N.Y.C. Council v. N.Y.C. Hous. Auth.

• Citation: 2013 NY Slip Op 33035
• Decision Date: 02 December 2013
• Docket Number: Index No. 101386/13
• Court: United States State Supreme Court (New York)
• Parties: In the Matter of the Application of NEW YORK CITY COUNCIL, BARUCH HOUSES TENANTS' ASSOCIATION, ROBERTO NAPOLEON, DOUGLASS HOUSES TENANTS' ASSOCIATION and JANE WISDOM, Petitioners, For a Judgment Pursuant to Article 78 of the Civil Practice Law & Rules v. NEW YORK CITY HOUSING AUTHORITY and JOHN B. RHEA, as Chairman of the Board of the New York City Housing Authority, Respondents.

2013 NY Slip Op 33035

In the Matter of the Application of NEW YORK CITY COUNCIL,
BARUCH HOUSES TENANTS' ASSOCIATION, ROBERTO NAPOLEON,
DOUGLASS HOUSES TENANTS' ASSOCIATION
and JANE WISDOM, Petitioners,
For a Judgment Pursuant to Article 78 of the Civil Practice Law & Rules
v.
NEW YORK CITY HOUSING AUTHORITY
and JOHN B. RHEA, as Chairman of the Board
of the New York City Housing Authority, Respondents.

Index No. 101386/13

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: Part 55

Dated: December 4, 2013
Dated: December 2, 2013

DECISION/ORDER

HON. CYNTHIA S. KERN, J.S.C.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion for:

Papers	Numbered
Notice of Petition and Affidavits Annexed	1
Replying Affidavits	2
Exhibits	3
Exhibits	5

Petitioners New York City Council, Baruch Houses Tenants' Association, Roberto Napoleon, Douglass Houses Tenants' Association and Jane Wisdom (collectively hereinafter referred to as "petitioners") commenced the instant proceeding pursuant to Article 78 of the Civil Practice Law and Rules ("CPLR") seeking to challenge a land lease initiative proposed by respondents New York City Housing Authority and John B. Rhea (hereinafter referred to as

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"NYCHA" or "respondents"). For the reasons set forth below, the Petition is denied.

The relevant facts are as follows. In 2011, NYCHA unveiled "Plan NYCHA: A Roadmap for Preservation," a five-year strategic plan which identified new and sustainable sources of revenue, including development rights at NYCHA Campuses that NYCHA could use to generate a significant source of capital funding to raise money for its capital budget. Early in 2013, NYCHA publicly unveiled its proposed plan to lease land from existing public housing projects to private developers (the "Land Lease Initiative"). Pursuant to the Land Lease Initiative, fourteen parcels of land from eight NYCHA developments located in Manhattan would be leased for 99 years to private developers for the purposes of building high-rise residential buildings. Pursuant to the Land Lease Initiative, eighty percent of the units in the new high rises are to be leased out at market rates and twenty percent of the units are to be reserved for low-income individuals. NYCHA alleges that it chose the fourteen sites primarily for "their potential to generate significant revenue" for developers, and in turn, for NYCHA and its buildings. Specifically, it alleges that "[t]he income generated through land leases would be dedicated to building improvements at the eight developments, initially, and other public housing properties citywide."

After unveiling the Land Lease Initiative, NYCHA released a document entitled "Land-Lease Initiative - Pre-RFP Discussion Document" (the "Pre-RFP"), which provided significant information about the Land Lease Initiative to potential developers such as the identification of the various sites, the amount of square footage that is available under certain zoning rules and NYCHA's views on the applicable approval process. Subsequent to releasing the Pre-RFP, NYCHA held a series of meetings with residents and resident associaions of the affected NYCHA developments. NYCHA alleges that it released detailed information about the

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development sites, including responses to questions and concerns and created a two-step process whereby NYCHA would first issue a Request for Expressions of Interest ("RFEI"), to be followed by the issuance of a Request for Proposals ("RFP"). Pursuant to the process, only developers who responded to the RFEI would be permitted to respond to the RFP but a developer could be conditionally designated after a response to the RFEI alone. This means that a developer could be selected subject to the successful completion of all legal pre-development requirements such as local and Department of Housing and Urban Development ("HUD") reviews and approvals, as a result of an "exceptionally responsive and visionary" proposal in response to the RFEI. However, the RFEI makes clear that "NYCHA may only incur a legal obligation identified in the RFEI with regard to the Parcels described in it after NYCHA enters into a binding written agreement and such written agreement is approved by the Board."

On August 16,2013, NYCHA issued its Request for Expressions of Interest ("RFEI") which "invites developers to submit proposals for the design, constr action and operation" of the residential developments called for by the Land Lease initiative and informs prospective developers that an "internal selection committee" of NYCHA staff will review the submissions. Upon review, the NYCHA members may recommend to NYCHA's board that "a Developer be selected for a particular Development Parcel." Once NYCHA's board approves the recommendation, it will issue a Conditional Designation Letter to the developer and the "selected Applicant must begin pre-development work within thirty (30) days of the date of the conditional Designation Letter." Petitioners then commenced the instant Article 78 petition in October 2013 seeking to challenge the Land Lease Initiative.

It is well-settled that an Article 78 proceeding may only be brought to challenge a final agency determination or action. See CPLR § 7801. A court lacks subject matter jurisdiction to

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issue an opinion in the absence of a genuine legal dispute and thus does not have discretion to entertain an unripe claim. See Combustion Eng'g, Inc. v. Travelers Indent. Co., 75 A.D.2d 777 (1^st Dept 1980). In order for an agency action to be deemed "final," two criteria must be satisfied: (1) "the action must 'impose an obligation, deny a right or fix some legal relationship as a consummation of the administrative process...[meaning] a pragmatic evaluation [must be made] of whether the' decision maker has arrived at a definitive position on the issue that inflicts an actual, concrete injury"; and (2) "there must be a finding that the apparent harm inflicted by the action 'may not be prevented or significantly ameliorated by further administrative action or by steps available to the complaining party.'" Gordon v. Rush, 100 N.Y.2d 236, 242 (2003), citing Matter of Essex County v. Zagata, 91 N.Y.2d 447, 453 (1998). "If further agency proceedings might render the disputed issue moot or academic, then the agency position cannot be considered 'definitive' or the injury 'actual' or 'concrete.'" Matter of Essex County, 91 N.Y.2d at 454.

In the instant action, that portion of the petition seeking to challenge the Land Lease Initiative as arbitrary and capricious must be denied as unripe as the RFEI was not a final agency action. As an initial matter, the issuance of the RFEI was not a final agency action because it did not inflict an actual, concrete injury upon petitioners....