The opinion of the court was delivered by: JOHN KEENAN, Senior District Judge
MEMORANDUM OPINION and ORDER
This application for a preliminary injunction and cross-motion
to dismiss relate to construction of a shopping center in the
East Harlem area of Manhattan along FDR Drive between 116th and
119th Streets. The development is known as the East River Plaza
Project ("the Project").
Plaintiffs are an unincorporated association of East Harlem
residents and a group of local residents and property owners.
Plaintiffs' Memorandum of Law ("Pl.") at 2. Defendants are the
U.S. Department of Housing and Urban Development ("HUD"), the
U.S. Department of Health and Human Services ("HHS")
(collectively "the Federal Defendants"), the Upper Manhattan
Empowerment Zone Corporation ("UMEZ"), the New York Empowerment
Zone Corporation ("NYEZC") (collectively "the State Defendants"),
and Tiago Holdings, LLC ("Tiago" or private defendant). Pl. at 2.
The State Defendants are New York corporations whose function is
to foster development in the area near the proposed project.
Federal Defendants' Memorandum of Law ("Def.") at 8. Tiago is the
owner of the site of the Project, formerly the site of the
Washburn Wire Factory ("the Factory"). Pl. at 2, 4.
Beginning in July 2003, plaintiffs moved by Order to Show Cause
for a preliminary injunction preventing demolition of the Factory
until the Federal Defendants had conducted a review of the impact of the Project on historical resources as required by
Section 106 of the National Historic Preservation Act ("NHPA").
Def. at 13. On August 19, 2003, this Court denied the motion and
instructed plaintiffs to submit additional statements outlining
the remaining relief requested. Def. at 13-14. Defendants were
likewise given opportunity to respond to plaintiffs' statements.
The Federal Defendants did respond; the State Defendants and
Tiago rested on their earlier submissions. The results of
plaintiffs' statements and Federal Defendants' response are the
Plaintiffs seek a preliminary injunction halting construction
at the factory site until the Federal Defendants have conducted a
review pursuant to Section 106 of the NHPA. Def. at 14.
Plaintiffs argue that proximity of the Project to one historic
resource listed on the National Register of Historic Places, the
Thomas Jefferson Play Center, and three potential historic
resources, the Manhattan Center for Science and Mathematics, a
warehouse at 2138-2152 First Avenue, and a building at 204 East
116th Street, warrant Section 106 review. Def. at 14-15. The
Federal Defendants contend that Section 106 review is unnecessary
because the Project is controlled and implemented by state and
local entities, and that therefore the claim should be dismissed
and a preliminary injunction denied. The State Defendants and
Tiago, in their August 2003 submissions, similarly raised the issue of lack of federal control. Throughout
the course of this litigation, all parties have submitted and
relied upon voluminous affidavits and declarations.*fn1
For the reasons given below, the application for a preliminary
injunction is denied, and summary judgment is granted in favor of
The Federal Defendants offer a lengthy statement of facts in
support of their contention that review under Section 106 of the
NHPA is not required in the instant action. The Court summarizes
those factual assertions here.
This case revolves around New York City's "Empowerment Zones"
("EZs"): those urban areas designated by the Secretary of HUD as
eligible for tax incentives and special consideration for
programs of federal assistance. See 24 C.F.R. § 597.3 (2004). The
nominating bodies develop a "Strategic Plan" ("SP") for each EZ
that sets forth the goals and vision for the EZ. Id.; see
Def. at 4. After designation, HUD's role is simply to
periodically review the actions and measure the progress of the
EZ to ensure compliance with the SP. Def. at 4-5. Should an EZ fail to meet
the goals set forth in the SP, HUD may revoke the area's EZ
designation. Def. at 5.
EZs receive federal funding not from HUD, but from HHS in the
form of Social Services Block Grants ("Block Grants"). Def. at 6.
These grants are given to state agencies for specific purposes in
accordance with the SP. Def. at 6. HHS has no role in the
specific disbursement of Block Grant funds. Def. at 7. Instead,
the state grantees remove, or "draw down" funds from their
accounts as needed, subject to certain regulations. Def. at 7.
HUD also has no control or approval power concerning the Block
Grant funds. Def. at 8.
In New York City, HUD designated an EZ, including the Upper
Manhattan neighborhood that encompasses the former site of the
Factory. Def. at 6. HHS allocated $100 million in Block Grants to
the Empire State Development Corporation ("ESDC"), a state
agency. Def. at 7, 8. ESDC, in turn, created the New York
Empowerment Zone Corporation ("NYEZC") to monitor New York City's
EZs. Def. at 8. NYEZC selects EZ projects, including the East
River Plaza Project as issue here, in accordance with procedures
outlined in a Memorandum of Understanding ("MOU") to which the
state, the city, the Upper Manhattan Empowerment Zone Corporation
("UMEZ"), and another constituent organization are parties. Def.
at 8-9. Although HUD served as a non-voting director of NYEZC through 2002, neither HUD nor HHS are parties to the MOU. Def. at
8 n. 3, 9.
HUD is a party, however, to a Memorandum of Agreement with the
city and the state, which calls for periodic reporting and
findings on continued EZ eligibility. Def. at 11. Again, HUD may
revoke EZ designation but has no power to select specific
projects or to set budgets for projects. Def. at 11.
Funding of specific projects within New York City's EZ is
determined by local entities, which, under the MOU, involves
requesting funding from state agencies, reviewing for compliance
with SPs, selecting service providers and vendors, and monitoring
performance of those providers. Def. at 10. NYEZC has approved,
but not yet obligated or released, $15 million for the East River
Plaza Project, of which $5 million is potentially ...