Why Community Groups Can Never Win Against Developers

Making a motion you cannot win is usually sanctionable — but here, it is actually required. This is wasteful of the resources of the courts and the parties alike. It is also based on a false promise of protection. Dreikausen stated that "a race to completion cannot be determinative," that "structures changing the use of property most often can be destroyed," and that therefore "relief remains at least theoretically available even after completion of the project." 98 N.Y.2d at 172. But "theoretically" remains the operative word.

No Going Back

The reality is that the race to completion of a building project is in fact determinative. There appears to be no reported case in which a building has been ordered demolished at the behest of a private litigant who alleges that a building department or zoning board of appeals erred in interpreting a zoning resolution.

This is because courts are extremely reluctant to order the demolition even of partly completed structures. "[A] mandatory injunction to remove or destroy a building is a drastic remedy which will only be granted if the benefit to the movant if the injunction were granted and the irreparable harm to the movant if the injunction were not granted substantially outweighs the injury to the party against whom the injunction is sought." Angiolillo v. Town of Greenburgh, 21 A.D.3d 1101, 1104 (2d Dept. 2005; Sunrise Plaza Associates, L.P. v. International Summit Equities, 288 A.D.2d 300, 301 (2d Dept. 2001) (same).

Cases actually requiring a developer to demolish all or part of a substantially completed building are very rare, and involve egregious behavior on the developer's part going well beyond aggressive interpretation of a zoning resolution. There is only one case, frequently cited, in which a court ordered the partial demolition of a substantially completed Manhattan high-rise because it violated zoning: Parkview Associates v. City of New York, 71 N.Y.2d 274 (1988). That case is notorious for a reason: It is unique. It was not a garden variety zoning violation. It involved bad faith on the part of the developer, not differences in interpretation of the Zoning Resolution. Id. at 279. It was the City that issued a stop-work order. The developer then sued the City — so obviously there was a live controversy. The case turned on the principle that there could be no estoppel against the City when it was carrying out its statutorily mandated duties, not on mootness. In a very few other cases, small structures have been ordered demolished, but always at the behest of a local government, not a private party, and following egregious illegal behavior such as repeated violations of stop-work orders. See, e.g., Massa v. City of Kingston, 284 A.D.2d 836 (3d Dept. 2001); lv. den. (addition to residence ordered demolished); Town of N. Elba v. Grimditch, 131 A.D.3d 150, 156-157 (3d Dept. 2015) (boathouse ordered demolished).

Petitioners' cases are made even more difficult by the requirement of exhaustion of administrative remedies. If the Department of Buildings (DOB) approves a Zoning Diagram before it issues a building permit, "exhausting" means filing a Zoning Challenge with DOB, which takes two to three months, and then appealing to the Board of Standards and Appeals (BSA). If the challenge is to a building permit that has been issued, the challenger can appeal directly to the BSA. In either event, the BSA's publicly available database, "BSA Applications Status," shows that appeals take on average 9.3 months from date of filing to date of decision.

There are exceptions to the requirement that a challenger exhaust administrative remedies, for example where the question presented is a pure question of law, and the expertise of the administrative agency is not required to decide it. Sievers v. New York Dept. of Buildings, 146 A.D.2d 473 (1^st Dept. 1989); Weeks Woodlands v. Dormitory Auth. of the State of N.Y., 2011 N.Y. Slip Op. 30286(U) (S. Ct. N.Y. Co. Jan. 18, 2011). However, these exceptions are infrequently applied, as the courts are unwilling to delve into the merits of the challenge in the face of the formidable body of case law requiring exhaustion. The result is that challengers must proceed on two fronts simultaneously: appealing before the administrative agencies while at the same time bringing the case to Supreme Court to seek a preliminary injunction they can never get and appealing from the denial thereof.

Knowing that the probability that they will be ordered to demolish their buildings decreases as their buildings rise, developers proceed full speed ahead and damn the torpedoes. In Comm. For Environmentally Sound Dev. v. Amsterdam Ave. Redev. Assoc., 2019 N.Y. Slip Op. 30621 (U) (Sup. Ct. N.Y. Co. March 14, 2019), for example, the petitioners argued that a proposed building at 200 Amsterdam Ave. was more than 30 stories taller than allowed. The Supreme Court annulled the BSA's determination and remanded, but did not enjoin construction. The developer was so confident that it would not be ordered to demolish its building that it proceeded with construction even in the face of this ruling. On June 25, 2019, the BSA reaffirmed its original determination on the same grounds as before, and the petitioners are now back in the Supreme Court. Meanwhile, the building is now topped out. It remains to be seen whether a court will order it trimmed back to its legal size and height.

Recent years have seen an explosion of development in New York City. Some new buildings are based on misinterpretations of the Zoning Resolution and exploitation of loopholes that the courts might have closed, if given the chance. Super-tall residential skyscrapers incorporate enormously tall supposed mechanical spaces in their middle sections whose sole purpose is to boost the height and prices of the apartments above — a loophole only partially closed by recent legislation. A developer is completing a building on a zoning lot from which it sliced off a tiny sliver solely to avoid having to comply with zoning rules that apply on side streets on Manhattan's Upper East Side — another loophole that the City Planning Department is addressing after the horse has left the barn. Another developer is racing to complete a building which has a bizarrely gerrymandered zoning lot the boundaries of which do not conform to those of any tax lots. Yet another developer proposed to shoehorn a new tower between existing buildings on a superblock by counting the square footage of the rooftop garden of a luxury building toward the required common open space that by law has to be accessible to all the residents of the zoning lot, including those who live in three middle-income rental buildings on that same lot. All these buildings were permitted by the Buildings Department and appeals from those permits were denied by the BSA. All were, or are, subjects of litigation, but the only one in which petitioners have so far succeeded is the last-mentioned one, where, because the proposed building was a nursing home that required State approval, the developer was unable to start construction while litigation was pending.

Community groups and neighbors can win cases against developers, but only if the project is not as-of-right, or if the need for other governmental approvals prevents construction from beginning until all litigation is resolved. See, e.g., Avella v. City of New York, 29 N.Y.3d 425 (2017); Peyton v. NYC Bd. of Standards and Appeals, 116 A.D.3d 120 (1^st Dept. 2018), Council of the City of N.Y. v. Dept. of City Planning of the City of N.Y., 2019 N.Y. Slip Op. 32332(U) (S. Ct. N.Y. Co., July 31, 2019).

What Can Be Done?

It could well be argued that the courts are overly solicitous of property rights, and that they should not be reluctant to fulfill the promise of Dreikausen by ordering demolitions where warranted. But short of a sea change in this regard, there are other changes that could give petitioners a fair chance of a remedy after construction starts.

Courts must be able to reach the merits promptly and, where warranted, issue a permanent injunction before construction has advanced too far. Unlike at the preliminary injunction stage, at the merits stage, petitioners only have to show that they are right on the law. They do not have to show irreparable harm or post a bond. The requirement that petitioners seek a preliminary injunction they cannot obtain is wasteful of the time and money of all concerned, and delays the merits adjudication. These cases truly embody the maxim that "justice delayed is justice denied."

Three changes would ameliorate this situation. First, the administrative appeals process should be accelerated. Prior to 1988, NYC Charter §669(c) provided for an automatic stay of any Buildings Department determination — whether adverse or favorable to the developer — upon appeal to the BSA. In 1988, over objections from the Real Estate Board of New York, this provision was repealed and replaced with a requirement that the BSA decide appeals "within a reasonable time," except for developers' appeals from revocation of a permit, which must be heard within five weeks. This accelerated timetable should be extended to all appeals when construction is ongoing, and a deadline should also be set for the BSA to issue its written decision.

Second, the Court of Appeals should retreat from the draconian holding of Dreikausen, and should hold that a petitioner is not required to prove its seriousness by seeking a preliminary injunction that it cannot get. It should suffice that a petitioner files an appeal to the BSA or, where appropriate, an action or proceeding directly in the Supreme Court. This would avoid the colossal waste of pointless motions and allow these cases to proceed to a judgment on the merits in time for that judgment to be effectual.

Third, to level the playing field between plaintiffs and defendants, Civil Practice Law & Rules (CPLR) 3212(a) should be amended to allow a plaintiff to move for summary judgment in an action before issue has been joined. Federal Rule 56(b) was similarly amended in 1948 to overcome a tactical advantage that defendants otherwise have: they can move to dismiss the complaint, whereas plaintiffs must wait to seek analogous relief until after adjudication of that motion and after the defendant files its answer. See, Wright & Miller ¶ 2717. Conforming the CPLR to the federal rule would go some way toward leveling what will still be a playing field tilted towards developers.

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John R. Low-Beer is Of Counsel at Kirby McInerney and practices pro bono and "low bono" law, representing plaintiffs in land use and environmental cases. This article also appeared in the New York Law Journal, a sibling publication of Commercial Leasing Law & Strategy.