Union Square Park Cmty. Coal., Inc. v.

• Decision Date: 20 February 2014
• Citation: 2014 N.Y. Slip Op. 01207,985 N.Y.S.2d 422,8 N.E.3d 797,22 N.Y.3d 648
• Parties: UNION SQUARE PARK COMMUNITY COALITION, INC., et al., Appellants, v. NEW YORK CITY DEPARTMENT OF PARKS AND RECREATION et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

22 N.Y.3d 648
8 N.E.3d 797
985 N.Y.S.2d 422
2014 N.Y. Slip Op. 01207

UNION SQUARE PARK COMMUNITY COALITION, INC., et al., Appellants,
v.
NEW YORK CITY DEPARTMENT OF PARKS AND RECREATION et al., Respondents.

Court of Appeals of New York.

Feb. 20, 2014.

Quinn Emanuel Urquhart & Sullivan, LLP, New York City (Sanford I. Weisburst and Yelena Konanova of counsel), Super Law Group, LLC (Reed W. Super and Alexander I. Hankovszky of counsel), and Albert K. Butzel Law Offices (Albert K. Butzel of counsel), for appellants.

Michael A. Cardozo, Corporation Counsel, New York City (Deborah A. Brenner, Leonard Koerner and Amy McCamphill of counsel), for respondents.

Shapiro, Arato & Isserles LLP, New York City (Marc E. Isserles and Chetan A. Patil of counsel), for Liz Krueger and others, amici curiae.

Friedman Kaplan Seller & Adelman LLP, New York City (Eric Seiler, Jeffrey R. Wang and Pearline M. Hong of counsel), for Union Square Partnership and others, amici curiae.

Carter Ledyard & Milburn LLP, New York City (Christopher Rizzo and Holly Leicht of counsel), for New Yorkers for Parks, amicus curiae.

Pace Environmental Litigation Clinic, Inc., White Plains (Daniel E. Estrin of counsel), for Raritan Baykeeper, Inc. and another, amici curiae.

OPINION OF THE COURT
GRAFFEO, J.

[8 N.E.3d 799]

Plaintiffs challenge an agreement by the New York City Department of Parks and Recreation to allow the operation of a restaurant in Union Square Park. We conclude that plaintiffs fail to state a claim for a violation of the public trust doctrine and therefore affirm the Appellate Division order dismissing the complaint.

Union Square Park occupies approximately 3.6 acres in Lower Manhattan. Dating back to the early 1800s, the park has been the site of various public gatherings, protests and marches, and was designated as a national historic landmark by the United States Department of the Interior. A colonnaded pavilion, the structure at issue on this appeal, stands in the paved plaza at the northern end of the park. In 2008, as part of a citywide restoration initiative, the New York City Department of Parks and Recreation (the Department) renovated portions of the park, including the pavilion area. The project included the future use of the pavilion as a restaurant to replace Luna Park, a cafe that had operated in a space adjacent to the pavilion from 1994 until 2007.

In 2012, the Department executed a written “License Agreement” with Chef Driven Market, LLC (CDM), which permitted CDM to operate a seasonal restaurant in the pavilion for a term of 15 years. The restaurant would be open from mid-April to mid-October each year, from 7:00 a.m. until midnight on a daily basis. In return, CDM agreed to pay the City an annual license fee of $300,000 in the first year (increasing to about $450,000 in the final year) or 10% of annual gross receipts, whichever amount was greater. The agreement further obligated CDM to outlay at least $700,000 in specified capital improvements.

The Department retained extensive control over the daily operations of the restaurant under the terms of the agreement. For example, the Department “must approve in advance and in writing all plans, schedules, services, hours of operation, menu items and prices as well as all changes to services, menu items, merchandise, and any increase in fees and prices.” The preapproved menu must include breakfast items ranging from $1.95 to $15.95; brunch options costing $2.95 to $19.95; and lunch and dinner sandwiches and entrees at prices of $8.95 to $33.95. Outdoor seating would remain open to the public as well as paying customers. The agreement also required CDM to use Union Square Park Greenmarket vendors as suppliers and to offer a number of community programs, including free weekly educational programs; at least 10 annual charity fundraising events; and culinary internships for local students. Finally, the agreement contains a broad termination clause in favor of the Department:

“[T]his License is terminable at will upon written notice by the Commissioner at any time; however, such termination shall not be arbitrary and capricious. Such termination shall be effective twenty-five (25) days after the date of such written notice ... In addition, in the event this License Agreement is terminated, [the Department] will not reimburse Licensee's unamortized capital improvement cost.”

Plaintiffs Union Square Park Community Coalition, Inc. and several individuals brought this action against the Department, its Commissioner, the City of New York and CDM (collectively, the Department)

[8 N.E.3d 800]

seeking a declaratory judgment and injunctive relief restraining the Department from altering the park pavilion to accommodate the restaurant under the public trust doctrine. As relevant to this appeal, plaintiffs asserted two claims: (1) the restaurant constituted a nonpark purpose and was unlawful absent legislative approval and (2) the agreement between the Department and CDM constituted a lease, not a license, thereby amounting to an improper alienation of park-land. ¹ PLAINTIFFS MOVED For a preliminary injunction and the city cross-moved to dismiss the complaint under CPLR 3211(a)(1) and (7). The City contended that the restaurant served a valid park purpose by providing a unique, reasonably-priced dining experience that would promote park safety during evening hours when the park would otherwise be less heavily trafficked, and that the documentary evidence demonstrated that the agreement was a valid license.

Supreme Court granted plaintiffs' request for a preliminary injunction and denied the City's cross motion to dismiss (38 Misc.3d 1215[A], 2013 N.Y. Slip Op. 50110[U], 2013 WL 308912 [2013] ). The Appellate Division reversed, denied the motion for a preliminary injunction and granted dismissal of the complaint, concluding that the seasonal restaurant did not violate the public trust doctrine and that the concession agreement was a revocable license terminable at will, not a lease (107 A.D.3d 525, 966...