Kaur v. NYS Urban Dev. Corp.

• Decision Date: 03 December 2009
• Parties: In the Matter of PARMINDER KAUR et al., Petitioners,<BR>v.<BR>NEW YORK STATE URBAN DEVELOPMENT CORPORATION, Doing Business as EMPIRE STATE DEVELOPMENT CORPORATION, Respondent.<BR>In the Matter of TUCK-IT-AWAY, INC., et al., Petitioners,<BR>v.<BR>NEW YORK STATE URBAN DEVELOPMENT CORPORATION, Doing Business as EMPIRE STATE DEVELOPMENT CORPORATION, Respondent.
• Court: New York Supreme Court — Appellate Division

72 A.D.3d 1
892 N.Y.S.2d 8

In the Matter of PARMINDER KAUR et al., Petitioners,
v.
NEW YORK STATE URBAN DEVELOPMENT CORPORATION, Doing Business as EMPIRE STATE DEVELOPMENT CORPORATION, Respondent.
In the Matter of TUCK-IT-AWAY, INC., et al., Petitioners,
v.
NEW YORK STATE URBAN DEVELOPMENT CORPORATION, Doing Business as EMPIRE STATE DEVELOPMENT CORPORATION, Respondent.

CATTERSON, J.

12-03-2009

[72 A.D.3d 2]

Goldberg Weprin Finkel Goldstein LLP, New York City (David L. Smith of counsel), for Parminder Kaur and others, petitioners.

Norman Siegel, New York City, McLaughin & Stern, LLP, New York City (Steven J. Hyman of counsel), and Philip Van Buren, New York City, for Tuck-It-Away petitioners.

Carter Ledyard & Milburn LLP, New York City (John R. Casolaro, Joseph M. Ryan, Susan B. Kalib, Victor J. Gallo and Theodore Y. McDonough of counsel), and Sive Paget & Riesel, P.C., New York City (Mark Chertok and Dan Chorost of counsel), for respondent.

NARDELLI, J., concurs with CATTERSON, J.; RICHTER, J., concurs in a separate opinion; TOM, J.P., and RENWICK, J., dissent in a separate opinion by TOM, J.P.

OPINION OF THE COURT

CATTERSON, J.

"`An ACT of the Legislature (for I cannot call it a law) contrary to the great first principles of the

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social compact, cannot be considered a rightful exercise of legislative authority ... A few instances will suffice to explain what I mean ... [A] law that takes property from A. and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with SUCH powers; and, therefore, it cannot be presumed that they have done it. The genius, the nature, and the spirit, of our State Governments, amount to a prohibition of such acts of legislation; and the general principles of law and reason forbid them." (Calder v Bull, 3 Dall [3 US] 386, 388 [1798].)^[1]

The exercise of eminent domain power by the New York State Urban Development Corporation, doing business as Empire State Development Corporation (hereinafter referred to as ESDC) to benefit a private elite education institution is violative of the Takings Clause of the US Constitution, article I, § 7 of the New York Constitution, and the "first principles of the social compact." The process employed by ESDC predetermined the unconstitutional outcome, was bereft of facts which established that the neighborhood in question was blighted, and ultimately precluded the petitioners from presenting a full record before either ESDC or, ultimately, this Court. In short, it is a skein worth unraveling.

THE TAKING OF MANHATTANVILLE

This case involves the acquisition, by condemnation or voluntary transfer, of approximately 17 acres in the Manhattanville area of West Harlem for the development of a new campus for Columbia University, a not-for-profit corporation (hereinafter referred to as the Project). The Project, referred to as the Columbia University Educational Mixed Use Development Land Use Improvement and Civic Project, would consist of a total of approximately 6.8 million gross square feet in up to 16 new buildings, a multi-level below-grade support space, and the adaptive reuse of an existing building. In addition, the Project would purportedly create approximately two acres of publicly accessible open space, a market along 12th Avenue, and widened, tree-lined sidewalks.

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The Project site is bounded by and includes West 125th Street on the south, West 133rd Street on the north, Broadway and Old Broadway on the east, and 12th Avenue on the west, as well as certain areas located beneath city streets within this area and beneath other city streets in the Project site. The estimated acquisition and construction cost for the Project is $6.28 billion, and will be funded by Columbia without any contribution from any municipal entity.

In 2001, Columbia, together with numerous other organizations, began working with the New York City Economic Development Corporation (hereinafter referred to as EDC) to redevelop the West Harlem area. In August 2002, the EDC issued a West Harlem Master Plan (hereinafter referred to as the Plan) describing the economic redevelopment plan. In the Plan, the EDC contended that the area was "once denser, livelier and a waterside gateway for Manhattan," and that "[a] renewed future seem[ed] possible." The EDC stated that it hoped to "revitaliz[e] . . . a long-forsaken waterfront," provide transportation, develop "a vibrant commercial and cultural district," and support academic research. The EDC noted that the current land use was "auto-related or vacant," with several "handsome, mid-rise buildings . . . interspersed with parking lots and partially empty industrial buildings." According to data prepared for the Plan by Ernst & Young, 54 of the 67 lots were in "good," "very good" or "fair" condition.

In 2000, Columbia owned only two properties in the Project area. In 2002, Columbia began purchasing property in the area in order to effectuate its own plan to expand its facilities. By early October 2003, Columbia controlled 51% of the property in the Project area—33% of which was still privately owned.

As early as March 2004, ESDC, EDC, and Columbia began meeting regarding the Project and the condemnation of land. In June 2004, Columbia hired Allee King Rosen & Fleming, Inc. (hereinafter referred to as AKRF), an environmental and planning consulting firm, to assist in its planning, to act as its agent in seeking approvals and determinations from various agencies necessary to realize its expansion plan, and to prepare an environmental impact statement (hereinafter referred to as the EIS). (See Matter of Tuck-It-Away Assoc., L.P. v Empire State Dev. Corp., 54 AD3d 154, 157 [1st Dept 2008], lv granted 12 NY3d 708 [2009] [hereinafter referred as Tuck-It-Away I].) AKRF began attending meetings with Columbia, ESDC and EDC in connection with the Project.

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On July 30, 2004, Columbia entered into an agreement with ESDC to pay the costs incurred by ESDC in connection with the Project. According to the agreement, Columbia owned or controlled, or expected to control, "a substantial portion of the lots within the" Project area.

In August 2004, EDC issued a "Blight Study" of the West Harlem/Manhattanville Area which was prepared by a consultant, Urbitran Associates, Inc. The study concluded that the area was "blighted."

In December 2004, ESDC, not content to rest on the Urbitran study, noted that it would have to make its own "blight findings" in connection with the Project. In an e-mail dated January 7, 2005, Columbia's project manager, Lorinda Karoff of Karen Buckus and Associates, indicated that Columbia's attorneys "and also possibly AKRF (who has already reviewed the document once at EDC's offices), wished to see the draft blight study." Karoff noted that the draft study "may change or even be completely replaced as ESDC uses different standards than the City."

In or about September 2006, ESDC retained Columbia's consultant AKRF to evaluate the conditions at the Project site. AKRF in turn retained Thornton Tomasetti, Inc., an engineering firm, to inspect and evaluate the physical condition of each existing structure at the Project site.

On November 1, 2007, AKRF issued its Manhattanville Neighborhood Conditions Study (hereinafter referred to as AKRF's study). The study noted that as of April 30, 2007, Columbia owned or had contracted to purchase 48 of the 67 tax lots (72%) in the study area. The study found that "48 of the 67 lots in the study area (or 72 percent of the total lots) have one or more substandard condition, including poor or critical physical lot conditions, a vacancy rate of 25 percent or more, or site utilization of 60 percent or less." In addition, the study found that "34 of the 67 lots in the study area (or 51 percent of the total lots) were assessed as being in poor or critical condition." According to the study, "[t]he presence of such a high proportion of properties with multiple substandard conditions suggests that the study area has been suffering from a long-term trend of poor maintenance and disinvestment." The study concluded that the Project area was "substantially unsafe, unsanitary, substandard, and deteriorated."

On November 16, 2007, the New York City Planning Commission (hereinafter referred to as the CPC), the lead agency for

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the Project under the New York State Environmental Quality Review Act (hereinafter referred to as SEQRA) and the City Environmental Quality Review Act (hereinafter referred to as CEQRA), issued a notice of completion for the Project's final environmental impact statement (hereinafter referred to as the FEIS). On November 26, 2007, CPC issued its findings on the FEIS pursuant to both SEQRA and CEQRA.

After a public hearing held by the City Council on December 12, 2007, the Council approved the rezoning of approximately 35 acres of West Harlem including the 17-acre Project site. Meanwhile, West Harlem Business Group (hereinafter referred to as WHBG), a group of businesses within the Project area, as well as Tuck-It-Away Associates, L.P. (TIA), a member of WHBG, requested various documents from ESDC related to the Project pursuant to the Freedom of Information Law (hereinafter referred to as FOIL). When ESDC refused to provide certain documents, WHBG and TIA filed CPLR article 78 petitions. (See Tuck-It-Away I, 54 AD3d at 159.)

On July 3, 2007 and on or about August 23, 2007, the New York County Supreme Court (Shirley Werner Kornreich, J.) granted the applications to compel ESDC to release the documents, including documents involving ESDC's communications with AKRF. In particular, the court found that an agency exemption did not apply to the AKRF documents since AKRF lacked "sufficient neutrality" due to its role as a consultant for both ESDC and Columbia. ESDC appealed from those orders.

On July 15, 2008, this Court affirmed Supreme Court's order for disclosure of documents related to ESDC's communications...