Zoning and Land Use: A Tale of Two Cities?

Continuing a trend reported in our Sept. 9, 2020 alert (“Zoning and Land Use: Turning the World Right-Side Up Again”), the Appellate Division for the First Department, which exercises appellate jurisdiction over courts in Manhattan, has reversed two more decisions by Supreme Court judges who had startled the development community with rulings in favor of neighborhood-based challenges to controversial projects. At the same time, however, judges in Brooklyn have interceded in a dramatic and unprecedented way in the City Planning Commission’s efforts to restart its Uniform Land Use Review Procedure (ULURP) functions after a monthslong suspension caused by the COVID-19 pandemic.

Our prior alert reported on (1) the Appellate Division’s July 23, 2020 reinstatement of the Inwood rezoning (N. Manhattan Is Not For Sale v. City of N.Y., 185 A.D.3d 515, lv. to appeal denied, ___ N.Y.3d ___, Mot. No. 2020-606 [Nov. 23, 2020]) and (2) the same court’s Aug. 27, 2020 rejection of the claim by the City Council and the Manhattan Borough President (BP) that the Planning Commission’s approval of three projects in the Lower East Side’s Two Bridges neighborhood was subject to ULURP and therefore required review by the BP and review and approval by the Council (Council of City of N.Y. v. Dep’t of City Planning, 188 A.D.3d 18, motion for lv. to appeal pending, Mot. No. 2020-942).

In 2021, more good news has come from the Appellate Division (although the decisions remain subject to possible further review by the Court of Appeals in Albany).

In February, the Appellate Division reversed two Supreme Court rulings in favor of community groups and neighborhood residents who mounted separate challenges to the Two Bridges projects. Project opponents argued that the Planning Commission’s approval of the projects should be annulled for failure to make certain findings. The issue was whether Zoning Resolution provisions governing a “Large Scale Residential Development” (LSRD) required the Planning Commission to make those findings. The statute defines an LSRD as one or more contiguous zoning lots (including lots separated by a street or intersection) that contain at least 1-1/2 acres and three buildings or 500 dwelling units and are “used predominantly for residential use.” The statute treats the zoning lots in an LSRD as a single unit for some purposes so as to allow greater flexibility in zoning compliance.

The Supreme Court judge held that, because the projects required that the Planning Commission approve modifications to the LSRD’s site plan and calculations demonstrating zoning compliance within the LSRD, the Planning Commission was obligated to make various findings. In reversing, the Appellate Division ruled that for the same reason the projects are not subject to ULURP — i.e., they comply with the zoning requirements applicable to the sites and do not require the Planning Commission to allow variation from those requirements — the findings requirement invoked by the Supreme Court judge does not apply. The appellate court held that the judge “should have deferred to” the Planning Commission’s “reasonable interpretation of the [Zoning Resolution] not to require” that those findings be made. Tenants United Fighting for the Lower East Side v. City of N.Y. Dep’t of City Planning, 2021 NY Slip Op. 01018 (1st Dep’t Feb. 16, 2021).

Even more recently, the Appellate Division reversed a Supreme Court ruling that the topped-off 55-story residential building at 200 Amsterdam Ave. is illegal and must be partially demolished. The issue in the case is whether a “zoning lot” — i.e., the basic unit of land used for measuring compliance with the Zoning Resolution — may include partial tax lots or must be comprised exclusively of entire tax lots. The Zoning Resolution contains multiple definitions of what qualifies as a zoning lot, but the relevant definition — the “(d) definition” — provides that a zoning lot is “a tract of land, either unsubdivided or consisting of two or more lots of record contiguous for a minimum of ten linear feet, located within a single block, which at the time of the filing for a building permit … is declared to be a tract of land to be treated as one zoning lot for the purposes of this resolution.” Got that? As the Appellate Division pointed out, “[t]he terms ‘tract of land,’ ‘unsubdivided,’ and ‘lot of record’ are not defined” in the statute.

In what the Zoning Resolution’s drafters presumably thought would be helpful clarification, the statute further provides that “[a] zoning lot … may or may not coincide with a lot as shown on the official tax map of the City of New York, or on any recorded subdivision plat or deed.” In 1978, shortly after the (d) definition of a zoning lot was added to the statute, the Department of Buildings (DOB) issued a memorandum to provide guidance for implementation of the new definition. The memorandum stated that a zoning lot “may consist of one or more tax lots or parts of tax lots, as shown on the official tax map” (emphasis added). This remained DOB’s interpretation for decades. In reliance on this interpretation, (1) the zoning lot on which the 200 Amsterdam building was constructed was assembled over a period of years by merging together parts of multiple tax lots and incorporating in the project the unused development rights generated by those parts, (2) the building was designed, (3) the building was approved by DOB and a New Building permit was issued, (4) DOB reaffirmed the permit’s validity after conducting an audit in response to neighbors’ objections, (5) construction commenced and continued apace, (6) the Board of Standards and Appeals (the BSA) denied an appeal by project opponents and affirmed DOB’s decision to issue the permit for the building, and (7) the BSA reaffirmed and expanded on its decision after the Supreme Court vacated the BSA’s initial decision and remanded the matter to the BSA for further consideration.

Inconveniently, however, during the course of these proceedings, DOB published a draft bulletin indicating its intention to rescind the 1978 memorandum insofar as it approved the inclusion of partial tax lots in a zoning lot. At the same time, DOB adhered to the position that its issuance of a New Building permit for the 200 Amsterdam project was proper despite the project’s dependence on the inclusion of partial tax lots in its zoning lot.

After all these events — and despite the fact that the building by then had been topped off at its full 55 stories in height — the Supreme Court judge struck down the BSA’s second decision. The court reasoned that the language of the Zoning Resolution’s (d) definition is clear and unambiguous and only can be interpreted to mean that a zoning lot must be comprised exclusively of entire tax lots; therefore, the project was unlawful and overbuilt and must be partially demolished.

The Appellate Division saw the case differently and reversed:

We find that the law is “not entirely clear and unambiguous when read as a whole,” as it contains undefined technical terms and is capable of conflicting interpretations. In addition to not defining “lot of record” and “unsubdivided,” nothing in the language of subsection (d) requires that a tract of land be comprised of “entire” lots of record — whether they be tax lots, recorded plats or deeds, or some other recorded interest. Thus, we defer to the BSA’s interpretation since it involved “special expertise in a particular field to interpret statutory language,” and its decision was not “counter to the clear wording” of ZR § 12-10(d).

Comm. for Environmentally Sound Dev. v. Amsterdam Ave. Redevelopment Assocs. LLC, 2021 NY Slip Op. 01228 (1st Dep’t Mar. 2, 2021) (internal citations omitted). The court further held that, in any event, the challenge to the project had become moot and was no longer actionable because the opponents had allowed the building to become “substantially complete” without seeking injunctive relief to stop construction at every stage of the litigation.

But the appellate court’s learning may not have crossed the East River. Two cases now pending in the Supreme Court, Kings County, are troublesome for the development community. In both cases, opponents of proposed rezonings have succeeded in persuading Supreme Court judges to issue a temporary restraining order (TRO) that stops the Planning Commission from certifying ULURP applications as complete and commencing public hearings pursuant to ULURP. The basis for the TROs are claims that the Planning Commission and the affected community boards should not be allowed to conduct ULURP-required hearings remotely during the COVID-19 pandemic. One case has stopped the Planning Commission from proceeding with the city’s own proposal to rezone the Gowanus neighborhood. Friends & Residents of Greater Gowanus v. City of N.Y., Index No. 501178/2021. The other case has stopped the Planning Commission from proceeding with a developer’s revised and scaled-down proposal for a project that has engendered controversy due to its proximity to the Brooklyn Botanical Garden. Boyd v. Von Engel, Index No. 001687/2020. While these lawsuits are premised on the alleged inadequacy and illegality of remote public hearings, these claims may be pretextual, with the opponents’ real goal being to delay ULURP hearings long enough to prevent completion of the process before a new Mayor and City Council take office on Jan. 1, 2022.

No final decision has been rendered by the court in either case. However, the issuance of TROs in these cases is inconsistent with some basic, well-established legal principles — including the principle that courts should not prevent legislative or administrative bodies from taking actions that are within their jurisdiction, and the principle that parties should exhaust their administrative remedies by seeking relief from the relevant agencies before they ask a court to intervene. And it is incongruous to see a court that is holding its hearings remotely due to the pandemic take so seriously claims that the Planning Commission and community boards should not be allowed to conduct their own hearings remotely during the pandemic.