Posted On: June 24, 2010

N.Y. Court of Appeals Reverses Appellate Division and Says Columbia University Condemnation May Proceed

In a rebuke to the Appellate Division First Department, the New York Court of Appeals today held that the condemnation of land on the upper west side of Manhattan to benefit Columbia University may go forward. In Matter of Kaur v New York State Urban Dev. Corp., the Court of Appeals reversed the Appellate Division rejection of the proposed condemnation and, in reliance on its recent holding in Matter of Goldstein v. New York State Urban Development Corporation, held that the findings of (1) blight, (2) that the petitioner's property qualified as a "land use improvement project" and (3) the finding of a "civic purpose" to the project, were "rationally based and entitled to deference."

The proposal is for development of a new 17 acre campus for Columbia University. Over the last decade Columbia has acquire a majority of the parcels in the area, however, a number of property owners have held out and this challenge is to the proposal by the Empire State Development Corporation (ESDC) to utilize its authority under the Eminent Domain Procedure Law (EDPL) to acquire the balance of the parcels within the area covered by ESDC's General Project Plan (GPP) to implement the Columbia proposal. After reviewing the history of the case, the Court reviewed and struck down each of the holdings of the Appellate Division.

The Court noted that the main argument in opposition was that the condemnation is not for the purpose of putting the properties to a "public use" within the meaning of the New York Constitution and that the findings of blight were arrived at in bad faith. The Court noted that in "Matter of Goldstein, we reaffirmed the longstanding doctrine that the role of the Judiciary is limited in reviewing findings of blight in eminent domain proceedings...Thus, given our precedent, the de novo review of the record undertaken by the plurality of the Appellate Division was improper. On the "record upon which the ESDC determination was based and by which we are bound" (id. at 517, citing Matter of Levine v New York State Liq. Auth., 23 NY2d 863, 864 [1969]), it cannot be said that ESDC's finding of blight was irrational or baseless. Indeed, ESDC considered a wide range of factors including the physical, economic, engineering and environmental conditions at the Project site. Its decision was not based on any one of these factors, but on the Project site conditions as a whole. Accordingly, since there is record support — "extensively documented photographically and otherwise on a lot-by-lot basis" (id. at 526) — for ESDC's determination that the Project site was blighted, the Appellate Division plurality erred when it substituted its view for that of the legislatively designated agency."

The Court then went on to discount the claim of bad faith by ESDC, noting that the ESDC had undertaken multiple studies of the area and, in rejecting any findings by the Appellate Division to the contrary, found no support in the record for any finding of bad faith.

The next claim discussed was that the term used to define a blighted area "substandard or insanitary area" is void for vagueness. In likewise rejecting that claim the Court stated: "blight is an elastic concept that does not call for an inflexible, one-size-fits-all definition (see Berman v Parker, 348 US 26, 33-34 [1954]). Rather, blight or "substandard or insanitary areas," as we held in Matter of Goldstein and Yonkers Community Dev. Agency, must be viewed on a case-by-case basis. Accordingly, because the UDC Act provides adequate meaning to the term "substandard or insanitary area," we reject petitioners' argument that the statute is unconstitutionally vague on its face."

Then in dismissing the finding by the Appellate Division, which seemed (at least to some) the most likely to separate this case from others and form a basis for upholding that decision, the Court of Appeals reversed the lower court's finding that the area was not blighted before the majority of the properties were acquired by Columbia and that Columbia, in effect, caused the current blighting condition by vacating and neglecting the properties it had acquired.

"In determining that Columbia created the blighted conditions in West Harlem, the plurality of the Appellate Division disregarded the Urbitran blight study commenced in 2003. That study, made at EDC's request and not ESDC's, was based on a survey of the Project site and surrounding neighborhood at a time when Columbia was only beginning to purchase property in the area. Indeed, the Urbitran study unequivocally concluded that there was "ample evidence of deterioration of the building stock in the study area" and that "substandard and unsanitary conditions were detected in the area." Moreover, Earth Tech found that, since 1961, the neighborhood has suffered from a long-standing lack of investment interest. Thus, since there is record support that the Project site was blighted before Columbia began to acquire property in the area, the issue is beyond our further review."

In further rejecting the Appellate Division determination that this is a private project, the Court concluded that this project fell with the UDC Act definition of a a "civic project." It noted that this is an educational institution and that "education and the expansion of knowledge are pivotal government interests." Further, the Court noted other civic benefits from the project such as open space, transit infrastructure improvements and job growth.

Finally, the Court rejected the claim that there was a deprivation of due process because of a FOIL violation, which was later remedied in favor of the property owners. Noting first that there is no discovery permitted in this phase of a condemnation proceeding, the Court held that the release of substantial numbers of documents (8,000 pages) as well as the lengthy submission made by the objectors demonstrated that they had a fair opportunity to present their case.

"Here, petitioners have not met their burden, neither explaining how they were deprived of a meaningful opportunity to be heard during the administrative process nor demonstrating the materiality of the records sought through FOIL."

The Court therefore conclude:

"In sum, we give deference to the findings and determination of the ESDC that the Project qualifies as both a land use improvement project and as a civic project serving a public purpose under the UDC Act. We further conclude that petitioners were not deprived of procedural due process."

-Steven Silverberg

Posted On: June 17, 2010

Another Vested Rights Decision From The N.Y. Court of Appeals

The Court of Appeals ruled today that owners of a landfill had a vested right to use all 50 acres of their property as a landfill, even though they had only used 3 acres before more restrictive zoning was implemented. In Matter of Jones v Town of Carroll the court found that landfill operations were similar to mining operations and therefore the Court's recent holding in Glacial Aggregates LLC v. Town of Yorkshire, in which the Court concluded that for mining operations the expense of the permitting process, coupled with taking forty truck loads of material for testing, removal of timber and surveying a road and mining areas was sufficient to establish a vested right to the use and manifest an intent to mine the area, was applicable to this case and warranted a finding of vested rights (see our 2/18/10 Blog on the Glacial Aggregates case).

Originally the Plaintiffs had received a variance to operate a landfill from the Town as long as they obtained permits from the DEC to operate the landfill. Plaintiffs later received a permit from the DEC to operate a landfill on only 3 of the 50 acres. In 2005 the Town changed the zoning and prohibited the expansion of any landfill. Plaintiffs challenged the law and won in the Supreme Court. The Appellate Division reversed finding that, since a condition of the variance was obtaining DEC permits and the permit was limited to 3 acres, there was no vested right to use the remaining 47 acres as a landfill, as such use was merely contemplated.

The Court of Appeals reversed finding that the owner had a vested right to use the entire 50 acres as a landfill. The Court held: "the use of property as a landfill, like a mine, is unique because it necessarily envisions that the land itself is a resource that will be consumed over time. Additionally, the owner of landfill property can reasonably be expected to hold a portion of the land in reserve for future expansion of that activity, just as a quarry operator may find necessary. The fact that the DEC permit covered only a limited area is not determinative of plaintiffs' rights over the remaining 47 acres of the parcel (see Buffalo Crushed Stone, 13 NY3d at 101-102). Instead, the factors to examine are whether the operation of a C & D landfill was a lawful use on the property prior to the enactment of the 2005 zoning law and whether plaintiffs' activities before that time manifested an intent to utilize all of their property in a manner consistent with that purpose."

In finding that the use was legal when established and that the owner had manifested the requisite intent to utilize the entire property the Court stated:

"In 1989, the Town had acknowledged that there was no other reasonable use for the property and granted plaintiffs a variance that covered all 50 acres. This not only established that the landfill was a lawful use, it also gave plaintiffs a measure of security that they would be able to use additional acreage for the landfill operation as the need arose so long as DEC continued to issue the appropriate permits for expanded operations. The evidence also shows that plaintiffs manifested an intent before 2005 to devote the 50-acre parcel to use as a landfill since they dedicated substantial areas around the actual landfill site for related purposes, purchased necessary heavy equipment (such as a bulldozer, a backhoe, an excavator, a loader and a dump truck), employed a dozen people, developed plans for multi-stage enlargement of the landfill and engaged in discussions with investors regarding future operations. On these facts, plaintiffs adequately demonstrated that they acquired a vested right to operate a C & D landfill on their entire parcel, subject to regulation by DEC, and that the 2005 local law could not extinguish their legal use of the land for that purpose.["

This decision, while placing emphasis again on the uniqueness of the use, would appear to open the door, once again, to further interpretation of the law regarding vested rights.

-Steven Silverberg

Posted On: June 6, 2010

Condemnation Award Will Not Be Disturbed On Appeal If Based On Evidence

An appellate court upheld an award for condemnation of land underwater as well as denial of consequential damages for a partial taking, in a case where part of a residential subdivision was taken for parkland. In Matter of Board of Commr. of Great Neck Park Dist. of Town of N. Hempstead v Kings Point Hgts., LLC, the Appellate Division Second Department upheld the decision of the lower court noting that if the lower court's "explanation of its award is supported by the evidence, it is entitled to deference and will not be disturbed on appeal...."

The property at issue was just over 6 acres, including almost an acre of underwater land. The taking was 2.3 acres, including the underwater land. The property owner sought consequential damages claiming that by creating a park the value of the remaining land it owned was reduced, as the park reduced privacy. The park district's appraiser claimed that the park enhanced the value of the remaining property because it provided an unobstructed view of Long Island Sound as a result of restrictions on the use.

The Court noted in determining damages:
"[t]he measure of damages for a partial taking of real property is the difference between the value of the whole property before the taking and the value of the remainder after the taking...Consequential damages are measured by the difference between the before and after values of the property, less the value of the land and improvements appropriated...The measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time..." and where a partial taking enhances the value of the remaining land "the Supreme Court was precluded from taking that enhanced value into account in rendering the award."

The Court concluded the determination by the lower court that the park actually enhanced the value of the remaining land was supported by the evidence and therefore the lower court was correct in not modifying the award based upon the effect of the taking on the remaining land. As for the issue of land underwater, the Court noted there were letters patent granting title to that land and therefore the property owner was entitled to damages for the taking.

-Steven Silverberg