In re City of New York

• Decision Date: 04 April 2006
• Citation: 847 N.E.2d 1166,6 N.Y.3d 540
• Parties: In the Matter of CITY OF NEW YORK, Respondent, Relative to Acquiring Title to Certain Real Property for the Construction of the Third Water Tunnel, Shaft 30B. Grand Lafayette Properties LLC, Appellant.
• Court: New York Court of Appeals Court of Appeals

847 N.E.2d 1166

6 N.Y.3d 540

In the Matter of CITY OF NEW YORK, Respondent, Relative to Acquiring Title to Certain Real Property for the Construction of the Third Water Tunnel, Shaft 30B.

Grand Lafayette Properties LLC, Appellant.

Court of Appeals of New York.

April 4, 2006.

Gibson, Dunn & Crutcher LLP, New York City (Jack M. Weiss, Randy M. Mastro, Cynthia S. Arato and Megan A. Burns of counsel), and Blank Rome LLP (James G. Grelisheimer of counsel) for appellant.

Michael A. Cardozo, Corporation Counsel, New York City (Paul T. Rephen and Joseph Bavuso of counsel), for respondent.

Kramer Levin Naftalis & Frankel LLP, New York City (Jeffrey L. Braun and Kerri B. Folb of counsel), for Real Estate Board of New York, Inc., amicus curiae.

OPINION OF THE COURT

GRAFFEO, J.

The City of New York brought this eminent domain vesting proceeding to acquire a parcel of real property for use in a public improvement project involving the City's water system. Because the landowner failed to timely challenge the taking in a CPLR article 78 proceeding, we conclude that its excessive taking claim is time-barred. We therefore affirm the grant of the petition permitting the City to take title.

Under the Eminent Domain Procedure Law (EDPL), a two-step process is required before a condemnor obtains title to property for public use. First, under EDPL article 2, the condemnor must make a determination to condemn the property either by using the hearing and findings procedures of EDPL 203 and 204 or by following an alternative procedure permitted by EDPL 206. Second, pursuant to EDPL article 4, the condemnor must seek the transfer of title to the property by commencing a judicial proceeding known as a vesting proceeding.

In September 2003, the City of New York's Department of Environmental Protection (DEP) and Department of Citywide Administrative Services (DCAS) (collectively the City) began the first step in the condemnation process by filing an application with the Department of City Planning to condemn real property located at 142 Grand Street. At that time, the parcel was owned by Gerald Cohen. Respondent Grand Lafayette Properties LLC (GLP) operated a 95-vehicle parking lot on the 12,500-square-foot lot. The City sought to acquire the property in order to drill a 512-foot-deep shaft that, upon completion, will carry water from the Third Water Tunnel to the City's water mains.¹ The City proposed the construction of a large distribution chamber, three feet beneath the parcel's ground surface, for the purpose of regulating water pressure. The application indicated that construction would take approximately 44 months and that the property would be substantially returned to its original condition upon completion, although an air vent and two hatchways allowing access to the chamber for maintenance and inspection purposes would be visible at ground level.

Employing an alternate condemnation procedure authorized under EDPL 206(C) — the City's Uniform Land Use Review Procedure (ULURP) (see N.Y. City Charter §§ 197-c, 197-d) — the Department of City Planning certified the City's application as complete and ready to proceed. Community Board 2 adopted a resolution recommending approval of the City's application for acquisition, with the condition that the site be used ultimately for open space or a public park after project completion (see N.Y. City Charter § 197-c [e]). The Manhattan Borough President approved the City's application with the same condition (see N.Y. City Charter § 197-c [g]). Acting as lead agency, DEP issued a negative declaration under the State Environmental Quality Review Act (SEQRA) and City Environmental Quality Review (CEQR) procedures.

In March 2004, the City Planning Commission (CPC) held a public hearing to review the City's condemnation application (see N.Y. City Charter § 197-c [h]). Cohen, the owner at the time, appeared at the hearing and voiced his opposition to the use of his parcel as a shaft site. GLP, the current owner of the realty (GLP later entered into a contract to purchase the property from Cohen in April 2004 and acquired title in June 2004), does not deny that it also received notice of the hearing.

On April 14, 2004, the CPC issued a resolution approving the City's request to acquire the property in its entirety, concluding that condemnation for construction of the shaft and related facilities was appropriate. The CPC's determination discussed the public importance of the project and the planned use of the shaft, along with examining the City's compliance with SEQRA, CEQR and ULURP. The CPC also noted that, upon completion of the project, ownership of the site would revert to DCAS, while DEP would "retain a permanent easement of approximately 4,000 square feet for the area above the subsurface distribution chamber." The CPC's decision could have been reviewed by the City Council if the Council had chosen to do so within a 20-day "call-up" period (see N.Y. City Charter § 197-d [b][3]). In August 2004, the Office of the Mayor approved the acquisition. GLP did not commence an article 78 proceeding challenging the CPC's resolution.

With all governmental approvals secured, in November 2004 the City commenced step two of the procedure, the vesting proceeding under EDPL 402, to formally acquire title to GLP's property. Supreme Court ordered that GLP — who by this time had acquired ownership of the parcel — show cause why the City should not be granted permission to file an acquisition map and take title to the property in fee simple absolute. In response, GLP conceded that the City's plan to construct the shaft served a public use, but asserted as an affirmative defense in its answer that the City's taking of the entire premises in fee simple was excessive and therefore arbitrary and capricious. Relying on Hallock v. State of New York, 32 N.Y.2d 599, 347 N.Y.S.2d 60, 300 N.E.2d 430 [1973], GLP claimed that the City could have achieved its objectives by less intrusive means, such as an easement or by acquisition of only a portion of the parcel. GLP later interposed similar allegations in a counterclaim in its amended answer.²

GLP also requested that Supreme Court conduct an evidentiary hearing regarding its excessive taking claim. The City replied that GLP's defenses and counterclaims were untimely and without merit. The court granted the City's petition and rejected GLP's excessiveness argument, determining that the City had adequately demonstrated its need for the entire premises. The court also dismissed GLP's remaining counter-claims as time-barred. The Appellate Division affirmed and GLP appeals to this Court as of right (see CPLR 5601[b][1]). We now affirm.

The City argues that the courts below should not have addressed the excessive taking issue because GLP failed to timely raise it. The City contends that GLP should have sought review of its claim in an article 78 proceeding commenced within four months after the CPC's April 2004 determination approving the condemnation became final. GLP counters that it validly raised the issue in its answer in this EDPL article 4 vesting proceeding. Before we resolve the appropriate procedure for judicial review of GLP's excessive taking claim, a brief review of the operation of New York's eminent domain law is helpful.

The Legislature enacted the EDPL "to supplant a mosaic of more than 150 scattered provisions with a uniform procedure" (Matter of Jackson v. New York State Urban Dev. Corp., 67 N.Y.2d 400, 417, 503 N.Y.S.2d 298, 494 N.E.2d 429 [1986]). The main purpose of article 2 of the EDPL is to ensure that an appropriate public purpose underlies any condemnation (see id. at 417-418, 503 N.Y.S.2d 298, 494 N.E.2d 429). To achieve this determination, a condemnor is required to hold a public hearing before it may approve the acquisition (see EDPL 201, 202, 203). The condemnor's written determination must prescribe at least

"(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; [and]

"(3) the general effect of the proposed project on the environment and residents of the locality" (EDPL 204[B]).

EDPL article 2 sets forth a judicial review procedure, which allows a condemnee only 30 days within which to commence a proceeding directly in the Appellate Division for review of the condemnor's section 204 determination (see EDPL 207). The scope of review is very limited — the Appellate Division must "either confirm or reject the condemnor's determination and findings," and its review is confined 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 (EDPL 207[C]).

Significantly, the Legislature provided that, under certain circumstances, a condemnor need not comply with the notice, hearing and determination requirements of EDPL article 2. A number of alternative procedures that a condemnor may undertake are outlined in EDPL 206, any one of which exempts the condemnor from compliance with article 2. As relevant here, EDPL 206(C) permits an exemption where

"pursuant to other law or regulation [the condemnor] undergoes or conducts or offers to conduct prior to an acquisition one or more public hearings upon notice to the public and owners of property to be acquired, and provided further that factors similar to those enumerated in [EDPL 204(B)] herein may be considered at such public hearings."

In this case, the City opted to proceed under EDPL 206(C) by using its own land acquisition statute — the ULURP — which also requires public hearings to ensure valid public use.

Against this statutory backdrop, we examine the timeliness issue. Although EDPL 207 provides a 30-day statute of limitations, during which time period a condemnee must seek ...