REDEVELOPMENT: HOW DOES AN OWNER STAND ITS GROUND?

          This article is written from the New York State perspective.  There are factors in play in New York which are very different from the remainder of the country.  First, Kelo v City of New London, 545 US 469 (2005) hardly presented a shock to the New York condemnation bar.  New York’s law was always, and still is, decidedly slanted towards condemnors.  Secondly, redevelopment never stopped.  There was never any recession impact on redevelopment.

Authorizing and Challenging the Condemnation

Article 2 of New York’s Eminent Domain Procedure Law sets forth the prescribed way that property is to be acquired by eminent domain.  EDPL Section 201 provides that there must be public hearings for both state and non-state takings at a location reasonably proximate to the property.  It is essential that notice be given by publication and by personal service or certified mail, return receipt requested, to each assessment record billing owner or his or her attorney of record, as required by Section 202.

          The hearing is not only about the project, but it also is to serve to give information concerning the impact of the taking on the claimant’s remaining land, and alert the condemnors to factors that might make the acquisition of the subject property far more expensive than originally contemplated.  A condemnor may not know that the subject property is actually used in conjunction with another non-adjacent piece or that zoning has changed.  All condemnors must take findings on specific issues.  Section 204 provides that:

(B) The condemnor, in its determination and findings, shall specify, but shall not be limited to the following:

1. the public use, benefit or purpose to be served by the proposed public project;
2. the approximate location for the proposed public project and the reasons for the selection of that location;
3. the general effect of the proposed project on the environment and residents of the locality;
4. such other factors as it considers relevant.

Procedure to Challenge/EDPL Section 207 Petition

          Ninety days after the conclusion of a public hearing, which is jurisdictional, a condemnor is to make a Determination and Findings concerning the proposed public project.  N.Y. Em. Dom. Proc. Law § 204(A).  Many condemnors hold the hearing open for an additional period of time for submissions of further comments or materials.  There is a requirement to publish a synopsis of the determination in at least two successive issues of a newspaper.  Id. § 204(A).  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). 

          Although Section 207(C) of the EDPL only provides four areas of review, it is clear that there are at least two additional grounds for granting a petition to set aside a Determination and Findings – an “excess taking” can be challenged as well as a “pretext taking.”  Id.

          A petitioner will find it extremely difficult to prevail and have a petition granted to reject the condemnor’s Determination and Findings.  If an adequate basis for determination is shown and the objector cannot show that the determination was without foundation, the agency’s determination will be confirmed. 

          The most successful challenge is based on the failure to conduct a proper environmental study.  Section 207(C)(3) of the EDPL requires compliance with the State Environmental Quality Review Act (SEQRA).  The leading case in New York dealing with SEQRA is Jackson v New York State Urban Development Corp., 69 NY2d 400 (1986).  Judge Kaye, who wrote the decision involving a challenge to the 42^nd Street Development project, stated:  “The heart of SEQRA is the Environmental Impact Statement (EIS) process….  Under the act, an EIS must be prepared regarding any action that ‘may have a significant effect on the environment.’”  Id. at 415.  It was held that SEQRA “does not require an agency to impose every conceivable mitigation measure, or any particular one,” but rather, “requires the imposition of mitigation measures only ‘to the maximum extent practicable.’”  Id. at 422.  Essentially, what was required was to identify those impacts of the proposed development and to take “a hard analytical look at them.”  Id. at 426.

          The entire holding thus can be summarized, as it was recently by the Appellate Division, Second Department, as the condemnor identifying ‘“the relevant areas of environmental concern,’ [taking] a ‘hard look’ at them, and [making] a ‘reasoned elaboration’ of the basis for its determination.”  Gyrodyne Co. of America, Inc. v State Univ. of N.Y. at Stony Brook, 17 AD3d 675, 676 (2d Dept. 2005) (citations omitted).  Even a major change in the project, specifically the removal of a new football stadium for the New York Jets and the proposed enlargement of the Javits Convention Center was not enough to render reliance on an environmental study to “give rise to the need for the preparation of a supplemental EIS (SEIS).”  C/S 12^th Ave., LLC v City of New York, 32 AD3d 1, 7 (1st Dept. 2006).  The new stadium was to be Mayor Bloomberg’s centerpiece for the City’s bid for the 2012 Olympics but was vetoed by the Assembly Speaker.  Charles v Bagli & Michael Cooper, Bloomberg’s Stadium Quest Fails; Olympic Bid Is Hurt, N.Y. Times, June 7, 2005 at A1.  This is not to say that condemnor cannot fail to comply with SEQRA.  In Sun Company, Inc. v City of Syracuse Industrial Development Agency, which involved the Carousel Landing Shopping Mall project in Syracuse, New York, the proposed taking was rejected because of the failure “to consider all the environmental ramifications of the …[p]roject and …to analyze reasonable alternatives….”  209 AD2d 34, 50 (4th Dept. 1995).  Since SEQRA mandates the preparation of an EIS when the proposed action may include the potential for at least one significant environmental effect, “there is a relatively low threshold for the preparation of an EIS.”  Uprose v Power Auth. of N.Y., 285 AD2d 603, 608 (2d Dept. 2001); see Silvercup Studios, Inc. v Power Auth. of N.Y., 285 AD2d 598, 600 (2d Dept. 2001).

          All in all, it is very difficult to stop a condemnation in New York.