Eminent Domain in Manhattanville

For the second time in six months, the Court of Appeals has upheld the use of eminent domain to permit large-scale development by a private entity. A unanimous court rejected landowner challenges to condemnation of portions of a West Harlem neighborhood to accommodate Columbia University's expansion plans. The court's opinion suggests that in New York, judicial deference to eminent domain decisions made by the political branches will be nearly absolute.

Columbia's Expansion Plan

In 2001, Columbia approached the New York City Economic Development Corporation (EDC) about redeveloping the area west of Broadway from 125th Street to 133rd Street. Most of the buildings in the area were commercial, and Columbia began purchasing land within the area to facilitate the plan. In response to Columbia's initiative, the EDC prepared a mater plan for the area outlining strategies for economic development of the area. The study emphasized that a change in the use of the area would foster job growth and create improved street life. By 2003, the EDC hired a consulting firm to examine neighborhood conditions. The following year, the study concluded that conditions in the area were blighted, emphasizing that several buildings were dilapidated. Columbia then hired its own consulting firm (AKRF) to assist it obtaining approvals for the project. Subsequently the Empire State Development Corporation (ESDC) hired AKRF to conduct a study of neighboring conditions, in part because AKRF was already familiar with the area. AKRF's study concluded that the site was “substantially unsafe, unsanitary, substandard, and deteriorated.” Meanwhile, the City Planning Commission, noting Columbia's importance to the area as a center of educational excellence and economic growth, approved rezoning of the area to permit construction of a new urban campus. The City Council approved the rezoning. After affected landowners challenged ESDC's choice of AKRF to conduct the blight study, ESDC hired yet another consulting firm, Earth Tech, to conduct a study. Earth Tech's conclusions mirrored those of the previous AKRF study.

Pursuant to sections 201 and 202 of the Eminent Domain Law, ESDC then solicited public comment on the proposed project and the attendant exercise of the eminent domain power, conducted public hearings, and ultimately endorsed the project. ESDC emphasized both the blighted conditions in the area, and the city and state's need for educational, community, and recreational facilities.

The Challenge

Landowners affected by the condemnation challenged ESDC's findings and determination, and a fractured Appellate Division invalidated the condemnation. A two-judge plurality concluded that ESDC's determination that the project had a public use, benefit or purpose was unsupported by the record. A third justice focused only on a procedural point. ESDC appealed.

In reversing the Appellate Division and upholding the condemnation, the Court of Appeals responded to three primary contentions: the contention that there was inadequate evidence of blight, the contention that ESDC's findings were pretextual and made in bad faith, and the contention that the proposed project served no civic purpose.

With respect to the blight determination, the court faulted the Appellate Division for conducting a “de novo review of the record.” Judge Ciparick, writing for the court, emphasized the deferential standard that applies to judicial review of eminent domain determinations: “a court may only substitute its judgment for that of the project when such judgment is irrational or baseless.” Measured against that standard, the record generated by ESDC and its consulting firms was more than sufficient to support the blight determination. The court rejected the argument that the statutory standard, which requires a finding that an area is “substandard or insanitary” is unconstitutionally vague, noting that the standard is sufficiently definite to put a person of ordinary intelligence on notice.

The court also rejected the Appellate Division's conclusion that the blight determination had been a mere pretext, made in bad faith to enable Columbia to pursue its expansion plans. The court was unwilling to draw an inference of bad faith from the fact that ESDC had chosen the same consultant previously used by Columbia, and emphasized that when criticized about the choice, ESDC hired a second consulting firm that conducted an entirely independent study.

Finally, the court held that even if the Manhattanville area suffered from no blight at all, the project qualified for condemnation as a “civic project” within the meaning of the UDC Act. The statute itself defines civic project to include one designed for the purpose of providing facilities for educational purposes, and permits ESDC to acquire property for construction of a civic project when ESDC finds that there “exists in the area in which the project is to be located, a need for the educational ' facility to be included in the project.” Unconsolidated Laws, section 6253[6][d] and 6260[d]. The court noted that the statutory language did not limit educational projects to public educational institutions, and observed that in any event Columbia operates as a non-profit educational corporation, making this an easier case than the Atlantic Yards case, where the court sustained condemnation to permit a private entity to build a basketball arena.

Judge Smith concurred on constraint of the Atlantic Yards case, but distanced himself from the “civic project” prong of the majority opinion. He noted that once the court sustained the blight determination, it did not have to reach the civic project issue, and expressed concern that in construing the statute to permit condemnation for this “civic project,” the majority ignored potential constitutional problems that might arise from a broad construction of the statute. In particular, he questioned whether private tennis camps or karate schools ' however educational they might be ' would qualify as public uses in the constitutional sense.

The Bottom Line

Read in conjunction with Matter of Goldstein v. New York State Urban Development Corp., 13 NY3d 511 (the Atlantic Yards case), Kaur suggests that the Court of Appeals will impose no more stringent constraints on the exercise of the eminent domain power than did the United States Supreme Court in the Kelo case. Making a record may be essential to support a finding of blight, but consultants know what findings their principals want, and it is not difficult to find evidence of blight in even the most prosperous areas of the city. The deferential standard articulated in the majority opinion ensures that a municipality that follows the court's road map will have its blight determination sustained. Moreover, the court's broad interpretation of the “civic project” language in the statute may make it unnecessary, in many cases, to go through the trouble of conducting blight studies. Landowners unhappy about condemnation determinations would be well advised to plead their case before voters, local legislators, and the media; the court has left little room for recourse to the courts.

Stewart E. Sterk, Mack Professor of Law at Benjamin N. Cardozo School of  Law, is Editor-in-Chief of this newsletter.

For the second time in six months, the Court of Appeals has upheld the use of eminent domain to permit large-scale development by a private entity. A unanimous court rejected landowner challenges to condemnation of portions of a West Harlem neighborhood to accommodate Columbia University's expansion plans. The court's opinion suggests that in New York, judicial deference to eminent domain decisions made by the political branches will be nearly absolute.

Columbia's Expansion Plan

In 2001, Columbia approached the New York City Economic Development Corporation (EDC) about redeveloping the area west of Broadway from 125th Street to 133rd Street. Most of the buildings in the area were commercial, and Columbia began purchasing land within the area to facilitate the plan. In response to Columbia's initiative, the EDC prepared a mater plan for the area outlining strategies for economic development of the area. The study emphasized that a change in the use of the area would foster job growth and create improved street life. By 2003, the EDC hired a consulting firm to examine neighborhood conditions. The following year, the study concluded that conditions in the area were blighted, emphasizing that several buildings were dilapidated. Columbia then hired its own consulting firm (AKRF) to assist it obtaining approvals for the project. Subsequently the Empire State Development Corporation (ESDC) hired AKRF to conduct a study of neighboring conditions, in part because AKRF was already familiar with the area. AKRF's study concluded that the site was “substantially unsafe, unsanitary, substandard, and deteriorated.” Meanwhile, the City Planning Commission, noting Columbia's importance to the area as a center of educational excellence and economic growth, approved rezoning of the area to permit construction of a new urban campus. The City Council approved the rezoning. After affected landowners challenged ESDC's choice of AKRF to conduct the blight study, ESDC hired yet another consulting firm, Earth Tech, to conduct a study. Earth Tech's conclusions mirrored those of the previous AKRF study.

Pursuant to sections 201 and 202 of the Eminent Domain Law, ESDC then solicited public comment on the proposed project and the attendant exercise of the eminent domain power, conducted public hearings, and ultimately endorsed the project. ESDC emphasized both the blighted conditions in the area, and the city and state's need for educational, community, and recreational facilities.

The Challenge

Landowners affected by the condemnation challenged ESDC's findings and determination, and a fractured Appellate Division invalidated the condemnation. A two-judge plurality concluded that ESDC's determination that the project had a public use, benefit or purpose was unsupported by the record. A third justice focused only on a procedural point. ESDC appealed.

In reversing the Appellate Division and upholding the condemnation, the Court of Appeals responded to three primary contentions: the contention that there was inadequate evidence of blight, the contention that ESDC's findings were pretextual and made in bad faith, and the contention that the proposed project served no civic purpose.

With respect to the blight determination, the court faulted the Appellate Division for conducting a “de novo review of the record.” Judge Ciparick, writing for the court, emphasized the deferential standard that applies to judicial review of eminent domain determinations: “a court may only substitute its judgment for that of the project when such judgment is irrational or baseless.” Measured against that standard, the record generated by ESDC and its consulting firms was more than sufficient to support the blight determination. The court rejected the argument that the statutory standard, which requires a finding that an area is “substandard or insanitary” is unconstitutionally vague, noting that the standard is sufficiently definite to put a person of ordinary intelligence on notice.

The court also rejected the Appellate Division's conclusion that the blight determination had been a mere pretext, made in bad faith to enable Columbia to pursue its expansion plans. The court was unwilling to draw an inference of bad faith from the fact that ESDC had chosen the same consultant previously used by Columbia, and emphasized that when criticized about the choice, ESDC hired a second consulting firm that conducted an entirely independent study.

Finally, the court held that even if the Manhattanville area suffered from no blight at all, the project qualified for condemnation as a “civic project” within the meaning of the UDC Act. The statute itself defines civic project to include one designed for the purpose of providing facilities for educational purposes, and permits ESDC to acquire property for construction of a civic project when ESDC finds that there “exists in the area in which the project is to be located, a need for the educational ' facility to be included in the project.” Unconsolidated Laws, section 6253[6][d] and 6260[d]. The court noted that the statutory language did not limit educational projects to public educational institutions, and observed that in any event Columbia operates as a non-profit educational corporation, making this an easier case than the Atlantic Yards case, where the court sustained condemnation to permit a private entity to build a basketball arena.

Judge Smith concurred on constraint of the Atlantic Yards case, but distanced himself from the “civic project” prong of the majority opinion. He noted that once the court sustained the blight determination, it did not have to reach the civic project issue, and expressed concern that in construing the statute to permit condemnation for this “civic project,” the majority ignored potential constitutional problems that might arise from a broad construction of the statute. In particular, he questioned whether private tennis camps or karate schools ' however educational they might be ' would qualify as public uses in the constitutional sense.

The Bottom Line

Read in conjunction with Matter of Goldstein v. New York State Urban Development Corp. , 13 NY3d 511 (the Atlantic Yards case), Kaur suggests that the Court of Appeals will impose no more stringent constraints on the exercise of the eminent domain power than did the United States Supreme Court in the Kelo case. Making a record may be essential to support a finding of blight, but consultants know what findings their principals want, and it is not difficult to find evidence of blight in even the most prosperous areas of the city. The deferential standard articulated in the majority opinion ensures that a municipality that follows the court's road map will have its blight determination sustained. Moreover, the court's broad interpretation of the “civic project” language in the statute may make it unnecessary, in many cases, to go through the trouble of conducting blight studies. Landowners unhappy about condemnation determinations would be well advised to plead their case before voters, local legislators, and the media; the court has left little room for recourse to the courts.

Stewart E. Sterk, Mack Professor of Law at Benjamin N. Cardozo School of  Law, is Editor-in-Chief of this newsletter.