United States District Court, S.D. New York
February 10, 2004.
BART DIDDEN, DOMENICK BOLOGNA, FRED DeCESARE, CABERNET 119 REALTY CORP., OPUS 113 CORP., PAUILLACE 115 REALTY CORP., 117 NORTH MAIN STREET CORP., Plaintiffs, -against- THE VILLAGE OF PORT CHESTER, THE BOARD OF TRUSTEES for the VILLAGE OF PORT CHESTER, GERALD LOGAN, individually and in his official capacity as Village Trustee for the Village of Port Chester, DANIEL COLANGELO, JR., individually and in his official capacity as Village Trustee for the Village of Port Chester, JOHN M. CRANE, individually and in his official capacity as Village Trustee for the Village of Port Chester, GERARD DIROBERTO, individually and in his official capacity as Village Trustee for the Village of Port Chester, ANTHONY NAPOLI, individually and in his official capacity as Village Trustee for the Village of Port Chester, ROBERT SORENSEN, individually and in his official capacity as Village Trustee for the Village of Port Chester, G&S Port Chester, LLC. and Gregory Wasser, Defendants
The opinion of the court was delivered by: JAMES McMAHON, Magistrate Judge
DECISION AND ORDER DENYING PLAINTIFFS' MOTION
FOR A PRELIMINARY INJUNCTION
In this action, Plaintiffs Bart Didden, Domenick Bologna, Fred
DeCesare, Cabernet 119 Realty
Corp., Opus 113 Corp., Pauillac 115 Realty Corp. and 117 North Main
Street Corp. seek an order staying a condemnation proceeding in state
court. For the following reasons, Plaintiffs' motion is denied.
This case arises out of a dispute between private developers over a
development project associated with the Village of Port Chester's ("Port
Chester") redevelopment of 27 acres of its downtown and waterfront area.
The Redevelopment Project
Port Chester had been seeking to redevelop its blighted waterfront and
downtown areas since 1977 without success. In April 1998, Defendants
G&S Port Chester, LLC. ("G&S"), and its principal, Defendant
Gregory Wasser (together, the "Private Defendants") entered into a Land
Acquisition and Disposition Agreement ("LADA") with Port Chester which
named G&S as the designated developer of the Modified Marina
Redevelopment Project (the "Redevelopment Project") in the urban renewal
area of Port Chester known as the Marina Redevelopment Project Urban
Renewal District (the "MUR District") in April 1998. The agreement called
for development of approximately 500,000 square feet of modern retail
The Project was to be anchored by a Costco Wholesale warehouse store
employing more than 150 people. The Project also includes a movie
theater, a Marshall's department store, a Designer
Shoe warehouse, a Bed, Bath & Beyond, a Michael's Arts &
Crafts Store, as well as a Stop & Shop Supermarket. All of these
stores are under construction today, employing dozens of union
construction workers pursuant to agreements with several major
contractors. Upon completion, the Project will offer jobs to more than
1,000 people, produce millions in tax revenues to Port Chester and the
State, and add over 2000 additional parking spaces to downtown Port
On July 14, 1999, following a public hearing, the Port Chester Board of
Trustees (the "Board") adopted a resolution (the "1999 Findings") (1)
making a Finding of public purpose for condemnation purposes under
Article 2 of the New York State Eminent Domain Procedure Law and (2)
approving the LADA and the designation of G&S as "the qualified and
eligible redeveloper" for the Project (Affidavit of Greg Wasser ¶ 12
Exh. A.) The 1999 Findings stated that the Project "is designed to
revitalize and beautify the Village's long neglected waterfront,
eliminate a deteriorating downtown urban blighted area, bring sorely
needed jobs to the Village, add to the Village's tax base, and
importantly, bring the public back to the Village's downtown and
waterfront." (Wasser Aff. ¶ 11 Exh. A.) Notice of the hearing was
published pursuant to New York Eminent Domain Procedure Law (the "EDPL")
§ 202A, which requires the condemnor to publish notice of the hearing
in newspapers at least 10, but not more than 30 days before the hearing.
Although the EDPL does not require individual notice to the affected
property holders, Defendants have attached a copy of the notice of public
hearing and copies of signed receipts acknowledging that Plaintiffs
received that notice. (Wasser Aff. ¶ 12 Exhs. D & E.) The EDPL
allowed affected property owners 30 days after July 14, 1999 to appeal
the Board's findings. EDPL § 207. Plaintiffs took no such appeal.
The Redevelopment Project became one of Westchester County's largest
and most visible of
such endeavors. It was the subject of substantial environmental
review, public meetings and widespread publicity.
The Redevelopment Project called for the acquisition of thirty-eight
separate properties and the relocation of more than one hundred
individual families, most of whom were renting substandard or illegal
apartments in deteriorated structures. Fifty-two businesses were also
relocated. Lawsuits predictably ensued. G&S reached private
settlements with most of the displaced business owners, landowners and
residential tenants, and the Condemnation Part of the Supreme Court of
Westchester County determined the remaining claims, some after trial.
Due to the Redevelopment Project's size, it has been undertaken in
phases. G&S obtained building permits and proceeded with its first
phase, which included Costco; it was completed in August 2002. At the
same time, Defendants acquired land for subsequent phases and installed
millions of dollars of public infrastructure improvements, including the
construction of a waterfront park and new sea wall; new water, sanitary
and storm sewers; new traffic controls, curbing and lighting and removal
of old overhead utility lines.
While the first phase appears to have proceeded apace, the second phase
of the Redevelopment Project was significantly delayed due to litigation
initiated by various property owners and tenants. Although all cases were
eventually decided in favor of Port Chester, the process took nearly two
years. At the federal level, property owner William Brody, filed suit in
this Court, alleging that the EDPL violated the Due Process Clause of the
Fourteenth Amendment, both facially and as applied to him. In January
2001, the district court (Baer, J.) granted Brody's motion for a
preliminary injunction, finding that defendants had failed to give Brody
notice of the Findings of the Port Chester
Board of Trustees or of his statutory right to appeal the Board's
Findings. The injunction halted large portions of the Redevelopment
Project, at a significant cost to Defendants, until it was lifted by the
Second Circuit on August 8, 2001. See Brody v. Village of Port
Chester, 261 F.3d 288 (2d Cir. 2001) ("Brody I"). Port
Chester acquired title to Brody's property on August 28, 2001.
At the state court level, several owners challenged Port Chester's
request for a writ of assistance pursuant to EDPL § 405(A), thereby
preventing Port Chester from condemning their properties. Justice Peter
Rosato of the Supreme Court of Westchester County granted Port Chester's
writ in all cases. See e.g., In Matter of Village of Port
Chester, Greatest Estate Services of America, Inc., 00 No.
64481 (N.Y.Sup.Ct. Weschester Co. March 18, 2002); In Matter of
Village of Port Chester v. Luis Perez, d/b/a Luis Luncheonette, 00
No. 3793 (N.Y.Sup.Ct. Westchester Co. March 27, 2002); In Matter of
Village of Port Chester v. Fabio Sorto, d/b/a Rinconcito
Salvadoreno, 00 No. 3793, (N.Y.Sup.Ct. Westchester Co. March 18,
2002). Plaintiffs appealed Justice Rosato's decisions to the Appellate
Division, and were granted stays pending appeal of those decisions to the
New York Court of Appeals. The stays were entered on March 28, 2002.
Progress on the second phase began again when the stays were lifted
after the Court of Appeals dismissed the final three motions for leave to
appeal on July 1, 2003. See In Matter of Village of Port Chester,
Greatest Estate Services of America, Inc., 100 N.Y.2d 577,
764 N.Y.S.2d 386 (2003); In Matter of Village of Port Chester v. Luis
Perez, d/b/a Luis Luncheonette, 100 N.Y.2d 577, 764 N.Y.S.2d 386
(2003); In Matter of Village of Port Chester v. Fabio Sorto, d/b/a
Rinconcito Salvadoreno, 100 N.Y.2d 577, 764 N.Y.S.2d 386 (2003).
Port Chester finally had possession of all the parcels for the second
phase by July 11, 2003. (Affidavit of John Watkins ¶ 24.)
Soon thereafter, Port Chester began preparation for phase three of the
process, which included the area containing Plaintiffs' property.
In 2002, Private Defendants had publically announced their intention to
locate Walgreens, a national drug store chain, in the area of the MUR
District commonly referred to as "Retail E." The announcement came after
Private Defendants failed to come to terms with CVS Pharmacy, following
protected negotiations. (Wasser Aff. ¶ 30, see below.) In
June 2003, G&S sought amendments to its approved site plan for the
MUR District, including "Retail E," in order to accommodate the Walgreens
store. (Didden Decl. ¶ 20.) Plaintiffs believed that the site plan
was flawed, and planned to comment on the flaws at the next public
hearing, scheduled for July 21, 2003. (Id. ¶ 21.) At the
hearing, G&S announced that it was withdrawing the proposed
amendments. (Id. ¶ 22.) Port Chester ordered and received
updated title reports in August 2003, a map in October 2003, and a metes
and bounds description in November 2003. (Watkins Aff. ¶¶ 26-30.) As
soon as the metes and bonds description was finalized, Port Chester
assembled a Petition to condemn Plaintiffs' property. (Id ¶
31.) The condemnation proceeding was commenced on November 6, 2003.
The CVS Project
Plaintiffs are private developers who own or control various adjoining
properties in Port Chester that are situated in "Retail E" (the "Inside
Properties"). In addition to the Inside Properties, Plaintiffs own or
control four adjoining properties situated outside the MUR District (the
Since at least 1996, Plaintiffs have tried to redevelop both the Inside
and Outside Properties as a CVS Pharmacy (the "CVS Project"). CVS showed
little interest in the Project until Port Chester
adopted the LADA agreement and designed G&S as the developer.
In late 2001, a CVS representative entered into negotiations with a
G&S representative to discuss the possibility of locating a CVS
entity in the "Retail E" area. (Declaration of Alfred Callegari ¶ 7.)
The negotiations resulted in a proposal for development of a CVS store on
"Retail E," which CVS ultimately rejected on May 8, 2002 because the size
of the "Retail E" area was inadequate (Id ¶ 8.)
In March 2003, CVS approached Plaintiffs because the Inside Properties
and Outside Properties, both owned by Plaintiffs, were, in combination,
sufficiently large to accommodate CVS's spatial requirements. (Callegari
Decl. ¶ 9; Declaration of Bart Didden, dated January 15, 2004 ¶
25.) Plaintiffs secured various municipal approvals for the CVS Project
and entered into a long-term lease of the Inside and Outside Properties
with CVS. (Callegari Decl. ¶ 10.)
Plaintiffs entered into the CVS lease knowing full well that, under the
LADA, the Private Defendants, as the designated developer of all sites
within the MUR District (including the Inside Properties), "at some
point,  might attempt to buy or condemn [the Inside Properties]."
(1/15/04 Didden Decl. ¶ 26.) As long ago as March 30, 1999,
Plaintiffs had sent a letter to the Board (the "March 1999 Letter")
stating that G&S's designation as "preferred developer" placed them
at a competitive disadvantage in their negotiations with G&S, and
asked that Port Chester remove the Inside Properties from the proposed
project and site plan approval process. (Wasser Aff. Exh. C.)*fn1 The
letter, which followed-up on comments made by Plaintiffs at a March 19,
1999 public hearing, is here reproduced in its entirety:
Dear Madam Mayor and Board Members:
We would like to thank the Board for its
willingness to listen and take under advisement
the public's numerous comments and suggestions
regarding the revitalization of the marina
district of our village.
We would like to take this opportunity to review
the comments of March 18 and formally restate our
request for your thoughtful consideration. We have
owned the property known as 103-105 North Main
Street for six years. Dick has owned and
maintained some of the adjacent buildings for more
than fifteen years. Approximately three years ago,
when CVS was endeavoring to construct a pharmacy
in Byram and failed due to opposition by the local
residents, we had contact with CVS. We were at
that time willing to build to their
specifications, but they informed us that they
were "not interested in Port Chester."
We were willing to develop then. We are still
willing to develop and are ready.
At this time, when G&S Investors is proposing
a project for the downtown area, we find a synergy
surrounding the project which is causing increased
interest among many possible tenants, including
CVS which formerly had no interest in Port
As you are aware, we have had a number of meetings
in recent months, in the village with G&S and
additionally with G&S and Peg/Park, the
planners for G&S, in White Plains. These
meetings have been promising, but they have borne
no fruit. Hence, we find ourselves at a unique
disadvantage. We are anxious to develop our
property, but by your actions, we are precluded
because of the "preferred developer" status
granted by you, the Board, upon G&S Investors
with respect to "Retail E". We will continue to
negotiate with G&S, but with the designation
of "preferred developer", G&S enjoys the
ultimate assistance of condemnation for those
property owners with whom they are unable to
finalize a deal. (Emphasis added).
To our detriment, with their right to
condemnation, G&S is not required or bound to
ultimately negotiate in good faith. We have been
discussing a proposed partnership whereby we would
contribute all of the land necessary for the
proposed building known as "Retail E". G&S
would build the building and we assume, based on
land value vs. construction costs and tenant
acquisition, the percentages of ownership would be
derived. This is a hypothetical formula and
difficult to get agreement on. G&S, which we
find open and cooperative to work with, has no
urgency in finalizing a deal with us. They are not
required to finalize a deal of this or any nature.
They, by a matter of right, may go directly to
condemnation and proceed on their way.
have believed in Port Chester for many years, as
evidenced by our investments. Our investments are
not limited to just this one site. Besides real
estate, our respective primary operating
businesses employ many local residents and provide
needed services not only to businesses but
residents, as well.
Our impression from speaking with various Board
members and hearing your comments made at the
public meetings, we realize that this project
doesn't fully satisfy your individual wishes 100%.
Agreed. But just as you do, we want to see a
doable project proceed in the village.
Since "Retail E," located on our property, was not
included in the original proposal, the removal of
our property in no way would hamper the integrity
or functionality of the future project.
Furthermore, since we still desire to develop the
property and would so in concert with the style of
the G&S proposal, even if not a partnership
with G&S, we request the following action of
the Board of Trustees:
To remove the property know as 103-105 North Main
Street and the immediately adjoining properties
from the proposed project and site plan approval
process so that from a level playing field we may
negotiate with G&S to a possible partnership.
If a partnership with G&S is not attainable
for whatever reason, we are agreeable to commit,
in a binding fashion, to construct a building in
accordance with the G&S construction schedule
on the site without delay after proceedings
through the local approval process. Your fallback
position is that at anytime it is deemed that we
are not living up to our end of the agreement, you
can always rededicate the preferred developer
status on this property and move it forward or
include the property in phase 2.
Please permit us the opportunity to maintain and
fully realize our investment potential without
seeking the injunction of the courts to protect
our rights of ownership. We would like to explore
the possibility of working with G&S and,
ultimately, together with local financing and
utilizing G&S, construct a building that
compliments the entire project and have the
ownership remain here in local hands. In our
opinion, this course of action would be consistent
with what is best for the village. Nobody wants to
delay the progress of the village.
As you can see, we all share the same opinions.
They may not be the best, but they are doable
Yours for a better village,
Domenick Bologna and Bart A. Didden.
In response to the letter, Port Chester declined to grant
Plaintiffs' request for removal from the Redevelopment Plan, but urged
the parties to convene a meeting to discuss the CVS Project.*fn2
In fact, Plaintiffs and Private Defendants were already well
acquainted. Plaintiffs participated in a public hearing convened by
Defendants in March 1999. The March 1999 Letter also referred to "a
number of meetings in recent months, in the village with G&S and
additionally with G&S and Peg/Park, the planners for G&S, in
White Plains." (Wasser Aff. Exh. C.) At their first meeting, G&S
representative Gregg Wasser informed Plaintiffs that their properties
were not part of the first phases of the development, but that before the
Project reached their properties they would attempt to reach a fair
settlement prior to initiating a condemnation proceeding. (Wasser Aff
¶¶ 24-25.) At another meeting, in 1999, the parties discussed the
possibility of initiating a joint venture. (Id. ¶ 26.)
G&S's conduct at these meetings as "open and cooperative."
(March 1999 Letter.)
At the July 21, 2003 public hearing, Plaintiffs voiced their concerns
regarding G&S's proposed Walgreens site plan. Rather than engage in
further public debate with Plaintiffs, G&S withdrew the amended site
plan application and attempted, again, to negotiate with Plaintiffs
directly. (Wasser Aff. ¶ 31.)
At the behest of Port Chester officials, including the Mayor of Port
Chester, the parties met again on November 5, 2003.
The parties do not agree on what happened during the meeting.
Plaintiffs allege that Private Defendants demanded that Plaintiffs either
pay them $800,000 or give them a partnership interest in the project or
Private Defendants would cause Port Chester to commence a condemnation
proceeding against the Inside Properties and thereby divest Plaintiffs of
title. Private Defendants characterize the meeting differently. According
to Gregg Wasser, the G&S representative present at the meeting, he
and G&S's attorney informed Plaintiffs Didden and Bologna that it
would be a waste of time for the lawyers to argue over who had "better"
rights to proceed with their project. In lieu of continuing the "rights"
debate, Wasser claims to have offered to conduct a joint venture with
Plaintiffs on the Retail E property. After Plaintiffs rejected the offer,
Wasser determined that the only other way to proceed would be to
establish a value for the property and for one side to buy-out the other.
Wasser estimated that the profit on the CVS store deal would be $2
million. He then stated to Plaintiffs that whoever would be responsible
for completing the Project should be given some credit for the additional
work and was entitled to more than a 50-50 split. Based on the $2 million
profit figure, Wasser proposed a buy-out figure of $800,000, in addition
to the fair market value of the property, to be divided among Plaintiffs
Didden, Bologna and DeCesare. He said he would be just as happy
being bought out by Plaintiffs at that figure as he would be to buy
Plaintiffs out. (Wasser Aff. ¶ 32.) He also informed Plaintiffs that
the condemnation process was continuing, and that, if they could not
reach an agreement, G&S expected that Port Chester would acquire the
Inside Properties through condemnation.
On November 6, 2003, Port Chester commenced a condemnation proceeding
against the Inside Properties in the Westchester County Supreme Court by
filing a Notice of Petition and Petition (the "Condemnation Proceeding").
The petition seeks court permission authorizing Port Chester to file an
acquisition map with the court and thereby gain title in fee to the
Inside Properties pursuant to Article 4 of the EDPL. See In the
Matter of Village of Port Chester to Acquire Title To Certain Real
Property Located In the Village of Port Chester, Westchester County,
State of New York, and Designated on the Tax Maps of the Village of Port
Chester as Section 2, Block 60, Lots 9, 10, 11, 12, 13, 14, 15, 16,
No. 18821/03 (N.Y.Sup.Ct. Westchester Co. filed November 6, 2003).
On November 24, 2003, the Port Chester Planning Commission held a
public hearing on Plaintiffs' site plan application for the CVS Project,
and granted preliminary site plan approval. (Declaration of Domenick
Bologna, dated January 15, 2004 ¶¶ 21-22.) Following receipt of the
site plan approval, Plaintiffs attended a meeting of the Board on
December 1, 2003, in which they asked the Board to withdraw the pending
Condemnation Proceeding. (1/15/04 Bologna Decl. ¶ 23.) On December 3,
2003, the Board held a special meeting to consider Plaintiffs' request.
Although the request was denied, Port Chester allowed Plaintiffs
additional time to respond to petition. (Id. ¶ 24.)
On December 17, 2003, Plaintiffs again petitioned Port Chester to amend
the boundary line of the MUR District to remove the Inside Properties
from the district (the "Rezoning Petition"). (Id. ¶ 25.)
On January 6, 2004, the Board held another special meeting, during
which it announced, upon the advice of its special counsel, that it would
not act on the Rezoning Petition. (Id. ¶ 27.) Instead, it agreed to
convene a meeting with the Board's counsel, Plaintiffs and Private
Defendants. This meeting occurred on January 12, 2004. (Id. ¶ 28.)
Private Defendants reiterated their November 5 offer to Plaintiffs at the
January 12, 2003 meeting. Plaintiffs did not accept.
The Instant Action
On January 16, 2004, Plaintiffs filed a complaint and an order to show
cause with this Court, seeking temporary and preliminary injunctive
relief that would stay the Condemnation Proceeding, as well as
declaratory and monetary relief pursuant to 42 U.S.C. § 1983 against
Port Chester and its Board of Trustees (the "Public Defendants") and
Private Defendants. As a first claim for relief, the complaint alleges
that Defendants are depriving Plaintiffs of their property without due
process in violation of the Fourteenth Amendment. The second claim for
relief alleges that Defendants have effected a taking of Plaintiffs'
property in violation of the Takings Clause of the Fifth Amendment to the
United States Constitution, as applied to the states through the
Fourteenth Amendment. The third claim for relief alleges that Defendants
have abused their condemnation powers in violation of Plaintiffs'
substantive due process rights under the Fourteenth Amendment. The fourth
claim for relief alleges that Plaintiffs have been intentionally and
unlawfully singled out and mistreated by Defendants in violation of the
Equal Protection Clause. The fifth claim for relief seeks a declaration
that the development agreement (LADA) between Public Defendants and
Private Defendants is unconstitutional because it unlawfully delegates
Public Defendants' eminent domain power to the Private Defendants. The
and seventh claims for relief seek preliminary and permanent injunctive
relief as well as attorney's fees.
The crux of Plaintiffs' argument is that the Public and Private
Defendants have conspired to deprive Plaintiffs of the use of their
property in order to pursue their own private interests
specifically, their development plans with Walgreens rather than
the interests of the public. Plaintiffs ask this Court to enjoin the
The Defendants have asked me to abstain from deciding these issues,
which they allege are properly before the state court in the Condemnation
Proceeding. In lieu of such a ruling, Defendants ask that I deny
Plaintiffs' request for a preliminary injunction on the merits.
Following oral arguments on January 16, 2004, I granted Plaintiffs'
request for a 10-day temporary restraining order and ordered Plaintiffs
to post a $1,000 bond, which they did. On January 23, 3004, after full
briefing and oral arguments, I lifted the TRO and denied Plaintiffs'
request to enter a preliminary injunction enjoining the condemnation
proceeding. This opinion sets forth the reasons for that decision.
Steel Co. v. Citizens for a Better Environment, 523 U.S. 83,
118 S.Ct. 1003 (1998), instructs federal courts to resolve questions of
Article III jurisdiction before reaching the merits of a plaintiff's
claim. The doctrine of abstention, however, is equitable, not
jurisdictional, in nature. Schachter v. Whalen, 581 F.2d 35, 36
n.1 (2d Cir. 1978) (per curiam) ("Younger abstention goes to the
exercise of equity jurisdiction, not to the jurisdiction of the federal
district court as such to hear the case"). Therefore, I need not first
reach the issue of abstention before deciding whether Plaintiffs are
entitled to a preliminary injunction on the merits. Id.,
at 36. Turning to that dispositive issue first, I find that they are not.
II. Preliminary Injunction
A. Standard of Review
In this Circuit, a preliminary injunction will be granted if the moving
party shows that he will suffer irreparable harm absent injunctive relief
and either (1) that he is likely to succeed on the merits of his
claim; or (2) that there are sufficiently serious questions going to the
merits to make them fair ground for litigation, and that the balance of
hardships tips decidedly in favor of the moving party. Wright v.
Giuliani, 230 F.3d 543, 547 (2d Cir. 2000);Fun Damental
Too, Ltd. v. Gemmy Industries Corp., 111 F.3d 993, 998-99 (2d Cir.
1997). However, where the moving party seeks to enjoin government action
taken in the public interest pursuant to a statutory scheme, that party
must satisfy the more rigorous "likelihood of success on the merits"
standard and may not resort to the lower "fair ground of litigation"
test. See Forest City Daly Hous., Inc. v. Town of N.
Hempstead, 175 F.3d 144, 149 (2d Cir. 1999).
I deny Plaintiffs' motion for a preliminary injunction because I find
that Plaintiffs cannot establish a likelihood of success on the merits,
and that the balance of hardships favors Defendants.
B. Likelihood of Success on the Merits
Plaintiffs have not demonstrated that they are likely to succeed on the
merits. Indeed, for the
most part it is clear, not only that they are not likely to
succeed, but that they cannot possibly succeed.
1. Statute of Limitations Bars Plaintiffs' Constitutional
First, Plaintiffs claims are time-barred. Plaintiffs claims are
premised on 42 U.S.C. § 1983. In New York, § 1983 claims are
subject to the New York State's 3-year statute of limitations governing
general personal injury actions. Owens v. Okure, 488 U.S. 235,
251 (1989). While state law provides the limitations period, the issue of
when the federal cause of action accrued is a matter of federal law.
Fiesel v. Board of Ed. of City of New York, 675 F.2d 522, 524
(2d Cir. 1982). Under federal law, a cause of action under
42 U.S.C. § 1983 accrues when the plaintiff knows or has reason to know of the
injury which is the basis of the action. Barrett v. U.S.,
689 F.2d 324, 333 (2d Cir. 1982), cert. denied, 462 U.S. 1131.
Here, Plaintiffs had reason to know of the basis of their injury as
soon as the Board announced its public purpose finding on July 14, 1999.
On that date, Port Chester authorized a land disposition agreement with
G&S which covered the use of eminent domain incidental to the
implementation of the Redevelopment Project. It found that there was a
legitimate public purpose for condemnation as a means of acquiring
property for the Project.
Plaintiffs now complain that no public purpose underlies the pending
condemnation of their property, and that Port Chester unconstitutionally
delegated its condemnation powers to G&S. But the March 30, 1999
letter from Plaintiffs to the Port Chester Board of Trustees, cited
above, shows that Plaintiffs were fully aware that such a finding would,
if not immediately overturned, expose them to the prospect of
condemnation. Plaintiffs do not dispute receipt of the notice of public
hearing submitted to
the Court by Defendants. This action was commenced on January 16,
2004, nearly five years after Plaintiffs sent their March 30, 1999
letter, and well over four years after the Village issued a public
purpose finding and decided to enter into a land disposition agreement
with G&S. Therefore, I find that all of Plaintiffs' claims are
2. Plaintiffs Were Accorded All the Process They Were Due
In addition, Plaintiffs have no likelihood of success on their due
process claims. Procedural due process requires that the Condemnation
Proceeding be fair and reasonable and that the government not act
arbitrarily or unfairly interfere with Plaintiffs' property rights,
Daniels v. Williams, 474 U.S. 327, 330, 106 S.Ct. 662, 665
(1986), while substantive due process restricts the power of the state
from regulating in an arbitrary matter. Natale v. Town of
Ridgefield, 170 F.3d 258, 263 (2d Cir. 1999).
Plaintiffs have no claim under either theory. As to procedural due
process, Defendants have complied fully and fairly with the EDPL. It was
up to Plaintiffs to seek judicial review of Port Chester's Article 2
determination if they so desired. At this point, Plaintiffs remedy is
limited to contesting the EDPL Article 4 Petition and making an Article 5
claim for just compensation. And, that is all the process that is due
them. Hellenic American Neighborhood Action Committee v. City of New
York, 101 F.3d 877, 880-881 (2nd Cir. 1996). As to substantive due
process, the EDPL has been held to meet all constitutional requirements.
See Frooks v. Town of Cortlandt, 997 F. Supp. 438, 452
(S.D.N.Y.1998), aff'd, 182 F.3d 899 (2d Cir. 1999). Thus,
Plaintiffs cannot succeed on their due process claims.
3. Plaintiffs' Takings Claim Cannot Succeed
Plaintiffs are not likely to prevail on their takings claim.
The Fifth Amendment, made applicable to the states through the
Fourteenth Amendment, precludes the taking of private property for
public use without just compensation. Dolan v. City of
Tigard, 512 U.S. 374, 383-84 & n.5, 114 S.Ct. 2309 (1994).
Defendants contend that the Redevelopment Project (including the Inside
Properties) serves a clear public purpose the redevelopment of
the blighted downtown area of Port Chester. This was specifically
recognized by the Second Circuit whose rulings I am hardly in a
position to contravene when it vacated the Brody
injunction. See Brody I, 261 F.3d 290-91. The alleged "bribe" by
Private Defendants, even if it was a "bad faith" offer, could not in any
way have transformed that public purpose into a private purpose.
Insofar as Plaintiffs argue only that the taking of their property, not
the overall Redevelopment Project, is not for a public use, Plaintiffs'
arguments are also without merit. As this Court has previously held
Once a legitimate public purpose for the overall
project is conceded . . . the court cannot get
involved in parsing the particular degree of
public or private motivation behind the inclusion
of a particular site in the Project area, so long
as that inclusion could rationally be related to
the public purpose of the plan as a whole.
Rosenthall & Rosenthal Inc. v. New York State Urban
Development Corp., 605 F. Supp. 612 (S.D.N.Y. 1985), aff'd,
771 F.2d 44
, 45 (2d Cir. 1985). Plaintiffs have failed to adduce any
evidence that the taking of their property was not rationally related to
the purpose of the overall Redevelopment
And, under Berman v. Parker, 348 U.S. 26
35-36 (1954), I will not substitute this Court's judgment for that of the
municipality as to where the appropriate boundary of the Redevelopment
Project should be located.
Thus, I find that the Plaintiffs have no likelihood of success of
showing that the condemnation of the Inside Properties does not serve a
4. Plaintiffs Have Waived Their Right to Challenge the Public
Purpose of the Redevelopment Project
Even if Plaintiffs could have made a showing of non-public use, it is
too late for them to do so now. Port Chester issued its public purpose
findings in July 1999. Under the EDPL, Plaintiffs and others were allowed
thirty days to challenge the public purpose finding in state court. EDPL
§ 207. Plaintiffs failed to do so. Plaintiffs do not (and cannot)
allege that they failed to receive notice of Port Chester's declaration
of public purpose. To allow Plaintiffs to challenge the public purpose of
the Redevelopment Project now would contradict the express provisions of
the EDPL, and undermine New York's constitutional unitary scheme for the
condemnation of property.
5. Rooker-Feldman Bars This Court From Revisiting the Public
Under the Rooker-Feldman doctrine, a federal district court
does not have jurisdiction to review a claim that has been previously
decided by a prior state court proceeding. D.C. Court of Appeals v.
Feldman, 460 U.S. 462, 482, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983);
Rooker v. Fidelity Trust Co., 263 U.S. 413, 416, 44 S.Ct. 149,
68 L.Ed. 362 (1923); Phifer v. City of New York, 289 F.3d 49,
55-56 (2d Cir. 2002).
Federal district courts lack subject matter jurisdiction "over cases
that effectively seek review of judgments of state courts."
Phifer, 289 F.3d at 55. The only means by which a party may seek
federal review of a state court judgment is by petitioning the Supreme
Court for certiorari. Id. Moreover, issues that are directly
decided or are "inextricably intertwined" with a state court decision are
barred from federal review. Feldman, 460 U.S. at 486-87,
103 S.Ct. 1303. Rooker-Feldman extends to lower state court
judgments. Campbell v. Greisberger, 80 F.3d 703, 707 (2d
Cir. 1996). Claims are "inextricably intertwined" when entertaining the
second action would allow the party to "collaterally attack" the state
court decision. The Second Circuit has stated that:
the Supreme Court's use of "inextricably
intertwined" means, at a minimum, that where a
federal plaintiff had an opportunity to litigate a
claim in a state proceeding (as either the
plaintiff or defendant in that proceeding),
subsequent litigation of the claim will be barred
under the Rooker-Feldman doctrine if it
would be barred under the principles of
Moccio v. New York State Office of Court Admin.,
95 F.3d 195, 199-200 (2d Cir. 1996).
However, even if res judicata or collateral estoppel do not preclude
the second suit, the Rooker-Feldman doctrine still may prevent
maintenance of a federal action if "the litigant in federal
court seeks relief that would effectively void or reverse a related
state court ruling." Wanderlust Pictures, Inc. v. Empire
Entertainment Group, No. 01 CV 4465, 2001 WL 826095, at *3 (S.D.N.Y.
July 19, 2001).
Under principles of collateral estoppel, Plaintiffs' takings claim will
be barred if "(1) the issue in question was actually and necessarily
decided in a prior proceeding, and (2) the party against whom the
doctrine is asserted had a full and fair opportunity to litigate the
issue in the first proceeding." Moccio, 95 F.3d, at 200 (quoting
Colon v. Coughlin, 58 F.3d 865, 869 (2d Cir. 1995)). Both
elements are present here. First, that the Redevelopment Project
constituted a "public purpose" was actually and necessarily determined
during the Article 2 phase of the Condemnation Proceedings in July 1999.
Second, EDPL § 207 provided Plaintiffs with a full and fair
opportunity to litigate the issue of public purpose in state court;
indeed, under the EDPL, it was Plaintiffs' only provided forum for
litigating the issue.
Additionally, the Article 2 "public purpose" determination was the
predicate for numerous other individual judgments and court approved
settlements previously reached between Port Chester and other lot owners
in the MUR District pursuant to Article 4 in the Condemnation Proceeding.
See e.g., In Matter of Village of Port Chester, Greatest Estate
Services of America, Inc., 00 No. 64481 (N.Y.Sup.Ct. Weschester
Co. March 18, 2002); In Matter of Village of Port Chester v. Luis
Perez, d/b/a Luis Luncheonette, 00 No. 3793 (N.Y.Sup.Ct.
Westchester Co. March 27, 2002); In Matter of Village of Port Chester
v. Fabio Sorto, d/b/a Rinconcito Salvadoreno, 00 No. 3793, (N.Y.
Sup.Ct. Westchester Co. March 18, 2002). Each of these decisions, have
been affirmed by the New York State Appellate Division with leave to
appeal denied by the New York State Court of
Appeals. In Matter of Village of Port Chester, Greatest Estate
Services of America, Inc., No. 2002-03226 (N.Y. App. Div. March 3,
2003); In Matter of Village of Port Chester v. Luis Perez, d/b/a Luis
Luncheonette, No. 2002-03229 (N.Y. App. Div. March 3, 2003); In
Matter of Village of Port Chester v. Fabio Sorto, d/b/a Rinconcito
Salvadoreno, No. 2002-03230 (N.Y. App. Div. March 3, 2003).
Were I to rule now that Private Defendants' actions had somehow
transformed the public purpose of the Redevelopment Project into a
private one, it would have the effect of undermining or voiding all of
those prior state court rulings. This is precisely the situation that the
Rooker-Feldman doctrine was intended to avoid. Thus, Plaintiffs'
Takings Claim is also likely to be barred by Rooker-Feldman.
6. Plaintiffs' Equal Protection Claim Will Not Succeed
Plaintiffs are not likely to succeed on their Equal Protection claim.
To establish an Equal Protection violation, Plaintiffs must show that
(1) compared with others similarly situated, they were selectively
treated and (2) they were singled out for such disparate treatment as a
result of a malicious or bad faith intent to injure them. Crowley v.
Courville, 76 F.3d 47, 52-53 (2d Cir. 1996).
Plaintiffs' property was a part of the EDPL Article 2 determination,
which includes 37 other lots. Plaintiffs, like all other condemnees, had
the chance to challenge the Article 2 determination. Like all others,
they have the opportunity to contest Port Chester's Petition seeking an
order and judgment permitting the filing of the acquisition map as to
their parcel and the vesting of title in Port Chester under
Article 4 of the EDPL. Like all other condemnees, Plaintiffs are
entitled to be compensated under Article 5 of the EDPL and can always
make a claim within the time frame specified by the Supreme Court in the
Notice of Acquisition. Finally, because Articles 3, 4 and 5 require
resolution on a case-by-case/lot-by-lot basis, there is no requirement
that all condemnees receive the same value for their property, so it is
unlikely that Plaintiffs will be able to show disparate treatment based
on the amount of compensation they receive for the Inside Properties.
7. No Unlawful Delegation
Plaintiffs are unlikely to succeed on their claim that the LADA is
unconstitutional because it unlawfully delegates Public Defendants'
eminent domain power to the Private Defendants.
Plaintiffs argue that the terms and conditions of the LADA are such
that Port Chester has essentially handed-over its condemnation authority
to G&S. If true, this would contravene the well-settled rule that a
State cannot delegate its power of eminent domain to a private party.
See Contributors to Pennsylvania Hospital v. City of
Philadelphia, 245 U.S. 20, 23-24, 38 S.Ct. 35, 36 (1917) (citations
omitted); see also Kaufmann's Carousel, Inc. v. City of Syracuse
Industrial Development Agency, 301 A.D.2d 292, 750 N.Y.S.2d 212 (4th
Dep't 2002), leave to appeal denied, 99 N.Y.2d 508, 757 N.Y.S.2d 819
But Plaintiffs have been aware of the terms of the LADA for quite some
time. The LADA was adopted in 1999. EDPL created a mechanism for
Plaintiffs to challenge LADA as being overly beneficial to Private
Defendants at that time. Having made the determination not to challenge
it then, they cannot now come to this Court to do so now, when the
Redevelopment Project has moved
forward at great expense to both Public and Private Defendants.
C. Balance of the Equities
Even if there were serious questions going to the merits of Plaintiffs'
federal claims which there are not the balance of the
equities tips decidedly in favor of Defendants.
The Second Circuit has held that
Whenever a request for a preliminary injunction
implicates public interests a court should give
some consideration to the balance of such
interests in deciding whether a plaintiff's
threatened irreparable injury and probability of
success on the merits warrants injunctive relief.
Otherwise a claim that appears meritorious at a
preliminary stage but is ultimately determined to
be unsuccessful will have precipitated court
action that might needlessly have injured the
Brody I, 261 F.3d 288
, 290 (2d Cir. 2001) (quoting
Time Warner Cable v. Bloomberg, L.P., 118 F.3d 917
, 929 (2d Cir.
1997)). Here, as in Brody I, it is unquestionable that were I to
enjoin the Condemnation Proceeding, Defendants and the public in general
would suffer substantially greater harm than Plaintiffs would suffer if I
were to allow the Condemnation Proceeding to proceed.
First, Defendants are already well on their way to completing the
second phase of the Redevelopment Project, consisting of approximately
300,000 square feet of national credit retail. An injunction, and the
resulting delay caused by continuing litigation, would jeopardize all of
the leases with the national tenants which Defendants would use to obtain
credit to finance the construction of the next phase of the development.
(Wasser Aff. ¶ 40.) Defendants assert without contradiction that
loses from such delay could total in the tens of millions of dollars.
(Id.) Second, Defendants have borrowed more than $120 million to
date, which is partially secured by mortgages on the Redevelopment
These loans are to be repaid out of the rent proceeds received from
tenants upon the completion of the Project. These tenants include several
major national retail establishments. The rent roll for the next phase of
the Project, due to be completed in Fall 2004, exceeds $7 million per
annum ($600,000 per month). (Id. ¶ 41.) A loss of even a few
months rent therefore amounts to millions of dollars. Third, Port Chester
is due to receive more than $1.5 million per year in new tax revenue from
the Redevelopment Project. Further delay in the Project would therefore
hamper Port Chester's ability to allocate this revenue to needed
services. The last time the Redevelopment Project was halted by
litigation, in 2002, it cost both Port Chester and G&S millions of
dollars. There is no doubt that the same result would occur here if I
were to grant Plaintiffs' request.
By contrast, it is unclear that Plaintiffs would suffer any harm were I
to deny their request for an injunction. Plaintiffs argue that they will
be harmed by the violation of their constitutional rights, the unlawful
taking of their property and the loss of a unique investment opportunity.
To the extent that Plaintiffs have allegedly suffered constitutional
harms due to the nature of the Condemnation, the time for them to raise
these issues was during the Article 2 proceeding. To the extent that
Plaintiffs will allegedly suffer monetary harm for the taking of their
property and the loss of an investment opportunity, Plaintiffs can
address those concerns in the Article 5 proceeding. They have a
constitutional right to just compensation and there is no reason to
believe that just compensation will not be paid.
As discussed above, the long history of this Redevelopment Project and
the litigation surrounding it, as well of the course of dealing between
the parties, indicate to me that this dispute is really nothing more than
a local land use matter, which can and should be resolved by the state
court. Eddystone Equipment and Rental Corp. v. Redevelopment
Authority of the County of Delaware
(1988 WL 52082, at *1, aff'd, 862 F.2d 307 (3d Cir. 1988)
("an injunction would require federal court involvement in local land use
decision-making, a result never intended by Congress in enacting §
1983 . . . The essentially local character of this dispute and the
availability of constitutional remedies in state court argue strongly
against federal intervention, although the action is cast as a civil
Although I have denied Plaintiffs' preliminary injunction motion
because Plaintiffs are unlikely to succeed on the merits, I note that
Younger abstention also weighs in favor of denying Plaintiffs
the remedy they seek.
C. Standard of Review
In Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746 (1971), the
Supreme Court established the principle that federal courts generally
should not enjoin or interfere with ongoing state court proceedings.
Younger held, specifically, that a federal court may not enjoin
pending state court criminal proceedings absent bad faith, harassment or
other unusual circumstances calling for equitable relief.
In Middlesex County Ethics Committee v. Garden State Bar
Ass'n, 457 U.S. 423, 102 S.Ct. 2515 (1982), the Court extended the
reasoning of Younger to state administrative proceedings.
Middlesex invoked a three-prong test for abstention in
non-criminal proceedings: (1) whether the administrative proceedings
constitute ongoing state judicial proceedings; (2) whether the state
proceedings implicate important state interests; and (3) whether state
procedures are available that
allow the plaintiff to raise his federal claim in state court.
Middlesex, 457 U.S. 423, 432, 102 S.Ct. 2515, 2521 (1982). An
affirmative finding of all three factors compels a district court to
abstain unless the state proceeding was commenced in bad faith or was
filed for the purpose of harassing the plaintiff, or if other unusual
circumstances warrant the court's intervention. Middlesex, 457
U.S. at 435, 102 S.Ct. at 2523.
A district court should not abstain "where a prosecution or proceeding
has been brought to retaliate for or to deter constitutionally protected
conduct, or where a prosecution or proceeding is otherwise brought in bad
faith or for the purpose to harass." Cullen v. Fliegner,
18 F.3d 96, 103-04 (2d Cir. 1994), cert. denied sub nom., 513 U.S. 985,
115 S.Ct. 480 (1994). "In such cases, a showing of retaliatory or bad
faith prosecution establishes irreparable injury for the purposes of the
Younger doctrine, and the expectations for success of the party
bringing the action need not be relevant." Id. (citations
In this case, the state Condemnation Proceeding, which commenced on
November 6, 2003, two months before this action was filed, is an ongoing
state judicial proceedings. And the pending Condemnation Proceeding
implicates important state interests. In fact, this Court has previously
found that New York eminent domain proceedings always satisfy the first
two prongs of Younger. Broadway 41st Street Realty Corp. v.
The New York State Urban Development Corp., 733 F. Supp. 735, 740-742
(S.D.N.Y. 1990). Accordingly, Plaintiffs' only basis for federal
intervention is that (1) they have not had an adequate opportunity to
raise their federal claims in the Condemnation Proceeding; and/or (2)
that the Condemnation Proceeding was commenced in bad faith.
B. Younger Abstention
1. Adequate Opportunity in State Court
A district court will abstain from exercising jurisdiction over a state
action if the state action provides the plaintiff with an adequate
opportunity to raise its constitutional claims. Middlesex
County, 457 U.S. at 432, 102 S.Ct. at 2521.
Plaintiffs' argument hinges on whether the New York EDPL provides an
adequate mechanism for addressing Plaintiffs federal constitutional
claims. It does.
The purpose of the EDPL is to regulate the procedure for condemnation
of private property. The EDPL sets forth a staged process for addressing
the various issues that arise during a condemnation each stage
being the subject of its own section (article) of the EDPL. However, as
Judge Leisure recognized in Broadway 41st Street Realty Corp.,
the five stages of EDPL constitute a single, unitary proceeding.
Broadway 41st Street Realty Corp., 733 F. Supp. at 743.
The Article 2 phase conclusively determines the need and location of a
public project. Article 2 requires the condemnor of a property to conduct
the public hearing upon public notice. EDPL § 202-203. Following the
public hearing, the condemnor must issue a determination and findings,
which must be published. EDPL § 204. Aggrieved persons may then seek
judicial review in the Appellate Division by filing a petition within
thirty (30) days after the completion and publication of the
determination and finding. EDPL § 207.
The scope of review under EDPL § 207 includes whether (1) the
proceeding was in conformity with the federal and state constitutions;
(2) the proposed acquisition is within the condemnor's statutory
jurisdiction or authority; (3) the condemnor's determination and
findings were made in accordance with the statutory procedures; and (4)
and the public use, benefit or purpose will be served by the proposed
acquisition. EDPL § 207(c) (emphasis added). Later judicial
review is precluded as to "any matter which was or could have been
determined" by the Appellate Division, including a non-public use claim.
EDPL § 208.
Article 3 of the EDPL controls the making of compensation offers for
property that has been forced to be subject to condemnation for a public
purpose. The preamble to Article 3 states that the public policy of New
York favors negotiated settlements. EDPL § 301. However, the
fulfils the requirements of EDPL § 303 by
making an offer to respondent property owners that
`it believes to represent just compensation for
the real property to be acquired.' There is no
requirement that petitioner `plead or prove, as a
prerequisite to the acquisition of property by
eminent domain, that it negotiated in good faith
with the [property] owner[s].'
National Fuel Gas Supply Corp. v. Town of Concord,
299 A.D.2d 898
, 899, 752 N.Y.S.2d 187
, 189 (3d Dep't. 2002); Matter of
County of Tompkins, 237 A.D.2d 667, 669-70, 654 N.Y.S.2d 849, 851
(3d Dep't. 1997). "If a property owner believes that an offer is
inadequate, the remedy is to commence an action in the Court of Claims
pursuant to EDPL article 5." Town of Concord, 299 A.D.2d at 899;
752 N.Y.S.2d at 189.
Following an Article 2 determination and finding and an Article 3
negotiation or offer, the condemnor may commence proceedings to acquire
the necessary property under Article 4. EDPL § 401. Article 4
proceedings are commenced when a petition is filed in the Supreme Court,
served by registered or certified mail upon property owners and
published. The petition must allege compliance with the provisions of
Article 2; it need not allege compliance with Article 3. EDPL § 402;
Matter of Consolidated Edison Co. of New York, Inc.,
143 A.D.2d 1012, 1013, 533 N.Y.S.2d 591, 592 (2d Dep't. 1988) (denying leave
to amend answer under Article 4 because compliance with article 3 of the
EDPL was not a constitutional prerequisite to the acquisition of the
respondent's property pursuant to Article 4 of the EDPL). Property owners
are permitted to appear and interpose a verified answer, which must
specifically deny each material allegation controverted by the owners,
and which may allege "new matters constituting a defense to the
proceeding." The Court may grant the petition upon "proof to its
satisfaction" that the procedural requirements of the law have been met.
EDPL § 402(b)(5). Thus, Article 4 effects the taking of the property.
If, after title passes, the amount to be paid for the property remains in
dispute, compensation is adjudicated in the Court of Claims pursuant to
Plaintiffs argue that, because the Condemnation Proceeding is now at
the Article 4 stage, and because Article 4 does not allow a state court
to consider non-procedural issues, including constitutional claims,
Plaintiffs were precluded from raising in state court their claim that
their property is being taken for a non-public purpose.
That is true, but of no moment. Plaintiffs allege that Private
Defendants have somehow commandeered the condemnation proceedings and
subverted them for private rather than public benefit. But, Port
Chester's findings and determination of July 14, 1999 under Article 2
stated that the Redevelopment Project constituted a "public use." (Wasser
Aff. Exh. A.) Plaintiffs, who were in negotiation with CVS as long ago as
1996 (and whose letter of March 30, 1999 indicates a renewed interest in
the area by CVS), could have appealed Port Chester's July 14, 1999
determination within 30 days as required by EDPL § 207. That was the
moment to argue that the LADA unduly favored
Defendants purely private interests. Indeed, because I am required
to "view the state court condemnation proceedings as one unified
judicial proceeding which fully provides plaintiffs with the opportunity
to raise their federal constitutional claims, albeit at different stages
in the proceedings," Broadway 41st St. Realty Corp., 733 F. Supp.
at 743, I am constrained to conclude that Port Chester's "public use"
determination under Article 2 is "part" of the ongoing Condemnation
Proceedings, and that Plaintiffs had adequate opportunity to raise their
concerns regarding the alleged "private use" of the Redevelopment Project
in state court at the appropriate time in those proceedings. They chose
not to do so. They cannot complain about it now.
Plaintiffs argue that Private Defendants showed their true color by
attempting to coerce $800,000 from Plaintiffs as a condition of allowing
them to develop the Inside Properties with CVS. They suggest that until
the last few months they could not have known that the Private Defendants
were acting for a private benefit or more accurately, that they
head turned from public benefit actors to private benefit actors. But the
Private Defendants efforts to negotiate some sort of resolution with
Plaintiffs that would accommodate both parties' economic interests does
not retroactively transform the purpose of the Redevelopment Project (or
any portion of it) from public to private. It merely recognizes that, as
with so many things in life, whether something is fair or not is all a
matter of money.
Brody v. Village of Port Chester, 345 F.3d 103 (2d Cir. 2003)
("Brody II"), cited by Plaintiffs in support of their arguments,
does not auger a contrary result. In Brody II, the Second
Circuit considered an appeal on an action brought by property owner
William Brody against Port Chester for failing to provide him notice of
the public hearing regarding condemnation of his commercial property in
connection with the same redevelopment project that is at issue in this
case. The Court of Appeals
found that Brody had standing to assert his due process challenge
in federal court because his constitutional claims could only have been
raised in an Article 2 EDPL proceeding, not under Article 4, and the
Article 2 phase was long since past. Id., at 114-116. But,
Brody II applies only where the property owner had no notice of the
Article 2 findings, and therefore no opportunity to challenge them in a
timely fashion. No such allegation has been made here. Indeed, as noted
above, Defendants attach to their submissions a copy of the Public Notice
for the July 14, 1999 public hearing that was sent to Plaintiffs along
with signed return receipts acknowledging that Plaintiffs had received
the Notice. (Wasser Aff. Exhs. D & E.) In their March 1999 Letter,
Plaintiffs evidenced full awareness of what was going on in terms of the
Redevelopment Project and the LADA. They even acknowledged that their
properties were subject to condemnation. Thus, Plaintiffs clearly had the
opportunity to raise their concerns about the "private" nature of the
redevelopment within 30 days of the issuance of the "public use" finding
nearly five years ago.
Plaintiffs protest that they have no issue with the Redevelopment
Project itself or with Port Chester's July 14, 1999 finding of public
use. Rather, Plaintiffs argue that the problem is with the LADA because
it "provides Private Defendants with an unlawful degree of control over
the Village's exercise of eminent domain power" (Pl. Reply Brief at 11)
and that, as a result, "the Condemnation Proceeding has been and
continues to be used as a club by the Private Defendants in an effort to
steal a piece of the CVS Project" (Pl. Reply Brief, at 14.) But, the time
for Plaintiffs to object to LADA on the ground that it provided a private
rather than a public benefit (the real thrust of their argument) was
during the Article 2 proceedings, of which they were given fair notice.
That time has long since passed. Plaintiffs are barred from raising the
Nor can Plaintiffs argue that the taking of the Inside Properties
specifically is not within the ambit of the Redevelopment Project's
public purpose. As discussed above, that claim is barred by
Rosenthall & Rosenthal Inc. v. New York State Urban Development
Corp., 605 F. Supp. 612 (S.D.N.Y. 1985), aff'd, 771 F.2d 44,
45 (2d Cir. 1985). Having conceded, as they must, that the implementation
of the Redevelopment Project was for a public purpose, Plaintiffs, in
seeking federal intervention, are now limited to showing that the
inclusion of the Inside Properties in the overall redevelopment scheme
was not rationally related to the public purpose of the plan as a whole.
No such showing has been made on the record before me.
Plaintiffs thus had adequate opportunity to raise their federal claims
in state court.
2. Bad Faith
Plaintiffs next argue that I should intervene in the Condemnation
Proceeding because it was brought in bad faith. See Broadway,
733 F. Supp. at 744 ("A federal district court should not abstain from
interfering with state court proceedings if those proceedings have been
brought in bad faith"). Plaintiffs allege that Private Defendants used
the LADA to pressure Plaintiffs to pay them $800,000 in order to avoid
the condemnation of their property, or alternatively, to gain a portion
of the profits from Plaintiffs' CVS Project, and that Public Defendants
initiated the Condemnation Proceeding solely in retaliation for
Plaintiffs' refusal to pay the $800,000 to Private Defendants. Defendants
counter that the $800,000 figure was an estimate of what it believed,
when combined with the fair market value of the Inside Properties, to
represent a fair valuation of the total value of the Inside Properties,
including Plaintiffs' expected profit from CVS Project. Private
Defendants proposed that either side could buy-out
the other for this amount.
The Second Circuit generally requires that a district court hold a full
evidentiary hearing on factual disputes before making credibility
findings on the issue of bad faith. See Kern v. Clark,
331 F.3d 9, 12 (2d Cir. 2003). In Kern, however, the district court erred
by failing to address the plaintiff's evidence that defendants
"repeatedly and vigorously prosecuted weak cases against him at the
behest of politically-connected complainants," which was precisely the
basis of plaintiff's bad faith claim. Id. Here, however, the
parties' factual disputes (which are really disputes about the meaning of
certain words that everyone agrees were said) are immaterial to the
question of bad faith. The bad faith argument is, therefore, inadequate
as a matter of law.
Undermining Plaintiffs' suggestion of bad faith is the simple fact that
Defendants had no obligation whatsoever to negotiate, in good
faith or otherwise, with Plaintiffs. They merely had the obligation to
offer Plaintiffs just compensation prior to acquiring title to their
property pursuant to the EDPL. And, the offer is not the last word on the
subject; determination of the adequacy of compensation is a matter that
can be raised in state court during the Article 5 proceedings.
The same holds true for any claim that the Article 4 phase of
condemnation, as to the Inside Properties, was initiated in bad faith.
Plaintiffs rely on Gubitosi v. Kapica, 895 F. Supp. 58 (S.D.N.Y.
1995) and Brooklyn Institute of Arts and Sciences v. City of New
York, 65 F. Supp.2d 196 (E.D.N.Y. 1999) ("Brooklyn
Institute"). In Gubitosi, this Court found that allegations
of bad faith were sufficient to avoid abstention where "the basic thrust
of [plaintiff's] complaint is that the entire proceedings were initiated
to retaliate against constitutionally protected conduct."
Gubitosi, 895 F. Supp. at 62. In Brooklyn Institute, the
court refused to abstain where it found that a state court action
by New York City "was conceived and initiated as an instrument to
pressure the Museum and to compel it to . . . remove specific
objectionable works . . . and it is part of an ongoing effort to
retaliate against and deter plaintiff's exercise of First Amendment
rights." Brooklyn Institute, 65 F. Supp.2d, at 196.
Here, as noted above, the Condemnation Proceeding is one unified
judicial proceeding. It began at the Article 2 phase, back in July 1999.
As a result of those Article 2 determinations, which cannot now be
judicially challenged, Plaintiffs' property (and all other properties
within the MUR District) has been found to be subject to condemnation for
a public purpose. Plaintiffs have not suggested that the proceeding was
commenced in bad faith at that time. Nor does the record support such a
finding. Plaintiffs have had numerous opportunities to voice their
concerns at public hearings and Defendants made repeated efforts to
negotiate with Plaintiffs. It is clear that, even prior to the start of
the Redevelopment Project, Defendants went out of their way to ensure
that Plaintiffs' requests received a fair hearing.
Neither does the fact that, "For more than four years after the 1999
approval of the MMRP, G&S expressed no interest and took no action
with respect to the properties comprising Retail E" have any bearing on
Port Chester's right to initiate a condemnation proceeding against
Plaintiffs' properties. Even if true, this fact could not have led
Plaintiffs to assume that the public purpose of the Redevelopment Project
had been abandoned as to their properties. (1/15/04 Bologna Decl. ¶
16; see also Declaration of Bart Didden, dated January 15, 2004
¶ 26.) Plaintiffs should have known, as a matter of law, and did
know, as a matter of fact, (1/15/04 Didden Decl. ¶ 26), that
Defendants had the right to initiate the phase three proceeding at any
point within 10 years of the commencement of the
Condemnation Proceeding before it would be considered
abandoned. 250 West 41st Street Realty Corp. v. New York State Urban
Development Corp., 277 A.S.d.2d 47, 47-8, 715 N.Y.S.2d 407, 408 (1st
Dep't. 2000), leave to appeal denied, 96 N.Y.2d 705,
723 N.Y.S.2d 132 (2001).
Plaintiffs' argument is disingenuous for still another reason. Until
the summer of 2003, between the Brody injunction and the stay entered by
the Appellate Division, the earlier stages of the Redevelopment Project
were at a standstill. It is only in the last six or seven months that
Defendants have been free to turn their attention to the next phase of
the Project. That the next phase would involve Plaintiffs' properties was
signaled by the Walgreens' announcement, which was made in 2002. And, the
preparations to condemn the Inside Properties clearly began well before
November 5, 2003. On this record, it is impossible to infer bad faith
commencement of proceedings.
Finally, Plaintiffs argue that Aaron v. Target Corp.,
269 F. Supp.2d 1162 (E.D.Mo. 2003) counsels against abstention in this
instance. Target Corp. involves facts that are similar, but not
identical, to those facing me today. In Target, property owners
brought an action under
§ 1983 against Target Corp., the City of St. Louis and the Land
Clearance Redevelopment Authority of the City of St. Louis ("LCRA"),
seeking to enjoin state condemnation proceedings on the allegation that
their property was being taken for private rather than public use in
violation of their constitutional rights under the Fifth Amendment. The
district court found that abstention was not justified because the first
and third prongs of Younger were not met. In addition, the court
found that the bad faith exception applied based on the following:
Plaintiffs have presented evidence that the state
court condemnation action is not the product of a
legitimate legislative or municipal finding of
blight, but rather is the result of
LCRA and the City allowing Target to usurp the
municipal process and power necessary to find the
Properties subject to condemnation, in order to
take plaintiffs' Properties for Target's own
private purpose. Plaintiffs presented evidence
that (1) Target proposed a renegotiation of the
Trust-Target Lease, but did not attempt to address
the issue further after receiving Trust
Plaintiffs' counterproposal; (2) Target told the
City it might abandon the Properties because it
had been unable to reach an agreement with
plaintiffs as to a sale price, although no
discussions ever took place between Target and
plaintiffs concerning a possible sale of the
Properties; (3) Target authored the Blighting
Study, or at least the critical part of it finding
that the Properties were blighted or insanitary;
(4) without plaintiffs' knowledge, Target
presented a redevelopment plan for the Properties,
under which it would be the redeveloper; and (5)
plaintiffs received no notice of the hearing
before the Board of Aldermen on November 30, 2002,
at which the Board considered declaring the
Properties blighted, approving Target's proposed
redevelopment plan, and authorizing LCRA to
acquire the Properties through the exercise of
eminent domain, because the City mailed notice of
this hearing to Trust Plaintiffs "in care of
Target" at its Minneapolis headquarters and Target
apparently failed to forward the notice.
Target Corp., 269 F. Supp.2d, at 1172. Thus, Target
Corp. involved a situation where the private entity surreptitiously
manipulated a locality's eminent domain procedure from its inception
solely to take ownership in the building it was leasing for the purpose
of building a new Target store on the site. Id., at 1165.
The same simply cannot be said about this case. Because local eminent
domain procedures differ materially among jurisdictions, the Missouri
court's decision in Target Corp. has limited precedential value
for this Court's evaluation of Plaintiffs' bad faith claim under the
EDPL. Nevertheless, even assuming for present purposes that Target
Corp. were relevant, it is easily distinguishable. First, unlike in
Target Corp., the Redevelopment Project involves a huge
redevelopment comprised of some 27 acres of Port Chester's downtown and
waterfront, provides for the construction of over 500,000 square feet of
retail space, and includes only about 0.5 acres of Plaintiffs' property
(about 2% of the MUR District). (1/15/04 Bologna Decl. ¶¶ 11, 15.) Due
to the substantial size of the Redevelopment Project, the development
plan and the LADA have been well publicized, and were discussed at
frequent public hearings prior to its adoption. Plaintiffs attended at
least some of those hearings, and have not contested that they at least
knew about the July 1999 hearing, during which the public use
determination was made. Second, unlike in Target Corp.,
Defendants have tried on numerous occasions to negotiate with Plaintiffs.
Lastly, unlike in Target Corp., there is no evidence in the
record of any threat or other coercive action by Private Defendants to
abandon the Redevelopment Project if Port Chester refused to exercise its
eminent domain power over Plaintiffs' property.
Because the Constitution bars only taking for a public purpose without
just compensation, Defendants are obligated to do no more than pay a
reasonable sum for the Inside Properties. Plaintiffs' allegations of bad
faith in this matter are insufficient to warrant an evidentiary hearing
or the granting of a preliminary injunction staying the state court
proceedings. Plaintiffs therefore have no right to have their property
exempted from the Project so that they can develop it privately.
For the foregoing reasons, I deny Plaintiffs' Motion for a Preliminary
Injunction enjoining the prosecution of the EDPL Article 4 proceeding
relating to Plaintiffs' Inside Properties in the New York State Supreme
The Clerk of the Court is ordered to extinguish the bond.