DOES ACQUIRING PROPERTY TO RETURN IT TO PRODUCTIVE USE SERVE A VALID PUBLIC PURPOSE? OR, IS LAND BANKING SPECULATIVE AND IMPROPER?

          The Second Department handed down two decisions in two consecutive weeks deciding challenges to determinations adopted to condemn property by eminent domain for the purpose of returning the property to productive use in accordance with the City of Yonkers Master Plan in two separate urban renewal plans.  Matter of One Point St. Inc. v City of Yonkers Indus. Dev. Agency, ____ AD3d ____, 2019 NY Slip Op 01769 (March 13, 2019); Matter of City of New York v Yonkers Industrial Development Agency, ____ AD3d ____, 2019 NY Slip Op 02087 (March 20, 2019).  Both Challenges arose by virtue of petitions filed pursuant to Section 207 of the Eminent Domain Procedure Law which is the exclusive way to challenge a proposed condemnation in New York.  EDPL Sec. 204.

          The challenge of a Determination and Findings must be made by filing a petition pursuant to Section 207 of the EDPL within thirty days of the condemnor’s publication of its synopsis of the Determination and Findings.  Id. § 204(A).  This is an extremely limited time period.  As adopted, Section 207 of the EDPL mandates that the petition is to be an original proceeding filed in the Appellate Division embracing the county where the property was located.  Further, only a “condemnee” as defined by Section 103(c) of the EDPL could file a petition.  See East Thirteenth St. Cmty. Ass’n. v N.Y. State Urban Dev. Corp., 84 NY2d 287, 296 (2d Dept 1994); see also McCarthy v Town of Smithtown, 19 AD3d 695, 696, 555(App. Div. 2005) (a non-condemnee is entitled only to a properly conducted hearing held on proper notice).  The EDPL provides that the scope of review is limited to four issues:

  1. Was the proceeding in conformity with Federal and State constitutions;
  2. Whether the proposed acquisition is within the condemnor’s statutory jurisdiction or authority;
  3. Whether the condemnor’s determination and findings were made in accordance with procedures set forth in this article [Article 2] and with Article 8 of the Environmental Conservation Law (SEQRA); and
  4. Whether a public use, benefit, or purpose will be served by the proposed acquisition.  N.Y. Em. Dom Proc. Law § 207(C). 

Other Grounds for a Petition Under Section 207 of the EDPL

          The remaining grounds for a Section 207 petition under the EDPL are that the condemnor is making an excessive taking, that the project is a pretext and that the proceeding is being brought in bad faith.  See Waldo’s, Inc., 74 NY2d 718, 720-722; Pfohl v Vill. of Sylvan Beach, 26 AD3d 820 (4th Dept. 2006).  A condemnor may not take, through use of eminent domain, property not necessary to fulfill a public purpose.  Hallock v State of New York, 32 NY2d 599, 604 (1973).  Nor could it condemn a fee interest when an easement would be sufficient.  Davis Holding Co. v Vill. of Margaretville, 55 AD3d 1101, 1104 (2d Dept. 2008); see also Feeney v Town of Harrison, 4 AD3d 428, 428-29 (2d Dept. 2004).  There is, however, deference to the condemnor which “has broad discretion in deciding what land is necessary to fulfill that purpose” of the condemnation.  Rafferty v Town of Colonie, 300 AD2d 719, 723 (3d Dept. 2002); Wechsler v New York Dep’t of Envtl. Conservation, 153 AD2d 300, 303, aff’d, 564 NE2d 660 (N.Y. 1990).

          The second additional challenge is the general classification of a pretext taking.  Here the proposed taking is really a sham.  There is no public benefit, or purpose, but rather a pretextual justification for providing property to another person.  An example was the Village of Haverstraw’s attempt to condemn property to assist its developer in meeting its affordable housing obligation and to reduce costs to the developer.  49 WB, LLC v Vill. of Haverstraw, 44 AD3d 226, 235 (2d Dept. 2007).  It is clear that “[a] purely private taking could not withstand the scrutiny of the public use requirement; it would serve no legitimate purpose of government and would thus be void.  Haw. Hous. Auth. v Midkiff, 467 US 229, 245 (1984).

          There is one other valid challenge which was set forth in the City of New York decision, property presently used for a public purpose may not be condemned.  We discuss this in full at the bottom of this article.

          In both recent cases, the Appellate Division held that the condemnor’s stated purposes were not so vague as to be illusory.  The Court noted that the petitioners’ unsubstantial allegations fall short of the “clear showing” necessary to establish that the agency acted in bad faith, citing Matter of 265 Penn Realty Corp. v City of New York, 99 AD3d 1014, 1015.  The Court also noted that the desired public purpose was “rational” and there was no basis to disturb it.

          But there should be present more than a “rational” public purpose. 

          In the City of New York decision, the Court noted that in reviewing a municipality’s determination of eminent domain, the Court must determine whether “a public use, benefit or purpose will be served by the proposed acquisition.”  EDPL Sec. 207 [c] [4].

The Taking Should Be Necessary

          We believe that the proposed taking should also be “necessary” for the public purpose.  As we noted, New York has limited condemnation of land not necessary for the project… “No more may be taken than is required for the particular public purpose.”  Hallock v State of New York, 32 NY2d 599 (05/1973).  It seems clear that if it is not necessary for the public project, the taking should not occur.  To allow a future taking of property “to return it to productive use” is simply speculative and should not be permitted.  It amounts to land banking which is not a public purpose.

          Recently, New Jersey struck down a proposed taking to take land in an “area in need of redevelopment.”  The stated public purpose was “redevelopment” and “increasing the availability of public parking,” but there were no present plans for the construction of parking facilities.  The New Jersey Appellate Division did not agree the taking was “necessary” for the redevelopment project.  So, there must be need for the property directly related and linked to the project, not just a plan.  Borough of Glassboro v Grossman, ________ N.J. Super (App. Div. Jan. 7, 2019).

Posted in Challenges to Condemnation, EDPL Sec. 207, Land Banking, Speculative Taking, Uncategorized
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