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Mhany Management Inc. v. Incorporated Village of Garden City

United States District Court, E.D. New York

December 6, 2013


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For Plaintiffs: Frederick K. Brewington, Esq., of Counsel, Law Offices of Frederick K. Brewington, Hempstead, New York.

For Plaintiffs: Joseph D. Rich, Esq., Linda H. Mullenbach, Esq., Abigail E. Shafroth, Esq., of Counsel, Lawyers' Committee for Civil Rights Under Law, Washington, DC.

For Mhany Management Inc., Plaintiff: Stanley J. Brown, Esq., Peter J. Dennin, Esq., Chava Brandriss, Esq., Andrew J. Sein, Esq.he h, Sarah J. Gregory, Esq., Benjamin A. Fleming, Esq., Of Counsel, Hogan Lovells U.S. LLP, New York, New York.

For Incorporated Village of Garden City and Garden City Board of Trustees, Defendants: James G. Ryan, Esq., Ariel E. Ronneburger, Esq., Thomas B. Wassel, Esq., Cynthia Ann Augello, Esq., Douglas J. Bohn, Esq., Jennifer A. McLaughlin, Esq., of Counsel, Cullen and Dykman, LLP, Garden City, NY.


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ARTHUR D. SPATT, United States District Judge.

In 2005, several individual plaintiffs and organizations commenced a lawsuit against the County of Nassau, the Incorporated Village of Garden City (the " Village" or " Garden City" ), and the Garden City Board of Trustees. Briefly, the Plaintiffs allege that the Defendants discriminatorily re-zoned two parcels of Nassau County-owned land that were located in Garden City to prevent the building of low-and middle-income housing on that site. The Plaintiffs further allege that this decision was part of a long-standing racially discriminatory policy maintained by the Defendants.

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Based on these allegations, the Plaintiffs assert claims pursuant to the Fair Housing Act (" FHA" ), 42 U.S.C. § 3601 et seq.; 42 U.S.C. § 1981; 42 U.S.C. § 1982; 42 U.S.C. § 1983; and 42 U.S.C. § 2000d et seq. The Plaintiffs seek injunctive and declaratory relief, costs, and attorneys' fees. In response, the Defendants deny any wrongdoing and assert that they have no racially discriminatory policies.

Currently, only the corporate Plaintiffs, MHANY Management, Inc. (" MHANY" ), formerly known as New York ACORN Housing Company, Inc. (" NYAHC" ) and the Intervenor-Plaintiff New York Communities for Change, Inc. (" NYCC" ), the practical successor to former Plaintiff, the New York Association of Community Organizations for Reform Now (" New York ACORN" ), remain as plaintiffs. Also, the case against the County of Nassau was dismissed by a summary judgment decision and thus only the Incorporated Village of Garden City and the Garden City Board of Trustees (the " Garden City Defendants" ) remain as defendants.

The Court has jurisdiction over this case pursuant to 42 U.S.C. § 3613 and 28 U.S.C. § § 1343 and 2201. The Court conducted an 11-day bench trial commencing on June 17, 2013. Having considered the evidence and the arguments submitted at the trial and the written submissions of the parties, the Court concludes that the Plaintiffs have established the liability of the Garden City Defendants under (1) the FHA based on a theory of disparate treatment and disparate impact; (2) 42 U.S.C. § 1981; (3) 42 U.S.C. § 1983; and (4) the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.

This opinion will first state the Court's findings of fact which will essentially be a history of the events leading to the subject zoning decision of the Village of Garden City. Next, the Court will briefly review the complicated procedural history of this case. Finally, the opinion will close with this Court's conclusions of law and choice of remedies.


A. The Parties

MHANY is a not-for-profit community-based developer of affordable housing incorporated in New York and, at all times relevant to the allegations in the amended complaint was known as NYHAC. The former Plaintiff New York ACORN is a former local chapter of a nationwide nonprofit corporate entity that was called the Association of Community Organizations for Reform Now organized and existed under the State of Arkansas which disbanded in or about December 2009. NYCC is a non-profit entity formed in December 2009, and which intervened in this action on June 30, 2010.

The Village of Garden City is a municipal corporation organized under the laws of the State of New York. It is located in New York State in the County of Nassau. The Garden City Board of Trustees is an elected governing body in Garden City.

B. The Racial Makeup of Nassau County and Garden City

The Plaintiffs' expert Nancy McArdle, who conducted an analysis of racial change and segregation in Nassau County, testified that, as of the year 2000, the minority population share of the total population in Nassau County was 20.3%. McArdle defined minority as all persons identifying their ethnicity as Hispanic or African-American. The minority population in Garden City increased from 2.9% in 1980 to 4.1% in the year 2000.

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C. The Affordable Housing in Nassau County

Former Nassau County Executive Thomas Suozzi testified that a lack of affordable housing has been a problem in Nassau County. (Tr. at 977-78.). The parties defined affordable housing as that which is financially attainable -- namely, no more than 30% of a household's income is spent on housing -- for households earning 80% or less of the Area Median Income for the Nassau-Suffolk Metropolitan Statistical Area. (Tr. at 493-94.)

In the year 2000, although only 14.8% of all households in Nassau County were African-American or Hispanic, 41.4% of " very low" income elderly renter households in the County were African-American and Hispanic, as were 53.1% of " very low" income non-elderly renter households. (Tr. at 148.) In 2000, African-American people comprised 88% of the waiting list in Nassau County for Section 8 housing. (Tr. at 164-65.) " Section 8" housing refers to federally subsidized rental assistance paid to private landlords pursuant to Section 8 Housing Act of 1937, 42 U.S.C. § 1437f on behalf of low income renters.

D. The Racial Makeup of Garden City

As of the year 2000, Garden City had a population of 21,672 people. Garden City is 5.3 square miles in size. In 2011-2012, Garden City contained the following types and numbers of residential dwelling places: Single-Family homes, 6,845, Condominiums, 410, Apartments or Co-ops, 691. (Tr. at 67.)

McArdle testified that, as of the year 2000, the percentage of minority population in Garden City was 4.1%, up from 2.9% in 1980. McArdle further noted that 61% of the Village's African-American population was living in dormitories in 2000, and thus, excluding this population would significantly alter these statistics. If one examined only people living in households and not in dormitories in 2000, the minority population in Garden City was just 2.6% of the population, as opposed to the 4.1% stated above, and as compared to 15.3% of the County. (Tr. at 139.)

In 2000, 2.3% of the households in Garden City were headed by an African-American or Hispanic person, compared to 15.3% of the Nassau County households. (Tr. at 144-45.) If minorities comprised the same share of Garden City households as they did of Nassau County households, Garden City would have 1,333 African-American or Hispanic households, as opposed to the actual total of 167.

E. The Affordable Housing Options in Garden City

Village Administrator Robert Schoelle testified that, to his knowledge, Garden City, unlike other parts of Nassau County, contained no affordable housing, nor does it to this day. (Tr. at 494.) Garden City has declined to join the Nassau County Urban Consortium, a group of municipalities in Nassau County that are eligible to receive federal funding to support affordable housing development. (Tr. at 494.)

In May 2006, the County announced that it intended to sell a parcel of land, the Ring Road Site, located in Garden City for the purpose of developing affordable housing in Garden City and Nassau County. The County issued a Request for Proposals (" RFP" ) for the purchase of the " Ring Road" site in Garden City. This was a mixed-use development which was characterized as " mixed income" and would have included affordably priced residential units. (Tr. at 1013.) However, Garden City residents expressed opposition to the construction of affordable housing in the

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community. To date, nothing has been built on the property. (Tr. at 658.)

F. Evidence of Discriminatory Acts in Garden City

The Village Administrator Schoelle testified that, in 1989, a developer proposed constructing fifty one units of affordable housing at the former Doubleday & Co. site on Franklin Avenue in Garden City. The Garden City Defendants deny having any record indicating that any such application has ever been filed. In any event, the Plaintiffs contend that a building moratorium in Garden City in the late 1980s prevented such construction. Recently, a luxury development was approved for the Doubleday site. (Tr. at 645.)

In February 2004, ACORN released a study entitled " Whites Only" -- which involved " actual testing" by sending " Caucasian testers and sending African[-]American or Latino testers into real estate companies and documenting the results of how they were treated, what they were given, what they were told." (Tr. at 1268-72.)

In 2005, the New York State Attorney General determined that Garden City enforced a local requirement limiting the use of its parks to Garden City residents in a racially discriminatory manner. In the wake of this investigation, Garden City adopted policies and procedures to ensure that local regulations were not enforced in a racially discriminatory manner.

G. The County's Real Estate Consolidation Plan

In May 2002, the County, under the leadership of then County Executive Suozzi, began drafting a Real Estate Consolidation Plan (the " Plan" ). The purpose of the Plan was to identify what property the County needed to operate its government. The balance of the other properties that the County owned would be sold in order to maximize revenue to fund renovations for the County's existing operations.

One of the properties considered under the Plan was a parcel of land located within the boundaries of the Village of Garden City in its Public or " P" Zone. This property encompasses numerous County buildings, including the Nassau County Police Headquarters and the County Executive Building. It also included the Nassau County Supreme Court building, the Social Services Building, and parking lot areas for the Court and the Social Services Building. The P-Zone did not permit residential housing. The entire parcel encompasses 84.76 acres. The portion of the " P" Zone site at issue in this case is an approximately 25 acre site which, currently and at all times relevant to the allegations in the amended complaint, houses the parking lots for the Supreme Court of Nassau County, the former Social Services building, a garage, an ancillary building, and additional parking facilities (the " Social Services Site" ). The Social Services Site is property owned by the County. However, Garden City retained the right to zone the property.

The Social Services Site consists of 21.44 acres located on the eastern side of County Seat Drive, on which the Social Services building and a parking lot are situated, and an additional 3.03 acres located on the western side of County Seat Drive, on which are located a County owned building and parking garage. The County intended to sell the Social Services Site to a private developer and aimed to maximize the sale value of the Social Services Site. In this regard, the County hoped to receive at least $30 million for the property.

H. The Re-Zoning of the Social Services Site

In June 2002, at the County's request, the Village created a sub-committee

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charged with retaining a planner and reviewing zoning options for the entire 84.76 acre P-Zone, including the Social Services Site (the " P-Zone Committee" ). The P-Zone Committee consisted of Village Trustees Peter Bee, Peter Negri, and Gerard Lundquist. Trustee Bee was the chairman of the P-Zone Committee.

The Village also retained the firm of Buckhurst Fish and Jacquemart (" BFJ" ) to provide a recommendation with regard to the rezoning of the Social Services site. Over the course of Garden City's decades-long relationship with BFJ, the Village had come to respect BFJ's work and generally adopted its recommendations. (Tr. at 230-31.) The Village also hired attorney John Kiernan to advise it on the rezoning process. (Tr. at 498.)

During the re-zoning process, Schoelle served as a liaison between the P-Zone Committee and the Board of Trustees. (Tr. at 1096.) The P-Zone Committee also kept Garden City's four Property Owners Associations (" POAs" ) apprised of the rezoning process. (Tr. at 490, 838-39.) The POAs, in turn, acted as liaisons between Garden City and the citizens who lived within their respective " jurisdictions." (Tr. at 488-90.) The Social Services Site is located within the " jurisdiction" of the Eastern Property Owners' Association. (Tr. at 490-91.)

On September 13, 2002, BFJ sent a facsimile to Garden City outlining the general planning principles for redevelopment of County properties in Garden City. These principles included that " [a]ny rezoning associated with the proposed development should be in accordance with the goals and parameters set forth in the zoning code [in Garden City]." (Tr. at 239.) In particular, these principles provided that any development should " be consistent with the existing character and surrounding neighborhoods of Garden City" ; " not overburden roads, utilities, and schools" ; " be consistent with the surrounding neighborhood in terms of scale and design and with the densities permitted in the Zoning Code" ; " not tend to depreciate the value of property in the village" ; " be in accordance with the goals and parameters set forth in the Zoning Code" ; and " protect[] . . . the environment [in terms of traffic, visual effects, or burdens on public facilities] . . . through compliance with the State Environmental Quality Review (SEQR)." (Tr. at 239-41.)

By memorandum dated November 15, 2002, entitled " Potential Approach to 'P' Zone Changes," and addressed to the P-Zone committee, BFJ recommended that Garden City borrow from its already existing zoning regulations and apply something similar to the " CO-2" zone, allowing for commercial and office use, as well as residential use on the southern part of the property. (Plf's Exh 386.) Specifically, BFJ suggested that the residential use include a maximum density of one unit per 2,300 square feet of area, which would permit as many as 440 units on the property.

By memorandum dated April 29, 2003, BFJ proposed to the P-Zone Committee the creation of a " CO-5(b)" zone for the Social Services Site and Co-5(a) zone for the remaining 63.32 acres of the P-Zone. BFJ also proposed applying " multi-family residential group" (" R-M" ) zoning controls to the residential component of the proposed CO-5(b) zone. This would have allowed for up to 311 residential units to be built at the Social Services Site. The proposed R-M zoning controls also permitted the construction of multi-family housing.

In May 2003, BFJ again proposed R-M zoning to the P-Zone Committee, which contemplated single-family homes and apartments for the residential component of the Social Services Site. The May 2003

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report states that BFJ's zoning proposal would " be likely to generate a net tax benefit to the Village."

On May 29, 2003, BFJ made a PowerPoint presentation of the May 2003 Report to the Village at a public forum. Under the proposed zoning, single family homes and apartments would be permitted at the Social Services Site. At the forum, several residents expressed concern about the impact of 311 residential units on traffic and the schools.

In July 2003, BFJ issued a revised version of its study, which again included the proposal that Garden City zone the Social Services site under the " CO-5 zone, which would permit residential development of either 311 apartment units or approximately 75 single-family homes." Responding to some of the residents' concerns, the July 2003 report states that " [t]here would be a smaller number of school children generated by the new development than with the development of single-family homes." At this time, the P-Zone Committee " adopted [BFJ's] final report for recommendation to the Village Trustees" containing the proposed R-M zoning. (Tr. at 281.)

In September 2003, BFJ issued a draft Environmental Assessment Form (" EAF" ). The EAF proposed that R-M zoning controls be used for the residential component of the Social Services Site. The EAF concluded that the proposed zoning " will not result in any large and important impact(s) and, therefore, is one which will not have a significant impact on the environment, therefore a negative declaration will be prepared." (Tr. at 288-290.) Specifically, according to the EAF, multi-family housing at the Site would: (1) not " result in the generation of traffic significantly above present levels" (Tr. at 290.); (2) have a minimal impact on schools. (Tr. at 299-300.); (3) create a transition zone between the surrounding single-family and office uses; (4) maximize existing zoning tools; (5) respect the character of surrounding neighborhoods; and (6) have positive aesthetic impacts. (Tr. at 301.) The impacts of the proposed zoning were so minimal that a full Environmental Impact Statement was not required. (Tr. at 289.) Frank Fish of BFJ and Superintendent of the Garden City Buildings Department Michael Filippon agreed with the conclusions reached in the EAF. (Tr. at 1720-1721.)

On October 17, 2003, a notice was placed in the Garden City News entitled, " Tell Them What You Think About the County's Plan for Garden City," which stated:

Where is the Benefit to Garden City? Are We Being Urbanized? . . . The County is asking the Village to change our existing zoning -- P (Public use) ZONE -- to allow the County to sell the building and land . . . now occupied by the Social Services Building, to private developers. Among the proposed [sic] plans: Low-density (high-rise?) housing -- up to 311 apartments . . . These proposals will affect ALL of Garden City.

(Plf's Exh. 45.)

On October 23, 2003, at a second public forum, BFJ made another PowerPoint presentation to the Village summarizing the Co-5b zoning, including the R-M zone for the residential component.

In November 2003, BFJ presented its third report to the P-Zone Committee, again confirming its proposal for the R-M designation that allowed for a possible 311 apartment units on the Social Services site. The November 2003 report set forth a draft zoning text for the CO-5B district and R-M controls for the residential component of the Social Services Site.

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On November 20, 2003, the Board accepted the P-Zone Committee's recommendations. (Tr. at 514-15.) On December 4, 2003, the Board made a finding pursuant to New York's State Environmental Quality Review Act that the zoning incorporated in the proposed Local Law 1-2004 would have " no impact on the environment" and moved the law to a public hearing. Local Law 1-2004 would create a new CO-5b zone which would include the Social Services Site, allowing residential use as well as office and courtroom use. The residential use in the new CO-5b zone would allow both single family as well as multi-family units at the Social Services Site.

On January 8, 2004, Garden City held a public hearing for the purpose of considering Local Law 1-2004. At the hearing, residents voiced concerns that multi-family housing would generate traffic, parking problems, and school children. In response, Filippon stated " If I could just add on this point of traffic . . . You have to remember that the existing use on that site now generates a certain amount of traffic, a fair amount of traffic. That use is going to be vacated. The two residential uses that are being proposed as one of the alternates, each of which on their face automatically generate far less traffic than the existing use. That is something to consider also." (Joint Exh. 24, at 875.)

On January 20, 2004, the Eastern Property Owners Association held a meeting at which Trustee Bee discussed BFJ's recommendation for the Social Services Site. A summary of the meeting reports that " Trustee Bee answered many questions from the floor" and, in doing so, expressed the opinions that " Garden City demographically has a need for affordable housing" and that " he would keep an open mind but he still felt the recommended zoning change were appropriate." (Pls.' Ex. 147.) Although Suozzi did not attend the January 20, 2004 meeting, he met with the Trustees earlier that evening to discuss the most recent plans for the Social Services Site. The summary states that " Suozzi was reminded that he pledged not to do anything that Garden City residents objected to. Mr. Souzzi's [sic] commitment still stands." (Id.)

On February 5, 2004, Suozzi attended a public hearing for the residents of Garden City at which time he presented the Plan. At the hearing, one resident asked whether Trustee Bee's statement " last time" about affordable housing was true. (Joint Exh. 12, at 905.) Trustee Bee responded that " neither the County nor the Village is looking to create a so-called affordable housing at that spot." An unidentified speaker then asked whether Trustee Bee could " guarantee" that the housing on the Social Services Site would be " upscale" rather than affordable and expressed concerns about multi-family housing " depress[ing] the market." (Id. at 906)

The residents further voiced their opposition to multi-family housing at the Social Services site. Id. at 918 (" Brian Gemmel" [to Suozzi]: " I don't think you are hearing a lot of the people. We're not against residential, we're against multi-level residential." ); id. at 921 (" Suozzi: You would probably like to see single family housing I presume. Unidentified Speaker: Single family. (Applause)." ); id. at 921-922 (" Gail Madigan: I moved here from Brooklyn so that when I walked out of my house I did not turn to my left and see apartment buildings." ); id. at 922 (" Suozzi: Mayor out of respect, let me stipulate the facts here. The public of Garden City especially from the eastern civic association does not want to see multi-family housing here. They'd rather see single-family housing." ); id. at 923 (" David Piciulo: I don't hear a compelling argument

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from anyone here tonight as to why we should have multi-dwelling homes. Can we take it out of the proposal?" )

Similarly, one resident urged officials to adopt zoning " in the flavor and character of what Garden City is now." (Id. at 912.) Residents further objected to " full families living in one bedroom townhouses, two bedroom co-ops," resulting in " overburdened and overcrowded" schools and " overrun" sanitation, a " multi-housing community . . . [with] four people or ten people in an apartment," and " that whole section of people" who use the bus to access the Department of Social Security. (Id. at 912, 929, 944.)

However, Suozzi clarified that the County is " absolutely not interested in building affordable housing there and there is a great need for affordable housing, but Garden City is not the location." (Id. at 905.) He further stated that developers

would love to build upscale housing in Garden City. . . . We would be willing to put deed restrictions on any property that we sold. The Village would have control of their zoning requirements. We would put on restrictions whatsoever, no ifs ands or buts, that it can't be anything but upscale housing. Put it this way, we generate more revenues for the County by selling it for upscale housing.

(Id. at 906.) Also, at one point, Suozzi stated bluntly that a resident's concern about traffic was " irrational." (Id. at 908.) Fish testified that residents who claimed to prefer single-family homes because of school impacts were " simply wrong." (Tr. at 316.)


The Garden City Trustees are close to voting on how to zone this property. They might choose to zone it for multi-family housing (If Senator Balboni's current bill passes in June, as many as 30 of those apartments would be considered 'affordable housing.' According to this bill, 'Affordable workforce housing means housing for individuals or families at or below 80% of the median income for Nassau Suffolk primary metropolitan statistical area as defined by the Federal Department of housing and urban development.' . . . NOT JUST GARDEN CITY INCOMES! . . .)

(Pls.' Ex. 17.) The flyer reached Schoelle, who faxed it to Fish and at least one member of the Board of Trustees. (Tr. 662-63.) The record reflects that the flyer was brought to Trustee Lundquist's attention as well. (Tr. at 767-68.) On the other hand, Trustee Negri claimed that he had never seen nor had any conversations about this flyer. (Tr. at 1080-81.)

At a Board meeting on March 18, 2004, residents raised concern about the Balboni Bill. Schoelle's notes from that meeting indicate that residents expressed concern that the Balboni Bill might apply " retroactive[ly]." (Tr. 551-553.) One resident urged decision-makers to " play it safe" with respect to the Balboni Bill and " vote for single family homes." (Tr. at 550.) The following month, Trustee Negri told residents at a Central Property Owners Association meeting that he and other Village officials met with state representatives to discuss the Balboni Bill, noting that a family of four making $67,000 per year would qualify for housing under the proposed legislation. (Plfs' Exh. 379, at 522.)

Fish testified that, by the spring of 2004, the public was beginning to have an influence on the decision-making process. (Tr. at 331, 333-34.) On April 1, 2004, BFJ

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modified its zoning proposal to reduce office density, minimize traffic impacts, and to lower the number of multifamily units to reduce population numbers. (Tr. at 1670-1673.)

On April 22, 2004, BFJ made a PowerPoint presentation to the Village residents. Under the proposed zoning contemplated by this presentation, single-family homes and apartments would be permitted at the Social Services Site. However, this time, only 215 apartments would be permitted.

By memorandum dated May 4, 2004 and addressed to the Board, BFJ proposed eliminating the CO-5b zone altogether, and with it, the potential for multi-family housing on the 21.44 acres of land of the Social Services located east of County Seat Drive. Specifically, BFJ stated:

[W]e reviewed the public comments with Robert Schoelle, Michael Filippon and [Garden City counsel] Gary Fishberg. Based upon these discussions we would recommend for your consideration two basic refinements to the recommendations: (1) Elimination of office use for the 101 County Seat Drive area; (2) Provide for multi-family housing in the 101 County Seat Drive area only by special permit and limited to the West Side of County Seat Drive.

(Joint Exh. 19.) BFJ suggested renaming the proposed zoning designation as " Residential--Townhouse" (" R-T" ), which essentially limited the development of multi-family housing to less than 15% of the Social Services site, and only by special permit. BFJ's proposed description of the R-T zone defined " townhouse" as a " single-family dwelling unit."

In May 2004, BFJ issued its final EAF, which proposed a R-T district to replace the previously proposed CO-5b District. No draft EAF was ever issued for the R-T Zone, even though Fish affirmed that the R-T zoning proposal was a significant change to the Co-5b zoning proposal with R-M controls. (Tr. at 341.)

On May 20, 2004, proposed Local Law No. 2-2004, which deleted the P--Zone and replaced it with CO-5 and R-T districts, the latter of which encompassed the Social Services site, was considered at a public hearing. There, a member of the New York ACORN expressed concern about the need for affordable housing on Long Island and asked that Garden City consider building affordable housing in their community. Indeed, responding to an inquiry regarding multi-family housing with a special permit under R-T zoning, Fish stated that " [t]he P Zone Committee had been considering this and the Trustees on the entire site, it wasn't an after thought. This was, this was a conscious decision . . . there was a concern that if the whole 25 acres were developed for multi-family it would generate too much traffic . . ." (Joint Exh. 25, at 35.)

At the hearing, Fishberg explained that the required referral to the Nassau County Planning Commission (the " NCPC" ) had already been made, and that the NCPC would be addressing the new law the following week. (Joint Exh. 25, at 25.) ACORN members subsequently attended the NCPC meeting and again expressed opposition to the R-T zoning. (Tr. at 1288-89.) At the same time, NYAHC sent a letter to the NCPC strongly opposing R-T zoning and warning that ...

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