Development

Vested Rights

Matter of Waterways Development Corp. v. Town of Brookhaven Zoning Board of Appeals

NYLJ 3/6/15, p. 26, col. 6

AppDiv, Second Dept.

(memorandum opinion)

In landowner's article 78 proceeding challenging a determination by the zoning board of appeals (ZBA) that previously approved height variances had expired, the ZBA appealed from Supreme Court's judgment annulling the ZBA's determination. The Appellate Division affirmed, holding that landowner had acquired vested rights to complete its project.

In the 1980s, landowner's predecessor had obtained height variances to construct three story buildings within a planned retirement community. In 1986, the ZBA granted an extension of those variances, and provided that the variances would last for the duration of the project. The predecessor completed 228 units before going into bankruptcy in 1995. In 1997, when current owner was considering purchasing the property, the planning board commissioner stated that the remainder of the units, including those for which the predecessor had obtained variances, could still be built. In 2001, landowner, having purchased the property, applied for building permits to build the buildings, and the building inspector denied the permits because they exceeded the 2 '-story zoning maximum.

After landowner sought unsuccessfully to transfer development rights to another project, it again applied for building permits, and the inspector again denied the application. The ZBA confirmed the building inspector's determination that new variances would be needed, and concluded that the variances did not survive the long hiatus, bankruptcy, and multiple transfers of ownership. Landowner then brought this article 78 proceeding, and Supreme Court annulled the ZBA's determination.

In affirming, the Appellate Division concluded that landowner had vested rights to complete construction of the buildings. The court noted that vested rights ordinarily accrue when a landowner makes expenditures in reliance on a building permit, but observed that vested rights can also arise when landowner has obtained site plan approval for a project and landowner has made substantial expenditures in connection with other phases of an integrated project. Here, because landowner and its predecessors had made substantial expenditures in reliance on the continued validity of the variances, landowner had acquired vested rights to complete construction in accordance with the approved site plan and variances. Moreover, the court held that the ZBA could not apply a 2003 ordinance providing that all previously granted variances would expire in 2005, emphasizing that the ZBA's dilatory tactics after landowner's 2001 application precluded the ZBA from applying the subsequently-enacted ordinance.

COMMENT

While case law regarding vested rights in relationship to site plans is underdeveloped, there is substantial case law in analogous situations of subdivision plans. Under the single integrated project theory, if a landowner had commenced substantial construction and expenditures in connection with other phases of an integrated project, the landowner acquires vested rights to complete construction on an undeveloped portion of the project if a change in zoning would render the expenditures essentially valueless and not equally useful under the new zoning requirements. In Telimar Homes, Inc. v. Miller, 14 A.D.2d 586, the court held that landowner had acquired vested rights to complete a subdivision when landowner had commenced substantial construction and expenditures on a water system, roads, a drainage system, a model house construction and advertising for the benefit of the entire subdivision. The court emphasized that placement of these expenditures would have been totally different under the new zoning ordinance and therefore conformity to the new ordinance would have made these expenditures essentially valueless. By contrast, in Padwee v. Lustenberger, 226 A.D.2d 897, the court held that landowner had not acquired vested rights to complete a five-lot subdivision, even though landowner had completed construction of a cul-de-sac and water and sewer mains, because those improvements would have been equally useful under a new, more restrictive, zoning ordinance. After construction of the improvements, but prior to construction on the individual plots, the Town amended its zoning requirements, which limited the subdivision to three lots.

However, once a municipality approves a site or subdivision plan, the right to complete construction is not in perpetuity and “divestiture may occur as the result of abandonment, recoupment or overriding considerations of public safety, health and welfare.” Schoonmaker Homes ' John Steinberg, Inc. v. Village of Maybrook, 1 78 A.D.2d 722, 727 (3d. Dept. 1991). In Schoonmaker, the court first found that the landowner acquired vested rights to a subdivision plan, under the single integrated project theory, by incurring costs of over $14 million on other locations within the subdivision. But the court then determinedthat the landowner had lost vested rights via 20-year abandonment of the subdivision plan.

Under identical provisions in Village Law ' 7-709, Town Law ' 265-a, and General City Law ' 83-a, a subdivision plan may still be protected against a change in zoning by a municipality without vested rights for a period of up to three years; where an amendment to a zoning ordinance increases minimum lot areas or dimensions beyond those approved in a subdivision plot, the amendment will not apply to that subdivision plot for a period up to three years after filing of the subdivision. During that period, the landowner can acquire vested rights by making substantial construction and expenditures in connection with the subdivision that would be essentially valueless under the new zoning requirements.

'

Area Variance Denial

Matter of L&M Graziose, LLP v. City of Glen Cove Zoning Board of Appeals

127 A.D.3d 863, 4/8/15

AppDiv, Second Dept.

(memorandum opinion)

In an article 78 proceeding to annul denial of an area variance, the zoning board of appeals (ZBA) appealed from Supreme Court's grant of the petition. The Appellate Division affirmed, holding that there was no evidence in the record to show that the variance would have an undesirable effect on the character of the neighborhood.

In denying applicant an area variance, the ZBA concluded that the requested variances were substantial. The Appellate Division conceded that this determination was rational, and acknowledged that a zoning board is not required to justify its determination on an area variance application with supporting evidence as to each of the five statutory factors, but the court nevertheless concluded that the ZBA's determination was irrational because of the absence of evidence about undesirable effect on the character of the neighborhood or detriment to health, safety, and welfare of the community.

'

Vested Rights

Matter of Waterways Development Corp. v. Town of Brookhaven Zoning Board of Appeals

NYLJ 3/6/15, p. 26, col. 6

AppDiv, Second Dept.

(memorandum opinion)

In landowner's article 78 proceeding challenging a determination by the zoning board of appeals (ZBA) that previously approved height variances had expired, the ZBA appealed from Supreme Court's judgment annulling the ZBA's determination. The Appellate Division affirmed, holding that landowner had acquired vested rights to complete its project.

In the 1980s, landowner's predecessor had obtained height variances to construct three story buildings within a planned retirement community. In 1986, the ZBA granted an extension of those variances, and provided that the variances would last for the duration of the project. The predecessor completed 228 units before going into bankruptcy in 1995. In 1997, when current owner was considering purchasing the property, the planning board commissioner stated that the remainder of the units, including those for which the predecessor had obtained variances, could still be built. In 2001, landowner, having purchased the property, applied for building permits to build the buildings, and the building inspector denied the permits because they exceeded the 2 '-story zoning maximum.

After landowner sought unsuccessfully to transfer development rights to another project, it again applied for building permits, and the inspector again denied the application. The ZBA confirmed the building inspector's determination that new variances would be needed, and concluded that the variances did not survive the long hiatus, bankruptcy, and multiple transfers of ownership. Landowner then brought this article 78 proceeding, and Supreme Court annulled the ZBA's determination.

In affirming, the Appellate Division concluded that landowner had vested rights to complete construction of the buildings. The court noted that vested rights ordinarily accrue when a landowner makes expenditures in reliance on a building permit, but observed that vested rights can also arise when landowner has obtained site plan approval for a project and landowner has made substantial expenditures in connection with other phases of an integrated project. Here, because landowner and its predecessors had made substantial expenditures in reliance on the continued validity of the variances, landowner had acquired vested rights to complete construction in accordance with the approved site plan and variances. Moreover, the court held that the ZBA could not apply a 2003 ordinance providing that all previously granted variances would expire in 2005, emphasizing that the ZBA's dilatory tactics after landowner's 2001 application precluded the ZBA from applying the subsequently-enacted ordinance.

COMMENT

While case law regarding vested rights in relationship to site plans is underdeveloped, there is substantial case law in analogous situations of subdivision plans. Under the single integrated project theory, if a landowner had commenced substantial construction and expenditures in connection with other phases of an integrated project, the landowner acquires vested rights to complete construction on an undeveloped portion of the project if a change in zoning would render the expenditures essentially valueless and not equally useful under the new zoning requirements. In Telimar Homes, Inc. v. Miller, 14 A.D.2d 586, the court held that landowner had acquired vested rights to complete a subdivision when landowner had commenced substantial construction and expenditures on a water system, roads, a drainage system, a model house construction and advertising for the benefit of the entire subdivision. The court emphasized that placement of these expenditures would have been totally different under the new zoning ordinance and therefore conformity to the new ordinance would have made these expenditures essentially valueless. By contrast, in Padwee v. Lustenberger, 226 A.D.2d 897, the court held that landowner had not acquired vested rights to complete a five-lot subdivision, even though landowner had completed construction of a cul-de-sac and water and sewer mains, because those improvements would have been equally useful under a new, more restrictive, zoning ordinance. After construction of the improvements, but prior to construction on the individual plots, the Town amended its zoning requirements, which limited the subdivision to three lots.

However, once a municipality approves a site or subdivision plan, the right to complete construction is not in perpetuity and “divestiture may occur as the result of abandonment, recoupment or overriding considerations of public safety, health and welfare.” Schoonmaker Homes ' John Steinberg, Inc. v. Village of Maybrook, 1 78 A.D.2d 722, 727 (3d. Dept. 1991). In Schoonmaker, the court first found that the landowner acquired vested rights to a subdivision plan, under the single integrated project theory, by incurring costs of over $14 million on other locations within the subdivision. But the court then determinedthat the landowner had lost vested rights via 20-year abandonment of the subdivision plan.

Under identical provisions in Village Law ' 7-709, Town Law ' 265-a, and General City Law ' 83-a, a subdivision plan may still be protected against a change in zoning by a municipality without vested rights for a period of up to three years; where an amendment to a zoning ordinance increases minimum lot areas or dimensions beyond those approved in a subdivision plot, the amendment will not apply to that subdivision plot for a period up to three years after filing of the subdivision. During that period, the landowner can acquire vested rights by making substantial construction and expenditures in connection with the subdivision that would be essentially valueless under the new zoning requirements.

'

Area Variance Denial

Matter of L&M Graziose, LLP v. City of Glen Cove Zoning Board of Appeals

127 A.D.3d 863, 4/8/15

AppDiv, Second Dept.

(memorandum opinion)

In an article 78 proceeding to annul denial of an area variance, the zoning board of appeals (ZBA) appealed from Supreme Court's grant of the petition. The Appellate Division affirmed, holding that there was no evidence in the record to show that the variance would have an undesirable effect on the character of the neighborhood.

In denying applicant an area variance, the ZBA concluded that the requested variances were substantial. The Appellate Division conceded that this determination was rational, and acknowledged that a zoning board is not required to justify its determination on an area variance application with supporting evidence as to each of the five statutory factors, but the court nevertheless concluded that the ZBA's determination was irrational because of the absence of evidence about undesirable effect on the character of the neighborhood or detriment to health, safety, and welfare of the community.

'