designations, they will overturn such designations where a board departs from a prior decision denying a landmark designation, and fails to explain its departure from the prior precedent. In Matter of L.S.O.F. CYNWYD, L.P. v. Town of North Hempstead, 298 A.D.2d 520, the court held that the Town Board's decision in 2000 designating the clubhouse and its surrounding property a landmark was arbitrary and capricious because in 1996, the Town Board had denied an application to give the same property landmark status. The court emphasized that the Town Board had not given a reason for its changed decision, and that no facts had changed since the earlier decision.

Matter of Stahl suggests that courts will not impose a heavy burden on a municipality to explain its reason from departing from a prior landmark application rejection.

Variance Grant Upheld Even Though Neighboring Parcels Suffered from
Similar Hardship

Matter of Vomero v. City of New York

NYLJ 10/6/08, p. 33, col. 2

AppDiv, Second Dept.

(3-2 decision; majority memorandum; dissenting memorandum by Lifson, J.)

In an article 78 proceeding brought by neighbors challenging the grant of a use variance by the Board of Standards and Appeals (BSA), landowner and the city appealed from the Supreme Court's grant of the petition. A divided Appellate Division reversed, emphasizing that the BSA enjoys broad discretion, and that its determination was not arbitrary or capricious.

In 2003, landowner purchased a lot zoned for residential purposes for $275,000. Landowner then demolished the existing house, and sought a use variance to permit construction of a two-story photography studio. Before the BSA, landowner argued that a five-foot widening line encumbrance, together with the irregular shape of the lot, would create practical difficulties or unnecessary hardship. Landowner submitted a map showing that of 56 corner lots in the area, only three remained in residential use, and also submitted evidence that the lot was less desirable for residential purposes because it was adjacent to a commercial area. Landowner alleged hardship because it operated a catering hall across the street and felt it necessary to add a photography component to the catering hall. On these facts, the BSA granted the variance, concluding that some other, similar properties in the area were plagued by unique physical conditions that would create practical difficulties for any conforming use, and concluded that landowner could not obtain a financially reasonable return if the land were put to for a conforming use. The Supreme Court annulled that determination, concluding that any hardship was self-created, and the city and the landowner appealed.

In reversing, the Appellate Division majority noted that purchase with knowledge of the restrictions did not make the hardship self-created, and concluded that the BSA's determinations had a rational basis in the record.

Justice Lifson, dissenting for himself and Justice Angiolillo, started by noting that the only appraisal of the land in the record indicated that the current value of the land with the zoning restriction in place was $375,000, negating any suggestion that landowner could not obtain a reasonable return without the variance. Justice Lifson also noted that any finding that landowner's lot was faced with unique conditions was belied by the record, which indicated that all of the other residential lots in the subject area were encumbered by the same five-foot widening easement. Moreover, he noted that the fact that the land was adjacent to a commercial area did not make the property unsuitable for residential use. Finally, he noted that the hardship alleged by landowner ' that it needed a studio adjacent to its catering hall ' was not a hardship unique to the subject land. He argued that a hardship unique to the landowner, rather than the parcel of land, does not entitle landowner to a variance. Because the dissenters concluded that the landowners had failed to establish several of the requisites for obtaining a use variance, they would have affirmed the Supreme Court's grant of the petition.

COMMENT

When a parcel's location on the boundary between residential and commercial districts creates a hardship, that hardship may not serve as the basis for a use variance because the hardship is not unique to the parcel. Thus, in Seinfeld v. Murdock, 259 AppDiv. 694., affd 258 N.Y. 718, the court held that landowner was not entitled to a use variance when the parcel constituted the dividing line between a business area to the north and a residential area to the south. Rejecting the owner's effort to obtain a greater return by renting the ground floor of his apartment to shop owners, the court upheld a variance denial since a “line of demarcation must be drawn at some point.” If a zoning board grants a use variance based on close proximity to a commercial district then the next property owner whose parcel is now the “line of demarcation” could receive a variance based on the same reason as the first applicant. Ultimately, the zoning board would be redrawing the zoning map.

The Second Department applied this basic principle to invalidate grant of a use variance in Shiner v. Board of Estimate of City of New York, 95 AD2d 831, a case involving the same street at issue in Vomero . In Shiner, the property was a corner lot fronting on heavily trafficked Hylan Boulevard, but the court found no unique circumstances warranting the grant of a variance. In upholding the variance in Vomero, the majority failed to distinguish Shiner and Seinfeld.