Development

City May Not Condition Application on Reconstruction of Public Sewer Line

Application of the Enlarged City School District of Middletown v. City of Middletown

NYLJ 2/14/11

Supreme Court, Orange County

(Lubell, J.)

In a hybrid article 78 proceeding/declaratory judgment action, the school district challenged the city's refusal to consider an application by the district to connect to the city's water supply and sewer system unless the district agreed to fund reconstruction of a public sewer line. The court held that the city could not refuse to consider a permit application, but could impose a “hookup fee” proportionate to the district's use of the sewer line relative to its total capacity.

The school district plans to replace an existing building with a new elementary school building. A bond issue has been approved to pay for the building, with approvals and permits from the city. In 2008, when the district prepared an environmental assessment form in connection with the project, the only concern the city raised was related to traffic, although the form made it clear that the district expected to dispose of sewage through the existing municipal sewer system. Then, in 2010, as construction-related activities had begun, the city demanded that the district replace 3,300 feet of sewer pipeline, extending beyond the district's property and servicing private individuals as well as the district, as a condition for the city's consideration of the district's application of a construction permit. The district brought this proceeding challenging the city's demand.

In granting declaratory relief to the district, the court concluded that questions of fact precluded resolution of some of the issues in the dispute, but held nevertheless that the city may not condition development approval on an applicant's agreement to make off-site improvement to public infrastructure. At the same time, however, the court held that the city did have authority to impose a “hookup fee,” but only if the city has to build a replacement line to accommodate the new building, and only if the fee is “proportionate to the District's usage of that sewer line relative to its total capacity.”

COMMENT

New York statutes do not confer express authority on planning boards to require off-site improvements or fees in lieu thereof as a condition for subdivision or site plan approval. See Town Law sec 277; Village Law sec. 7-730 (subdivision review); Town Law sec. 274-a; Village Law sec. 7-725-a (site plan review) In the absence of that authority, the court in Sepco Ventures Ltd. v. Planning Bd. of Town of Woodbury, 230 A.D.2d 913, held that a planning board could not condition subdivision approval on improvements to off-site public roads. Id. at 915. As a result, the court granted developer's article 78 proceeding challenging the planning board's determination conditioning approval on a requirement that developer improve off-site roads or pay a fee to cover the costs of such improvements. Similarly, the Court of Appeals has held that state legislation establishing a budget system for improvements and repairs to highways pre-empts local legislation imposing fees on developers to cover the cost of off-site road improvements. In Albany Area Builders Ass'n v. Town of Guilderland, 74 N.Y.2d 372, the court invalidated a municipality's Transportation Impact Fee Law, which would have imposed an impact fee on any applicant for building plans that would generate additional traffic and would have put that money back into the development and maintenance of roads. The court relied on article 8 of the Town Law, which delineates how towns are to budget for improvements and repairs to highways Similarly, in Coconato v. Town of Esopus, 152 A.D.2d 39, the court invalidated a local legislation imposing a water district hookup fee, holding that the fee was pre-empted by state law, which permits only “a uniform service charge for the installation of such portion of a supply pipe” as falls within the bounds of a public highway. N.Y. Town Law ' 198(3)(a).

The Middletown court and others have suggested in dicta that a tailored “hookup fee” that includes a proportional share of the cost of proposed off-site improvements necessitated by a proposed project might be a valid condition for development, but no court has yet upheld such a fee. Instead, language suggesting the validity of hookup fees appears in cases where courts have invalidated fees that include more than the discrete costs of hooking the applicant into an existing municipal system. Thus, in Phillips v. Town of Clifton Park Water Authority 286 AD.2d 834, the court, at the behest of a commercial owner, invalidated fees that were in excess of “standard turn-on, meter inspection and hook-up fees,” holding that the fees were impermissible because they were a tax that went to general municipal funds without any relation to the exact benefits received by the applicant. Id. at 836. It remains to be seen whether future courts would follow the Middletown court's suggestion that a planning board could impose fees in individual cases where changes to the existing municipal systems were, in fact, solely or primarily for the benefit of the applicant.

Mandamus Available to Require Board to Hold Public Hearing on Site Plan Application

Matter of East End Resources, LLC v. Town of Southold Planning Board

NYLJ 3/1/11, p. 38., col. 1

AppDiv, Second Dept.

(memorandum opinion)

In landowner's article 78 proceeding challenging the planning board's delay in considering its application for site plan review, landowner appealed from Supreme Court's dismissal of its claim for mandamus relief compelling the board to conduct a public hearing. The Appellate Division reversed and reinstated the claim, holding that the board's subsequent preliminary hearing did not render landowner's claim academic.

In 2006, landowner submitted an application for site plan review of a proposed 24-unit senior housing development on a 6.75-acre parcel. The planning board did not conduct timely review of that proposal. In October 2008, landowner submitted an amended application. The following month, landowner brought this article 78 proceeding based on the planning board's alleged deliberate and systematic delay of site plan review. In its third cause of action, landowner sought mandamus to compel the planning board to conduct a public hearing pursuant to Town Law section 274-a(8). Subsequently, the planning board conducted a preliminary hearing and declared itself lead agency for purposes of SEQRA review. Based on that hearing, Supreme Court dismissed the third cause of action as academic. Landowner appealed.

In reversing, the Appellate Division held that the preliminary hearing was not equivalent to the public hearing mandated by section 274-a(8). The court noted that under the town code, a preliminary hearing is not equivalent to a public hearing; the code mandates that the board hold a preliminary hearing before the public hearing. As a result, landowner's complaint was not academic and should not have been dismissed.

COMMENT

When a planning board does not approve a site plan within the time allotted by local law, the applicant is not entitled to automatic approval of the site plan unless the local zoning ordinance includes an “approval by default” provision. In Nyack Hosp. v. Village of Nyack Planning Bd., 641 N.Y.S.2d 215, affd 231 A.D.2d 617, the court held that since the local zoning law did not provide for approval by default for site plan applications, the village planning board's alleged failure to render a decision within the requisite time frame for final site plan approval did not result in its automatic approval. The court emphasized that the local legislature's exclusion of a default approval provision for site plans, while including a similar provision with respect to subdivisions, “is a strong indication that such exclusion was intended.” 641 N.Y.S.2d at 216. As a result, the landowner's sole remedy was to commence a special proceeding to compel the Planning Board to act. In East End, as in Nyack, the local ordinance included no approval by default provision.

By contrast, courts enforce local ordinances that explicitly provide for default approval when the planning board does not timely act upon an application for site plan review. The Second Department, in Biondi v. Rocco, 173 A.D.2d 700, held that a site plan application for a shopping mall should be deemed approved where the planning board failed to timely render its decision. The court based its holding upon provisions of the Town of Orangetown Code, which provided that “failure to render a decision shall be considered an approval of the site development plan.” Although the planning board's inaction was caused by the Town Attorney's failure to provide the site plan applicant with a legal opinion, as directed by the planning board, the court held the local law applicable to any branch of the municipal government.

City May Not Condition Application on Reconstruction of Public Sewer Line

Application of the Enlarged City School District of Middletown v. City of Middletown

NYLJ 2/14/11

Supreme Court, Orange County

(Lubell, J.)

In a hybrid article 78 proceeding/declaratory judgment action, the school district challenged the city's refusal to consider an application by the district to connect to the city's water supply and sewer system unless the district agreed to fund reconstruction of a public sewer line. The court held that the city could not refuse to consider a permit application, but could impose a “hookup fee” proportionate to the district's use of the sewer line relative to its total capacity.

The school district plans to replace an existing building with a new elementary school building. A bond issue has been approved to pay for the building, with approvals and permits from the city. In 2008, when the district prepared an environmental assessment form in connection with the project, the only concern the city raised was related to traffic, although the form made it clear that the district expected to dispose of sewage through the existing municipal sewer system. Then, in 2010, as construction-related activities had begun, the city demanded that the district replace 3,300 feet of sewer pipeline, extending beyond the district's property and servicing private individuals as well as the district, as a condition for the city's consideration of the district's application of a construction permit. The district brought this proceeding challenging the city's demand.

In granting declaratory relief to the district, the court concluded that questions of fact precluded resolution of some of the issues in the dispute, but held nevertheless that the city may not condition development approval on an applicant's agreement to make off-site improvement to public infrastructure. At the same time, however, the court held that the city did have authority to impose a “hookup fee,” but only if the city has to build a replacement line to accommodate the new building, and only if the fee is “proportionate to the District's usage of that sewer line relative to its total capacity.”

COMMENT

New York statutes do not confer express authority on planning boards to require off-site improvements or fees in lieu thereof as a condition for subdivision or site plan approval. See Town Law sec 277; Village Law sec. 7-730 (subdivision review); Town Law sec. 274-a; Village Law sec. 7-725-a (site plan review) In the absence of that authority, the court in Sepco Ventures Ltd. v. Planning Bd. of Town of Woodbury, 230 A.D.2d 913, held that a planning board could not condition subdivision approval on improvements to off-site public roads. Id. at 915. As a result, the court granted developer's article 78 proceeding challenging the planning board's determination conditioning approval on a requirement that developer improve off-site roads or pay a fee to cover the costs of such improvements. Similarly, the Court of Appeals has held that state legislation establishing a budget system for improvements and repairs to highways pre-empts local legislation imposing fees on developers to cover the cost of off-site road improvements. In Albany Area Builders Ass'n v. Town of Guilderland, 7 4 N.Y.2d 372, the court invalidated a municipality's Transportation Impact Fee Law, which would have imposed an impact fee on any applicant for building plans that would generate additional traffic and would have put that money back into the development and maintenance of roads. The court relied on article 8 of the Town Law, which delineates how towns are to budget for improvements and repairs to highways Similarly, in Coconato v. Town of Esopus, 152 A.D.2d 39, the court invalidated a local legislation imposing a water district hookup fee, holding that the fee was pre-empted by state law, which permits only “a uniform service charge for the installation of such portion of a supply pipe” as falls within the bounds of a public highway. N.Y. Town Law ' 198(3)(a).

The Middletown court and others have suggested in dicta that a tailored “hookup fee” that includes a proportional share of the cost of proposed off-site improvements necessitated by a proposed project might be a valid condition for development, but no court has yet upheld such a fee. Instead, language suggesting the validity of hookup fees appears in cases where courts have invalidated fees that include more than the discrete costs of hooking the applicant into an existing municipal system. Thus, in Phillips v. Town of Clifton Park Water Authority 286 AD.2d 834, the court, at the behest of a commercial owner, invalidated fees that were in excess of “standard turn-on, meter inspection and hook-up fees,” holding that the fees were impermissible because they were a tax that went to general municipal funds without any relation to the exact benefits received by the applicant. Id. at 836. It remains to be seen whether future courts would follow the Middletown court's suggestion that a planning board could impose fees in individual cases where changes to the existing municipal systems were, in fact, solely or primarily for the benefit of the applicant.

Mandamus Available to Require Board to Hold Public Hearing on Site Plan Application

Matter of East End Resources, LLC v. Town of Southold Planning Board

NYLJ 3/1/11, p. 38., col. 1

AppDiv, Second Dept.

(memorandum opinion)

In landowner's article 78 proceeding challenging the planning board's delay in considering its application for site plan review, landowner appealed from Supreme Court's dismissal of its claim for mandamus relief compelling the board to conduct a public hearing. The Appellate Division reversed and reinstated the claim, holding that the board's subsequent preliminary hearing did not render landowner's claim academic.

In 2006, landowner submitted an application for site plan review of a proposed 24-unit senior housing development on a 6.75-acre parcel. The planning board did not conduct timely review of that proposal. In October 2008, landowner submitted an amended application. The following month, landowner brought this article 78 proceeding based on the planning board's alleged deliberate and systematic delay of site plan review. In its third cause of action, landowner sought mandamus to compel the planning board to conduct a public hearing pursuant to Town Law section 274-a(8). Subsequently, the planning board conducted a preliminary hearing and declared itself lead agency for purposes of SEQRA review. Based on that hearing, Supreme Court dismissed the third cause of action as academic. Landowner appealed.

In reversing, the Appellate Division held that the preliminary hearing was not equivalent to the public hearing mandated by section 274-a(8). The court noted that under the town code, a preliminary hearing is not equivalent to a public hearing; the code mandates that the board hold a preliminary hearing before the public hearing. As a result, landowner's complaint was not academic and should not have been dismissed.

COMMENT

When a planning board does not approve a site plan within the time allotted by local law, the applicant is not entitled to automatic approval of the site plan unless the local zoning ordinance includes an “approval by default” provision. In Nyack Hosp. v. Village of Nyack Planning Bd., 641 N.Y.S.2d 215, affd 231 A.D.2d 617, the court held that since the local zoning law did not provide for approval by default for site plan applications, the village planning board's alleged failure to render a decision within the requisite time frame for final site plan approval did not result in its automatic approval. The court emphasized that the local legislature's exclusion of a default approval provision for site plans, while including a similar provision with respect to subdivisions, “is a strong indication that such exclusion was intended.” 641 N.Y.S.2d at 216. As a result, the landowner's sole remedy was to commence a special proceeding to compel the Planning Board to act. In East End, as in Nyack, the local ordinance included no approval by default provision.

By contrast, courts enforce local ordinances that explicitly provide for default approval when the planning board does not timely act upon an application for site plan review. The Second Department, in Biondi v. Rocco, 173 A.D.2d 700, held that a site plan application for a shopping mall should be deemed approved where the planning board failed to timely render its decision. The court based its holding upon provisions of the Town of Orangetown Code, which provided that “failure to render a decision shall be considered an approval of the site development plan.” Although the planning board's inaction was caused by the Town Attorney's failure to provide the site plan applicant with a legal opinion, as directed by the planning board, the court held the local law applicable to any branch of the municipal government.