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.
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.
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 ...