Uhlfelder v. Weinshall

Decision Date08 November 2007
Docket NumberNo. 109890/04,No. 8444.,8444.,109890/04
Citation47 A.D.3d 169,845 N.Y.S.2d 41,2007 NY Slip Op 8390
CourtNew York Supreme Court — Appellate Division
PartiesBERNARD UHLFELDER et al., Appellants, v. IRIS WEINSHALL, as Commissioner of the Department of Transportation of the City of New York, et al., Respondents.

Emery Celli Brinkerhoff & Abady LLP, New York City (Andrew G. Celli, Jr., Eric Hecker and Mariann Meier Wang of counsel), for appellants.

Michael A. Cardozo, Corporation Counsel, New York City (Elizabeth I. Freedman, Leonard Koerner and Virginia Waters of counsel), for respondents.

Amanda Hiller, New York City, for Municipal Art Society of New York, Inc., amicus curiae.

Kramer Levin Naftalis & Frankel LLP, New York City (Jeffrey L. Braun, Samuel H. Lindenbaum and Toni L. Finger of counsel), for Real Estate Board of New York, Inc., amicus curiae.

Davis Wright Tremaine LLP, New York City (Victor A. Kovner, Carolyn K. Foley and Kevan D. Choset of counsel), for Harper's Magazine Foundation and others, amici curiae.

OPINION OF THE COURT

McGUIRE, J.

The plaintiffs in this action against the City of New York and individual city officials and agencies (collectively, the City) are 11 licensed newsstand operators in the City of New York and the New York City Newsstand Operators Association (the Association), a trade association of licensed newsstand operators. Plaintiffs challenge, on various constitutional and statutory grounds, Local Law No. 64 (2003) of the City of New York, which amends the Administrative Code of the City of New York in relation to the installation and maintenance of newsstands and the placement of advertising thereon.

Pursuant to Local Law 64, as implemented through a request for proposals (RFP) for a Coordinated Street Furniture Franchise (CSFF), all newsstands in the City (approximately 281 newsstands were in operation as of August 12, 2004) will be replaced by structures to be built, owned and maintained by a corporate franchisee. The existing structures are owned by the operators, each of whom is licensed by the Department of Consumer Affairs (DCA); the licensees either built the structures at their own expense or purchased them from prior licensees. The newly constructed newsstands, however, will be operated by the individual licensees who own the newsstands that are replaced. According to the City, the provisions of Local Law 64 governing the size and siting of newsstands will allow virtually all of the existing newsstands to be replaced at precisely or essentially the same locations. Although Local Law 64 affects the value of the ownership interest of licensees in their current newsstands, it does not affect the ownership interest itself. Thus, the licensees are free to remove their newsstands and retain (on private property) or dispose of them. If an existing licensee does not wish to retain his or her newsstand, the burden of removing the newsstand is cast upon the franchisee.

Although the franchisee will incur all the costs associated with replacing existing newsstands, a license applicant who wishes to open a new newsstand (as opposed to a "replacement newsstand") is not similarly given the free use of a newsstand constructed and paid for by the franchisee. Rather, pursuant to paragraph (2) of subdivision (c) of the new section 20-241.1 added to the Administrative Code by Local Law 64, a licensee who operates a newsstand "that is not a replacement newsstand and that has been constructed and installed by the franchisee ... shall reimburse the franchisee for the cost of such construction and installation," as those costs are determined by the Department of Transportation (DOT).1 With respect to annual maintenance and the costs of any repairs that may be needed, the financial burden is on the franchisee regardless of whether the newsstand is a new or a replacement newsstand.

The economic engine behind the proposed CSFF is the revenue expected from the franchisee's sale of advertising on the newsstands (as well as other structures, including bus shelters), as authorized by Local Law 64. Thus, Local Law 64 amends Administrative Code § 20-231 (i) by qualifying its absolute prohibition on placing any exterior advertising on newsstands so as to permit such advertising provided it is "placed by a franchisee." The RFP permits the franchisee to place up to 82.5 square feet of advertising on newsstands, and reserves a minimum of 2.5% of all advertising panels on the newsstands for public service announcements and 20% of all advertising space for use by the City and its marketing partners, at no cost to the City or its partners. Under Administrative Code § 20-231 (d) (2), a newsstand cannot occupy more than 72 square feet of sidewalk space or exceed nine feet in height.2

The proposed franchise, which is for a period of 20 years, requires the franchisee to install and maintain a minimum of 330 newsstands; neither Local Law 64 nor the RFP limit the maximum number of newsstands. Under the RFP, the City is to receive an annual payment from the franchisee in the form of a franchise fee. The amount of the fee will be the greater of a guaranteed minimum payment or a specified share of the advertising revenue. The City estimates it will receive $1 billion in revenues from the CSFF over the 20-year period of the franchise.

Provisions of Local Law 64 governing the siting of newsstands also are relevant. The license of any newsstand operator will not be renewed if the newsstand "poses an obstruction to the free use of sidewalks by pedestrians" (Administrative Code § 20-231 [d] [1]). All newsstands, regardless of when they first were licensed, must be located so as not to (i) reduce the area maintained on the sidewalk for pedestrian movement below a width of 9.5 feet (the clear path requirement), (ii) be within five feet of a fire hydrant, (iii) create a level of service at the proposed location for the peak 15 minutes of the peak hour of a pedestrian flow rate equal to or greater than 11 people per minute per linear foot of clear path, as determined by DOT (the pedestrian level of service or PLOS requirement) (Administrative Code § 20-231 [d] [2] [a] [i]-[iii]; [b] [i]-[iii]). Newsstands must satisfy other specified siting criteria that vary somewhat depending on when a newsstand first was licensed, including criteria relating to proximity to a subway entrance and to intersections (Administrative Code § 20-231 [d] [2] [a] [iv]-[vi]; [b] [iv]-[v]). In addition, all newsstands, regardless of when they first were licensed, must not "otherwise create a hazardous condition" (Administrative Code § 20-231 [d] [2] [a] [vii]; [b] [vi]). The term "hazardous condition" is defined by two identically worded provisions, one applicable to newsstands first licensed on or after August 1, 1999 and the other applicable to newsstands first licensed prior to that date, to

"include, but not be limited to, the location of a newsstand less than one foot, six inches from the curb, under a fire escape, within ten feet of a driveway or parking lot or within two feet from underground access points, such as utility access openings, ventilation grills, or cellar doors" (id.).3

The parties agree that all of the newly constructed newsstands must comply with the requirements of the Americans With Disabilities Act (the ADA) (42 USC § 12101 et seq.), although they disagree about certain specifics of those requirements and about the extent to which the replacement newsstands for existing newsstands might be required to relocate due to an inability to comply with both ADA requirements and the siting requirements of Local Law 64. The replacement newsstand for an existing newsstand that must be relocated as a result of these requirements may be able to be placed at a site within a radius of 500 feet from its existing location, the "catchment area," in which certain otherwise applicable siting requirements (but not, most notably, the clear path and PLOS requirements) are relaxed (Administrative Code § 20-231 [k] [5] [a]). If the replacement newsstand for an existing newsstand cannot, consistent with the siting and ADA requirements, be located within the catchment area, the operator is permitted to relocate to any other location in New York City where those requirements can be satisfied. The newsstand at the new location would be a "replacement newsstand" as that term is defined by Local Law 64, provided only that the operator's license was in full force and effect at the time of the removal of the noncompliant newsstand (Administrative Code § 20-228 [e] [ii]). Accordingly, the cost of constructing and installing the newsstand at the new location would be borne by the franchisee (Administrative Code § 20-241.1 [c] [1]).

With the filing of their complaint, plaintiffs moved by order to show cause for a preliminary injunction preventing the City both from implementing, applying or enforcing Local Law 64 and from entering into any CSFF contract pursuant to the RFP that includes or covers newsstands. After answering the complaint, the City cross-moved for summary judgment dismissing the complaint in its entirety. In a published opinion (10 Misc 3d 151 [2005]) the IAS court denied the motion for a preliminary injunction and granted the cross motion to the extent of dismissing all of the causes of action except the second, which was severed and continued. That cause of action, which is not at issue on this appeal, alleges that Local Law 64 renders valueless the ownership interest of the individual plaintiffs in their newsstands and thus effects a taking of their property without just compensation in violation of article I, § 7 (a) of the New York State Constitution.

On this appeal, plaintiffs contest both the denial of the motion for a preliminary injunction and the granting of the cross motion for summary judgment dismissing the complaint. As limited by their brief, plaintiffs' constitutional challenges to...

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