The opinion of the court was delivered by: Ward, District Judge.
Defendants City of New York (the "City"), New York City
Planning Commission ("CPC"), New York City Department of City
Planning ("DCP"), New York City Transit Authority ("TA"), and
Metropolitan Transportation Authority ("MTA") move, pursuant
to Rule 56, Fed.R.Civ.P., for summary judgment dismissing the
complaint, with costs, including reasonable attorneys' fees.
Plaintiffs Peter Sudarsky ("Sudarsky") and Nominee Trading
Corporation ("NTC") d/b/a 225-227 East 52nd Street Associates
cross-move, pursuant to Rule 56, Fed.R.Civ.P., for partial
summary judgment as to liability. For the reasons that follow,
defendants' motion for summary judgment is granted and
plaintiffs' cross-motion for partial summary judgment is
This action, brought pursuant to 42 U.S.C. § 1983, arises out
of a dispute concerning the procedures used by defendants in
reviewing plaintiffs' development project. These procedures had
the ultimate effect of preventing plaintiffs from developing
their property in the manner they desired. The facts are
undisputed, except as noted.
At all times relevant to this action, Sudarsky and NTC were
the sole partners of 225-227 East 52nd Street Associates (the
"Partnership"), a New York partnership engaged in the real
estate business. The Partnership is owned 99% by Sudarsky and
1% by NTC. The CPC is a department of the City government
established pursuant to the New York City Charter (the "City
Charter") and Administrative Code.*fn1 The CPC's
responsibilities include, among other things, the regulation
of land use in conformity with applicable zoning rules and the
preparation of recommendations for changes in zoning. The DCP
is a division of the CPC. The TA is a public benefit
corporation organized pursuant to N.Y.Pub.Auth.Law §§ 1201 et
seq. for the purpose of operating transit facilities within the
City. The TA's responsibilities include, among other things,
the operation, maintenance and planning of subway stations and
access thereto. The MTA is a public authority organized and
existing pursuant to N.Y.Pub.Auth.Law §§ 1260 et seq. The MTA's
responsibilities include, among other things, the development
of commuter transportation facilities within the City of New
York and the counties of Dutchess, Nassau, Orange, Putnam,
Suffolk and Westchester.
Because Sudarsky's claims concern the process of obtaining
the requisite approvals for a real estate development project
in the City, some understanding of that approval process is
necessary to an analysis of his claims. Therefore, a brief
description of the relevant City regulations follows.
The New York City Zoning Resolution (the "Zoning
Resolution") is established under section 200.a.1 of the City
Charter. The New York City Department of Buildings (the
"Buildings Department") is primarily responsible for enforcing
and administering the Zoning Resolution. Zoning Resolution
§ 71-00. Appeals from administrative interpretations of the
Zoning Resolution are heard by the Board of Standards and
Appeals. Id. at § 72-01.
Obtaining Approval for a Development Project
In order to obtain approval for a development project within
the City, a developer must file an application for a building
permit with the Buildings Department. See N.Y. City Charter §
645(b)(1). The Buildings Department then either approves the
permit or indicates "objections" to the permit application.
The existence of objections to a development proposal do not
necessarily mean the proposal will not ultimately proceed, but
rather that the objections must be resolved before a building
permit is approved. Exhibit 23 to Affidavit of Peter Sudarsky,
filed May 24, 1991 ("Sudarsky aff.") (deposition of Stephen B.
Jacobs) ("Jacobs dep."). The objections may simply be requests
for additional information, or may be more substantive, such
as a requirement that certain agency approvals be obtained or
that the proposed building plans be altered to conform with
zoning regulations. See Exhibit D to Affidavit of Albert
Fredericks, filed April 29, 1991 ("Fredericks aff.") at
A00179-81; Jacobs dep.; Affidavit of Mario A. Fristachi, filed
June 17, 1991 at ¶¶ 5-10.
If all of the Building Department's objections are
successfully resolved, the department will issue a building
permit and the developer can then proceed to begin
construction on the project.
Article 95 of the Zoning Resolution provides for the
establishment of a Special Transit Land Use District (the "TA
District"). The parties inform the Court that the TA District
was created to accommodate the proposed Second Avenue subway
line. Among the purposes of the TA District is the reduction
of conflict between normal pedestrian traffic on the public
sidewalks and persons attempting to gain access to the subway
system. Zoning Resolution § 95-00. In furtherance of that
purpose, developments within the TA District are required to
provide access to the subway. Id.
Any new development within the TA District is required to
"provide an easement on the zoning lot for subway-related
use," if it is determined that such an easement is required.
Id. at § 95-03. A developer either files an application for a
transit easement certification himself, pursuant to § 95-041 of
the Zoning Resolution, or is notified that a transit easement
may be needed when the Buildings Department determines that a
proposed development involves "ground level construction within
the [TA District]," and makes an objection regarding the need
for a transit easement certification on the developer's
building permit application. Id. at 95-03. The developer must
then apply to the CPC and the TA for their determination as to
whether a transit easement will be required. Id. at § 95-04.
The CPC and the TA must jointly certify their decision within
sixty days after the receipt of the application.
Once the need for a transit easement has been certified, a
developer must negotiate a transit easement agreement with the
TA and the CPC. Id. at 95-041. The easement application is
referred to the DCP, which determines the exact location and
dimensions of the proposed easement. This determination
requires the DCP to obtain detailed plans of the proposed
construction from the developer, as well as to communicate with
the developer concerning the required volume of the easement.
Events Leading to the Instant Dispute
For the purpose of their development plans, plaintiffs
merged the various parcels into a single zoning lot as
permitted under § 12-10 of the Zoning Resolution. The merger
allowed the plaintiffs to use the development rights of the
53rd Street portion of the property for the construction of a
new building that was proposed for the 52nd Street portion of
the property. Plaintiffs developed a plan to construct a
17-story building on the 52nd Street portion of the lot in
place of six existing buildings, which were to be demolished.
The 53rd Street buildings were to be preserved and renovated.
At the time plaintiffs were formulating their development
plans, the DCP was studying a proposal to "down-zone" the area
in which plaintiffs' property was located from R8 to R8B.
Under R8B zoning, the maximum FAR is 4.0. This ratio was too
small to permit the total floor area in plaintiffs' proposed
building. Plaintiffs were aware of the existence of this
proposal. Exhibit I to Fredericks aff.; Exhibit L to
Fredericks aff. (deposition of Victor Marrero).
A small part of the TA District is located along East 53rd
Street. According to defendants, this "spur" was created to
allow for the eventual construction of a pedestrian
subterranean passageway connecting the proposed Second Avenue
subway and the existing Lexington-Third Avenue subway station
located at 53rd Street. The 53rd Street section of plaintiffs'
property was located in this section of the TA District.
Although plaintiffs' proposed development was not planned for
this portion of the lot, due to the fact that the lot had been
merged for zoning purposes, a question arose as to whether
plaintiffs' project was subject to a determination as to
whether a transit easement was required.*fn2
On or about December 5, 1986, plaintiffs filed an
application and plans with the Buildings Department,
requesting permission to construct a 17-story residential
building on the 52nd Street portion of their property. On or
about December 12, 1986, the Department of Buildings issued a
series of objections to plaintiffs' application, one of which
indicated that the development proposed by plaintiffs could
not be approved until the CPC and the TA determined whether
plaintiffs would be required to provide a transit easement on
the lot. On or about December 22, 1986, plaintiffs applied to
the CPC and the TA for certification as to whether or not a
transit easement would be required.
Following the receipt of plaintiffs' application, a TA
official wrote a letter dated January 12, 1987, advising the
DCP that a transit easement was not needed for the location of
Sudarsky's proposed development. A copy of this letter was
sent to plaintiffs. Exhibit 7 to Sudarsky aff. This letter was
superseded by a second letter from the TA, dated February 13,
1987, which stated: "upon reconsideration, the Transit
Authority has determined that a transit easement is required
[on plaintiffs' proposed development]." Exhibit 17 to Sudarsky
aff. Plaintiffs also received a copy of the second letter. On
or about February 19, 1987, the DCP wrote to the Buildings
Department, stating that CPC and the TA jointly certified that
a transit easement was required on the subject zoning lot.
Exhibit 20 to Sudarsky aff.
In October 1987, the New York City Board of Estimate
approved an amendment to the Zoning Resolution, by which the
area surrounding plaintiffs' property was down-zoned from R8
to R8B. As pointed out above, the 17-story building proposed
by plaintiffs was no longer permitted under the new
classification. In 1988, plaintiffs sold the property for
approximately $12,000,000. The DCP thereafter formally
terminated the application for easement certification.
Plaintiffs initiated the instant lawsuit on July 28, 1989
and subsequently amended their complaint on September 26,
1990. The Amended Complaint alleges that the DCP and CPC, in
furtherance of a City policy of discouraging mid-block real
estate development in east midtown, adopted a plan designed to
prevent plaintiffs' development project, by illegal or
unconstitutional means if necessary. According to the Amended
Complaint, pursuant to this plan, the DCP determined that it
would claim a transit easement through plaintiffs' proposed
development site, delay the City's action on such easement
administratively and delay issuance of plaintiffs' building
permit, until such time as the area including the site had
been down-zoned so as to make plaintiffs' proposed development
illegal. Plaintiffs claim that defendants' actions violated
their rights to substantive and procedural due process and
equal protection of the laws and amounted to an
unconstitutional taking, in addition to violating their rights
under the New York State constitution. The complaint seeks
compensatory damages in the amount of $26,000,000, for losses
plaintiffs claim they sustained on their investment as well as
for lost profits had the project gone forward as planned.
Plaintiffs also seek reasonable attorneys' fees pursuant to
42 U.S.C. § 1988.
Following the completion of discovery, defendants moved for
summary judgment, claiming that they are entitled to judgment
as a matter of law, or alternatively, that the evidence
produced in discovery reveals that they acted legally at all
times. Plaintiff subsequently ...