This post is authored by Michael Rikon.
Ramfis Realty, Inc. v. The City of New York, is a written decision published at 37 Misc.3d 1207(A), in which a Brooklyn Judge sitting in Supreme Court of Richmond County corrected a major abuse by the New York State Department of Environmental Conservation (DEC). The two main issues that existed at trial were whether a potential buyer would have been permitted to build under a Consent Order entered into between the DEC and the owner, and where the exact boundaries between the wetland and wetland adjacent upland areas lay, which critically impacted the development potential of the site.
The subject property was a 6.35 acre parcel located on Father Capodanno Boulevard in the South Beach neighborhood of Staten Island. In the late 70’s, the property commenced construction of an 8-story hotel complex. The building department of the City of New York approved the existing buildings on the property and approved the future plans, issuing a building permit for the property owner to demolish the existing buildings and begin construction and the driving of piles for a new building. (It is worth noting at this point that the Wetlands Act was enacted in 1975.) The testimony at trial established that over 220 piles were driven for the project, but that progress stopped in 1983 when the New York State DEC issued a Notice of Violation to the owners, alleging that they had illegally filled wetlands. A cease-and-desist order was issued and the project came to a halt. The result of this was a Consent Order entered into by the parties, providing that in the event a permit to fill was not granted, the owner (Ramfis) would be require to remove all fill within 60 days of being notified of the denial of a permit to fill, and to restore the site to its pre-violation condition within 90 days of the notice of denial.
At this time no map indicating the presence of wetlands on this property existed. Nothing was on file in Staten Island or elsewhere Nevertheless, the property owner attempted to work with the DEC and hired environmental consultants who proposed various solutions to the State, including mitigation by improving the wetlands to create a small pond and adding additional planting to the property. Indeed, over 4 formal mitigation proposals and 12 informal mitigation proposals were submitted to the DEC. In addition, the property owner bought an adjoining large parcel to serve as an enhanced mitigation area which would hold a lake and appropriate plants in exchange for being able to build on the other part of its property. In spite of these efforts, the mitigation proposals were always rejected.
On May 28, 2008, the City of New York took title to the property as part of its South Beach Bluebelt system. Up until that date, any effort to move forward to develop the property was rebuffed by the DEC, and just as troubling, every request by the owner to the DEC to delineate specific boundaries for the wetlands and wetland adjacent upland areas went unanswered. The expert testimony at trial indicated that no wetlands were ever filled illegally, but rather that the fill was “historic” fill, predating the enactment of the 1975 Wetlands Act.
The City argued that the Consent Order entered into by the parties would preclude development of the property because it prevented the owner from obtaining a permit. However, the court explicitly rejected that argument, finding instead that the consent order would be a “point of negotiation” between the DEC and whatever owner or developer sought a permit. Thus, having determined that the 1983 Order would not have been an “insurmountable bar” to obtaining a permit to build, the court turned to the difficult question of whether sufficient wetlands adjacent upland area existed to support a sufficient buffer so that the DEC would grant a permit for development as proposed by Claimant’s expert.
At trial, only the Claimant’s expert prepared a map indicating the boundaries of the wetlands and adjacent upland areas. The City’s expert did not prepare his own map and instead relied upon previous maps, prepared in 1981 and 1987 respectively, neither of which the Court found satisfactory to depict the boundary of the wetland and wetland adjacent uland portions of the property. Again, the DEC had repeatedly refused the owner’s requests to delineate the property or to confirm prior wetland delineations performed over 20 years prior to title vesting, based on the alleged presence of illegal fill at the site. The United States Army Corps of Engineers, which shared jurisdiction over wetlands with the DEC, did inspect the property and confirmed the delineation made previously.
The DEC’s missteps went beyond its refusals to grant a permit or confirm the wetland delineations. At the trial, the City called as a witness an assistant regional attorney of the DEC to provide fact evidence and expert opinion. Not only did the DEC provide this kind of expert opinion, but he also assisted the City’s experts and provided counsel the City’s trial assistants as to how to try the case. These actions were directly contrary to the official regulations which state that no one subpoenaed from the DEC shall offer expert opinion. The attorney testified at trial that he was surprised at the magnitude of the claimant’s valuation and that it was not suited for the purpose for which it was cited. The court specifically noted that while this expert “had no material interest in the outcome of the case, he was not a disinterested expert.”
The court specifically noted the DEC’s refusal to confirm delineations based on allegations of illegal fill were contrary to statute and case law. The court awarded $7,992,000 plus interest which brought the total award above $10 million. The City’s appraised damages were $846,000.
The Claimant is now preparing an application under EDPL 701 to recover legal appraisal and other expert fees expended in this litigation. Two earlier decisions on motions were decided in this case: The first was Claimant’s motion leading for a court Order to obtain an advance payment, and the second was a denial of the City’s motion to re-argue that Order.