decision to terminate negotiations with CIR over the lease, or
did anything to revive any commitment the City might still have
been bound by in March, 1994. Indeed, the affidavits suggest to
the contrary that CIR, when apprised of the City's plan to build
a baseball stadium, immediately attempted to collaborate,
suggesting a site other than the City-owned property in
Steeplechase Park. See Scheffer Aff. at ¶ 8. The City
entertained CIR's suggestion, although from the outset also made
clear that if CIR was again unable to procure financing, the
City would proceed without CIR. Id. at ¶ 10. Talks continued
off and on for over a year, and CIR made several presentations
to designees of the Mayor, hoping to persuade the City to work
in conjunction with CIR on the development of the stadium.
Significantly, on the account of CIR's own consultant, a
sticking point appears to have been the fact that, although CIR
did own certain contiguous parcels, it did not have a lease on
the Cityowned property in Steeplechase Park. Id. at ¶ 20. This
fact was a matter of particular concern to CIR's development
partners, New Roc Associates, which worried "that in order to
obtain permanent bank financing for the project, the City would
have to activate CIR lease." Id. In turn, New Roc was told by
former EDC President Charles Millard "that he could not comment
on, or activate CIR's lease, without the expressed permission of
the Mayor, as this project was out of the hands of EDC, and
under the control of the Mayor." Id.
Unfortunately for CIR, that permission was never forthcoming.
The preliminary talks fell through, and the City proceeded on
the baseball stadium without CIR. In January, 1999, Mayor
Giuliani highlighted the stadium in his State of the City
message. And, on April 12, 2000, the New York City Council voted
to approve zoning changes necessary for the development of
City-owned property in Steeplechase Park into a minor league
baseball stadium. The City presently intends the stadium to be
ready for baseball in June, 2001.
The standards governing a motion for summary judgment are
familiar. Summary judgment is appropriate where the moving party
establishes that "there is no genuine issue as to any material
fact and that [it] is entitled to a judgment as a matter of
law." Fed.R.Civ.P. 56(c). The moving party must show that if the
evidentiary material of record were reduced to admissible
evidence in court, it would be insufficient to permit the
non-moving party to carry its burden of proof. Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265
Once the moving party has carried its burden under Rule 56,
"its opponent must do more than simply show that there is some
metaphysical doubt as to the material facts." Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct.
1348, 89 L.Ed.2d 538 (1986). The opposing party must set forth
specific facts showing a genuine issue for trial and may not
rest upon the mere allegations or denials of its pleadings.
Franco v. Kelly, 854 F.2d 584, 587 (2d Cir. 1988). The court's
function in ruling on a motion for summary judgment is not to
weigh the evidence and determine the truth of the matter, but
rather to determine whether there is a genuine issue for trial.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct.
2505, 91 L.Ed.2d 202 (1986). The mere existence of some alleged
factual dispute between the parties, however, will not defeat an
otherwise properly supported motion for summary judgment. Id.
at 247248, 106 S.Ct. 2505.
Applying these principles, the ample record of this case —
comprising a paper trail some 16 years long, including one prior
and one pending judicial proceeding, legislative and municipal
enactments, extensive correspondence, documents, and detailed
affidavits from a half-dozen of the major players — compels the
conclusion that the defendants' motion for summary
judgment must be granted. The plaintiff has alleged violations
of it rights under the Due Process, Equal Protection, Contract,
and Takings Clauses of the Constitution, but has failed to raise
any colorable issue that it is entitled to relief on the basis
of any of these constitutional doctrines. The plaintiff has also
raised a claim of equitable estoppel, which is equally
unavailing. The claims are treated in turn.
A. Due Process
CIR argues that the City has violated its property interest in
the lease on the Cityowned Steeplechase Park properties, which,
though a creature of New York state law, is protected under the
Due Process Clause of the Fourteenth Amendment to the U.S.
Constitution. Board of Regents of State Colleges v. Roth,
408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). CIR's
account of the state law basis of its claim to a protected
property interest shows that its claim of a due process
violation is without merit.
As already noted, at oral argument CIR abandoned its theory
that it was a party to a draft lease made valid and enforceable
by its part performance thereunder, in favor of a new theory,
also first broached at oral argument: that CIR fully performed
under a contract to enter into a lease that is valid and
enforceable on its face.*fn5 CIR's argument rests almost
entirely on a somewhat tendentious view of the transactions
between CIR and the City between May and September 1992.
Specifically, CIR notes that in the last three extension letters
from the City, dated May 22, June 25, and July 27 of 1992, there
is no express mention of financing as a condition on the
creation of a lease between CIR and the City. From this
observation, CIR invites the Court to infer that financing had
somehow fallen out of the contract between the parties, leaving
CIR with only two performance obligations: to sign and deliver
the draft lease, and to make all extension payments due under
extension letters dating back to November 22, 1990.
This argument fails on both the facts, and the law. As to the
facts, it begs the question: what was the mutually intended
purpose of the extensions for which CIR was paying so
handsomely? If, as of May 1992, the parties' understanding was
that CIR had no performance obligations other than to sign and
deliver the draft lease it had held since November, 1990, and to
make all due extension payments, what conceivable end could
signing yet another extension letter serve? The answer of course
is plain on the record. As stated by Deputy Mayor
Hernandez-Piñero in her November 25, 1991 letter to Mr. Bullard,
the reason CIR needed the extensions in the first place was that
it needed time to procure "financing . . . in form and amount
satisfactory to the City. . . ." Brown Aff., Exh. D. In her
affidavit of April 6, 1994, sworn to in support of the City's
opposition to CIR's application for an order to show cause
pursuant to Article 78, EDC Vice-President Angela Brown
explained this rationale:
Execution of the ground lease, however, was
conditioned upon CIR securing firm financing for the
construction and development of the proposed project.
It was the intention of the parties that the
developer could market the project to potential
investors with a substantially completed draft lease
in hand. A draft
lease was prepared in order that CIR could further
demonstrate to its potential financing sources that
the City fully intended to provide CIR with a
financeable leasehold interest in the property. Once
CIR secured a firm commitment for financing, the
parties could then make minor modifications to the
draft ground lease to meet the requirements of the
Brown Aff. at ¶ 25. There is not an iota of evidence in the
capacious record before this Court to suggest that CIR ever
secured "a firm commitment for financing," much less that such
financial interest as it did generate was "in form and amount
satisfactory to the City."*fn6 Though not for lack of trying,
CIR simply failed to obtain the financing that was a condition
precedent on the lease from the outset of and throughout its
dealings with the City. That fact alone suffices to explain why
the lease was never executed and delivered, why it cannot be
deemed valid and enforceable today, and why therefore it is not
a protected property interest under the Due Process Clause.
New York contract law supports the same conclusion. Contracts
are interpreted in light of all their surrounding circumstances
and of the acts of the parties. Archibald v. Panagoulopoulos,
233 N.Y. 478, 488-89, 135 N.E. 857 (1922). Here the surrounding
circumstances and the acts of the parties demonstrate that
financing remained a condition precedent to execution and
delivery of the lease throughout the entire negotiation process,
including the period covered by the final three extension
letters. From the project's conception with the Board of
Estimate Resolution in 1989, it was understood that the Mayor
and his designees were vested with discretion to execute and
deliver the lease under such terms and conditions as they deemed
"necessary, appropriate or desirable." Brown Aff., Exh. B at 7.
Foremost among the terms and conditions imposed under this
authority was the requirement that CIR obtain "financing in form
and amount satisfactory" to the Mayor or his designees. As the
Brown Affidavit from 1994 attests, the City provided a draft
lease to CIR in 1990, as an aid to the procurement of that
financing. The circumstances make the City's intent clear.
Having told CIR that no lease could be executed absent firm
financial commitments, yet knowing that securing such
commitments in the context of a real estate deal is difficult
absent evidence of a contemplated underlying property interest,
the City gave CIR a document that would show prospective
financiers what that property interest would look like were
they to make a firm commitment to the envisioned project. The
strategy did not work. CIR was unable to elicit that firm
commitment, even with the draft lease in hand, and
notwithstanding the City's diligent assistance, in extending
deadlines no fewer than five times. As a matter of law, the
conclusion could not be plainer: even if, as CIR now maintains,
the parties were contemplating a contract to enter a lease, a
condition precedent to that contract was
not satisfied. Consequently, there never was a contract. See
Kapson Constr. Corp. v. ARA Plumbing, & Heating Corp.,
227 A.D.2d 484, 485, 642 N.Y.S.2d 701, 703 (2d Dep't 1996) ("Since
the existence of the contract was premised on the satisfaction
of a condition precedent, no contract arises `unless and until
the condition occurs'.") (quoting Calamari and Perillo,
Contracts § 11-5, at 440 (3d ed)).
Even more to the point here are the words of Justice Cardozo,
engraved on the memories of anyone who has taken first-year
The law has outgrown its primitive stage of formalism
when the precise word was the sovereign talisman, and
every slip was fatal. It takes a broader view today.
A promise may be lacking, and yet the whole writing
may be `instinct with an obligation.' imperfectly
expressed . . .
Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 91, 118 N.E. 214
(1917). The words expressly recapitulating CIR's obligation to
procure financing as a condition precedent to execution and
delivery of the lease may have been missing from the last three
extension letters, but it would be the very epitome of primitive
formalism to infer from that omission that it had somehow
"fallen out" as a term of the agreement between the parties. Of
course, it had not; as noted, that is the reason CIR continued
to seek additional extensions. Thus, when CIR finally failed to
obtain the financing it sought, and the City terminated
negotiations with it, the City was not breaching any obligation
to CIR. A transaction that had been contemplated simply failed
to come to fruition. CIR, understandably aggrieved, does not
thereby have a claim of constitutional dimension.