Development

Diminution in Value Not Sufficient to Establish Taking

Adrian v. Town of Yorktown

NYLJ 4/19/11, p. 31, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In landowner's action to recover damages for an alleged taking, landowner appealed from Supreme Court's grant of summary judgment to the town. The Appellate Division affirmed, holding that landowner had not demonstrated sufficient diminution in value to sustain a taking claim.

Landowner owned 15 acres in the Town of Yorktown, and sought a number of permits to develop the property beginning in 1988 and continuing until 2000. The town allegedly denied permits to build a car wash and an auto body shop, denied wetlands permits, imposed onerous environmental regulations on a proposed supermarket project, and refused to permit the property to be included in a sewer district. Landowner then sold the property for $3.6 million, despite its alleged $10 million appraised value (before the town's actions). Landowner then brought this action for damages, and Supreme Court granted summary judgment to the town.

In affirming, the Appellate Division held that the alleged diminution of value was insufficient to support a taking claim. To prevail on such a claim, landowner would have to establish that the loss in value was one step short of complete. Here, landowner could not demonstrate that the parcel would be incapable of producing a reasonable return.

COMMENT

So long as a government regulation leaves a landowner's land with more than the just barest residue of its value, the regulation will generally survive a takings challenge so long as the regulation bears a reasonable relationship to a valid government interest. For example, in Bonnie Briar Syndicate, Inc. v. Town of Mamaroneck, 94 NY2d 96, the landowner sued to challenge the rezoning of its land, which had long been used as a golf course, from residential to solely recreational use. Though the rezoning resulted in a significant diminution of value, Court of Appeals upheld the regulation, emphasizing the long-standing, financially viable use of the land as a golf course. Absent a physical intrusion into the land or a complete diminishment of its economic value, the court sustained the regulation because there existed a “reasonable relationship” between the government's interest (flood control and preservation of open space and recreational opportunities), the town's actions did not constitute a taking. Cases in which the landowner meets the burden necessary to show a regulatory taking based on diminution in value are rare and involve extreme government action barring any economically viable use of the regulated land. One such recent example is Middleland, Inc. v. City Council of City of New York, 14 Misc.3d 1223(A), in which a landowner successfully challenged the city's refusal to cancel a restrictive declaration placed on its parcel of land as a condition of rezoning done in 1973. To facilitate the use of the property and surrounding plots as an IBM manufacturing plant, the restriction limited the use of landowner's land to use as a parking lot for an IBM manufacturing plant ' a plant that had ceased to exist in 1993. Though the landowner had notice of the restrictive declaration when it purchased the land, the court found that the city's refusal to cancel this restrictive declaration was a regulatory taking because the fact that the plot could be used only as a parking lot for manufacturing facilities that no longer existed meant that the city was denying the landowner any economically viable use of the land. Other than in cases this extreme, there is little case law to support a claim of a government taking based on diminution of economic value.

The case for a takings claim is easier for a landowner who argues that government regulation has interfered with the land physically, such as by interfering with his right to exclude. In Seawall Associates v. City of New York, 74 N.Y.2d 92, the Court of Appeals found that a moratorium on converting or demolishing single-room occupancy buildings (SROs), which also required that owners of such buildings repair and rent all vacant units or pay penalties, constituted a per se physical taking because it forced the landowners to “accept the occupation of their properties by persons not already in residence.” Id. Seawall court went further and argued that even if this were not a per se physical taking, the City's actions would have constituted a compensable taking because it denied the landowner any economically viable use of its land during the moratorium on converting SROs.

Tennis Facility Qualifies As Accessory Use

Matter of East Hampton Indoor Tennis Club, LLC v. Zoning Board of Appeals

NYLJ 4/25/11, p. 25, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In neighbor's article 78 proceeding to review an interpretation issued by the zoning board of appeals (ZBA), the neighbor appealed from Supreme Court's denial of the petition and dismissal of the proceeding. The Appellate Division affirmed, holding that neighbor had standing, but that the ZBA's determination that a tennis facility was an accessory use to a private school was entitled to deference.

Applicant operates a private school in a residential zoning district. In 2008, the school submitted a special permit and site plan application for construction of recreational facilities, which would include a tennis pavilion and a seasonably inflated tennis bubble that would be open to the public outside of school hours. Neighbor, who operates an indoor tennis facility in the town, sought an interpretation of the town's zoning ordinance to establish that the proposed tennis facility was not a permissible accessory use to a school. The Building Inspector concluded that the facility was a permitted accessory use, and the ZBA affirmed his determination. Supreme Court then dismissed the neighbor's article 78 proceeding, and neighbor appealed.

In affirming, the Appellate Division first held that the neighbor had standing because it had alleged injuries aside from the threat of increased business competition. Turning to the merits, however, the court noted that whether a use is a permissible accessory use turns on whether the use is incidental to and customarily found in connection with the principal use ' a fact-based finding on which the ZBA's determination is entitled to deference. Here, the court concluded that the ZBA's determination, based on its inquiries about customary practices at other local schools, was not arbitrary or capricious.

Negative Declaration Proper for 'Type 1' Action

Matter of Thorne v. Village of Millbrook Planning Board

NYLJ 4/13/11, p. 34, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In neighbor's article 78 proceeding challenging the Planning Board's negative SEQRA determination, neighbor appealed from Supreme Court's denial of the petition and dismissal of the proceeding. The Appellate Division affirmed, holding that the negative declaration was proper even though the proposed action was a “Type I” action under SEQRA.

Developer sought to build 91 homes on a 27.6-acre parcel of land. Although the applicable zoning ordinance permitted single family homes on two acres, the district provided for special use permits for up to four dwelling units per acre in a conservation density development (CDD). Developer applied for a special permit, site plan and subdivision approvals for a CDD on the site. The planning board held a public hearing, at which neighbors made a presentation and submitted expert reports. The board also conducted three workshop meetings with consultants. At the final meeting, the board issued a negative declaration and then granted the special permit and preliminary site plan and subdivision approval. Neighbors then brought this article 78 proceeding, challenging the SEQRA determination (and also challenging the approvals). Supreme Court denied the petition.

In affirming, the Appellate Division acknowledged that Type I actions come with a presumption that an environmental impact statement is required. But the court also noted that a board may properly issue a negative declaration in a Type I action when the project has been modified during the initial review process to accommodate environmental concerns of the lead agency and other interested parties. Here, the developer made modifications which were properly reviewed before issuance of the negative declaration. Because the planning board took the required “hard look” at environmental concerns, there was no SEQRA violation.

Street Not Abandoned

Matter of March v. New York State Department of
Environmental Conservation

NYLJ 5/10/11, p. 32, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In a hybrid action/proceeding, landowner appealed from Supreme Court's grant of summary judgment to the Village of Bayville declaring that the subject property had become a village street by prescription and had not been abandoned by nonuse. The Appellate Division affirmed, holding that landowner had not come forward with evidence of abandonment.

Village Law section 6-626 provides that lands which have been used as a public street continuously for ten or more years “shall be a street with the same force and effect as if it had been duly laid out and recorded as such.” Courts have construed the statute to require, in addition to use by the public, maintenance or repair by public authorities for the statutory period. In this case, the village established, by affidavits from public officials, that the village had plowed snow, sanded the street, removed garbage, and maintained fire hydrants and water mains. On that basis, Supreme Court awarded summary judgment to the village.

In affirming, the Appellate Division concluded that the provision of services established by the village was sufficient to establish that the road had been adopted by public authorities. The court then turned to landowner's argument that the road had been abandoned by non-use. The court conceded that a public highway is abandoned if it has not bee traveled or used as such for six years, but the court emphasized the presumption that a public highway, once established, continues to exist, and noted that landowner had not met its burden of demonstrating abandonment.

Court May Not Consider Grounds Not Raised Before ZBA

Matter of Kearney v. Cold Spring Zoning Board of Appeals

NYLJ 4/13/11, p. 31, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In landowner's article 78 proceeding challenging a variance denial, the zoning board of appeals (ZBA) appealed from Supreme Court's grant of the petition. The Appellate Division reversed, holding that the court could not consider grounds not raised before the ZBA.

Landowner owns a 10,000 square-foot parcel in a district zoned for industrial purposes. Residential development is permitted in the district, but only on a lot with a minimum size of 40,000 square feet. Landowner then sought an area variance to permit construction of a single-family home on the parcel, and the ZBA denied the variance. Landowner then brought this article 78 proceeding, contending that a “small lot exception” in the zoning code made a variance unnecessary. Supreme Court granted the petition, relying on the small lot exception and also concluding that the variance denial was arbitrary and capricious. The ZBA appealed.

In reversing, the Appellate Division first held that a landowner may not raise a new claim in an article 78 proceeding that was not raised at the administrative level. Here, although landowner had advised the ZBA that the parcel was covered by the small lot exception, at the public hearing, landowner explicitly disclaimed reliance on that exception, and indicated that landowner was simply seeking a variance. On that record, the Appellate Division held that Supreme Court could not invoke the small lot exception to overturn the ZBA's determination. The court then held that the ZBA could properly have concluded that the variance would create a bad precedent for the area, and that any hardship was self-created because landowner purchased with knowledge of the restriction. As a result, the ZBA's determination was not arbitrary and capricious.

Article 78 Proceeding Does Not Lie to Compel
Enforcement of Zoning Ordinance

Matter of Sorrentino v. Maybury

NYLJ 5/2/11, p. 25, col. 2

Supreme Ct., Westchester Cty.

(Zambelli, J.)

In an article 78 proceeding to compel a town to enforce its zoning code, the town moved to dismiss the proceeding. The court granted the town's motion, holding that the decision to enforce the code rests within the discretion of public officials charged with its enforcement.

Neighbor, who owns land in a residential district, contends that the subject parcel has been used by its current owner for the storage of commercial vehicles ' a use not permitted in the district. Neighbor also contends that the owner has allowed installation of fuel storage tanks without proper building permits. Upon neighbor's demand, the town issued a ticket for violation of the code, but the landowner then appealed to the ZBA, arguing that the violations were allowable as a prior non-conforming use. The proceedings on the violation ticket were stayed pending resolution of the matter before the ZBA. When landowner brought this article 78 proceeding challenging non-enforcement, the town argued that the town had taken action, mooting the proceeding.

In dismissing the proceeding, the court first held that the petition failed to state a cause of action because a town may not be compelled, through an article 78 proceeding, to enforce its own zoning code. Enforcement, in the court's view is not a proper subject for relief in the nature of mandamus, because the decision to enforce rests in the discretion of public officials. The court then held that the proceeding was moot in any event because the town had taken action against the landowner.

Diminution in Value Not Sufficient to Establish Taking

Adrian v. Town of Yorktown

NYLJ 4/19/11, p. 31, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In landowner's action to recover damages for an alleged taking, landowner appealed from Supreme Court's grant of summary judgment to the town. The Appellate Division affirmed, holding that landowner had not demonstrated sufficient diminution in value to sustain a taking claim.

Landowner owned 15 acres in the Town of Yorktown, and sought a number of permits to develop the property beginning in 1988 and continuing until 2000. The town allegedly denied permits to build a car wash and an auto body shop, denied wetlands permits, imposed onerous environmental regulations on a proposed supermarket project, and refused to permit the property to be included in a sewer district. Landowner then sold the property for $3.6 million, despite its alleged $10 million appraised value (before the town's actions). Landowner then brought this action for damages, and Supreme Court granted summary judgment to the town.

In affirming, the Appellate Division held that the alleged diminution of value was insufficient to support a taking claim. To prevail on such a claim, landowner would have to establish that the loss in value was one step short of complete. Here, landowner could not demonstrate that the parcel would be incapable of producing a reasonable return.

COMMENT

So long as a government regulation leaves a landowner's land with more than the just barest residue of its value, the regulation will generally survive a takings challenge so long as the regulation bears a reasonable relationship to a valid government interest. For example, in Bonnie Briar Syndicate, Inc. v. Town of Mamaroneck, 94 NY2d 96, the landowner sued to challenge the rezoning of its land, which had long been used as a golf course, from residential to solely recreational use. Though the rezoning resulted in a significant diminution of value, Court of Appeals upheld the regulation, emphasizing the long-standing, financially viable use of the land as a golf course. Absent a physical intrusion into the land or a complete diminishment of its economic value, the court sustained the regulation because there existed a “reasonable relationship” between the government's interest (flood control and preservation of open space and recreational opportunities), the town's actions did not constitute a taking. Cases in which the landowner meets the burden necessary to show a regulatory taking based on diminution in value are rare and involve extreme government action barring any economically viable use of the regulated land. One such recent example is Middleland, Inc. v. City Council of City of New York, 14 Misc.3d 1223(A), in which a landowner successfully challenged the city's refusal to cancel a restrictive declaration placed on its parcel of land as a condition of rezoning done in 1973. To facilitate the use of the property and surrounding plots as an IBM manufacturing plant, the restriction limited the use of landowner's land to use as a parking lot for an IBM manufacturing plant ' a plant that had ceased to exist in 1993. Though the landowner had notice of the restrictive declaration when it purchased the land, the court found that the city's refusal to cancel this restrictive declaration was a regulatory taking because the fact that the plot could be used only as a parking lot for manufacturing facilities that no longer existed meant that the city was denying the landowner any economically viable use of the land. Other than in cases this extreme, there is little case law to support a claim of a government taking based on diminution of economic value.

The case for a takings claim is easier for a landowner who argues that government regulation has interfered with the land physically, such as by interfering with his right to exclude. In Seawall Associates v. City of New York, 74 N.Y.2d 92, the Court of Appeals found that a moratorium on converting or demolishing single-room occupancy buildings (SROs), which also required that owners of such buildings repair and rent all vacant units or pay penalties, constituted a per se physical taking because it forced the landowners to “accept the occupation of their properties by persons not already in residence.” Id. Seawall court went further and argued that even if this were not a per se physical taking, the City's actions would have constituted a compensable taking because it denied the landowner any economically viable use of its land during the moratorium on converting SROs.

Tennis Facility Qualifies As Accessory Use

Matter of East Hampton Indoor Tennis Club, LLC v. Zoning Board of Appeals

NYLJ 4/25/11, p. 25, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In neighbor's article 78 proceeding to review an interpretation issued by the zoning board of appeals (ZBA), the neighbor appealed from Supreme Court's denial of the petition and dismissal of the proceeding. The Appellate Division affirmed, holding that neighbor had standing, but that the ZBA's determination that a tennis facility was an accessory use to a private school was entitled to deference.

Applicant operates a private school in a residential zoning district. In 2008, the school submitted a special permit and site plan application for construction of recreational facilities, which would include a tennis pavilion and a seasonably inflated tennis bubble that would be open to the public outside of school hours. Neighbor, who operates an indoor tennis facility in the town, sought an interpretation of the town's zoning ordinance to establish that the proposed tennis facility was not a permissible accessory use to a school. The Building Inspector concluded that the facility was a permitted accessory use, and the ZBA affirmed his determination. Supreme Court then dismissed the neighbor's article 78 proceeding, and neighbor appealed.

In affirming, the Appellate Division first held that the neighbor had standing because it had alleged injuries aside from the threat of increased business competition. Turning to the merits, however, the court noted that whether a use is a permissible accessory use turns on whether the use is incidental to and customarily found in connection with the principal use ' a fact-based finding on which the ZBA's determination is entitled to deference. Here, the court concluded that the ZBA's determination, based on its inquiries about customary practices at other local schools, was not arbitrary or capricious.

Negative Declaration Proper for 'Type 1' Action

Matter of Thorne v. Village of Millbrook Planning Board

NYLJ 4/13/11, p. 34, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In neighbor's article 78 proceeding challenging the Planning Board's negative SEQRA determination, neighbor appealed from Supreme Court's denial of the petition and dismissal of the proceeding. The Appellate Division affirmed, holding that the negative declaration was proper even though the proposed action was a “Type I” action under SEQRA.

Developer sought to build 91 homes on a 27.6-acre parcel of land. Although the applicable zoning ordinance permitted single family homes on two acres, the district provided for special use permits for up to four dwelling units per acre in a conservation density development (CDD). Developer applied for a special permit, site plan and subdivision approvals for a CDD on the site. The planning board held a public hearing, at which neighbors made a presentation and submitted expert reports. The board also conducted three workshop meetings with consultants. At the final meeting, the board issued a negative declaration and then granted the special permit and preliminary site plan and subdivision approval. Neighbors then brought this article 78 proceeding, challenging the SEQRA determination (and also challenging the approvals). Supreme Court denied the petition.

In affirming, the Appellate Division acknowledged that Type I actions come with a presumption that an environmental impact statement is required. But the court also noted that a board may properly issue a negative declaration in a Type I action when the project has been modified during the initial review process to accommodate environmental concerns of the lead agency and other interested parties. Here, the developer made modifications which were properly reviewed before issuance of the negative declaration. Because the planning board took the required “hard look” at environmental concerns, there was no SEQRA violation.

Street Not Abandoned

Matter of March v. New York State Department of
Environmental Conservation

NYLJ 5/10/11, p. 32, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In a hybrid action/proceeding, landowner appealed from Supreme Court's grant of summary judgment to the Village of Bayville declaring that the subject property had become a village street by prescription and had not been abandoned by nonuse. The Appellate Division affirmed, holding that landowner had not come forward with evidence of abandonment.

Village Law section 6-626 provides that lands which have been used as a public street continuously for ten or more years “shall be a street with the same force and effect as if it had been duly laid out and recorded as such.” Courts have construed the statute to require, in addition to use by the public, maintenance or repair by public authorities for the statutory period. In this case, the village established, by affidavits from public officials, that the village had plowed snow, sanded the street, removed garbage, and maintained fire hydrants and water mains. On that basis, Supreme Court awarded summary judgment to the village.

In affirming, the Appellate Division concluded that the provision of services established by the village was sufficient to establish that the road had been adopted by public authorities. The court then turned to landowner's argument that the road had been abandoned by non-use. The court conceded that a public highway is abandoned if it has not bee traveled or used as such for six years, but the court emphasized the presumption that a public highway, once established, continues to exist, and noted that landowner had not met its burden of demonstrating abandonment.

Court May Not Consider Grounds Not Raised Before ZBA

Matter of Kearney v. Cold Spring Zoning Board of Appeals

NYLJ 4/13/11, p. 31, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In landowner's article 78 proceeding challenging a variance denial, the zoning board of appeals (ZBA) appealed from Supreme Court's grant of the petition. The Appellate Division reversed, holding that the court could not consider grounds not raised before the ZBA.

Landowner owns a 10,000 square-foot parcel in a district zoned for industrial purposes. Residential development is permitted in the district, but only on a lot with a minimum size of 40,000 square feet. Landowner then sought an area variance to permit construction of a single-family home on the parcel, and the ZBA denied the variance. Landowner then brought this article 78 proceeding, contending that a “small lot exception” in the zoning code made a variance unnecessary. Supreme Court granted the petition, relying on the small lot exception and also concluding that the variance denial was arbitrary and capricious. The ZBA appealed.

In reversing, the Appellate Division first held that a landowner may not raise a new claim in an article 78 proceeding that was not raised at the administrative level. Here, although landowner had advised the ZBA that the parcel was covered by the small lot exception, at the public hearing, landowner explicitly disclaimed reliance on that exception, and indicated that landowner was simply seeking a variance. On that record, the Appellate Division held that Supreme Court could not invoke the small lot exception to overturn the ZBA's determination. The court then held that the ZBA could properly have concluded that the variance would create a bad precedent for the area, and that any hardship was self-created because landowner purchased with knowledge of the restriction. As a result, the ZBA's determination was not arbitrary and capricious.

Article 78 Proceeding Does Not Lie to Compel
Enforcement of Zoning Ordinance

Matter of Sorrentino v. Maybury

NYLJ 5/2/11, p. 25, col. 2

Supreme Ct., Westchester Cty.

(Zambelli, J.)

In an article 78 proceeding to compel a town to enforce its zoning code, the town moved to dismiss the proceeding. The court granted the town's motion, holding that the decision to enforce the code rests within the discretion of public officials charged with its enforcement.

Neighbor, who owns land in a residential district, contends that the subject parcel has been used by its current owner for the storage of commercial vehicles ' a use not permitted in the district. Neighbor also contends that the owner has allowed installation of fuel storage tanks without proper building permits. Upon neighbor's demand, the town issued a ticket for violation of the code, but the landowner then appealed to the ZBA, arguing that the violations were allowable as a prior non-conforming use. The proceedings on the violation ticket were stayed pending resolution of the matter before the ZBA. When landowner brought this article 78 proceeding challenging non-enforcement, the town argued that the town had taken action, mooting the proceeding.

In dismissing the proceeding, the court first held that the petition failed to state a cause of action because a town may not be compelled, through an article 78 proceeding, to enforce its own zoning code. Enforcement, in the court's view is not a proper subject for relief in the nature of mandamus, because the decision to enforce rests in the discretion of public officials. The court then held that the proceeding was moot in any event because the town had taken action against the landowner.