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Kaur v. New York State Urban Development Corp.

December 3, 2009


The opinion of the court was delivered by: Catterson, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Peter Tom, J.P., Eugene Nardelli, James M. Catterson, Dianne T. Renwick, Rosalyn H. Richter, JJ.

In these proceedings, the petitions challenge the determination of respondent New York State Urban Development Corporation d/b/a Empire State Development Corporation, dated December 18, 2008, which approved the acquisition of certain real property for the project commonly referred to as the Columbia University Educational Mixed Use Development Land Use Improvement and Civic Project.

" An ACT of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority [...] A few instances will suffice to explain what I mean [...] [A] law that takes property from A and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with SUCH powers; and, therefore, it cannot be presumed that they have done it. The genius, the nature, and the spirit, of our State Government, amount to a prohibition of such acts of legislation; and the general principles of law and reason forbid them." Calder v. Bull, 3 U.S. 386, 388, 3 Dall. 386, 388, 1 L.Ed. 648 (1798).*fn1 The exercise of eminent domain power by the New York State Urban Development Corporation d/b/a Empire State Development Corporation (hereinafter referred to as "ESDC") to benefit a private elite education institution is violative of the Takings Clause of the U.S. Constitution, article 1, § 7 of the New York Constitution, and the "first principles of the social contract." The process employed by ESDC predetermined the unconstitutional outcome, was bereft of facts which established that the neighborhood in question was blighted, and ultimately precluded the petitioners from presenting a full record before either the ESDC or, ultimately, this Court. In short, it is a skein worth unraveling.


This case involves the acquisition, by condemnation or voluntary transfer, of approximately 17 acres in the Manhattanville area of West Harlem for the development of a new campus for Columbia University, a not for profit corporation (hereinafter referred to as "The Project"). The Project, referred to as the Columbia University Educational Mixed Used Development Land Use Improvement and Civic Project, would consist of a total of approximately 6.8 million gross square feet in up to 16 new buildings, a multi-level below-grade support space, and the adaptive re-use of an existing building. In addition, the Project would purportedly create approximately two acres of publicly accessible open space, a market along Twelfth Avenue, and widened, tree-lined sidewalks.

The Project site is bounded by and includes West 125th Street on the south, West 133rd Street on the north, Broadway and Old Broadway on the east, and Twelfth Avenue on the west, as well as certain areas located beneath City streets within this area and beneath other City streets in the Project site. The estimated acquisition and construction cost for the Project is $6.28 billion, and will be funded by Columbia without any contribution from any municipal entity.

In 2001, Columbia, together with numerous other organizations, began working with the New York City Economic Development Corporation (hereinafter referred to as "EDC") to redevelop the West Harlem area. In August 2002, the EDC issued a West Harlem Master Plan (hereinafter referred to as the "Plan") describing the economic redevelopment plan. In the Plan, the EDC contended that the area was "once denser, livelier and a waterside gateway for Manhattan," and that "[a] renewed future seem[ed] possible." The EDC stated that it hoped to "revitaliz[e] [...] a long-forsaken waterfront," provide transportation, develop "a vibrant commercial and cultural district," and support academic research. The EDC noted that the current land use was "auto-related or vacant," with several "handsome, mid-rise buildings [...] interspersed with parking lots and partially empty industrial buildings." According to data prepared for the Plan by Ernst & Young, 54 of the 67 lots were in "good," "very good" or "fair" condition.

In 2000, Columbia owned only 2 properties in the Project area. In 2002, Columbia began purchasing property in the area in order to effectuate its own plan to expand its facilities. By early October 2003, Columbia controlled 51% of the property in the Project area - 33% of which was still privately owned.

As early as March 2004, ESDC, EDC, and Columbia began meeting regarding the Project and the condemnation of land. In June 2004, Columbia hired Allee, King, Rosen and Fleming, Inc. (hereinafter referred to as "AKRF"), an environmental and planning consulting firm, to assist in its planning, to act as its agent in seeking approvals and determinations from various agencies necessary to realize its expansion plan, and to prepare an Environmental Impact Statement (hereinafter referred to as the "EIS"). See Matter of Tuck-It-Away Assoc., L.P. v. Empire State Dev. Corp., 54 AD3d 154, 157, 861 N.Y.S.2d 51, 53-54 (1st Dept. 2008), lv. granted, 12 NY3d 708, 879 N.Y.S.2d 55, 906 N.E.2d 1089 (2009)(hereinafter referred as "Tuck-It-Away I"). AKRF began attending meetings with Columbia, ESDC and EDC in connection with the Project.

On July 30, 2004, Columbia entered into an agreement with ESDC to pay the costs incurred by ESDC in connection with the Project. According to the agreement, Columbia owned or controlled, or expected to control, "a substantial portion of the lots within the" Project area.

In August 2004, EDC issued a "Blight Study" of the West Harlem/Manhattanville Area which was prepared by a consultant, Urbitran Associates, Inc. The study concluded that the area was "blighted."

In December 2004, the ESDC, not content to rest on the Urbitran study, noted that it would have to make its own "blight findings" in connection with the Project. In an e-mail dated January 7, 2005, Columbia's Project Manager, Lorinda Karoff of Karen Buckus and Associates, indicated that Columbia's attorneys "and also possibly AKRF (who has already reviewed the document once at EDC's offices), wished to see the draft blight study." Karoff noted that the draft study "may change or even be completely replaced as ESDC uses different standards than the City."

In or about September 2006, ESDC retained Columbia's consultant AKRF to evaluate the conditions at the Project site. AKRF in turn retained Thornton Tomassetti, Inc., an engineering firm, to inspect and evaluate the physical condition of each existing structure at the Project site.

On November 1, 2007, AKRF issued its Manhattanville Neighborhood Conditions Study (hereinafter referred to as "AKRF's study"). The study noted that as of April 30, 2007, Columbia owned or had contracted to purchase 48 of the 67 tax lots (72 percent) in the study area. The study found that "48 of the 67 lots in the study area (or 72 percent of the total lots) have one or more substandard condition, including poor or critical physical lot conditions, a vacancy rate of 25 percent or more, or site utilization of 60 percent or less." In addition, the study found that "34 of the 67 lots in the study area (or 51 percent of the total lots) were assessed as being in poor or critical condition." According to the study, "[t]he presence of such a high proportion of properties with multiple substandard conditions suggests that the study area has been suffering from a long-term trend of poor maintenance and disinvestment." The study concluded that the Project area was "substantially unsafe, unsanitary, substandard, and deteriorated."

On November 16, 2007, the New York City Planning Commission (hereinafter referred to as the "CPC"), the lead agency for the Project under the New York State Environmental Quality Review Act (hereinafter referred to as the "SEQRA") and the City's Environmental Quality Review Act (hereinafter referred to as the "CEQRA"), issued a notice of completion for the Project's final environmental impact statement (hereinafter referred to as the "FEIS"). On November 26, 2007, CPC issued its findings on the FEIS pursuant to both SEQRA and CEQRA.

After a public hearing held by the City Council on December 12, 2007, the Council approved the rezoning of approximately 35 acres of West Harlem including the 17-acre Project site. Meanwhile, West Harlem Business Group (hereinafter referred to as "WHBG"), a group of businesses within the Project area, as well as Tuck-It-Away Associates, L.P., a member of WHBG, requested various documents from the ESDC related to the Project pursuant to the Freedom of Information Law (hereinafter referred to as "FOIL"). When the ESDC refused to provide certain documents, WHBG and TIA filed article 78 petitions. See Tuck-It-Away I, 54 AD3d at 159, 861 N.Y.S.2d at 55.

On July 3, 2007 and on or about August 23, 2007, the New York County Supreme Court (Shirley Werner Kornreich, J.), granted the applications to compel ESDC to release the documents, including documents involving ESDC's communications with AKRF. In particular, the court found that an agency exemption did not apply to the AKRF documents since AKRF lacked "sufficient neutrality" due to its role as a consultant for both the ESDC and Columbia. The ESDC appealed from those orders.

On July 15, 2008, this Court affirmed Supreme Court's order for disclosure of documents related to ESDC's communications with AKRF, and otherwise reversed. See Tuck-It-Away I, 54 AD3d at 162, 861 N.Y.S.2d at 57. With respect to the AKRF documents, we agreed with Supreme Court that AKRF's representation of both ESDC and Columbia with respect to the Project "creates an inseparable conflict for purposes of FOIL." 54 AD3d at 164, 861 N.Y.S.2d at 58-59. In particular, we found that "FOIL is not blind to the extensive record of the tangled relationships of Columbia, ESDC and their shared consultant, AKRF." 54 AD3d at 166, 861 N.Y.S.2d at 60. Due to AKRF's consulting and advocacy work for Columbia, we questioned AKRF's ability to provide "objective advice" to the ESDC, particularly with respect to its preparation of the blight study. Id., 861 N.Y.S.2d at 60.

In response to the concerns about AKRF's neutrality, on February 7, 2008, approximately two months after we heard oral argument on the FOIL litigation, Carter Ledyard & Milburn LLP, acting on behalf ESDC, retained Earth Tech, Inc., an engineering and environmental consultant, to "audit, examine and evaluate" AKRF's study. Pursuant to that agreement, Earth Tech was "not now providing services to" Columbia and was prohibited from "perform[ing] any services for Columbia throughout the duration of th[e] Agreement." While the agreement is not an admission that AKRF was thoroughly compromised in its representation of both ESDC and Columbia, it is nonetheless an acutely transparent attempt to inoculate Earth Tech and ESDC from the damage done by AKRF.

In May 2008, almost six years after EDC issued the West Harlem Master Plan, and five years after Columbia gained control of more than one half of the realty contained in the project area, Earth Tech issued a Manhattanville Neighborhood Conditions Study. According to that study, Earth Tech "independently reviewed" AKRF's study as well as Thornton Tomasetti's findings relating to the structural conditions of the buildings in the Project site. As part of its review, Earth Tech inspected and assessed the 67 lots on the Project site, "surveyed the study area," and "conducted various searches of public data bases on environmental contamination, Building Code violations, and ownership records." It bears repeating that, by this time, Columbia either owned or was in contract to purchase 48 of those 67 lots.

According to the Earth Tech study, Earth Tech's "independently arrived at findings substantially confirm[ed] those of AKRF and Thornton Tomasetti." However, Earth Tech found that certain buildings had "further deteriorated since the prior inspections." In particular, while the AKRF report had found that 34 lots (51%) were in critical or poor condition, Earth Tech found that 37 sites (55%) were in critical or poor condition. In addition, Earth Tech found a "long-standing lack of investor interest in the neighborhood," demonstrated by, among other things, the paucity of new buildings constructed since 1961, as well as "the extended neglect of building maintenance" and extensive Building Code violations. In particular, Earth Tech found that, as of July 2006, "there were 410 open violations" with respect to 75% of the lots in the Project site. Accordingly, Earth Tech concluded that a majority of the buildings and lots in the Manhattanville area exhibited "substandard and deteriorated conditions" creating "a blighted and discouraging impact on the surrounding community."

On July 17, 2008, the ESDC adopted a General Project Plan (hereinafter referred to as the "GPP") for the Project as both a land use improvement project and a civic project in accordance with the New York State Urban Development Corporation Act.

By notice dated August 3, 2008, ESDC advised the public that they would conduct a hearing on September 2 and 4, 2008 in connection with the proposed Project and acquisition of property within the Project site. The petitioners and others spoke at the hearing. The record of the hearing remained open for any additional written comments until October 10, 2008.

On December 18, 2008, ESDC approved its SEQRA statement of findings, adopted a modified GPP, and authorized the issuance of the determination and findings. On December 22, 2008, ESDC issued its determination and findings authorizing the acquisition of certain real property for the Project. In particular, ESDC found that "[t]he Project qualifies as both a Land Use Improvement Project and separately and independently as a Civic Project pursuant to the New York State Urban Development Corporation Act."

On February 20, 2009, two petitions were filed in this Court challenging the determination and findings. The petitioners Tuck-It-Away, Inc., Tuck-It-Away Bridgeport, Inc., Tuck-It-Away at 133rd Street, Inc. and Tuck-It-Away Associates, L.P. are owners of storage facilities located at 3261 Broadway, 614 West 131st Street, 655 West 125th Street, and 3300 Broadway. Petitioners Parminder Kaur and Amanjit Kaur are the owners of a gasoline service station located at 619 West 125th Street, and petitioner P.G. Singh Enterprises, LLP is the owner of a gasoline service station located at 673 West 125th Street. It is uncontested that the petitioners' property is within the Project site and thus is subject to condemnation. THE STANDARD OF REVIEW

In reviewing the determination and findings in these Eminent Domain Procedure Law (EDPL) proceedings this Court's scope of review is limited to whether (1) the proceeding was in conformity with the federal and state constitutions; (2) the proposed acquisition was within the condemnor's statutory jurisdiction or authority; (3) the condemnor's determination and findings were made in accordance with procedures set forth in EDPL article two and article eight of the Environmental Conservation Law ("SEQRA"); and (4) a public use, benefit or purpose will be served by the proposed acquisition. See EDPL § 207[C].

A negative finding in any one of these factors necessarily dooms ESDC's determinations. The petitioners assert that the ESDC exceeded its statutory authority in designating the Project as a "Civic Project" under the Urban Development Corporation Act (hereinafter referred to as "UDCA") (L 1968, ch 174, § 1, as amended) (McKinney's Uncons Laws of N.Y. § 6252 et seq.). In addition, the petitioners assert that the alleged "civic" benefits of the Project are insufficient public purposes for the use of eminent domain. In particular, the petitioners assert that the expansion of a private university does not qualify as a "civic project" nor as a public purpose to justify the use of eminent domain under the EDPL. In addition, the petitioners assert that the other purported "civic purposes" and public benefits of the Project do not qualify as public purposes to justify condemnation or the designation of the project as a "civic project" since some of the purported benefits (1) arise from pre-existing obligations of Columbia; (2) primarily benefit Columbia; and (3) are pretextual, unrelated to the use of the Project or are de minimis in value.

ESDC's determination that the project has a public use, benefit or purpose is wholly unsupported by the record and precedent. A public use or benefit must be present in order for an agency to exercise its power of eminent domain. See U.S. Const. 5th amend; NY Const. art. I, § 7; EDPL 204[B][1]). "[T]he term public use' broadly encompasses any use [...] which contributes to the health, safety and general welfare of the public." See Matter of C/S 12th Ave. LLC v. City of New York, 32 AD3d 1, 10-11, 815 N.Y.S.2d 516, 525 (1st Dept. 2006). If an adequate basis for the agency's determination is shown, and the petitioner cannot show that the determination was corrupt or without foundation, the determination should be confirmed. See Matter of Waldo's, Inc. v. Village of Johnson City, 74 N.Y.2d 718, 720, 544 N.Y.S.2d 809, 810, 543 N.E.2d 74, 75 (1989); Matter of Jackson v. New York State Urban Dev. Corp., 67 N.Y.2d 400, 425, 503 N.Y.S.2d 298, 310, 494 N.E.2d 429, 441 (1986); Kaskel v. Impellitteri, 306 N.Y. 73, 78, 115 N.E.2d 659, 661 (1953), cert. denied, 347 U.S. 934 (1954).

The UDCA defines a "civil project" as: "[a] project or that portion of a multi-purpose project designed and intended for the purpose of providing facilities for educational, cultural, recreational, community, municipal, public service or other civic purposes." Uncons. Laws of N.Y. § 6253(6)(d) (UDCA 3(6)(d)).

At the outset, it is important to note that as late as May 18, 2006, 2 1/2 years into ESDC's participation project planning, the draft GPP still identified the project only as the "Manhattanville in West Harlem Land Use Improvement Project" even though there was no arguably independent blight study until May 2008. It was not until September 2006 that the project had "and Civic Project" added to its title, fully two years after Columbia agreed to wholly underwrite the project.


Any analysis of the constitutionality of ESDC's scheme for the development of Manhattanville must necessarily begin with a discussion of the most recent Taking Clause exposition by the U.S. Supreme Court in Kelo v. City of New London. 545 U.S. 469, 125 S.Ct. 2655, 162 L.Ed.2d 439 (2005).

It is recognized that Kelo, as described below, did not concern an area characterized as "blighted." However, the blight designation in the instant case is mere sophistry. It was utilized by ESDC years after the scheme was hatched to justify the employment of eminent domain but this project has always primarily concerned a massive capital project for Columbia. Indeed, it is nothing more than economic redevelopment wearing a different face. "[E]ven where the law expressly defines the removal or prevention of blight' as a public purpose and leaves to the agencies wide discretion in deciding what constitutes blight, facts supporting such determination should be spelled out." Yonkers Community Development Agency v. Morris, 37 N.Y.2d 478, 484, 373 N.Y.S.2d 112, 119, 335 N.E.2d 327, 332 (1975), appeal dismissed, 423 U.S. 1010, 96 S.Ct. 440, 46 L.Ed. 381 (1975). Furthermore, "[c]arefully analyzed, it is clear that in such situations, courts are required to be more than rubber stamps in the determination of the existence of substandard conditions in urban renewal condemnation cases. The findings of the agency are not self-executing. A determination of public purpose must be made by the courts themselves and they must have a basis on which to do so." Yonkers, 37 N.Y.2d at 485, 373 N.Y.S.2d at 120, 335 N.E.2d at 333; see Matter of City of Brooklyn, 143 N.Y. 596, 618, 38 N.E. 983, 989 (1894), aff'd, 166 U.S. 685, 17 S.Ct. 718, 41 L.Ed. 1165 (1897) ("But whether the use for which the property is to be taken, is a public use, which justifies its appropriation, is a judicial question; upon which the courts are free to decide.")

The determination of the Yonkers Court and the hoary authority of City of Brooklyn are still controlling precedent that require this Court not to abdicate its role to decide a "judicial question." Whether the respondents describe the use of eminent domain in Manhattanville as "urban renewal" or economic redevelopment, the question ...

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