Bowers Dev., Inc. v. Oneida Cnty. Indus. Dev. Agency
| Decision Date | 23 December 2022 |
| Docket Number | 764,OP 22-00744 |
| Citation | 211 A.D.3d 1495,181 N.Y.S.3d 412 |
| Parties | In the Matter of BOWERS DEVELOPMENT, LLC, and Rome Plumbing & Heating Supply Co., Inc., Petitioners, v. ONEIDA COUNTY INDUSTRIAL DEVELOPMENT AGENCY and Central Utica Building, LLC, Respondents. |
| Court | New York Supreme Court — Appellate Division |
FOGEL & BROWN, P.C., SYRACUSE (MICHAEL A. FOGEL OF COUNSEL), FOR PETITIONERS.
PAUL J. GOLDMAN, ALBANY, FOR RESPONDENT ONEIDA COUNTY INDUSTRIAL DEVELOPMENT AGENCY.
COHEN COMPAGNI BECKMAN APPLER & KNOLL, PLLC, SYRACUSE (LAURA L. SPRING OF COUNSEL), FOR RESPONDENT CENTRAL UTICA BUILDING, LLC.
PRESENT: WHALEN, P.J., NEMOYER, CURRAN, BANNISTER, AND MONTOUR, JJ.
It is hereby ORDERED that the determination is annulled on the law without costs and the petition is granted.
Memorandum: Petitioners commenced this original proceeding pursuant to EDPL 207 seeking to annul the determination of respondent Oneida County Industrial Development Agency (OCIDA) to condemn certain real property by eminent domain. Pursuant to EDPL 207 (C), this Court "shall either confirm or reject the condemnor's determination and findings." Our scope of review is limited to "whether (1) the proceeding was constitutionally sound; (2) the condemnor had the requisite authority; (3) its determination complied with [the State Environmental Quality Review Act (SEQRA)] and EDPL article 2; and (4) the acquisition will serve a public use" ( Matter of City of New York [Grand Lafayette Props. LLC] , 6 N.Y.3d 540, 546, 814 N.Y.S.2d 592, 847 N.E.2d 1166 [2006] ; see EDPL 207 [C] ; Matter of Syracuse Univ. v. Project Orange Assoc. Servs. Corp. , 71 A.D.3d 1432, 1433, 897 N.Y.S.2d 335 [4th Dept. 2010], appeal dismissed and lv denied 14 N.Y.3d 924, 905 N.Y.S.2d 126, 931 N.E.2d 96 [2010] ).
We agree with petitioners that OCIDA lacked the requisite authority to acquire the subject property. As an industrial development agency, OCIDA's statutory purposes are, inter alia, to "promote, develop, encourage and assist in the acquiring ... [of] ... commercial ... facilities" ( General Municipal Law § 858 ). OCIDA's powers of eminent domain are restricted by General Municipal Law § 858 (4), which provides, in relevant part, that an industrial development agency shall have the power "[t]o acquire by purchase, grant, lease, gift, pursuant to the provisions of the eminent domain procedure law, or otherwise and to use, real property ... therein necessary for its corporate purposes." The purposes enumerated in the statute do not include projects related to hospital or healthcare-related facilities (see § 858 ). While OCIDA's determination and findings indicate that the subject property was to be acquired for use as a surface parking lot, the record establishes that, contrary to respondents’ assertion, the primary purpose of the acquisition was not a commercial purpose. Rather, the property was to be acquired because it was a necessary component of a larger hospital and healthcare facility project. We therefore annul the determination and grant the petition (see Syracuse Univ. , 71 A.D.3d at 1435, 897 N.Y.S.2d 335 ; see generally Schulman v. People , 10 N.Y.2d 249, 255-256, 219 N.Y.S.2d 241, 176 N.E.2d 817 [1961] ; Peasley v. Reid , 57 A.D.2d 998, 999, 394 N.Y.S.2d 471 [3d Dept. 1977] ).
In light of our determination, petitioners’ remaining contentions are academic (see Matter of Hargett v. Town of Ticonderoga , 35 A.D.3d 1122, 1124, 826 N.Y.S.2d 819 [3d Dept. 2006], lv denied 8 N.Y.3d 810, 834 N.Y.S.2d 719, 866 N.E.2d 1048 [2007] ).
All concur except Curran, J., who dissents and votes to confirm the determination and dismiss the petition in the following memorandum:
I respectfully dissent from the majority's conclusion that respondent Oneida County Industrial Development Agency (OCIDA) lacked the requisite statutory authority to acquire the subject property via eminent domain pursuant to its broad purposes as set forth in General Municipal Law § 858 because I conclude that OCIDA's determination that construction of a surface parking lot on the subject property constitutes a "commercial facility" is neither irrational nor unreasonable. Inasmuch as I agree with respondents that acquisition of the subject property serves a public purpose (see generally Matter of Truett v. Oneida County , 200 A.D.3d 1721, 1722, 155 N.Y.S.3d 913 [4th Dept. 2021], lv denied 38 N.Y.3d 907, 2022 WL 1573754 [2022] ), and further agree that petitioners’ remaining contentions are without merit, I would confirm the determination and dismiss the petition.
Following an extensive review process that concluded in 2015, the Mohawk Valley Hospital System (MVHS) began the process of consolidating its healthcare services for Oneida, Herkimer, and Madison counties into an integrated healthcare campus to be located in a blighted section of the downtown area of the City of Utica. In 2017, MVHS received a $300 million grant from the New York State Department of Health to situate the integrated healthcare campus at the downtown location. The central feature of the new campus will be Wynn Hospital, which has received its certificate of need and is currently under construction. Since its inception, MVHS's plan for the healthcare campus has included a private medical office building (MOB) to be located on Columbia Street behind Wynn Hospital. Also from its inception, the plan envisioned surface level parking to be located adjacent to the MOB. MVHS owns three of the four parcels along Columbia Street that would be leased to the MOB operator both for the MOB itself as well as for the adjacent surface level parking.
MVHS ultimately elected to have respondent Central Utica Building, LLC (CUB), a for-profit company founded by private physicians, own and operate the MOB. CUB's MOB would, in addition to servicing its own patients on a for-profit basis, provide outpatient services deemed valuable to MVHS for its integrated heathcare campus. CUB has specific occupancy plans for the MOB, including approximately 20,000 square feet dedicated to a group of cardiologist physicians, and 18,000 square feet for the purpose of operating "a[ ] [rticle 28 licensed, Medicare certified multi-specialty ambulatory surgery center with six operating rooms." CUB has secured financing for its MOB proposal.
The fourth parcel along Columbia Street—i.e., the subject property—is owned by petitioner Rome Plumbing & Heating Supply Co., Inc. The subject property is an approximately one-acre piece of real property that has, for years, been slated to be part of the surface level parking area located immediately adjacent to the MOB. Petitioner Bowers Development, LLC (Bowers) purports to be the contract vendee for the subject property. Bowers allegedly plans to construct its own MOB on the one-acre parcel, despite not having identified any physician group willing to service it, and not having any arrangement with MVHS or any ability to use the adjacent parcels owned by MVHS for parking.
Meanwhile, CUB submitted an application with OCIDA for financial assistance on the MOB project. It also requested that OCIDA take the subject property through the exercise of its eminent domain power under General Municipal Law § 858 (4). Before deciding whether to invoke its eminent domain powers to acquire the subject property, OCIDA conducted a public hearing during which Bowers agreed with CUB that a MOB located near the hospital would benefit downtown Utica, address urban blight, and enhance patient care. During the review process, one of petitioners’ main objections was that OCIDA lacked the requisite statutory authority under General Municipal Law § 858 to use its eminent domain power because that statute "provides the current list of projects for which industrial development agencies have authority," and that list "does not include hospital or health-related projects." Further, inasmuch as "[t]he proposed CUB project is a hospital or health-related project ..., the CUB project is not a type of project [for] which OCIDA has jurisdiction or authority." In its determination and findings, OCIDA expressly rejected those contentions and concluded that taking the subject property was within its power because it was for a "commercial facility"—i.e., the surface parking lot—noting, inter alia, that its determination of what constitutes a commercial project is entitled to judicial deference so long as it is reasonable (see Matter of Nearpass v. Seneca County Indus. Dev. Agency , 152 A.D.3d 1192, 1193, 60 N.Y.S.3d 732 [4th Dept. 2017] ). Thereafter, petitioners commenced this original proceeding pursuant to EDPL 207 seeking to annul OCIDA's determination to condemn the subject property via eminent domain.
In a proceeding brought pursuant to EDPL 207, "[t]he scope of our review is necessarily narrow since [the] exercise of the eminent domain power is a legislative function" ( Matter of West 41st St. Realty v. New York State Urban Dev. Corp. , 298 A.D.2d 1, 6, 744 N.Y.S.2d 121 [1st Dept. 2002], appeal dismissed 98 N.Y.2d 727, 749 N.Y.S.2d 476, 779 N.E.2d 187 [2002], cert denied 537 U.S. 1191, 123 S.Ct. 1271, 154 L.Ed.2d 1024 [2003] ; see Kaskel v. Impellitteri , 306 N.Y. 73, 80, 115 N.E.2d 659 [1953], rearg denied and mot to amend remittitur granted 306 N.Y. 609, 115 N.E.2d 832 [1953], cert denied 347 U.S. 934, 74 S.Ct. 629, 98 L.Ed. 1085 [1954] ; Matter of New York City Hous. Auth. v. Muller , 270 N.Y. 333, 339, 1 N.E.2d 153 [1936] ). As a result, this Court's review is limited to "whether (1) the proceeding was constitutionally sound; (2) the condemnor had the requisite authority; (3) its determination complied with SEQRA and EDPL article 2; and (4) the acquisition will serve a public use" ( Matter of City of New York [Grand Lafayette Props. LLC] , 6 N.Y.3d 540, 546, 814 N.Y.S.2d 592, 847 N.E.2d 1166 [2006] ; see EDPL 207 [C] ). As noted above, the issue in dispute here is whether OCIDA had the requisite...
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