Text of Decision Invalidating Theater Air Rights

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Hell's Kitchen Online                               7/1/99
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Below is the text of Judge McCooe's decision that invalidated the 1998 Theater Subdistrict/8th
Avenue "Air Rights" Zoning Plan.

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK         IAS PART 37
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In the Matter of the Application of

JOHN FISHER, individually and in his 
capacity as President of the CLINTON 
SPECIAL DISTRICT COALITION, the CLINTON 
SPECIAL DISTRICT COALITION, RICHARD N. 
GOTTFRIED, CHRISTINA BOERS, WILLIAM 
STRZEMPEK, MARILYN ROCKAFELLOW SIRASKY, 
FRED SIRASKY, IAN BRAND, TOM BURNETT 
and ROBERT KALIN,

               Petitioners-Plaintiffs,

For a Judgment Pursuant to Article 78 
of the Civil Practice Law and Rules,

               -against-                 Index No. 
                                         98-121717

RUDOLPH GIULIANI, in his capacity as 
Mayor of the City of New York; THE CITY 
OF NEW YORK; THE COUNCIL OF THE CITY OF 
NEW YORK, JOSEPH B. ROSE, in his capacity 
as Chairman of THE NEW YORK CITY PLANNING 
COMMISSION, and in his capacity as 
Commissioner of the NEW YORK CITY DEPARTMENT 
OF CITY PLANNING; and THE NEW YORK CITY 
PLANNING COMMISSION,

               Respondents-Defendants.
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WILLIAM P. McCOOE, J.

The City Council adopted amendments to the New York Zoning Resolution which authorized the sale of
development rights (air rights) by property owners to developers within a designated Manhattan
midtown west area. This amendment would permit the construction of buildings with a greater
density than previously authorized. The petitioners claim that an environmental impact statement
should have been prepared to assess the impact on the adjacent Clinton area. The respondents as a
preliminary issue urge that the petitioners lack standing to challenge the amendments. They
further contend that a comprehensive environmental assessment statement determined that the
amendment would not have a significant effect on the environment and issued a negative
declaration. Therefore an environmental impact statement is not required.

Petitioners move for a declaratory judgment pursuant to CPLR § 3001(1) annulling and vacating
respondents' adoption of the Theater Subdistrict Zoning Map Change and Text Amendments; (2)
annulling and vacating the Theater Subdistrict Zoning Map Change and Text Amendments; and (3)
permanently enjoining respondents Joseph B. Rose and the New York City Planning Commission from
certifying any transfers of development rights pursuant to New York City Zoning Resolution §
81-744. Respondents Rudolph Giuliani, the City of New York; the Council of the City of New York,
Joseph B. Rose, and the New York City Planning Commission (collectively, "respondents") oppose the
petition.

Background

In 1997, a proposal to amend the New York City Zoning Resolution was developed by the New York
City Department of City Planning ("DCP"). The proposal, titled the "Theater Subdistrict Proposal,"
has two primary objectives: (1) to strengthen and preserve the Broadway theaters and the Theater
Subdistrict, consisting of the area from 40th to 57th Streets, from Sixth to Eighth Avenues, and
(2) to promote the orderly growth and development of Eighth Avenue.

Under the existing zoning regulations, the designation of Broadway theaters as "listed" prohibited
the demolition of any of the theaters, resulting in unused development rights. Although a theater
could transfer their development rights, such transfer could only be to adjacent lots. The
proposal sought to achieve its goals by greatly increasing the receiving area for the transfer of
such rights. The proposal authorized the transfer of development rights from a listed theater to a
receiving development site located elsewhere within the Theater Subdistrict.

The proposal also sought to facilitate transfers by waiving the requirement of obtaining a special
permit, which is normally subject to public review and takes into consideration the population
density of the receiving area, reduced light and air, landmark preservation, and the accommodation
of vehicular and pedestrian traffic. Instead of requiring a special permit, the Chairman of the
New York City Planning Commission was to certify that the transfer mandated the continued use of
the theater and that funds were contributed to the Theater Subdistrict Fund for the promotion and
enhancement of theater use and preservation.

The DCP filed a Land Use Application for the proposal and commenced the Uniform Land Use Review
Procedure, as required by the New York City Charter. In that application, DCP indicated that an
Environmental Assessment Statement ("EA S") had been filed, which concluded that no Environmental
Impact Statement ("EIS") need be prepared because the amount of future development would be
unaffected by the proposal. Rather, the DCP reasoned, the same total amount of development would
occur on fewer sites, resulting in greater density on those sites. Thus, DCP determined, the
proposal would have no environmental impact on land use, community facilities and services, urban
design, neighborhood quality, solid waste, traffic and transit, and air quality.

The proposed action was the subject of a comprehensive environmental assessment resulting in a
75-page EAS. In the assessment, DCP projected the reasonable worst case development that could
result from the proposal and compared it with the development that otherwise would have occurred
without the proposed action. DCP determined there were 23 potential development sites, containing
more than 10,000 square feet of lot area. DCP concluded that these 23 sites would be ripe for
development whether or not the proposal was adopted.

DCP found that without the proposal, the 23 sites would have the capacity for approximately 10.9
million square feet of floor area if each site was built to the maximum density permitted as of
right. Under the proposal, DCP concluded, the same 23 sites would have a total capacity of 12.6
million square feet. It was the conclusion of DCP that with or without the proposed action, the
zoning capacity of the 23 sites would far exceed the likely future demand.

Using development trends in the midtown area between Fifth and Tenth Avenues and 38th and 59th
Streets during the period 1983 through 1993 as a model, DCP determined that without the proposed
action, the demand for residential space could be accommodated on four or five of the 23 sites and
the demand for office space could be accommodated on three or four of the 23 sites. DCP thus
projected that the combined demand for development in the Theater Subdistrict without the proposed
action over the next ten years would affect nine of the 23 sites. With the proposed action, DCP
concluded the demand for new residential and commercial space would not change, due to the limited
capacity of the market to absorb new development. This conclusion was based upon the factors that
the number of people living and working in Manhattan has not significantly increased in the past
several decades, only a small segment of the business community and residential population can
afford new space, and there is a limited amount of lenders willing to make sizable financial
commitments for such projects.

Implementing these projections, DCP studied the impact the proposed action would have on various
aspects of the environment. DCP analyzed each of the 23 sites for possible site-specific
environmental effects and conducted technical analyses in various environmental areas, concluding
that the proposal would have no significant effect on the quality of the environment. The New York
City Planning Commission, as lead agency for environmental review, issued a negative declaration
with respect to the proposal. The proposal was subsequently referred for review to Community
Boards Four and Five and the Borough Board, all of which opposed the proposal and recommended
disapproval, and to the Manhattan Borough President, who recommended approval with substantial
conditions attached. The New York City Planning Commission held a public hearing in May 1998, and
approximately one month later voted ten to two in favor of the proposal. The New York City Council
subsequently approved the proposal, concluding it would have no significant effect on the
environment. The City Council did, however, remove the west side of Eighth Avenue north of 45th
Street as a receiving area for the development rights.

Petitioners, a group composed of Clinton residents, a community organization, and an Assembly
member who represents Clinton constituents, maintain that it has long been the official policy of
New York City to protect the character of the Clinton neighborhood, stabilize low income housing
in the neighborhood, and provide penalties for any attempt by property owners to force tenants out
of the existing rent regulated housing. In furtherance of these goals, petitioners assert, New
York City established the Special Clinton District ("SCD"), the heart of which is the residential
area located primarily between Eighth and Tenth Avenues from 43rd to 56th Streets. Petitioners
contend this residential area affords reasonably priced housing and businesses and that the
proposal will have the effect of accelerating gentrification, exacerbating displacement of
existing residents, and will negatively impact the neighborhood's physical environment.
Petitioners further claim their neighborhood is already heavily congested due to the recent
development of the nearby Times Square district.

Petitioners assert respondents did not comply with the State Environmental Quality Review Act
("SEQRA") and the requirements of the City Environmental Quality Review by failing to prepare an
EIS, neglecting to determine whether the proposal may have a significant environmental effect, and
failing to evaluate the effects of potential increased development pursuant to the New York
General City Law. Petitioners maintain the proposal will result in an increased amount of overall
development in the Theater District, leading to illegal tenant harassment and consequent
displacement.

Respondents contend the detailed EAS was completed by the DCP, in which the reasonable worst-case
development that could result from adoption of the proposal was compared with the development that
otherwise would have occurred without the proposed action. Respondents assert that the proposal
would allow the projected demand for residential and commercial growth to be accommodated in fewer
buildings than without the proposed action. Respondents further claim that because the proposal
would have no significant adverse impact in numerous areas, including land use, zoning, open
space, sunlight, neighborhood character, traffic and transit, air quality, and noise, no EIS was
necessary. Respondents contend the maximum permitted density for as-of-right development within
the District was not changed by the proposal. According to respondents, the challenged transfer
mechanism will not induce additional development beyond that which would have otherwise occurred.

In response to the petition, respondents argue it should be dismissed as (1) petitioners lack
standing, as they will not suffer a direct injury different in kind and degree than that allegedly
suffered by the general public; (2) the environmental review process fully complied with the
applicable law; (3) the determination that the proposal will have no significant effect on the
environment was based upon a comprehensive EAS using standard methodologies; (4) no EIS was
required; and (5) the transfer of development rights is an accepted land use practice to further
legitimate public policy objectives.

Discussion

A. Standing

In order to demonstrate standing to raise a SEQRA challenge, the burden is on the petitioners to
establish that the rezoning determination would potentially cause them to suffer an "injury in
fact" which falls within the "zone of interests" sought to be promoted or protected by the
statute. Society of Plastics Indus., Inc. v. County of Suffolk, 77 NY2d 761, 773 (1991). See also
Gernatt Asphalt Products, Inc. v. Town of Sardinia, 87 NY2d 668, 687(1996). To meet the
requirement of injury in fact, "something more than the interest of the public at large is
required to entitle a person to seek judicial review -- the petitioning party must have a legally
cognizable interest that is or will be affected by the. . . determination." Sun-Brite Car Wash,
Inc. v. Board of Zoning & Appeals of Town of North Hempstead, 69 NY2d 406, 413 (1987). The
petitioners must further demonstrate a potential injury which is "environmental and not solely
economic in nature." Mobil Oil Corp. v. Syracuse Indus. Dev. Agency, 76 NY2d 428, 433 (1990).
Moreover, the identified injury must be specific and direct; not speculative and conclusory. See,
Boyle v. Town of Woodstock, ___ AD2d ___, 682 NYS2d 729, 731 (3d Dept 1999); Corbett v. New York
State Thruway Auth., 204 AD2d 542, 543 (2d Dept 1994).

The Court of Appeals has recognized that standing principles, particularly in the context of
zoning litigation, "should not be heavy-handed," as "it is desirable that land use disputes be
resolved on their own merits rather than by preclusive, restrictive standing rules." Sun-Brite Car
Wash, supra, 69 NY2d, at 413. Thus, the Court has stated that because it is reasonable to assume
that, when the use is changed, a person with property located in the immediate vicinity of the
subject property will be adversely affected in a way different from the community at large," an
allegation of close proximity, standing alone, may establish standing. Id. at 414. See, e.g.
McGrath v. Town Bd. of Town of North Greenbush, ___ AD2d ___ 678 NYS2d 834, 836 (3d Dept 1998)
(allegation that petitioner resides within 500 feet of the site "is sufficient to create a
presumption that she will be adversely affected in a way different from the public at large"). The
Court has also recognized, however, that standing does not exist when a petitioner is so far from
the property at issue that the effect of the proposed change is no different from that suffered by
the public in general. Sun-Brite Car Wash, supra, 69 NY2d, at 414.  See, e.g., Bridon Realty Co.
v. Town Bd. of Town of Clarkstown, 250 AD2d 677, 678 (2d Dept 1998) (petitioners lacked standing
where they were not in such close proximity to the rezoned parcel as to create an inference of
injury in fact and had failed to allege that their property would suffer direct environmental
harm).

The court finds that petitioners have standing to maintain this petition. Petitioners have
submitted affidavits establishing that they rent or own property directly adjacent to the area
affected by the proposal See e.g. Marilyn Sirasky Aff, at ¶ 3 (bought apartment on 45th Street
between Eighth and Ninth Avenues in 1988); Burnett Aff., at ¶ 3 (resides on the west side of
Eighth Avenue between 43rd and 44th Streets). This is sufficient to establish standing to
challenge the SEQRA process See King v. County of Monroe, ___ AD2d ___ 679 NYS2d 779, 780 (4th
Dept 1998) (petitioner had standing to challenge the SEQRA process as she "resides directly across
the street from the proposed project and has alleged that her property will suffer environmental
harm as a result of the project"). Furthermore, the large scope of the proposal, affecting a
seventeen block area two avenues wide, is broad enough to establish, in the context of standing,
that petitioners may be adversely affected by the proposed action.

Moreover, the identification by petitioners of the specific harms of increased traffic and
pedestrian congestion, localized air pollution, and the potential deprivation of light and air is
sufficient to establish standing. See McGrath, supra, 678 NYS2d, at 836 ("allegations of traffic
congestion and its consequential increase in noise are potential noneconomic environmental
concerns within the zone of interest of SEQRA" to establish standing). Compare, Gerdts v. State of
New York, 210 AD2d 645, 647 (3 d Dept 1994) (denying standing where party merely raised
generalized concerns). Furthermore, there is no need for petitioners to presently demonstrate
adverse environmental effects to establish standing. Har Enterprises v. Town of Brookhaven, 74
NY2d 524, 529 (1989). Accordingly, the court concludes that petitioners have established standing
to maintain their petition.

B. SEQRA Review

The court's role in reviewing the SEQRA process is limited to determining whether the agency
"identified the relevant areas of environmental concern, took a 'hard look' at them and made a
'reasoned elaboration' of the basis for its determination." King v. Saratoga Cty. Bd. of
Supervisors, 89 NY2d 341, 349-50 (1996) (quoting Jackson v. New York State Urban Dev. Corp., 67
NY2d 400, 417 [1986]) (citations omitted). It is not the court's function "to weigh the
desirability of any action or choose among alternatives, but to assure that the agency itself has
satisfied SEQRA, procedurally and substantively." Jackson, supra, 67 NY2d, at 416. Thus, although
a court may review the record, "[n]othing in the law requires an agency to reach a particular
result on any issue, or permits the courts to second-guess the agency's choice, which can be
annulled only if arbitrary, capricious or unsupported by substantial evidence." Id. at 417
(citations omitted).

In reviewing the issuance of a negative declaration by an agency, the court's task is to determine
whether the agency "made a thorough investigation of the problems involved and reasonably
exercised [its] discretion." Chinese Staff & Workers Assn. v. City of New York, 68 NY2d 359, 364
(1986). In making such review, the agency's obligations under SEQRA "must be viewed in light of a
rule of reason" and the court should recognize that SEQRA "has left the agencies with considerable
latitude in evaluating environmental effects and choosing among alternatives." Jackson supra, 67
NY2d, at 417 (citations omitted). Accordingly, "not every conceivable environmental impact,
mitigating measure or alternative, need be addressed in order to meet the agency's
responsibility." Neville v Koch, 79 NY2d 416, 425 (1992). Rather, the reasonableness of an
agency's action will depend largely on the circumstances surrounding the proposal. Id.

The crux of petitioners' claim is that respondents did not comply with SEQRA by failing to prepare
an EIS, neglecting to determine whether the proposal may have a significant environmental effect,
and failing to evaluate the effects of potential increased development pursuant to the New York
General City Law.

SEQRA authorizes local governments to develop and implement environmental review procedures.
Pursuant to the City Environmental Quality Review procedures, an agency determines whether the
proposed action is a Type I action, which carries with it the presumption that it is likely to
have a significant adverse impact on the environment and may require an EIS, or a Type II action,
which is not subject to environmental review. See, 6 NYCRR §§ 617.4(a)(1); 617.5(a). Once a
proposed action is identified by the agency as a Type I action, as in the present case, an EAS is
prepared and used to determine whether the proposed action may have a significant effect on the
environment. If so, an EIS is required. 6 NYCRR § 617.7(a). In reaching this determination, the
impact that may be reasonably expected to result from the proposed action must be compared against
a number of criteria considered to be indicators of significant adverse impact on the environment.
These include a substantial adverse change in existing air quality, traffic, or noise levels, a
substantial change in the intensity of the use of land, and the creation of a material conflict
with a community's current plans or goals. See 6 NYCRR § 617.7(c).

It is well established that the threshold as to whether a Type I action requires an EIS is a "low"
one. See, Chinese Staff & Workers Assn. v. City of New York, 68 NY2d 359, 364-65 (1986). ("The
threshold at which the requirement that an EIS be prepared is triggered is relatively low: it need
only be demonstrated that the action may have a significant effect on the environment");
Kirk-Astor Drive Neighborhood Assn. v Town Bd. of the Town of Pittsford, 106 AD2d 868 (4th Dept
1984) (threshold is "a low one"). This is because SEQRA requires an EIS for any action "[w]hich
may have a significant effect on the environment." H.O.M.E.S. v. New York State Urban Devt. Corp.,
69 AD2d 222, 232 (4th Dept 1979). In fact, "under the SEQRA regulations a Type I action, such as
the one at issue herein, 'carries with it the presumption that it is likely to have a significant
adverse impact on the environment and may require an EIS."' Riverhead Business Improvement Dist.
Mgt. Assoc.. Inc. v. Stark, 253 AD2d 752, 753 (2d Dept 1998) (quoting 6 NYCRR § 617.4[a][1]).

In light of the immense scope of the project, which covers seventeen blocks and two avenues, and
considering the vast potential amount of total capacity to be added pursuant to the amendment,
estimated at in excess of two million square feet, and taking into account the "low" threshold and
presumption of Type I actions, the court determines that an EIS should have been prepared. Key to
understanding DCP's conclusions in the 75-page EAS is its assumption that the amount of future
demand in the Theater Subdistrict for residential and office space will not be affected by the
transfer of development rights. See, Respondents' Memo of Law, at 3 ("Contrary to petitioners'
assertions, the challenged transfer mechanism will not induce additional development in the
Theater Subdistrict beyond that which would have occurred without the zoning amendments."). This
statement is largely based on the conclusion that the number of people living and working in
Manhattan has not significantly increased in the past several decades. Respondents also based
their determination on development trends in the midtown area between Fifth and Tenth Avenues and
38th and 59th Streets during the period 1983 to 1993. Respondents maintain Petitioners' assumption
of greater economic activity and development will result from the amendments is simply
speculation.

The Court finds that there is a basis in fact for the Petitioners to advance the argument that the
amendments will stimulate development. The claim of speculation ignores the current state of the
midtown real estate market and the fact that the economy and real estate market is greatly
different today than in the period 1983 to 1993. See, Reply Memo of Law at 8-10. The expectation
is that growth will continue. It is also noteworthy that the nearby Times Square neighborhood has
recently undergone a significant transformation, increasing the value and desirability of living
and working in the Theater Subdistrict, and augmenting the likelihood of significant development.
In fact, respondent Mayor Rudolph Giuliani apparently agrees. See Thomas J. Lueck, Times Square 's
New Gleam Slowly Reaches Seedy 8th Avenue, NY Times, June 20, 1997 (Mayor Giuliani stating,
"Eighth Avenue is coming back, and why not? After all, it's right next to Broadway. I see the
potential for a lot more development.") (attached as Verified Reply, Exh. F). Respondents' general
assessment of no significant effect on the environment is a conclusory one, and does not qualify
as a "reasoned elaboration" of the impact the proposal would or may have in numerous areas,
including community facilities and services, sunlight, urban design, neighborhood character,
traffic and transit, air quality, and noise. See, Tonery v. Planning Bd. of Town of Hamlin, ___
AD2d ___ 682 NYS2d 776, 776 (4th Dept 1998) (conclusory statements "'unsupported by empirical or
experimental data, scientific authorities or any explanatory information will not suffice as a
reasoned elaboration for its determination of environmental significance or nonsignificance"')
(quoting Tehan v Scrivani, 97 AD2d 769, 771 [2d Dept 1983]); Leibring v. Planning Bd. of Town of
Newfane, 144 AD2d 903, 903 (4th Dept 1988) (determination of environmental non-significance must
be a reasoned elaboration of its basis, rather than a conclusory statement).

As previously indicated, 6 NYCRR § 617.7(a) requires the preparation of an EIS if the proposed
action may have a significant effect on the environment. Among the factors considered in making
this conclusion are "a substantial adverse change in existing air quality, ground or surface water
quality or quantity, traffic or noise levels" and "a substantial change in the use, or intensity
of use, of land. . . ." 6 NYCRR § 617.7(c)(1)(i), (viii). Although respondents conducted an
analysis of these factors, the analysis was based upon a projected limited growth, contrary to
recent development. The court recognizes that "not every conceivable environmental impact,
mitigating measure or alternative, need be addressed in order to meet the agency's
responsibility." Neville, supra, 79 NY2d, at 425. The court also notes, however, that "the impact
that a project may have on population patterns or existing community character, with or without a
separate impact on the physical environment, is a relevant concern in an environmental analysis
since the statute includes these concerns as elements of the environment." Chinese Staff & Workers
Assn., supra, 68 NY2d, at 366. By basing its analysis on restricted growth, rather than the very
real possibility of greater development, DCP failed to comply with SEQRA. See, Tonery, supra, 682
NYS2d, at 776 (if agency fails to take a hard look at relevant areas of environmental concern,
"'there is a danger that the subsequent finding, made after the [environmental assessment form] is
reviewed, would merely be a 'rubber stamp' or afterthought"') (quoting Matter of E.F.S. Ventures
Corp. v Foster, 71 NY2d 359, 371 [1988]).

Respondents acknowledge that under the project, "the transfer of development rights would increase
the permitted density of receiving sites to varying degrees . . ." Respondents' Memo of Law, at 3.
However, rather than preparing an EIS, Respondents concluded there would be no significant effect
on the environment. This conclusion strains credibility, especially in light of other
determinations that an EIS was required for considerably smaller projects. See, e.g., Neville,
supra, 79 NY2d, at 421-22 (in analyzing the proposed rezoning of one Manhattan block from
medium-density manufacturing to high-density commercial and residential, DCP prepared a 700-page
draft EIS and a final EIS, examining the environmental impact of four "worst-case" scenarios, five
alternatives, and one "no build" hypothetical).

The court notes that a positive declaration is not a finding that the proposed action will have a
significant effect on the environment. Rather, it is a finding that it may have such an effect.
Harley Rendezvous. Inc. v. Town of Duanesburg Zoning Bd. of Appeals, 131 Misc2d 1060, 1065 (Sup.
Ct., Schenectady Cty. 1986). Nevertheless, because an EIS "'should be required where the action
may fairly be said to have a potentially significant adverse effect,"' H.O.M.E.S., supra, 69 AD2d,
at 232 (quoting Hanly v. Kleindienst, 471 F2d 823, 831 [2d Cir 1972], cert. denied sub nom. Hanly
v. Attorney General of United States, 412 US 908 [1973]), and as such a low threshold as been met
in the present case, the petition is granted.

Accordingly, it is

ADJUDGED that the petition is granted as follows:

(1) The determination of Respondents adopting the Theater Subdistrict Zoning Map Change and Text
Amendments is vacated and annulled.

(2) The Theater Subdistrict Zoning Map Change and Text Amendments are annulled and vacated.

(3) Respondents Joseph B. Rose and the New York City Planning Commission are enjoined from
certifying any transfers of development rights pursuant to New York City Zoning Resolution §
81-744.

(4) Respondent DCP is directed to prepare an EIS.

This constitutes the decision and judgment of this court.

Dated: 29 June 1999

ENTER: ___________
         J.S.C.