Development

After a nonjury trial, the court rejected landowner's argument that DOB's issuance of a building permit estopped the city from objecting to the approved building, noting that estoppel against a government agency is foreclosed in all but the rarest cases. The court, however, noted that undoing the existing construction project would not easily be accomplished. Rather than assessing penalties or damages, the court ordered landowner to prepare a plan in conformity with the 2002 approval, which would limit the house footprint to 4,194 square feet, and which would remedy the other violations. The court held penalties and damages in abeyance pending submission of that plan.

Lawyer Advertising Billboards Not Treated As Onsite Advertisements

Matter of Franklin Street Realty Corp. v. NYC Environmental Control Board, NYLJ 7/20/18, p. 22., col. 1, AppDiv, First Dept. (3-2 decision; majority opinion by Tom., J., dissenting opinion by Andrias, J.)

In a set of article 78 proceedings, corporate building owners sought to annul determinations by the New York City Environmental Control Board (ECB) that the owners were operating Outdoor Advertising Companies (OACs). The Appellate Division upheld the ECB determination, holding that it was rational to control that the building owners did not own the company whose services were being advertised on the signs.

Ciafone, a lawyer, was the principal of four corporations that own five buildings. He erected signs on each of the five buildings promoting his law practice, an entity known as “Ciafone, P.C.” The Department of Buildings issued violations charging each of the various corporate owners with operating an OAC, a violation that carries a minimum fine of $10,000. Ciafone, however, contended that he fell within an exception for accessory signs that promote onsite activity benefiting the owner associated with the building's primary use. The ECB hearing officers rejected Ciafone's argument, but concluded that the owners were not acting as OACs because Ciafone was selling himself on the signs, not making space available to others. The penalty for this lesser violation was a minimum fine of $800. On administrative appeal, the ECB reversed, concluding that the corporate owners were acting as OACs. The owners then brought these article 78 proceedings, which Supreme Court transferred to the Appellate Division.

In upholding the ECB's decision, the Appellate Division majority emphasized that the signs promoted Ciafone's law practice, not services by the corporation that owned the building. As a result, the court concluded that the corporations did not fall within the exception for accessory signs. Justice Andrias, dissenting for himself and Justice Kapnick, relied on precedent establishing that if the building had been owned by Ciafone as an individual, and he advertised his corporate business, he would not be operating as an OAC. The dissenters concluded that the distinction in treatment based on the form of corporate ownership was irrational.

Town Not Obligated to Consider Zoning Amendment

Matter of Cornwall Commons, LLC v. Town of Cornwall, NYLJ 7/20/18, p. 28., col. 6, AppDiv, Second Dept. (memorandum opinion)

In landowner's combined article 78 proceeding and action for declaratory relief challenging the town board's failure to rezone its parcel, landowner appealed from Supreme Court's grant of summary judgment to the town on three causes of action, and from that court's declaration that it could not compel the town to process landowner's application without delay. The Appellate Division affirmed, holding that the town was not required to consider the application of a zoning amendment

Landowner obtained a zoning amendment from the town creating a planned residential district (PRD), and applying the PRD classification to landowner's 197-acre parcel. The approved PRD district authorized landowner to develop a mixed residential/commercial facility with 100% of the residential units to be occupied by residents aged 55 and older. When market conditions changed, landowner sought an amendment that would permit 65% of the housing units to be non-age-restricted. When the town did not act on landowner's request, landowner brought this action/proceeding seeking to compel the town board to act on its application in good faith, contending that the town's zoning ordinance was not in accordance with its comprehensive plan, and contending that the town had worked a taking of its property. Supreme Court granted summary judgment to the town.

In affirming, the Appellate Division started by noting that a town board is not required to consider and vote on every application for a zoning change. Moreover the town board submitted unrebutted evidence that it was processing landowner's application diligently and in good faith. The court then held that even if the town's zoning ordinance was not in accordance with its comprehensive plan, the disparity would not mandate acceptance of landowner's proposed amendment, and the court had no power to require the town board to adopt the proposed amendment. The court then dismissed landowner's taking claim as unripe because landowner had not obtained a final decision from the town, and not demonstrated that seeking relief from the town would be futile.

East Harlem Rezoning Upheld

Ordonez v. City of New York, NYJ 7/30/18, p. 17., col 3, Supreme Ct., N.Y. Cty. (St. George, J.)

In two hybrid actions/article 78 proceedings, tenants and community groups challenged the city's environmental review of two zoning initiatives, contending both that the environmental review arbitrarily failed to consider indirect residential displacement and that the city's CEQR manual, on which the City Planning Commission had relied, was not validly promulgated. Supreme Court denied the petitions and dismissed the proceedings, upholding the city's environmental review process.

The first challenged project is a rezoning of a 96-block area of East Harlem that could add up to 3,500 additional housing units, many of them deemed “affordable” units. The second challenged project is a rezoning of Brooklyn's Bedford Union Armory and surrounding area to permit development of about 400, more than half of them affordable. In each case, and environmental impact statement was prepared as part of the ULURP process, and in each case, both the applicable community board and the applicable borough president recommended disapproval of the zoning change based largely on fears of indirect displacement of neighborhood residents. The City Planning Commission nevertheless voted to approve both projects. The City Council approved the East Harlem project, and its land use committee approved the Armory project. Tenant groups brought these proceedings, challenging the environmental review process.

In denying the petitions and dismissing the proceedings, the court first rejected the arguments by tenants and tenant groups that the city's CEQR technical manual constituted a “rule” that required promulgation pursuant to the city's administrative procedure act. The court emphasized that the manual instructed city agencies to exercise their discretion to depart from the numerical guidelines laid out in the manual, and concluded that the manual did not constitute a rule even if, as a matter of practice, city agencies never departed from those guidelines. Turning next to the argument that the city's environmental review was inadequate because the city did not consider the possibility that the rezonings would encourage landlords of rent regulated apartments to harass tenants illegally in order to force them out of their apartments, the court held that such illegal activity by landlords was beyond the scope of environmental review. With respect to the other arguments advanced by tenant groups, the court emphasized that the judicial responsibility was to make sure that the lead agency took a hard look at environmental issues. The case presented strong evidence that the lead agency had closely examined environmental impact, even if tenant groups disagreed with the city's conclusions.