Eklecco Newco LLC v. Town of Clarkstown

Decision Date21 May 2019
Docket NumberNo. 16-CV-6492 (NSR),16-CV-6492 (NSR)
PartiesEKLECCO NEWCO LLC and EKLECCO L.L.C., Plaintiffs, v. TOWN OF CLARKSTOWN, TOWN BOARD OF THE TOWN OF CLARKSTOWN, THE TOWN OF CLARKSTOWN PLANNING BOARD, and GEORGE HOEHMANN, as Supervisor of the Town of Clarkstown, Defendants.
CourtU.S. District Court — Southern District of New York
OPINION & ORDER

NELSON S. ROMÁN, United States District Judge

Plaintiffs EklecCo NewCo LLC and EklecCo L.L.C, (collectively, "EklecCo"), bring this action pursuant to 42 U.S.C. § 1983 and New York state law against the Town of Clarkstown ("Town"), the Clarkstown Town Board ("Town Board"), the Clarkstown Planning Board ("Planning Board"), and the Supervisor of the Town of Clarkstown, George Hoehmann. Plaintiffs allege that Defendants coerced them into surrendering certain constitutional rights in exchange for the discontinuance and conveyance of public roads that were necessary for the continued development of the Palisades Center shopping mall and discriminated against them in violation of the Fourteenth Amendment Equal Protection Clause. Additionally, Plaintiffs allege that Defendants violated their Fourteenth Amendment equal protection rights.

Presently before the Court is Defendants' motion to dismiss Plaintiffs' Second Amended Complaint pursuant to 12(b)(6) for failure to state a claim and 12(b)(1), for lack of subject-matter jurisdiction. (ECF No. 67.)

For the following reasons, Defendants' motion to dismiss is GRANTED.

BACKGROUND
I. Factual Background

The Court assumes familiarity with the facts in this matter but summarizes the facts below to accurately reflect the allegations in the Second Amended Complaint ("SAC"). For the purposes of this motion, the Court accepts the facts in the SAC as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

In 1985, Plaintiffs' predecessor in interest1 began amassing parcels of land located within the Town of Clarkstown ("Clarkstown" or "Town") for the purpose of constructing a regional shopping center. (Second Amended Compl. ("SAC") ¶ 37, ECF No. 56.)

On June 12, 1987, Plaintiffs petitioned the Town Board to rezone several of its recently-acquired parcels of land to a major regional shopping district. (Id. ¶ 40.) Over one year later, in December 1988, the Town Board passed a resolution and amended the Town's zoning map to "permit the construction of a regional shopping center to be known as the 'Palisades Center' " on Plaintiffs' land ("Rezoning Resolution"). (Id. ¶ 42.)

Plaintiffs applied to the Planning Board for approval of a preliminary site plan in May 1989 which included 875,000 square feet of gross leasable area ("GLA"). (Id. ¶ 43.) The Planning Board granted EklecCo preliminary site plan approval and permission to begin excavation and rock removal on February 28, 1990. (Id. ¶ 44.) Plaintiffs also sought permission to construct a "ring road" to connect the mall to surrounding roadways. (Id. ¶ 46.) To construct said road, the New York State Department of Transportation required that Plaintiffs obtain an expression of intent from the Town Board that the Town intended to accept public dedication ofa portion of that "ring road," and certain roadways connecting the ring road to other major thoroughfares. (Id.)

On January 22, 1991, the Town Board passed a resolution expressing its intent to accept dedication of such roads, provided that Plaintiffs agree to construct and maintain them at their sole expense and to post a bond or letter of credit. (Id. ¶ 47.)

Plaintiffs decided to modify their initial plan, and, on March 9, 1993, they applied to the Planning Board for approval of those modifications. (Id. ¶ 48.) The Town Board granted final site approval on June 23, 1993. (Id. ¶ 51.) In December 1994, Plaintiffs again modified their plan and applied to the Planning Board for preliminary approval to increase the size of the Palisades Center to include 1.2 million square feet of GLA. (Id. ¶ 52.) The Town Board issued a negative declaration pursuant to the New York State Environmental Quality and Review Act ("SEQRA"), finding that Plaintiffs' planned development was consistent with the Town's zoning laws and did not have adverse environmental consequences, and then issued a resolution granting final site plan approval. (Id. ¶¶ 53 - 55.)

Approximately a year after the previous expansion, in December of 1995, Plaintiffs filed another application to the Planning Board for approval of an increase in size, this time from 1.2 million square feet to 1.854 million square feet of GLA. (Id. ¶ 56.) The Planning Board granted preliminary site plan approval on February 28, 1996, subject to certain conditions. (Id. ¶ 57.) On March 27, 1996, however, the Planning Board issued an "Addendum" to its previous approval and imposed additional conditions to be satisfied by Plaintiffs prior to final site plan approval, one of which requiring Plaintiffs to "secure Town Board approval for discontinuance of Virginia Avenue and Besso Street," ("Town Roads") as portions of those roads would become part of the building footprint of the Palisades Center under the proposed expansion. (Id. ¶¶ 58 - 59, 100 &128.)

On April 5, 1996, the Office of the Building Inspector for the Town ("Building Department") issued a building permit granting Plaintiffs authorization to proceed with the construction of the foundation of the mall. (Id. ¶ 61.) Then, on April 24, 1996, the Planning Board passed a resolution granting final site plan approval for the Palisades Center, to include 1.854 million square feet of GLA ("Final Site Plan Approval"), subject to certain conditions one of which being that Plaintiffs secure the Town Board approval for the discontinuance of the Town Roads. (Id. ¶ 62 - 65.) At that time, the Town Board intended to discontinue and abandon the Town Roads to Plaintiffs to allow the construction of the Palisades Center to proceed at 1.854 million square feet of GLA. (Id. ¶ 67.)

The Town Board, on May 24, 1996, authorized the Town Supervisor to, through a "Shell Permit Agreement" with Plaintiffs, permit the Town Building Inspector to issue a shell building permit for the Palisades Center in exchange for certain payments and other assurances. (Id. ¶ 68.)

Plaintiffs allege that at the time the Town Board authorized the Shell Permit Agreement, it knew that Plaintiffs intended to apply to expand the Palisades Center to 3.05 million square feet of GLA. (Id. ¶ 70.) Moreover, the Town knew that a $50,000,000.00 construction loan Plaintiffs hoped to secure required the issuance of the building permit. (Id. ¶ 72.) Plaintiffs depended on this loan to proceed with their construction activities. (Id.) The Building Department issued a building permit to Plaintiffs the same day the Shell Permit Agreement was executed, thereby permitting construction to begin. (Id. ¶ 73.)

On July 17, 1996, EklecCo formally applied to the Planning Board to amend the Final Site Approval to increase the size of the Palisades Center from 1.854 million square feet of GLA to 3.05 million square feet of GLA by adding floors rather than expanding the existing footprintof the building. (Id. ¶ 74.) A vocal minority opposed any increase in the size of the Palisades Center beyond the already approved 1.854 million square feet of GLA. (Id. ¶ 79.)

All the while, Plaintiffs still needed to secure the Town Roads. In August of 1996, the Town Supervisor assured Plaintiffs that the Town would discontinue and abandon the Town Roads, which were known to be prone to flooding, to Plaintiffs. (Id. ¶¶ 81 & 88.) By September 19, 1996, EklecCo had substantially complied with the other conditions set forth in the Final Site Plan and had applied for discontinuance and abandonment of the Town Roads. (Id. ¶ 82.)

The Town Board convened on October 8, 1996 to decide whether to consent to discontinue and abandon the Town Roads and sell them to Plaintiffs. (Id. ¶ 94.) At that time, EklecCo already had the Planning Board's approval to build the Palisades Center at 1.854 million square feet, subject to the discontinuance of the Town Roads, and Plaintiff's application for the expansion to 3.05 million square feet of GLA was pending before the Planning Board. (Id. ¶ 95 & 97.) However, Plaintiffs contend that the Town Board used the expected formality of its vote on discontinuing the Town Roads to block the already approved development of the Palisades Center at 1.854 million square feet of the GLA by imposing a number of restrictions and conditions on the Palisades Center's construction. (Id. ¶ 98.)

On that date, the Town Board passed Resolution 909-1996. (Id. ¶ 99); (Defs.' Mot. to Dismiss Ex. P ("Roads Resolution"), ECF No. 67-17.) Under the Roads Resolution, upon the acceptance of the substitute roads to be built and maintained by Plaintiffs, the Town Roads would be abandoned and sold to Plaintiffs, subject to certain terms and conditions. (Id. ¶¶ 103 - 105.) Specifically, the Roads Resolution required that Plaintiffs pay a $1.5 million purchase price for the Town Roads and adhere to the following, among other terms:

(a) EklecCo's withdrawal of the Palisades Center Expansion Application;
(b) EklecCo, waiving releasing and covenanting not to sue the Town, the TownBoard, or any town employees, agents, or representatives "with respect to or in connection with any action taken . . . up to and including the adoption of [the] Resolution;"
(c) EklecCo "covenanting and agreeing to file an Amendment to the Covenants filed in compliance with the 1988 Rezoning Resolution precluding any further increase in the size of the Palisades Center in excess of the 1.85 million square feet of GLA without prior consent of the Town Board, the application for which, in no event, shall occur prior to twenty-four (24) months after the Palisades Center is open and operating at 90% occupancy;"
(d) EklecCo "covenanting and executing an easement in favor of the Town restricting all real property owned by EklecCo within the Site Plan, precluding any further increase in the size of the
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