Daily Development for Wednesday, August 27, 2008
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Husch Blackwell Sanders
Kansas City, Missouri
ZONING AND LAND USE; PROCEDURE; BASIS FOR DENIAL: Department of Buildings application may deny a permit to build a dormitory on the grounds that Applicant had not demonstrated that, as a practical matter, it could actually use the building as a dormitory.
9th & 10th Street L.L.C. v. Board of Standards and Appeals of the City of New York, 885 N.E.2d 881 (N.Y.App. 2008).
Applicant acquired a lot from the City of New York on East 9th Street in Manhattan that previously had been occupied by a former school building. Deed restrictions limited development of the property to a “Community Facility Use” as defined by the New York City Zoning Resolution. The Resolution permits the development of “student dormitories.”
Applicant submitted an application to construct a nineteen story “dormitory” on the property, to be configured much like a traditional apartment building. The applicable zoning restrictions allow dormitory buildings of such a height, but limit apartment buildings to ten stories. The Department stressed that a building qualifies as a dormitory only if it is operated by, or on behalf of, a college or school. The Department demanded that a “nexus” be established with an educational institution before it would approve the proposed structure. Applicant created an entity, University House Corp., to which it committed itself to lease the property for at least 10 years, guaranteeing that the entity’s board of directors would consist exclusively of persons appointed by educational institutions. Applicant, however, did not identify any such institutions that had expressed interest in participating in using the proposed structure for student housing.
The Department subsequently denied the building permit application. Applicant appealed the determination, but the City Zoning Board of Appeals (the “Board”) affirmed the denial. Applicant then brought an Article 78 proceeding to annul the Board’s ruling. The Supreme Court, New York County, denied Applicant’s petition. Upon Applicant’s appeal, the Supreme Court, Appellate Division, reversed on the grounds that a building permit could not be denied on the basis of a possible future illegal use and remanded to the lower court. The Board appealed.
The Court of Appeals of New York acknowledged that the mere possibility of a future illegal use remains an inadequate reason for withholding a building permit. In Matter of Di Milla v. Bennett, 149 A.D.2d 592 (N.Y. 2nd Dept. 1989), and Matter of Baskin v. Zoning Bd. Of Appeals of Town of Ramapo, 358 N.E.2d 1037 (N.Y. 1976), the court held that a building permit could not be denied on the basis of a possible future illegal use. In both cases, however, the Court noted, the reviewing courts found that authorities had improperly denied permits due to feared future illegal uses, not because the legal use proposed was either unlikely or impractical.
Where, as here, however, officials reasonably feared that the proposed legal use will prove impracticable, it is proper to require the applicant to demonstrate the feasibility of its proposal. Here, the Department doubted that dormitory use would ever be plausible, and requested assurances, in the form of some institutional connection, that such a use would indeed be possible, which Applicant did not provide. Use of a nineteen story building as an apartment complex instead of a dormitory would violate applicable zoning laws. Thus, the court held that city officials did not act arbitrarily or capriciously in trying to avoid the dilemma of having to either waive such zoning restrictions or require that the building be torn down in the event that the building was constructed and could not be used as a dormitory.
Comment: New York, of course, has an incredibly dense set of zoning and permitting regulations and basically decides many cases on a “parcel by parcel” basis. One assumes that a reviewing court, evaluating the system as a “uniform zoning scheme,” would simply throw up its hands and say that the special problems of a dense area like New York defy any meaningful generalization.
Even given that, however, the editor is a bit skeptical of the denial of an otherwise lawful permit on the grounds that the development scheme is not practical. This is basically admitting that, after the developer has rolled the dice and invested substantially in development of a dormitory, and failed the local authorities will roll over and let the developer use the building for apartment use. The editor admits that there’s some logic in this thinking.
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