The opinion of the court was delivered by: Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
Plaintiffs, property owners in the City of Binghamton, commenced this action pursuant to 42 U.S.C. § 1983 alleging that defendants violated their rights under the United States Constitution. Presently before the Court is defendants' motion to dismiss plaintiffs' complaint pursuant to Fed. R. Civ. P. 12(b)(6) and 12(b)(1). (Dkt. No. 27). Plaintiffs have opposed the motion. (Dkt. No. 32).
Plaintiffs are New York Limited Liability companies ("LLCs"). Isaac Levin ("Levin") is the managing member of the LLCs. In 2007, 2008 and early 2009, plaintiffs purchased properties at 26 Seminary Avenue (July 11, 2007), 33 Seminary Avenue (July 2008) and 31 Seminary Avenue (January 30, 2009) in the City of Binghamton. In 2008, plaintiffs converted 33 Seminary Avenue to five-bedroom units for college students. Plaintiffs sought to convert the remaining properties into "safe and upscale housing" for students attending the State University of New York at Binghamton or Broome County Community College.
On March 16, 2009, the City Council adopted, and Mayor Matthew Young subsequently approved, Ordinance 009-009 ("Ordinance") which amended certain sections of Chapter 410 of the Code of the City of Binghamton ("City Code"). Chapter 410 is entitled "Zoning". Article VI refers to Residential Districts. Of relevance herein is Section 410.27(B) which provides:
B. R-2 Residential One- and Two-Unit Dwelling District.
(3) Permitted with Planning Commission approval (special use permit and Series A site plan).
Conversion of dwelling Unit to More than Four Bedrooms Article VIII is entitled, "Special Use Permit/Series A Site Plan Review Requirements". Of relevance is Section 410.36 which provides:
A. Series A Site Plan approval from the Planning Commission pursuant to 410.39 of this Article VIII is required for all new construction, for all commercial uses, for all special permitted uses, for all principal permitted and accessory uses, for all changes of use, and as required by 410.27 or 410.29 of this Chapter. No building permit shall be issued by the Building Inspector for any use which requires site plan approval except upon authorization of an in conformity with plans approved by the Planning Commission.
B. Exceptions. Notwithstanding Subsection A of this section, no Series A Site Plan approval is required for: (i) single- and two-family dwellings and accessory uses thereto, except as may be required by 410.27 or 410.29 of this Chapter, or (ii) any change of use from one principal permitted or accessory use to another principal permitted or accessory use, including changes of use within a permitted multiple use, e.g. a shopping center, and where no exterior alterations or additions are proposed, provided the Planning Department and Building Inspector determine that the proposed change of use will not have any significant impact on:
3. On-site and off-site parking
5. Neighborhood noise levels
6. Green space (The proposed project will not have created a need for additional landscaping, screening, or buffering)
8. Character of the neighborhood
The list of items to be considered above is inclusive, but not exclusive, and the Planning Department and Building Inspector may consider any environmental or development issues that would have a significant impact on the parcel and/or the surrounding area.
Applications for 31 Seminary Avenue*fn2
On April 30, 2009, plaintiffs submitted a Building Permit Application ("Building Permit Application") to convert the one-unit dwelling to a two-unit dwelling with four bedrooms. Plaintiffs filed the required site plan and floor plan. Simultaneously, plaintiffs submitted an application to the Planning Commission ("Planning Commission Application"), pursuant to the Ordinance, for approval to construct a two-family home with five bedrooms per unit. Plaintiffs also submitted an application to the Zoning Board for a variance ("Variance Application") for a parking lot to provide parking for ten cars.*fn3
After the Building Permit Application was submitted, plaintiffs allege that the following events occurred:
! On May 5, 2009, defendant Supervisor Chadwick ("Chadwick") told Levin that the Building Permit was denied because the change of occupancy from a one-unit to a two-unit dwelling was deemed a "change of use".
! On May 7, 2009, Levin hand delivered a letter to Chadwick and Corporation
Counsel contesting the denial arguing that the change of occupancy was not a change of use and cited examples from other municipalities. ! On May 8, 2009, plaintiffs received a letter from Chadwick advising that the Building Permit Application had not yet been considered because Planning Commission approval was required due to the change of use. ! On May 8, 2009, Attorney Seachrist telephoned Levin to advise that the Building Permit Application would be approved if the renovation was changed from five bedrooms per dwelling to four bedrooms. ! Shortly thereafter, Levin had another conversation with Chadwick wherein Chadwick advised that only a permit to construct a one-unit dwelling with four bedrooms would be approved "as of right".
On May 14, 2009, plaintiffs submitted a modified permit application for the renovation of 31 Seminary Avenue providing for a one-unit dwelling with four bedrooms, two auxiliary rooms, one kitchen and parking for four vehicles ("Modified Application").*fn4 Chadwick allegedly informed Levin that the Modified Application would be denied because there were other applications pending. On May 26, 2009, plaintiff faxed a letter to the Planning Commission withdrawing all other applications.*fn5 On May 26, 2009, plaintiffs claim they received written correspondence denying the Modified Application.
Plaintiffs allegedly amended the modified permit application and resubmitted the floor plan without the auxiliary rooms. On June 3, 2009, the application was denied and plaintiffs claim they were advised to amend their plans to demonstrate that a single-family residence was being proposed.*fn6
In June 2009, plaintiffs were issued a permit for work.*fn7
On June 11, 2009, plaintiffs allegedly submitted another
application to convert the unit to a two-unit dwelling but claim the
application was denied on July 10, 2009. On June 17, 2009, plaintiffs
allegedly submitted an application to convert 31 Seminary Avenue from
a single-unit dwelling to a two-unit dwelling with four bedrooms per
unit. By letter dated June 29, 2009, plaintiffs claim that Chadwick
denied the application classifying the proposed conversion as a change
On July 6, 2009, Inspector Esworthy appeared at 31 Seminary Avenue for an inspection of the premises. Plaintiffs allege that the inspection was unannounced and that Levin was not present, had no knowledge of the inspection and did not consent to the inspection. Esworthy allegedly questioned the on-site workers about the work being performed. Plaintiffs claim that the only work being performed at the time was on the roof and exterior of the house. Esworthy issued a "red tag" and stopped work on the house. Plaintiffs claim that the stop work order was issued based upon statements of roofers who had no knowledge of plaintiffs' final plans for the interior of the home. Moreover, plaintiffs claim that the on-site workers had no authority to speak for or represent plaintiffs. As a result of the stop-work order, plaintiffs allegedly sustained over $100,000.00 in damages.
On October 21, 2009, plaintiffs wrote to the Zoning Board asking for an interpretation as to whether the proposed conversion of 31 Seminary Avenue was a change of "occupancy" or "use". Plaintiffs allegedly submitted the following documentation in their letter request: (a) opinion from Cheryl Fischer, New York State Assistant Director for Code Interpretation; and (b) the Code of the City of Albany. On December 1, 2009, Levin appeared before the Zoning Board on the application for an interpretation of change of "use" versus "occupancy". The Board held that the proposed conversion of 31 Seminary Avenue from a single-unit dwelling to a two-unit dwelling was a change of use.*fn9
On October 21, 2009, plaintiffs renewed their application to the Planning Board for a change of occupancy for 31 Seminary Avenue from a one-unit to two-unit dwelling with a floor plan providing for five bedrooms in each unit. On December 14, 2009, the Planning Commission conducted a hearing regarding plaintiffs' October 21, 2009 application.*fn10 Plaintiffs claim that members of the Commission expressed concerns regarding the egress, exits, kitchen staircase and windows and further, that Supervisor Costello was concerned that the change would cause the property to be considered a dormitory. The hearing was adjourned until January 4, 2010.*fn11 Prior to the next hearing, plaintiffs allegedly provided a memorandum from Cheryl Fischer, dated December 16, 2009, wherein Ms. Fischer rejected the dormitory theory and stated that "the lease of a two-family dwelling to students does not change the occupancy classification of a two-family dwelling to a dormitory".*fn12
On January 4, 2010, the Planning Commission reconvened and examined plaintiffs' October 21, 2009 application. Plaintiffs allegedly submitted various letters from the New York State Department of State in support of their application. The hearing was adjourned until February 1, 2010 to investigate the "dormitory issue". At the February 1, 2010 hearing, plaintiffs submitted a revised site plan for 31 Seminary but plaintiffs application was denied because a planned front vestibule did not have the required five-foot setback and no variance was sought.*fn13
On May 12, 2010, after restoring the vestibule, plaintiffs filed another application with the Planning Commission for the approval of a two-unit dwelling with five bedrooms per unit. On June 7, 2010, July 19, 2010 and August 2, 2010, the Planning Commission held hearings regarding the May 17, 2010 application. On August 2, 2010, plaintiffs' May 17, 2010 application was denied. To date, 31 Seminary Avenue remains vacant.
When plaintiffs purchased 26 Seminary Avenue, it was a three story building with commercial space on the ground floor, two apartments on the second floor and one apartment on the third floor. Plaintiffs claim that they received building and electrical permits and were advised that they did not need a parking variance. In 2008, plaintiffs undertook substantial construction on 26 Seminary Avenue and sought to convert the upper stories to single units with three bedrooms each and to convert the commercial space to a residential unit with three bedrooms. In early 2009, defendants revoked plaintiffs' permits for 26 Seminary. On June 25, 2009, plaintiffs presented the Zoning Board with a plan to provide six parking spaces for 26 Seminary Avenue on the property at 31 Seminary Avenue.*fn14
On January 5, 2010, Levin appeared before the Zoning Board on his application.*fn15 The application was denied. To date, 26 Seminary remains vacant.
Broome County and Cortland County Petitions*fn16
On July 24, 2009, plaintiffs 33 Seminary LLC and Issac Levin Individually, filed an Article 78 Petition in the Supreme Court of the State of New York, County of Broome. Petitioners claimed: (1) the Ordinance was ultra vires unconstitutional; (2) the properties named in the petition were not subject to the Ordinance; (3) that the review process mandated by the Ordinance constituted a "taking" in violation of the Fifth and Fourteenth Amendments; and (4) the city selectively enforced the Ordinance in violation of the Equal Protection Clause. Petitioners sought an Order declaring the Ordinance and all actions against petitioner illegal and directing the respondent to lift the stop work order and grant the applications.*fn17 Petitioners also sought $100,000.00 in damages. On October 14, 2009, the Honorable Molly Reynolds Fitzgerald issued a Decision and Order granting respondents' motion for dismissal. Judge Reynolds Fitzgerald dismissed the ultra vires argument finding that, "General City Law § 20, [ ] grants cities the right to enact ordinances necessary to 'regulate the density of the population in any given area'". The Court also dismissed petitioners' arguments regarding the interpretation of change of use because petitioners failed to seek Zoning Board of Appeals review, and thus, failed to exhaust administrative remedies. The Court dismissed the "takings" argument because petitioners' failed to demonstrate confiscation and finally, the Court dismissed the equal protection claims because petitioners' failed to show how they were similarly situated with others who were not subject to the Ordinance.
In March 2010, petitioners 33 Seminary LLC, 26 Seminary Avenue Project LLC and Isaac Levin, commenced an Article 78 proceeding in the Supreme Court of the State of New York, County of Cortland. In the initial petition, petitioners allegedly asserted the following claims: (1) a special permit and site plan are not required for the work at 31 Seminary Avenue; and (2) respondents' denials were arbitrary and capricious.*fn18 In April 2010, petitioners allegedly sought a preliminary injunction. That request was denied. Petitioners then filed an amended petition.*fn19 In
September 2010, petitioner moved for leave to file a Second Amended Petition to assert the following claims: (1) that respondents denied petitioners equal protection by selective enforcement of the Zoning Ordinance; (2) the requirement that the project comply with an amendment made to the Zoning Ordinance after petitioner 33 Seminary LLC had acquired the property amounted to retroactive enforcement of the amended Zoning Ordinance which denied petitioners due process of law; (3) that the Ordinance is facially unconstitutional; and (4) that respondents' actions were arbitrary and capricious. In the Second Amended Petition, petitioners sought an Order declaring the Ordinance unconstitutional pursuant to the Fifth and Fourteenth Amendments and an award of $155,680.00 in damages or, in the alternative, for an Order converting the action to one for declaratory judgment.
In October 2010, the Honorable Philip R. Rumsey issued a Decision, Order and Judgment. Judge Rumsey addressed the new claims asserted in plaintiffs' proposed amended petition. With ...