Sun Co., Inc. (R & M) v. City of Syracuse Indus. Development Agency
| Decision Date | 17 March 1995 |
| Citation | 625 N.Y.S.2d 371,209 A.D.2d 34 |
| Court | New York Supreme Court — Appellate Division |
| Parties | SUN COMPANY, INC. (R & M), Atlantic Refining & Marketing Company, Inc., and Citgo Petroleum Corporation, Petitioners, v. CITY OF SYRACUSE INDUSTRIAL DEVELOPMENT AGENCY, Respondent. MOBIL OIL CORPORATION, Petitioner, v. CITY OF SYRACUSE INDUSTRIAL DEVELOPMENT AGENCY, Respondent. UPSTATE MILK COOPERATIVES, INC., Petitioner, v. CITY OF SYRACUSE INDUSTRIAL DEVELOPMENT AGENCY, Respondent. |
Hancock and Estabrook by William Allen, Jr., Syracuse, for petitioners Sun Co., Atlantic & Citgo.
Nixon, Hargrave, Devans et al. by William D. Eggers and Kevin Recchia, Rochester, for petitioner Mobil Oil Corp.
Harter, Secrest and Emery by James P. Burns, III, Syracuse, for petitioner Upstate Milk Cooperatives, Inc.
Hiscock & Barclay by Mark R. McNamara, Buffalo, for respondent.
Before GREEN, J.P., and BALIO, FALLON, CALLAHAN and BOEHM, JJ.
Petitioners, Sun Company, Inc. (Sun), Atlantic Refining and Marketing Company, Inc. (Atlantic), and Citgo Petroleum Corporation (Citgo), Mobil Oil Corporation (Mobil) (collectively, the Oil Companies) and Upstate Milk Cooperatives, Inc. (Upstate) challenge, pursuant to Eminent Domain Procedure Law (EDPL) 207, the findings and determination of respondent, City of Syracuse Industrial Development Agency (SIDA), to condemn property owned by petitioners situated near the south shore of Onondaga Lake in the Oil City area of the City of Syracuse. The purpose of the taking is the proposed development of a retail shopping center to be known as Carousel Landing (Carousel Landing Project). SIDA's determination was made after entering into a Preferred Developer Agreement with Pyramid Companies (Pyramid), a partnership engaged in the development of retail commercial properties. Petitioners contend that the proposed taking of their property is not primarily for a public purpose and that, under the terms of the Preferred Developer Agreement, SIDA illegally "contracted away" its eminent domain power. Petitioners also attack the validity of the condemnation in various other respects. Petitioners contend, inter alia, that the environmental review of the Carousel Landing Project, made under ECL article 8, the State Environmental Quality Review Act (SEQRA), was improperly segmented from other planned development at the Syracuse lakefront and that the environmental review was deficient.
The proposed condemnation of petitioners' properties is the latest in a series of actions dating back to 1987, when SIDA and the City announced a Master Plan for redevelopment of approximately 800 acres of land known as the "Lakefront Area", bounded by Onondaga Lake to the north and by interstate highways on the east, south and west. At that time, in addition to development of a proposed retail shopping mall to be known as "Carousel Center", the Master Plan contemplated the creation of a lakefront park, a light industrial trade zone, cluster multi-family housing, a marina and office park, and mixed commercial and retail uses. In 1990, Pyramid completed construction of Carousel Center, financed with SIDA-issued bonds, in the northern portion of the Lakefront Area. With several other entities, Pyramid also constructed projects in the Franklin Square area, which is located at the southern end of the Lakefront Area.
In March 1988, after SIDA accepted the Final Environmental Impact Statement for Carousel Center, Mobil challenged the SIDA determination. Among the grounds raised by Mobil were the improper segmentation of SIDA's environmental review of the project, the failure to consider the secondary and cumulative effects of future development in Oil City, the adverse effect on the downtown business district, and the cost of relocating Mobil's oil tanks. We dismissed the petition on the ground that Mobil lacked standing (see, Mobil Oil Corp. v. Syracuse Indus. Dev. Agency, 152 A.D.2d 988, 544 N.Y.S.2d 767, affd. 76 N.Y.2d 428, 559 N.Y.S.2d 947, 559 N.E.2d 641).
In May 1990, pursuant to the redevelopment plan for the Syracuse lakefront, which was termed the "Inner Harbor Project", SIDA passed a resolution declaring its intent to act as lead agency for the purpose of undertaking the environmental review of the condemnation and redevelopment of 125 acres of land. In September 1990, having determined that the Inner Harbor Project could have a significant impact on the environment, SIDA authorized the preparation of a Generic Environmental Impact Statement (GEIS), and scheduled a public hearing regarding the scope of the issues that the Draft Generic Environmental Impact Statement (DGEIS) should address. The record indicates that public hearings were held, but does not indicate that the DGEIS was completed or that any further action on it was taken.
In December 1991 the Syracuse Office of Lakefront Development issued an "Action Plan for the Syracuse Lakefront" (Lakefront Plan). The Lakefront Plan was announced as having been prepared for the "citizens of Syracuse" by the Mayor's Lakefront Advisory Committee, comprised of an 11-member Inner Harbor Task Force and a 23-member Strategic Planning Team.
On September 18, 1992, SIDA and Pyramid entered into a "Preferred Developer Agreement", which designated Pyramid as a preferred developer for the Carousel Landing Project to be constructed on property owned by petitioners. The Carousel Landing Project was to be "no less than a 350,000 square foot retail complex." Under the terms of the Preferred Developer Agreement, Pyramid undertook certain financial obligations and, in return, SIDA agreed to acquire "at least those properties within [Oil City] which [Pyramid] commits to acquire from [SIDA] for the development of the [Carousel Landing Project]." Pyramid agreed to pay all costs associated with the acquisition of approximately 65 acres of property and the SEQRA review. In March 1993 consultants hired by Pyramid commenced preparation of a draft environmental impact statement (DEIS) for the Carousel Landing Project.
In July 1993 representatives of the Oil Companies met with City Officials, including Susan Hopkins, the City's Director of Lakefront Development, to propose alternatives to the Carousel Landing Project. The Oil Companies presented a plan whereby the petroleum facilities would be consolidated on 33 acres of land within Oil City. The Oil Companies' consolidation plan was rejected in a letter from Ms. Hopkins, dated August 3, 1993, in which she stated: "[W]e are bound by a preferred develope[r] agreement with [Pyramid] the terms of which preclude the adoption of the [Oil Companies'] proposal."
On August 19, 1993, SIDA signed an Environmental Assessment Form for the Carousel Landing Project and, by resolution that same day, declared its intent to act as lead agency for the project. Thereafter, in September 1993, SIDA accepted the DEIS prepared by Pyramid's consultants and the public comment period under SEQRA commenced. The Final Environmental Impact Statement (FEIS) for the Carousel Landing Project was filed by SIDA and, on December 21, 1993, SIDA issued its Findings and Determination to acquire petitioners' Oil City properties for the Carousel Landing Project.
In a prior proceeding, Supreme Court denied the motion of the Oil Companies for a preliminary injunction, dismissed their complaint as premature, and granted SIDA's motion for a preliminary injunction enjoining the Oil Companies from restraining SIDA's agents from entering upon petitioners' property for inspection purposes. We affirmed (see, Sun Co. v. City of Syracuse Indus. Dev. Agency, 197 A.D.2d 912, 602 N.Y.S.2d 456).
As noted, the proceedings now before us were commenced by petitioners pursuant to EDPL 207. They seek annulment of SIDA's determination to condemn their properties and further challenge the adequacy of the environmental review undertaken by SIDA. The SEQRA issues are before us in the first instance, pursuant to EDPL 207(C)(3).
SIDA's authority to acquire property is derived from General Municipal Law § 858(4), which provides that a public benefit corporation established as an industrial development corporation (IDA) under article 18-A of the General Municipal Law may "acquire by purchase, grant, lease, gift, pursuant to the provisions of the eminent domain procedure law * * * real property or rights or easements therein necessary for its corporate purposes".
Petitioners contend that the statutory condemnation scheme granting an IDA the power to condemn property is facially unconstitutional; that, as applied, the statutory procedure is subject to an agreement with a private commercial entity and is, therefore, unconstitutional; that they have been deprived of due process because Pyramid cannot provide them with a certain and adequate source and manner of payment of just compensation; that the proposed condemnation is not primarily for a public purpose; that SIDA illegally contracted away its eminent domain power; and that the condemnation would violate General Municipal Law § 862. Additionally, Upstate contends that the condemnation of its...
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