New York City Council, BARUCH HOUSES TENANTS' ASSOCIATION, ROBERTO NAPOLEON, DOUGLASS HOUSES TENANTS' ASSOCIATION and JANE WISDOM, , Petitioners, For a Judgment Pursuant to Article 78 of the Civil Practice Law & Rules
New York City Housing Authority and JOHN B. RHEA, as Chairman of the Board of the New York City Housing Authority, Respondents.
Petitioners: Patterson Belknap Webb & Tyler LLP
Respondent: New York City Housing Authority
Cynthia S. Kern, J.
Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion for
Notice of Petition and Affidavits Annexed ...............1
Affirmation in Opposition to Petition... ....................2
Replying Affidavits ..................................................3
Petitioners New York City Council, Baruch Houses Tenants' Association, Roberto Napoleon, Douglass Houses Tenants' Association and Jane Wisdom (collectively hereinafter referred to as "petitioners") commenced the instant proceeding pursuant to Article 78 of the Civil Practice Law and Rules ("CPLR") seeking to challenge a land lease initiative proposed by respondents New York City Housing Authority and John B. Rhea (hereinafter referred to as "NYCHA" or "respondents"). For the reasons set forth below, the petition is denied.
The relevant facts are as follows. In 2011, NYCHA unveiled "Plan NYCHA: A Roadmap for Preservation, " a five-year strategic plan which identified new and sustainable sources of revenue, including development rights at NYCHA Campuses that NYCHA could use to generate a significant source of capital funding to raise money for its capital budget. Early in 2013, NYCHA publicly unveiled its proposed plan to lease land from existing public housing projects to private developers (the "Land Lease Initiative"). Pursuant to the Land Lease Initiative, fourteen parcels of land from eight NYCHA developments located in Manhattan would be leased for 99 years to private developers for the purposes of building high-rise residential buildings. Pursuant to the Land Lease Initiative, eighty percent of the units in the new high rises are to be leased out at market rates and twenty percent of the units are to be reserved for low-income individuals. NYCHA alleges that it chose the fourteen sites primarily for "their potential to generate significant revenue" for developers, and in turn, for NYCHA and its buildings. Specifically, it alleges that "[t]he income generated through land leases would be dedicated to building improvements at the eight developments, initially, and other public housing properties citywide."
After unveiling the Land Lease Initiative, NYCHA released a document entitled "Land-Lease Initiative - Pre-RFP Discussion Document" (the "Pre-RFP"), which provided significant information about the Land Lease Initiative to potential developers such as the identification of the various sites, the amount of square footage that is available under certain zoning rules and NYCHA's views on the applicable approval process. Subsequent to releasing the Pre-RFP, NYCHA held a series of meetings with residents and resident associations of the affected NYCHA developments. NYCHA alleges that it released detailed information about the development sites, including responses to questions and concerns and created a two-step process whereby NYCHA would first issue a Request for Expressions of Interest ("RFEI"), to be followed by the issuance of a Request for Proposals ("RFP"). Pursuant to the process, only developers who responded to the RFEI would be permitted to respond to the RFP but a developer could be conditionally designated after a response to the RFEI alone. This means that a developer could be selected subject to the successful completion of all legal pre-development requirements such as local and Department of Housing and Urban Development ("HUD") reviews and approvals, as a result of an "exceptionally responsive and visionary" proposal in response to the RFEI. However, the RFEI makes clear that "NYCHA may only incur a legal obligation identified in the RFEI with regard to the Parcels described in it after NYCHA enters into a binding written agreement and such written agreement is approved by the Board."
On August 16, 2013, NYCHA issued its Request for Expressions of Interest ("RFEI") which "invites developers to submit proposals for the design, construction and operation" of the residential developments called for by the Land Lease initiative and informs prospective developers that an "internal selection committee" of NYCHA staff will review the submissions. Upon review, the NYCHA members may recommend to NYCHA's board that "a Developer be selected for a particular Development Parcel." Once NYCHA's board approves the recommendation, it will issue a Conditional Designation Letter to the developer and the "selected Applicant must begin pre-development work within thirty (30) days of the date of the conditional ...