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Zoning Estoppel
What remedies are available to a developer who expends substantial funds in reliance on an invalidly issued permit? The Court of Appeals addressed that issue in March in Matter of Perlbinder Holdings, LLC v. Srinivasan, NYLJ 3/25/16, p. 22., col. 1. The court's conclusion ' that a developer's remedy is to seek a variance, not to claim vested rights or estoppel against the municipality ' is consistent with pre-existing New York law, but may, in some circumstances, be quite problematic for “innocent” developers.
The Perlbinder Case
Perlbinder maintained an advertising sign on the side of a building it owns on Second Avenue in Manhattan. Although a permit was originally issued for the sign, subsequent amendments of the zoning ordinance made the sign a lawful nonconforming use. In 2002, Perlbinder obtained a zoning variance to build a new 34-story building on the site and to relocate the original sign, with slightly modified dimensions. Perlbinder did not complete the building or the new sign. In 2008, the Department of Building (DOB) issued a violation for failure to maintain the original building, which was now vacant. After a declaration of emergency, both the building and the original sign were demolished.
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