Petition for Writ of Certiorari — Committee to Oppose the Sale of St. Bartholomew's Church, Inc. v. Rector
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90-9 00
No. 90-
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1990
THE RECTOR, WARDENS AND MEMBERS OF THE
VESTRY OF ST. BARTHOLOMEW’S CHURCH,
Petitioner,
—against—
THE CITY OF NEW YORK AND
THE LANDMARKS PRESERVATION COMMISSION OF
THE CITY OF NEW YORK,
Respondents.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
Douglas M. Parker
Counsel Of Record
Judah Gribetz
Of Counsel: George A. Pierce
MUDGE ROSE GUTHRIE
ALEXANDER & FERDON
180 Maiden Lane
New York, New York 10038
Kent Greenawalt
New York, New York (212) 510-7000
Henry P. Monaghan
New York, New York
Counsel for Petitioner,
Raymond L. Vandenberg The Rector, Wardens And
Chancellor of Members Of The Vestry Of
St. Bartholomew’s Church St. Bartholomew’s Church
December 10, 1990
7
QUESTIONS PRESENTED
Whether Employment Division v. Smith, 110 S.Ct. 1595
(1990), may be extended to uphold a landmarks preserva-
tion law against a First Amendment challenge where:
(a) the law is applied selectively and has a dispropor-
tionate impact on religious organizations;
(b) the law provides a system of individualized exemp-
tions that excludes consideration of religious hard-
ship; and
(c) application of the law gives rise to a “hybrid” case
that also involves the constitutional protection pro-
vided by the takings clause of the Fifth
Amendment?
Whether the court of appeals applied an erronsous consti-
tutional standard in holding that, although the application
of a landmarks preservation law to petitioner “drastically
restricted” petitioner’s ability to generate revenue to sup-
port its religious mission, no infringement of petitioner’s
First Amendment rights could be found absent proof that
petitioner “cannot continue its religious practice in its
existing facilities?”
Whether the court of appeals erred in requiring petitioner
to show, in order to establish a taking under the Fifth
Amendment, that it “cannot continue its existing charita-
ble and religious activities in its current facilities,” even
though application of the landmarks preservation law had
destroyed more than eighty percent of the total value of
petitioner’s property?
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED i
TABLE OF CONTENTS .. see
TABLE OF AUTHORITIES iv
OPINIONS BELOW casa
JURISDICTION 2
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED 2
STATEMENT OF THE CASE. eccsssccccssessssesnseesssenssessee 2
REASONS FOR GRANTING THE WRIT 6
Certiorari Should be Granted to Review the
Denial of Petitioner’s First Amendment Claims ..... 10
Certiorari Should Be Granted To Review The
Denial of Petitioner’s Claim Under the Fifth
Amendment ................ ; 21
COP IUIIIITT ~ csnsisdivccnskdansnuctsinieebiccashectiaisigubibimiaabaansdcumisiancaaiias 30
APPENDIX
The Rector, Wardens, And
Members Of The Vestry Of
St. Bartholomew's Church v. The
City Of New York, et al., 914 F.2d
De ee ee I ee ek ee eee Weeks l
ee ee a ee ee ese tas te ee ee Ne See eee eee
TABLE OF CONTENTS, Continued
The Rector, Wardens, And
Members Of The Vestry Of
St. Bartholomew’s Church v. City
of New York, et al., 728 F. Supp.
958 DN.Y, A990) a. 2 >
United States Constitution,
Amendments 1,5 and14 ....
Ok ae
Administrative Code Of The City
Of New York §§ 25-301 to 25-321
TABLE OF AUTHORITIES
CASES Page
Agins v. Tiburon, 447 U.S. 255 (1980). 26
Bowen v. Roy, 476 U.S. 693 (1986)...... 12
Church of St. Paul and St. Andrew v. —
Barwick, 67 N.Y .2d 510, 496 N.E.2d
183 cert. denied, 479 U.S. 985 (1986) 13
City Council v. Taxpayers for Vincent,
466 U.S. 789 (1984) ........ccssccscersscersees 15
Corporation of Presiding Bishop v. Amos,
483 U.S. 327 (1987) 17
Employment Div., Department of Human
Resources of Oregon v. Smith, ___
US. __, 110 S.Ct. 1595 (1990)........ 8, 10
First Covenant Church of Seattle v. City
of Seattle, 114 Wash.2d 392, 787
Fy eS: eS -- F,-43,-16
First Unitarian Church v. Los Angeles,
BF FB. FES CORI scsctcctcratinnivvcenssesions 17
Follett v. McCormick, 321 U.S. 573
CUD Bait cttincclalisionis sihesisbibiebpicindidtaniooe 11
3 Hernandez v. Commissioner, ___ USS.
__-» 109 S.Ct. 2136 (1989) .......cccccccee. 10, 18
Hodel v. Irving, 481 U.S. 704 (1987)... 27
—jv—
Jimmy Swaggart Ministries v. Board of
Equalization, ___ U.S. ___, 110 S.Ct.
688 (1990) 10, 11, 18, 19, 21
Kedroff v. St. Nicholas Cathedral, 344
U.S. 94 (1952). 17
Keystone Bituminous Coal Assn. v. De
Benedictis, 480 U.S. 470 (1987)...... 25, 27
Minneapolis Star & Tribune Co. v.
Minnesota Commissioner of Revenue,
460 U.S. 575 (1983) 11
Murdock v. Pennsylvania, 319 U.S. 105
CUBES) caiitictnisiaidcnstddcsilitiiccniistritioestienes 11
NLRB v. Catholic Bishop of Chicago,
a Be GL | Seen 17
Nectow v. Cambridge, 277 US. 183
CIEE ciciieesinattib ainiaedinpiiedininhalhinteiiacincescenve 26
Nollan v. California Coastal Commission,
BBD BUR BAS C1067) svi ccscsevesseensciscsevecss 26, 27
Penn Central Transportation Co. v. City
of New York, 438 U.S. 104 (1978) 9, 21, 22, 23, 24
Pennsylvania Coal v. Mahon, 260 US.
Fe Bini cracilietiiaapintbiiliwinndasesitininesese 25
Seawall Associates v. City of New York,
74 N.Y.2d 92, 542 N.E.2d 1059
(1989), cert. denied sub nom.
Wilkerson v. Seawall Associates, ___
US. __, 110 S.Ct. 500 (1989).......... 23, 27
Secretary of State of Maryland
v. J.H. Munson Co., 467 U.S. 947
(1984)
ciety for Ethical Culture v. Spatt,
51 N.Y.2d 449, 415 N.E.2d 922,
(1980)
Society of Jesus of New Engiand et al. v.
Boston Landmarks, Suffolk Co. of
Mass., appeal docketed No. 5415 (Sup.
Jud. Ct. Mass. June 22, 1990).......
Speiser v. Randall, 357 US. 513
(1958)
Wisconsin v. Yoder, 406 U.S. 205
(1972) ;
STATUTES, RULES AND
REGULATIONS
United States Constitution First
FO RE LOE ET Le ee
United States Constitution Fifth
PIE evictnestcaniactersentnaccndsmtaicioe
United States Constitution Fourteenth
PIE Sovvecnsenctawiinteicn tanstanicanks
ge Sa SE. RR he be TREES RE
ae Nae ee ee
aeeee
18
4, 9, 12
10, 14
passim
passim
N.Y.C. Administrative Code Ch. 3 §
25-301 et. seqg., (“Landmarks Law’’)
OTHER AUTHORITY
Laycock, Towards a General Theory of
the Religion Clauses: The Case of
Church Labor Relations and the Right
to Church Autonomy, 81
Colum. L. Rev. 1373 (1981)...............
‘Marcus, The Grand Slam Grand Central
Terminal Decision: A. Euclid for
Landmarks, Favorable Notice for TDR
And a Resolution of the Regulatory/
Taking Impasse, 7 Ecology Law
Quarterly 731 (1979). .........cccsscescsscers
N.Y. Times September 15, 1990, § B at
i TSE ai Wildthnidnecicbintivnieoesiuneinstorenraeen
passim
17
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a e
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IN THE
SUPREME COURY OF THE UNITE” STATES
OCTOBER TERM, 1990
No. 90
THE RECTOR, WARDENS AND MEMBERS OF THE
VESTRY OF ST. BARTHOLOMEW’S CHURCH,
Petitioner,
Vv.
THE CITY OF NEW YORK AND
THE LANDMARKS PRESERVATION COMMISSION OF
THE CITY OF NEW YORK,
Respondents.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
Petitioner respectfully requests that a writ of certiorari
be issued to review the decision and judgment of the United
States Court of Appeals for the Second Circuit, in
St. Bartholomew's Church v. City of New York, 2d Cir. No.
90-7101 (Sept. 12, 1990).
OPINIONS BELOW
The opinion of the court of appeals is reported at 914
F.2d 348 (2d Cir. 1990). The district court opinion is reported
at 728 F. Supp. 958 (S.D.N.Y. 1989).'
JURISDICTION
The judgment of the court of appeals was entered on
September 12, 1990. This Court has jurisdiction to review the
judgment of the court of appeals by writ of certiorari pursuant
to 28 U.S.C. §1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
This action arises under the First, Fifth and
Fourteenth Amendments to the Constitution and 42 U.S.C.
§ 1983 and involves the Landmarks Law of New York City,
New York City Administrative Code §§ 25-301 to 25-321
(1996)(“Landmarks Law”). (61a — 99a).
STATEMENT OF THE CASE
This case concerns the burdens imposed by the
Landmarks Law on churches and other religious organizations
generally and, in particular, upon petitioner, The Rector,
Wardens and Members of the Vestry of St. Bartholomew’s
Church (“St. Bartholomew’s” or the “Church”).
In this case, the application of the Landmarks Law has
prevented petitioner from developing a portion of its property to
support its religious mission. Specifically, petitioner seeks to
1. The opinion of the court of appeals is reprinted at pages la — 24a of the
appendix to this brief. The district court opinion is reprinted at pages 25a —
57a of the appendix to this brief. The appendix in the court of appeals is cited
as “(A. ___).” The appendix in the district court is cited by volume/page; for
example, 10/3271 refers to volume 10, page 3271 of the district court
appendix.
alliis
demolish the community house adjacent to its church building
and erect a new building. The lower floors of the new building
would provide space for various church activities. The upper
floors would generate income that petitioner believes is essential
to support its mission, to repair and rehabilitate the church
building and, indeed, to assure its survival. The application of
the Landmarks Law has destroyed ninety percent of the value of
the community house site and eighty percent of the value of the
entire property and has deprived the Church of the ability to use
any of that value in support of its mission. In addition, the
Church has been left with a facility that provides insufficient
space and is in need of major repair and rehabilitation.
1. The Landmarks Law and Religious Organizations.
The Landmarks Law permits the designation as a land-
mark of any 30 year old building determined by the Landmarks
Preservation Commission (“the Commission”) to have “a special
character.” Landmarks Law § 25-302 n., (66a).’
As of 1986, approximately 600 buildings in New York
City had been individually landmarked, and of that number 95
were churches or other religious buildings. (A. 188). Each of
the churches whose property has been landmarked must, under
criminal penalty, maintain the landmarked appearance of that
property and cannot make any alteration or modification to the
exterior without the permission of the Commission. Landmarks
Law §§ 25-305, 25-317, (74a — 76a, 95a — 96a).
If a church seeks to alter its property it must first
apply for a “certificate of appropriateness” that will be granted
or denied by the Commission on the basis of its aesthetic
judgment. Landmarks Law §§ 25-307 a., 25-307 d., (77a,
79a). If a certificate of appropriateness is denied, the church
2. The Landmarks Law also autborizes the designation of historic districts but
such designations are not at issue in this action.
"a
may then apply to the Commission for a “certificate of
appropriateness on the ground of insufficient return.”
2. The Landmarks Law and St. Bartholomew’s.
St. Bartholomew’s was organized as a Protestant
Episcopal Church in 1835. The Church constructed buildings
on its current site, at the corner of Park Avenue and 50th Street,
in 1918. The buildings originally consisted of the church build-
ing and a small parish house. In 1927, the parish house was
demolished and ihe present community house was constructed.
(10/3271-73).
On March 16, 1967, the Commission issued a report
designating the church building and the community house a
landmark. (A. 596-97). Although the designation report of the
Commission detailed the many beautiful architectural features
of the church that formed the basis for designation, it did not
ascribe any distinctive architectural features to the community
house.
In December, 1983, the Church applied for a certifi-
cate of appropriateness to construct a 59 story building on the
site of the community house. By letter dated June 21, 1984, the
Commission criticized the design of the proposed building and
denied the Church’s application. (A. 598-603).
3. To obtain such certificate, a church (or other tax exempt owner) must
establish, inter alia, that the property, if it were not tax exempt, would be
incapable of earning a reasonable return and that the property is no longer
“adequate, suitable or appropriate” for its charitable purposes. Landmarks
Law §§ 25-309 a.(1)(a), (80a). In addition to the statutory test, the New
York Courts have developed as a “judicial test” an alternative standard for
relief applicable to charitable institutions including churches: i.e., that a land-
mark designation is permitted “only so long as it does not physically or finan-
cially prevent, or seriously interfere with the carrying out of the charitable
purpose.” Society for Ethical Culture v. Spatt, 51 N.Y.2d 449, 455, 415
N.E.2d 922, 925 (1980).
—4-
In December, 1984, the Church made a second
application for a certificate of appropriateness. It was based
upon a complete redesign of the proposed building to meet the
aesthetic objections of the Commission to the first building.‘
Nevertheless, the Commission rejected the redesigned building.
(A. 604-07).
In September, 1985, the Church applied for relief on
the ground of “insufficient return.” The Church presented evi-
dence that the space in the community house is inadequate to
accommodate the current needs of the Church’s programs, and
that both the church building and the community house suffer
from serious physical deterioration. (E.g., A. 506-29, 635-72).
An expert witness for the Church estimated that the cost of the
essential repair and rehabilitation work needed to permit both
buildings to function safely and adequately would exceed $11
million. (A. 644-47).
The Church also established that the major portion of
the value of its property lay in its development value. When the
Landmarks Law destroyed that value, it reduced the total value
of the Church’s property by more than eighty percent.
Specifically, a report and testimony of an appraisal firm placed
the value of the entire landmark site, if not landmarked, at
$175,000,000, and as landmarked at $35,000,000. The value of
the community house site alone, if not landmarked, was found to
be $125,000,000, and as landmarked, $15,000,000.
(A. 608-09).
On February 24-25, 1986, the Commission passed res-
olutions denying the Church’s application. The resolutions were
based, in principal part, upon estimates of repair and
4. The redesigned building reflected a twenty percent reduction in space avail-
able for the community house and a fifty-two per cent reduction in the space
to be leased as commercial offices. (A. 482-83). In addition, the materials
and texture of the proposed building had been changed from reflective glass to
limestone and brick in order to harmonize with the church building.
(A. 456-78, 1118).
we
rehabilitation introduced at Executive Sessions of the
Commission to which the Church had requested — and been
denied — an opportunity to respond. (A. 407-48, 764-69).
Such estimates totaled approximately $3 million.
This action was commenced in April, 1986. The com-
plaint challenged the constitutionality of the Landmarks Law as
applied to St. Bartholomew’s and the facial validity of the law
as applied to religious organizations generally. Federal claims
were asserted under the First, Fifth and Fourteenth
Amendments and 42 U.S.C. § 1983.
The district court upheld the facial validity. of the
Landmarks Law as applied to religious organizations generally.
The court also rejected the Church’s claims that the application
of that law to St. Bartholomew’s had violated its rights under
the First and Fifth Amendments as incorporated by the
Fourteenth Amendment. The latter claims were denied on the
grounds that the Church had failed to prove that “it can no
longer conduct its charitable activities or carry out its religious
mission in its existing facilities.” (57a).
The court of appeals affirmed. Without considering
the impact of the law on religious organizations generally, it
approved the standard applied by the district court with respect
to St. Bartholomew’s and the finding that the Church had
failed to meet that standard.
REASONS FOR GRANTING THE WRIT
“ [The court of appeals decision] is a total affirmation,
really, of our powers,” said Laurie Beckelman, chair-
woman of the city’s Landmarks Preservation
Commission. She said the court was affirming “the
absolute power” of the commission “to designate and
regulate religious properties as landmarks.” The New
York Times, Sec. B, p. 4, col. 2, September 13, 1990.
* * *
The power of landmark preservation commissions to
appropriate religious property has become a painful reality to
religious organizations throughout the country. As neighbor-
hoods change, congregations, once—thriving but now diminished,
are often left with buildings that are ill-suited to their needs and
costly to maintain and repair. When those buildings have been
landmarked, the capacity of a church to plot a course for sur-
vival is seriously threatened. If the church seeks to modify such
a building — to serve the changing needs of its congregation —
it will quickly discover that its destiny rests in the hands of a
secular agency whose priorities are altogether different and
whose discretion is virtually unfettered.
Against this background, the present case raises issues
of broad significance in two areas of constitutional
jurisprudence: the free exercise clause of the First Amendment
and the takings clause of the Fifth Amendment. Although the
free exercise clause and the takings clause implicate quite differ-
ent values, the court of appeals rejected petitioner’s claims
under each clause by application of the same simplistic formula
— that no constitutional violation has occurred so long as peti-
tioner has not been prevented from carrying on its existing activ-
ities in its current facilities. That standard has no basis in the
precedents of this Court and conflicts with decisions of the high-
est courts of the states of Washington and New York.
Free Exercise. In rejecting petitioner’s free exercise
claims, the court of appeals ignored the effect of the Landmarks
Law on religious organizations generally and looked only to the
impact on petitioner. The court then proceeded to create a stan-
dard that denies petitioner the ability to adapt its property to a
use compelled by the religious convictions of its congregation.
The decision of the court of appeals and the standard it applied
were clearly in conflict with the recent decision of the Supreme
Court of Washington in First Covenant Church vy. City of
Seattle, 114 Wash.2d 392, 787 P.2d 1352 (1990) which had
found the landmarking of a church to be a violation of the free
exercise clause.’
The decision by the court of appeals herein did not dis-
cuss, or even cite, First Covenant. Rather, the court relied prin-
cipally on this Court’s decision in Employment Division v.
Smith, __ U.S. ___, 110 S.Ct. 1595 (1990), which held that
requiring compliance with a neutral and generally applicable
criminal law did not infringe the free exercise clause. The most
basic error of the court of appeals was to conclude that the
Landmarks Law is a “generally applicable” law within the
meaning of Smith. Moreover, the court failed to consider the
two major exceptions to the applicability of Smith that were
explicitly recognized in that case: (a) cases arising under laws
that provide systems of individualized exemptions but exclude
(as the Landmarks Law does) consideration of religious hard-
ship; and (b) “hybrid” cases wherein a free exercise claim is
joined with a claim of other constitutional rights, in this case
petitioner’s rights as a property owner under the Fifth
Amendment.’ In short, the decision below represents a broad
and unwarranted expansion of Smith that this Court should
correct.
Takings. Petitioner’s takings claim presents an impor-
tant question not previously addressed by this Court: the stan-
daré to be applied in determining whether a regulation that
affects the property of a charitable or religious institution con-
stitutes a taking. We submit that, while the takings analysis
may differ in some particulars, a charitable or religious property
5. The landmarking of a church was also invalidated on First Amendment
grounds in Society of Jesus of New England et al. v. Boston Landmarks,
Suffolk Co. of Mass., appeal docketed No. 5415 (Sup. Jud. Ct. Mass.
June 22, 1990).
6. Subsequent to Smith, a motion for reconsideration was filed in First
Covenant and was denied by the Supreme Court of Washington on
September 12, 1990.
owner is surely entitled to no less protection under the Fifth
Amendment than a commercial owner. Such protection, how-
ever, was plainly denied under the standard applied by the court
of appeals.
In denying petitioner’s claim under the takings clause,
the court of appeals applied a redacted, and seriously distorted,
version of the constitutional test adopted by the New York
Court of Appeals for assessing the validity of the Landniarks
Law as applied to charitable institutions. See Society for
Ethical Culture v. Spatt, 51 N.Y.2d 449, 415 N.Ed.2d 922
(1980). In support of the standard it created, the court of
appeals cited only one decision of this Court, Penn Central
Transportation Co. v. New York City, 438 U.S. 104 (1978) —
which was decided twelve years ago by a divided court.
Although the decision was heavily fact-dependent — and the
facts were, in important respects, quite untypical — it has been
frequently misunderstood as a broad charter for any and all
landmarking.’ Thus, in the present case, the courts below
viewed Penn Central as dispositive, with little heed to the strik-
ing dissimilarity of its facts. The result was a decision that is, in
principle, contrary to Penn Central or, at best, a major and
unwarranted extension of that case. Such a result is particularly
troublesome in light of subsequent decisions of this Court that
suggest a limitation — and not an expansion —— of the reach of
Penn Central.
A decision that permits landmarking to destroy, with-
out compensation, more than eighty percent of the value of a
property will have a major impact. Indeed, if the decision is
permitted to stand, it will be seen as a clear signal that few if
any constraints to landmarking are posed by the takings clause.
The decision of the court of appeals, therefore, will have serious
implications, not only for religious organizations, but for all
7. See, e.g., Marcus, The Grand Slam Grand Central Terminal Decision:
A. Euclid for Landmarks, Favorable Notice for TDR And a Resolution of
the Regulatory/Taking Impasse, 7 Ecology Law Quarterly 731 (1979).
Min.
owners of landmarked buildings. Such a decision clearly merits
a review by this Court.
I. CERTIORARI SHOULD BE GRANTED TO
REVIEW THE DENIAL OF PETITIONER’S
FIRST AMENDMENT CLAIMS.
A. The Court of Appeals Erred In Its
Application Of Employment Division +.
Smith.
Prior to its recent decision in Employment Division v.
Smith, this Court had repeatedly held that a regulation impos-
ing a substantial burden on the free exercise of religion could
not be justified merely because the regulation appeared to be
“neutrel on its face.” Such a burden, the Court had indicated,
could only be justified by the showing of a “compelling govern-
mental interest.” Jimmy Swaggart Ministries v. Board of
Equalization, __ U.S. ___, 110 S.Ct. 688 (1990); Hernandez
v. Commissioner, __. U.S. ___, 109 S.Ct. 2136 (1989);
Wisconsin v. Yoder, 406 U.S. 205 (1972). In Smith, however,
the Court held that the compelling interest test was inapplicable
to “an across-the-board criminal prohibition on a particular
form of conduct.” ___ U.S. at __, 110 S.Ct. at 1603.
The Landmarks Law, with its aesthetic concerns and
wholly discretionary applications, is hardly analogous to “an
across—the—board criminal prohibition” or the “socially harmful
conduct” addressed in Smith. Accordingly, the holding of
Smith does not govern the present case. Indeed, even if Smith is
read more broadly, to apply to any law that is “neutral” and
“generally applicable,” it is clear that the Landmarks Law is not
such a regulation.
The Landmarks Law appears on its face to be neutral,
i.e., it makes no reference to religion or religious buildings
except to provide an exemption for the interiors of places of
worship. Landmarks Law § 25-303 a. (2), (70a). On the
other hand, the provisions that authorize the landmarking of
~10-
individual buildings are not “generally applicable” in any
meaningful sense of the term. The essence of the New York
law — and any landmarks law — is selectivity. For example,
to be landmarked pursuant to the New York law, a building
must be determined to have “a special character or special his-
torical or aesthetic interest or value.” Landmarks Law §
25-302 n., (66a). By its nature, such landmarking will be
applied to relatively few buildings.
The lack of general applicability is further manifested
by the fact that the law has been applied disproportionately to
religious buildings. Of approximately 600 individually land-
marked buildings in New York City in 1986, 95 were religious
buildings. Moreover, the impact of the law falls even more dis-
proportionately upon those denominations for whom the beauty
of their church buildings has been an important way to express
religious belief: one third of the landmarked religious buildings
are Episcopal churches. (A. 165-70).
The nature of the Landmarks Law is similar, in signifi-
cant respects, to the flat licensing taxes invalidated in Murdock
v. Pennsylvania, 319 U.S. 105 (1943) and Follett v.
McCormick, 321 U.S. 573 (1944). Like the Landmarks Law,
such taxes were “neutral”, i.e., they did not single out, or make
any reference to, religious organizations. Nevertheless, they
were found to place an unconstitutional burden on the free exer-
cise of religion and this Court has emphasized the difference
between such taxes and a “generally applicable sales tax.” See
Minneapolis Star & Tribune Co. v. Minnesota Commissioner
of Revenue, 460 U.S. 575, 587 n.9 (1983); Jimmy Swaggart
Ministries v. Bd. of Equalization, __ U.S. at __, 110
S.Ct. at 694-695.
In Swaggart and Minneapolis Star, the Court pointed
out that the license taxes invalidated in Murdock and Follett
had imposed a prior restraint on the exercise of a constitution-
ally protected right. That observation is equally applicable to
the Landmarks Law — which operates as a prior restraint on
the exercise of religion by every church whose property has been
landmarked. Compliance with the procedures of the Landmarks
af.
Law is exacted as a precondition to any alteration of the
church’s own property — no matter how essential to the mission
of the church. See, infra, pp. 15-16.
In addition to the court of appeals’ failure to observe
this Court’s limitation of the holding in Smith to laws of general
applicability, it also failed to acknowledge this Court’s explicit
recognition of two kinds of circumstances in which a compelling
governmental interest was still required to justify burdens on
free exercise rights. Although both of the circumstances identi-
fied in Smith are conspicuously present in the instant case, the
court of appeals failed to address either.
First, Smith reaffirmed the principle that “where the
State has in place a system of individual exemptions, it may not
refuse to extend that system to cases of ‘religious hardship’ with-
out compeiling reason,” __ U.S. at _, 110 S. Ct. at 1603,
citing Bowen v. Roy, 476 U.S. 693, 708 (1986). In this case, it
is clear that the Landmarks Law creates just such a “system of
individual exemptions.” Such a system is found in the statutory
provisions for relief on the ground of “insufficient return” and in
the judicial test formulated by the New York courts. See, e.g.,
Society for Ethical Culture v. Spatt, supra. It is equally clear
that neither the statutory nor the judicial provisions for relief
encompass any consideration of religious hardship. Indeed, the
New York Court of Appeals explicitly excluded consideration of
any religious hardship on the mistaken assumption that a
church’s use of its property to support its mission is “secular.”
51 N.Y.2d at 456. The Commission, for its part, applies the
same exclusion. See, infra p. 20.
Second, Smith pointed out that even the application of
a “neutral, generally applicable law to religiously related
action” had been barred in “hybrid” cases involving “other con-
stitutional protections.” __ U.S. at __, 110 S.Ct. at
1601-02. Specifically, the Court referred to free exercise cases
also involving freedom of expression or the right of parental
supervision. So here, the application of the Landmarks Law to
churches involves not only the free exercise of religion but the
rights of those churches, as property owners, under the Fifth
~12-
Amendment. Indeed, the latter rights, unlike the right of
parental supervision, do not arise merely by inference but are
enumerated in the text of the constitution.
The erroneous application of Smith permitted the
court of appeals to avoid the issue of whether any compelling
state interest could be. found to justify the burden of the
Landmarks Law. It is evident, however, that no such interest
exists. Recognition of aesthetics as a permissible state goal, as
in Penn Central, is plainly not the equivalent of recognizing it to
be a compelling state interest.’
The absence of any compelling state interest is glar-
ingly cbvious under the facts herein. The applications of
St. Bartholomew’s before the Commission did not seek quthor-
ity to demolish or modify in any way the only building on the
site of any architectural distinction, i.e., the church building.
Both plans submitted by the church preserved the church
building, as well as a garden in front of the community house.
8. In First Covenant Church v. City of Seattie, supra, the Supreme Court of
Washington carefully considered Penn Central and concluded:
The appellants [in Penn Central] did not allege any violation of a
fundamental right. Absent such a claim, the Court was abie to
employ minimal scrutiny in its analysis of New York City’s
Landmarks Preservation Law. Although the Court held that the
landmarks law satisfied the limited inquiry of minimal scrutiny, it
seems most likely the Court would not have reached the same result
had it analyzed the law under strict scrutiny.
We hold that the preservation of historical landmarks is not « com-
pelling state interest. Balancing the right of free exercise with the
aesthetic and community values associated with landmark preserva-
tion, we find that the latter is clearly outweighed by the constitu-
tional protection of free exercise of religion and the public benefits
associated with the practice of religious worship within the
community. See Church of St. Paul & St. Andrew v. Barwick, 67
N.Y.2d 510, 525, 496 I¥.E.2d 183, (1986) (Meyer, J., dissenting),
cert. denied, 479 U.S. 985 (1986). 787 P.2d at 1361.
ty
(A. 238-42, 245-49; A. 462-66, 470-77). In short, the
government’s interest, if discernible at all in this case, could not
justify a gross interference with the freedom of
St. Bartholomew’s to make use of its own property in support of
the religious work for which it was organized.
B. The Court of Appeals Erred In
Disregarding the Impact Of The
Landmarks Law on Religious
Organizations Generally and In The
Standard It Applied To Petitioner.
The court of appeals viewed petitioner’s First
Amendment claims through a very narrow lens. The court
declined to address at all the impact of the Landmarks Law on
religious organizations generally. And, in the case of petitioner,
the court found no burden upon the free exercise of religion so
long as petitioner is able to raise sufficient funds to permit it to
carry on its existing activities — at some undefined level — in
its present facilities. That is a standard, we believe, that disre-
gards basic values of the First Amendment.
1. The Burdens Of The Landmarks Law On
Religious Organizations Generally.
The Landmarks Law, on its face, imposes burdens on
religious organizations that severely impact upon the free exer-
cise of religion. As a threshhold proposition, it is vitally impor-
tant for a church to be able to devote its sanctuary and ancillary
buildings to the support of the church’s religious mission. And it
is equally clear that the use of such buildings constitutes the
exercise of religion, i.e., it is conduct “rooted in religious
belief.” See Wisconsin v. Yoder, 406 U.S. 205, 215 (1972). If,
howevet, the church site is landmarked, the ability of the church
and its members to use the buildings on the site in accordance
with the dictates of their faith is severely constrained.
If the church attempts to contest a proposed landmark
designation, it wil! find that the applicable standard is
exceedingly broad and exceedingly vague (e.g., “special
aye
character”). Landmarks caw § 25-302 n., (66a). In the courts
below, respondents cited Penn Central to defend the vague and
subjective standard of the Landmarks Law, but ignored the cru-
cial point that Penn Central did not involve a First Amendment
freedom.’
If a church is landmarked, the church, its clergy and
members know that, under pain of criminal sanctions, their first
priority must be not the funding of their programs in the prac-
tice of their religion, but preserving the landmark appearance of
their buildings. Landmarks Law § 25-317, (95a — 96a). The
church also knows that it can do nothing with respect to the
exterior of its buildings without the permission of the
Commission. The church’s days of autonomy in the manage-
ment of its affairs are over. As the Supreme Court of
Washington pointed out in striking down the application of a
similar ordinance to a church in Seattle:
9. Thus, while Justice Brennan, writing for the Court in Penn Central, was
willing to accept the vagueness and subjectivity of the Landmarks Law in the
context of a claim under the takings clause, he later made it clear that very
different considerations apply where, as here, important First Amendment
rights are directly implicated. City Council v. Taxpayers for Vincent, 466
U.S. 789, 821-22 (1984):
The fundamental problem in this kind of case is that a purely acs-
thetic state interest offered to justify a restriction on
speech . . . creates difficulties for a reviewing court in fulfilling its
obligation to ensure that government regulation does not trespass
upon protections secured by the First Amendment. The source of
those difficulties is the unavoidable subjectivity of aesthetic
judgment — the fact that “beauty is in the eye of the beholder.” As
a consequence of this subjectivity, laws defended on aesthetic
grounds raise problems for judicial review that are not presented by
laws defended on more objective grounds — such as national securi-
ty, public health, or public safety. In practice, therefore, the inherent
subjectivity of aesthetic judgments makes it all too easy for the gov-
ernment to fashion its justification for a law in a manner that impairs
the ability of a reviewing court meaningfully to make the required
inquiries. Brennan, J. dissenting. /d.
ais.
The practical effect of the provisions is to require a reli-
gious organization to seek secular approval of matters
potentially affecting the Church’s practice of religion.
First Covenant Church v. City of Seattle, supra, 787 P.2d at
1359.
If a church seeks to alter its landmarked building, it
must embark upon an administrative odyssey that is lengthy,
expensive and lacking the most basic elements of procedural due
process. First, the Landmarks Law requires the church to incur
the expense of designing the proposed alteration without know-
ing what might or might not be accepted by the Commission.
The design is then presented to the Commission with an applica-
tion for a certificate of appropriateness that, like the initial des-
ignation, will be granted or denied solely on the basis of the aes-
thetic sensibilities of the eleven Commissioners. Landmarks
Law § 25-307, (77a, — 79a).
After a denial of a certificate of appropriateness, the
church may then make an application on ground of “insufficient
return”. At this point, the church must submit to a broad and
searching examination into its operations. See infra p. 20.
Throughout that examination, the Landmarks Law fails to pro-
vide anything resembling an orderly procedure for the resolution
of factual issues or even the right to respond to adverse
evidence.”
The consequences of the foregoing are starkly
apparent. To begin with. ~ church’s loss of autonomy in the
management of its aff: is is, by itself, a matter of serious
10. The Landmarks Law requires a public hearing but explicitly provides that
“the commission in determining any matter as to which such hearing is held,
shall not be confined to consideration of the facts, views, testimony or evidence
submitted at such hearing.” Landmarks Law § 25-313 b., (93a). In the
present case, petitioner requested, but was denied, the opportunity to respond
to testimony that provided the core of the Commission’s findings. See, supri
pp. 5-6.
A6-
consequence. See Kedroff v. St. Nicholas Cathedral, 344
U.S. 94, 107-108 (1952) (legislation that regulates church
administration, the operation of the churches, [and] the appoint-
ment of clergy . . . prohibits the free exercise of religion);
NLRB y. Catholic Bishop of Chicago, 440 U.S. 490 (1979)
(National Eater Retations Bossd held not to have jurisdiction
over church-operated schools)."
Important as it is, however, loss of church autonomy is
by no means the only impact of the Landmarks Law upon the
free exercise rights of religious institutions. The intent and the
effect of the law is to place upon a church the “burdens of proof
and persuasion” that the church is entitled to devote its own
property to the support of its religious mission. The imposition
of such burdens on the exercise of First Amendment rights is
ble. Cf. First Unitarian Church v. Los Angeles, 357
US. 545, 547 (1958); Speiser v. Randall, 357 U.S. 513, 529
(1958). Given the obscure standards and onerous procedures of
the Landmarks Law, there are very few churches subject to the
law that will have the fortitude and financial strength even to
seek the relief that the law purports to provide. Thus, most
churches will be required to forsake any steps to expand or
maintain their religious missions that would involve a significant
alteration of their facilities. The observation of Speiser, made in
a different context, is nonetheless quite apt:
11. As one commentator has summed up the law, “Quite apart from whether
a regulation requires a church or an individual believer to violate religious doc-
trine or felt moral duty, churches have a constitutionally protected interest in
managing their own institutions free of government interference.” Laycock,
Towards a General Theory of the Religion Clauses: The Case of Church
Labor Relations and the Right to Church Autonomy, 81
Colum. L. Rev. 1373, 1373 (1981). Professor Laycock’s article was cited by
Justice Brennan concurring in Corporation of Presiding Bishop v. Amos, 483
US. 327 (1987), wherein the Court upheld the constitutionality of an exemp-
tion for religious organizations from a federal statute prohibiting religious dis-
crimination in employment. 483 U.S. at 341. Justice Brennan further
pointed out that “furtherance of the autonomy of religious organizations often
furthers individual religious freedom as well.” 483 U.S. at 342.
-17-
The man who knows that he must bring forth proof and
persuade another of the lawfulness of his conduct neces-
sarily must steer far wider of the unlawful zone than if
the State must bear these burdens. This is especially to
be feared when the complexity of the proofs and the gen-
erality of the standards applied, cf. Dennis v. United
States, supra, provide but shifting sands on which the
litigant must maintain his position. 357 U.S. at 526.
In short, the vagueness and overbreadth of the standards for
designation, coupled with the intrusive and cumbersome provi-
sions for relief, inevitably create a chilling effect on the practice
of religion by a landmarked church. Cf. Secretary of State of
Maryland v. J.H. Munson Co., 467 U.S. 947, 956 (1984).
2. The Burden Of The Landmarks Law On
St. Bartholomew’s And The Erroneous
Standard Applied By The Court Of Appeals.
The court of appeals acknowledged that ‘“‘the
Landmarks Law has drastically restricted the Church’s ability
to raise revenues to carry out its various charitable and ministe-
rial programs.” (13a). Remarkably, however, the court found
that fact to have no constitutional significance:
Nevertheless, we understand Supreme Court decisions to
indicate that neutral regulations that diminish the
income of a religious organization do not implicate the
free exercise clause. See Jimmy Swaggart Ministries
v. Board of Equalization, ___ U.S. ___, 110 S.Ct. 688
(1990); Hernandez v. Commissioner, _ U.S. ___, 109
S.Ct. 2136 (1989). (Id.)
That conclusion, we submit, clearly misapplies the holdings of ©
Hernandez and Swaggart.
To begin with, both Hernandez and Swaggart involved
“generally applicable” laws. For the reasons previously dis-
cussed, that characterization cannot be applied to the
Landmarks Law. Second, the magnitude of the financial
ft
burdens involved in Hernandez and Swaggart did not remotely
approach that imposed by the Landmarks Law on
St. Bartholomew’s. Both cases involved the relatively minimal
impact of an incrementally larger tax burden. The Court in
Swaggart, moreover, expressly recognized that a quite different
question would be presented by a “more onerous tax rate” that
“might effectively choke off an adherent’s religious practices.”
_. US. at __, 110 S.Ct. at 688.
The court of appeals apparently read Swaggart to
mean that an economic burden is irrelevant unless the effect is
to choke off religious practices entirely. So severe a standard is
neither required nor justified by that case. Where, as here, a
law is conceded to have the effect of “drastically restricting” the
revenue available to support a church’s mission, that fact should
not be ignored on the grounds that the church may nevertheless
be able to devise a method of surviving at some reduced level.
The court of appeals failed to recognize how directly
the constraints of the Landmarks Law may coerce a church and
prevent its congregation from acting in accord with their reli-
gious beliefs. Specifically, the resources of the church may be
— as they most surely have been in this case — diverted from a
use commanded by the religious faith of its members and appro-
priated to serve a secular purpose. In supporting the application
of St. Bartholomew’s before the Commission in this case, the
then Bishop of the New York Diocese, Paul Moore, expressed it
simply and clearly. After reviewing the parable of Judgment
Day from Matthew 25 he said:
In this parable, as in the First Sermon, as in the Sermon
on the Mount, as in the whole life and death upon the
cross, Jesus Christ set compassion and justice at the very
heart of our religion. Indeed, he said it is the basis on
which we are ultimately judged.
Would you deny us our right to practice our religion?
Would you deny us the means to pick up as best we can
the burden of the poor that the public sector has so
shamelessly laid down? Would you prevent us from
~19-
sheltering the homeless, feeding the hungry, caring for
desperate children in a city which in these days has
seemed to have lost its heart?
Under our polity all the churches and institutions of our
diocese which serve the poor are dependent on churches
like St. Bartholomew’s. Denying a hardship petition
today would be the denial of our right as Christians to
carry out the very heart of our mission. (2/477—78).
That plea, however, fell on deaf ears. The
Commission, citing Ethical Culture, -uled that the Church’s
desire to secure funds “to maintain its current ministry and to
respond to the future demands of the City, while commendable
and understandable, cannot be the basis for establishing a show-
ing of hardship ....” (7/2459). The court of appeals was simi-
larly unmoved. The standard it applied excluded from consider-
ation all but the most extreme form of religious hardship, i.e.,
inability te continue. So broad a disregard of religious hardship,
however, cannot be justified in the absence of some compelling
state interest. And here, we repeat, there is none.
Finally, the court of appeals brushed aside, in a foot-
note, the entanglement between church and state spawned by
the Landmarks Law:
The only scrutiny of the Church occurred in the pro-
ceedings for a certificate of appropriateness, :nd the
matters scrutinized were exclusively financial and
architectural. This degree of interaction does not rise to
the level of unconstitutional entanglement. (14a).
That depiction of the operation of the Landmarks Law totally
misapprehends the reality of proceedings before the
Commission. What the court of appeals failed to appreciate is
that the purported scrutiny of matters “financial and
-20-
te P
ee emg a
i Bi
Fer]
architectural” leads inexorably into the details of virtually every
facet of a church’s operations, priorities and motivations."
Such issues and such proceedings bear no resemblance
to ‘the routine administrative and recordkeeping obligations
involved in Jimmy Swaggart Ministries. Indeed, they represent -
a breadth and depth of entanglement that is unparalleled in any
reported case. It is, we submit, unique and unacceptable.
Il, CERTIORARI SHOULD BE GRANTED TO |
REVIEW THE DENIAL OF PETITIONER’S
CLAIM UNDER THE FIFTH
AMENDMENT.
The court of appeals also applied its free exercise stan-
dard to petitioner’s claim under the takings clause of the Fifth
Amendment. Specifically, the court rejected the takings claim
because it believed that petitioner is able to conduct its existing
charitable and religious activities in the present facilities. That
standard, however, is inconsistent with the only authority of this
Court cited by the court of appeals, Penn Central
Transportation Company v. New York City, supra. It also con-
flicts with subsequent decisions of this Court and with the con-
stitutional test adopted by the New York Court of Appeals with
respect to the landmarking of buildings owned by charitable
institutions.
12. The record below abundantly illustrates that fact. For example, in the
hearings before the Commission, the Church was called upon to address such
issues as: the decision to close the church sanctuary to the public on weekdays,
the size of the Rector’s apartment, the number and level of compensation of
the clergy employed by the church, the manner (and propriety) of providing of
food and shelter to the homeless, the managerial expertise of the Vestry, and
how and for what purposes the Church’s fundraising capacity should be
employed. (2/598, 604-606, 639-40; 3/1032-38; 4/1144—45, 1159-61,
1163-84, 1276-77).
_
1. The Penn Central Analysis.
In Penn Central, the Landmarks Law had been applied
to prevent the erection of a tower above Grand Central
Terminal. The decision of the Court upholding that application
turned upon its assessment of the “severity of the impact of the
law on [Penn Central’s] parcel” 438 U.S. at 136. Addressing
that issue, the majority noted that the Landmarks Law did not
interfere with the existing use of the property as a railroad
terminal. Upon making that observation, however, the Court
immediately pointed out that “[m]Jore importantly” the record
showed that Penn Central not only received a profit on the
Terminal but “a ‘reasonable return’ on its investment.” Id.
The majority then found that the impact of the law
was mitigated by two factors indicating that Penn Central had
not in fact lost all or most of its development rights, i.e., the air
rights above the Terminal. First, the Court pointed out that
after the initial rejection, Penn Central had not proposed an
alternate design and suggested that the Commission might
approve a smaller building. Second, the Court pointed out that
the air rights above the Terminal could be transferred to various
buildings owned by Penn Central that were adjacent to the
a SUR cr eee
rights. 438 U.S. at 137.
In the present case, the court of appeals sustained the
finding of the district court that petitioner was able to continue
to use the community house and held that fact to be dispositive.
The key factors in the Penn Central analysis were dismissed as
irrelevant or brushed aside in conclusory terms. By that process,
we submit, the court of —_ lost sight of the meaning of Penn
Central.
To begin with, the basic premise of the court of appeals
— continued use of the property — rests upon an analysis
wholly unlike anything found in Penn Central. Specifically, the
premise rests upon an assessment of the adequacy of the proper-
ty, the cost of addressing its deficiencies and the ability of
petitioner to bear that cost.
==
With respect to the cost of repair and rehabilitation,
petitioner had pointed out various errors in the $3 million esti-
mate accepted by the district court, including the total omission
of $1.5 million of work. The court of appeals, however, held
that “even if the potential cost of repair totaled $4.5 million,
the Church has not adequately demonstrated that it is unable to
meet this expense.” (20a — 21a).
That conclusion of the court of appeals rested upon a
seriously distorted view of the petitioner’s financial condition.
More importantly, however, the court’s focus on the financial
capacity of the Church represented a significant departure from
the analysis of Penn Central. The effect of that focus is to make
the fact of a taking turn not on the severity of the impact of the
law on “the parcel,” as in Penn Central, but ._ on the financial
resources of the person or entity who happens to own the parcel.
Such a mode of analysis finds no support in the decisions of this
Court or concepts of basic fairness.
The court of appeals further departed from Penn
Central in disregarding the factor of “reasonable return”. In
this case, it was demonstrated beyond serious argument that, if
the Church’s community house were devoted to commercial pur-
poses, it would not yield a reasonable return.” The court of
appeals, however, dismissed that fact as “irrelevant” on the
grounds that the existing use of the community house was for
charitable rather than commercial purposes. In lieu of a
“reasonable return” the court of appeals simply referred once
again to the posited continued use of the community house by
petitioner. The court, however, ignored the fact that continued
13. The court of appeals indicated that “the use of the Community House
would yield an estimated return of only six percent.” (17a). In fact, the
record showed that it would yield a return of less than six percent of assessed
valuation. (A. 490). As the New York Court of Appeals hus made clear,
assessed valuation is not a proper basis on which to determine reasonable
return. Seawall Associates v. City of New York, 74 N.Y.2d 92, 114 n. 13,
542 N.E.2d 1059, 1070 n. 13, cert. denied sub nom. Wilkerson v. Seawall
Associates, _ US. __, 110 S.Ct. 500 (1989).
agp.
use alone had not been deemed sufficient in Penn Central. On
the contrary, as we have shown, this Court had found it to be
more important that Penn Central was able to derive a reason-
able return from such use.
The inability of a charitable owner to derive a reason-
able return from a landmarked site may not, by itself, be
dispositive. Such inability, however, makes it even more impor-
tant to determine whether the impact of the Landmarks Law is
mitigated by any other factor. Here it is not and the severity of
that impact — destroying more than eighty percent of the value
of “the parcel” — remains wholly unmitigated.
In Penn Central, the Court questioned whether Penn
Central had lost all of the value of the air rights above the
Terminal since the Commission had not ruled out the possibility
of approving an alternative design for a smaller building. In this
case, the court of appeals sought to apply that analysis to peti-
tioner, but the facts herein do not fit. In this case, petitioner did
precisely what this Court had suggested in Penn Central —
after its first application was rejected, it returned with a second
proposal specifically designed to respond to the Commission’s
objections to the first application and proposing a significantly
smaller building.
Nevertheless, the court of appeals attempted to draw a
parallel with Penn Central, stating that respondent had “invited
appellant to propose an addition to the Community House in the
instant matter.” (17a). In fact, however, the only “addition”
that respondent ever indicated it might accept was a two-story
expansion. (A. 825-27, A. 839-40). Such an addition might
alleviate some of petitioner’s space problems, but it would gener-
ate no revenue to recover the cost of the expansion, let alone any
funds for support of petitioner’s mission or for repair and reha-
bilitation of the church and community house.
The present case also differs from Penn Central in that
petitioner has no feasible means of transferring its development
rights to another site. As this Court noted in Penn Central, air
rights are transferable only to a contiguous site, i.e., across the
~24-
street or across an intersection. 438 U.S. at 113-14. Petitioner,
unlike Penn Central, owns no other properties to which its air
rights could be transferred and has no other prospects for such a
transfer. (A. 388-95). Thus, although the court of appeals
suggested that petitioner’s rights are not “worthless,” it is clear
that such rights have no immediate value and that their possible
value at some future time is, at best, wholly speculative. If that
does not make petitioner’s development rights “worthless,” it
comes very close indeed.
2. The Cases Subsequent to Penn Central.
While Penn Central is the only decision of this Court
involving the Landmarks Law, or landmarking in general, it is
by no means the only decision relevant to the issues herein. In
Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470
(1987), as in Penn Central, the Court rejected a claim under the
takings clause. The analysis of the Court in Keystone, however,
clearly supports St. Bartholomew’s claims.
(2) The nature of the State interest and “reciprocity of
advantage”. In Keystone, the Court rejected a challenge to
the facial validity of a law prohibiting the mining of certain coal
to prevent the subsidence of the surface estate. The law
appeared to be similar in purpose and effect to a law that the
Court had invalidated in Pennsylvania Coal v. Mahon, 260 U.S.
393 (1922). In Keystone, however, the Court distinguished the
later statute on the ground that it was more clearly designed to
protect important public interests. The Court emphasized that
“the nature of the State’s action is critical in takings analysis”
and cited the numerous takings cases that had involved a
“noxious use” or some use of property analogous to 4 common
law nuisance. The Court also gave renewed importance to the
concept of “reciprocity of advantage” that was first articulated
by Justice Holmes in Pennsylvania Coal and had been stressed
by then Justice Rehnquist, dissenting in Penn Central, 438 U.S.
at 144-50.
In sustaining the facial validity of the Landmarks Law
in Penn Central, the Court had, by footnote, appeared to
as
minimize the importance of whether the challenged regulation
sought to restrain a “noxious” use 438 U.S. at 133-34, n. 30.
The decision in Keystone, however, restored that factor to the
forefront of takings analysis. That is not to say, and we do not
urge, that a regulation is necessarily invalid if it is not addressed
to a noxious use or some analogous condition. Thus, we do not
seek to overturn the determination in Penn Central that the
Landmarks Law is facially valid. Nevertheless, when a particu-
lar application of that law is challenged, the nature of the
law — and hence the nature of the government’s interest —
remains highly relevant.
In the present case, the governmental interest is
remarkably weak. As previously shown, the proposed develop-
ment would leave the church building unimpaired. See, supra,
p.13. Moreover, development of the community house site
would provide the funds that are desperately needed to restore
and preserve the church building.“
‘Similarly, the absence of any reciprocity of advantage
enjoyed by petitioner is striking. A landowner who is burdened
by the restrictions of a zoning law or a historic district receives
the benefit of the same restrictions being applied to adjacent
landowners. See Penn Central, supra, 438 U.S. at 147,
Rehnquist, J., dissenting. Where individual buildings are land-
marked, however, any benefit to the owner from the landmark-
ing of other buildings is attenuated at best. Indeed, this case
stands any concept of a reciprocity of advantage on its head.
14. Indeed, the application of the Landmarks Law in the present case fails to
meet the fundamental requirement of substantially advancing a legitimate
state interest. See Nollan v. California Coastal Comm., 483 U.S. 825, 834—
35 (1987); Agins v. Tiburon, 447 U.S. 255, 260 (1980); Nectow v. Cambridge,
277 U.S. 183 (1928). The court of appeals held that the governmental interest
identified in Penn Central was “equally applicable” in the present case but
made no attempt to support that conclusion with any analysis of the impact of
the proposed building.
ee
When St. Bartholomew’s was built in 1918, and for
many years thereafter, Park Avenue was zoned for residential
use. The Church shared with its neighbors the benefits and lim-
itations of that designation. The zoning law, however, was sub-
sequently changed to permit commercial development. After
World War II, commercial development blossomed and, ulti-
mately, became all encompassing. While the City realized mil-
lions of dollars in tax revenues from that development, it
resulted in the displacement of the Church’s neighborhood con-
gregation and the concomitant weakening of its financial
viability. (A. 209; A. 375). Ironically, the City now seeks to
prevent petitioner from adapting to the very environment the
City itself created.
(b) The value of the property taken. Keystone
made it clear that the test for a regulatory taking requires a
court to consider the value taken from the property. 480 US. at
497. In this case, viewing the Church’s property as a whole, the
value taken from the property is $140 million, while the value
remaining is $35 million. The court of appeals acknowledged
that a large value had been taken from the property: “In this
particular case, the revenues are very large because the
Community House is on land that would be extremely valuable
if put to commercial use.” (13a). Contrary to the command of
Keystone, however, the court of appeals proceeded to ignore that
value — holding that the only fact to be considered was the
Church’s continued ability to use the property.
Following Keystone, this Court upheld takings claims
in two cases decided the same term. Hodel v. Irving, 481
U.S. 704 (1987) held that a taking was effected by a law that
prohibited the devise of fractional shares of Indian lands.
Nollan v. California Coastal Commission, 483 U.S. 825
(1987), found a taking in the required grant of an easement
across the owner’s property. More recently, in Seawall
Associates v. City of New York, 74 N.Y.2d 92, 542 N.E.2d
1059, cert. denied sub nom. Wilkerson v. Seawall Associates,
_. * US. __, 110 S.Ct. 500 (1989), the New York Court of
7.
Appeals provided a careful analysis of the decisions in Penn
Central, Keystone, Hodel and Nollan.
In Seawall, the court struck down the City’s law regu-
lating single-room occupancy properties on the ground, inter
alia, that it destroyed the right to develop such properties. The
court noted that in Penn Central and Keysione, the Supreme
Court had held, under the facts of those cases, that the partial
loss of development rights did not constitute a taking. On the
other hand, the court observed, Hode/ and Nollan had each
found a taking in the total loss of a single element of property
value.
The Seawail opinion suggested that decisions in the
later cases, Hodel and Nolian, had moved toward acceptance of
the theory of “conceptual severance,’ [i.e., assessing only the
value of the rights taken without regard to its relationship to the
value of the whole property]”. 74 N.Y. 2d at 110, 542 N.E. 2d
at 1067. Under the facts of Seawall, however, the court found
the loss of development rights to be a taking under either
approach:
By any criterion — whether the property rights abol-
ished or impaired are considered alone, as in Hodel and
Nollan, or the values of these rights are compared with
the values of the properties as a whole, as in Penn
Central and Keystone — the conclusion is inescapable
that the effect of the [law] is unconstitutionally to
deprive owners of economically viable use of their
properties. 74 N.Y.2d at 110, 542 N.E.2d at 1068.
So here, the property rights appropriated by the
Landmarks Law may be considered alone or in comparison to
the value of the property as a whole. In either event, the fact of
a taking is inescapable. What is not permissible, we submit, is
the course taken by the court of appeals — to simply disregard
the value of the property taken.
it.
3. Conflict With the New York Court of Appeals.
As shown in the preceding section, the decision of the
court of appeals herein is fundamentally at odds with the analy-
sis of the New York Court of Appeals in Seawall Associates. In
addition, the decision is also in conflict with the constitutional
standard adopted by that court with respect to the application of
the Landmarks Law to charitable institutions.
Specifically, as we have earlier noted, the standard
adopted by the New York Court of Appeals is to determine
whether landmark designation “‘physically or financially
prevent[s] or seriously interferes with the carrying out of the
charitable purpose” (emphasis added). Society for Ethical
Culture v. Spatt, 51 N.Y.2d at 455, 415 N.E.2d at 925 (1980).
Both the district court and the court of appeals cited Ethical
Culture with apparent approval. Yet, both courts proceeded to
apply a drastic —- but wholly unexplained — redaction of the
Ethical Culture test. Specifically, both courts transformed the
test into a requirement of proof that petitioner “can no longer
carry out” its charitable purposes. Thus, they distorted the test
by excising the key phrase “or seriously interferes with.” As a
result, the test applied below is one that is in clear conflict with
the decisions of the New York Court of Appeals. It is a test, we
submit, that this Court should decisively reject.
~29-
CONCLUSION
For the foregoing reasons, petitioner respectfully prays
that the Court issue a writ of certiorari to review the judgment
of the Court of Appeals for the Second Circuit.
Dated: December 10, 1990
Of Counsel
Henry P. Monaghan
New York, New York
Kent Greenawalt
New York, New York
Raymond L. Vandenberg
Chancellor of
St. Bartholomew’s Church
Respectfully submitted,
Douglas M. Parker
Counsel of Record
Judah Gribetz
George A. Pierce
MUDGE ROSE GUTHRIE
ALEXANDER &
FERDON
180 Maiden Lane
New York, New York 10038
(212) 510-7000
Counsel for Petitioner,
The Rector, Wardens and
Members of the Vestry of
St. Bartholomew’s
Church
APPENDIX
The RECTOR, WARDENS, AND MEMBERS
OF THE VESTRY OF ST. BARTHOLOMEW’S
CHURCH, Plaintiff-Appellee (Re: 88-7751),
Plaintiff-Appellant (Re: 90-7101), .
v.
The CITY OF NEW YORK AND THE
LANDMARKS PRESERVATION
COMMISSION OF THE CITY OF NEW YORK,
Defendants—Appellees (Re: 88-7751, 90-7101).
Appeal of The COMMITTEE TO OPPOSE the
SALE OF ST. BARTHOLOMEW’S CHURCH
INCORPORATED, J. Sinclair Armstrong, Robert
E. Morris, Jr., Doris Capp Stass, George
H. Weiler, Il, Madeline Calder, Beatrice Lotz,
Bromwell Ault, Jr., Neal Goldman, and Charlotte
Pierce Armstrong, (Re: 88-7751).
Nos. 1431, 1432, Docket 88-7751, 90-7101.
United States Court of Appeals, Second Circuit.
Argued July 17, 1990.
Decided Sept. 12, 1990.
914 F.2d 348 .
Church brought action against city Landmarks
Preservation Commission alleging that application of
Landmarks Preservation Law to church imposed unconstitu-
tional burden on free exercise of religion and effected a taking
of property without compensation. The United States District
Court for the Southern District of New York, John E. Sprizzo,
J., 728 F. Supp. 958, found that Landmarks Law did not violate
right to free exercise of religion or right against taking of prop-
erty without just compensation. Appeal was taken. The Court
of Appeals, Winter, Circuit Judge, held that: (1) Landmarks
4
Law, as applied to auxiliary structure next to church’s main
house of worship, was not unconstitutional burden of free exer-
cise of religion and did not effect taking of property without just
compensation; (2) church failed to show that: any space defi-
ciency in building could not be remedied by expansion consistent
with Landmarks Law; and (3) church failed to show prospective
financial hardship entitling it to certificate of appropriateness.
Affirmed.
Douglas M. Parker, New York City (Judah Gribetz,
Howard W. Goldstein, George A. Pierce, Mudge Rose Guthrie
Alexander & Ferdon, Henry P. Kent Greenawalt, James
G. Glazebrook, New York City, of counsel), Monaghan, for
plaintiff-appellee (Re: 88-7751), plaintiff-appellant (Re:
90-7101).
Elizabeth Dvorkin, New York City (Victor A. Kovner,
Corp. Counsel of the City of New York, Leonard Koerner,
Jonathan L. Pines, Dorothy Miner, New York City, of counsel),
for defendants—appellees (Re: 88-7751 and 90-7101).
Gerald D. Fischer, New York City, for appellants (Re:
88-7751), amici curiae Committee to Oppose the Sale of
St. Bartholomew’s Church Inc., J. Sinclair Armstrong, Robert
E. Morris, Jr., Doris Capp Stass, George H. Weiler, III,
Madeleine Calder, Beatrice Lotz, Bromwell Ault, Jr., Neal
Goldman and Charlotte Pierce Armstrong (Re: 90-7101).
Donald G. Glascoff, Jr., Robert Knuts, Cadwalader,
Wickersham & Taft, New York City, for amici curiae New
York State Interfaith Com’n on Landmarking of Religious
Property, Council of Churches of the City of New York, Inc.,
Queens Federation of Churches, New York State Council of
Churches, Nat. Council of Churches of Christ in the U.S.A.,
Nat. Ass’n of Evangelicals, Baptist Joint Committee on Public
Affairs, Evangelical Lutheran Church in America, New York
Bd. of Rabbis, Dept. of Church in Soc., Div. of Homeland
Ministries, Christian Church (Disciples of Christ), and
Americans United for the Separation of Church and State (Re:
90-7101).
Lee Boothby, Boothby, Ziprick & Yingst, Berrien
Springs, Michigan, for amicus curiae Council on Religious
Freedom (Re: 90-7101).
George J. McCormack, Cusak & Stiles, New York City,
Kevin M. Kearney, Hurley, Kearney & Lane, Brooklyn, New
York, for amici curiae Roman Catholic Archdiocese of New
York, Roman Catholic Diocese of Brooklyn, and New York
State Catholic Conference (Re: 90-7101).
Frank Patton, Jr., Ellis, Stringfellow & Patton, New York
City, for amicus curiae Church of St. Paul and St. Andrew
(Re: 90-7101).
John J. Kerr, Jr., Elizabeth P. Johnson, Nancy
B. Mallery, Simpson Thacher & Bartlett, New York City, for
amici curiae Nat. Trust for Historic Preservation, National
Center for Preservation Law, New York Landmarks
Conservancy, Preservation Action, Fine Arts Federation,
Preservation League of New York State, and Women’s City
Club of New York, Inc. (Re: 90-7101).
William E. Hegarty, Howard G. Sloane, Cahill, Gordon
& Reindel, New York City, for amicus curiae Municipal Art
Soc. of New York, Inc. (Re: 90-7101).
Before WINTER and WALKER, Circuit Judges, and
MUKASEY,* District Judge.
WINTER, Circuit Judge:
This appeal poses the question of whether a church may
be prevented by New York City’s Landmarks Law, now codified
at New York City Administrative Code Sections 25-301 to
25-321 (1986), from replacing a church-owned building with
an office tower. The question implicates both First and Fifth
Amendment issues. Specifically, the Rector, Wardens, and
~$-
Members of the Vestry of St. Bartholomew’s Church (“the
Church”) appeal from Judge Sprizzo’s decision that the New
York City Landmarks Law, as applied to an auxiliary structure
next to the Church’s main house of worship, did not impose an
unconstitutional burden on the free exercise of religion or effect
a taking of property without just compensation.
The district court grounded its decision on its finding that
the Church had failed to prove that the landmark regulation
prevented the Church from carrying out its religious and chari-
table mission in its current buildings. We agree that this is the
legal standard established by Supreme Court precedent govern-
ing both free-exercise and takings claims. Moreover, we find no
clear error in the district court’s factual determinations. We
therefore affirm. We also affirm the denial of a motion to inter-
vene by a group of persons opposed to the Church’s plans to
develop its property.
BACKGROUND
St. Bartholomew’s Church is a Protestant Episcopal
Church organized in 1835 under the laws of the State of New
York as a not-for-profit religious corporation. The main house
of worship (“the Church building”) stands on the east side of
Park Avenue, between 50th and S5lst Streets, in New York
City. Constructed beginning in 1917 according to the plans of
architect Bertram G. Goodhue, the Church building is a nota-
ble example of a Venetian adaptation of the Byzantine style,
built on a Latin cross plan. Significant features include its poly-
chromatic stone exterior, soaring octagona! dome, and large rose
window. Perhaps most significantly, Goodhue incorporated into
his building the Romanesque porch of St. Bartholomew’s
former Church building at Madison Avenue and 44th Street.
* Hon. Michael B. Mukasey, United States District Judge for
the Southern District of New York, sitting by designation.
4-
Designed by the renowned architectural firm of McKim, Mead
& White, the porch is composed of a high arched central portal
flanked by two lower arched doorways, all supported by slender
columns. The doors themselves are richly decorated bronze,
depicting Biblical themes.
Adjacent to the Church building, at the northeast corner
of Park Avenue and 50th Street, is a terraced, seven-story
building known as the Community House. It is the replacement
of this building with an office tower that is at issue in the instant
matter. Completed in 1928 by associates of Goodhue,
Community House complements the Church building in x
materials and decoration. Together with the Church building,
the Community House houses a variety of social and religious
activities in which the Church is engaged. It contains a sixty—
student preschool, a large theater, athletic facilities (including a
pool, gymnasium, squash court, and weight and locker rooms),
as well as several meeting rooms and offices for fellowship and
counseling programs. A community ministry program, which
provides food, clothing, and shelter to indigent persons, is oper-
ated mainly from the Church building. Meals are prepared in a
small pantry on the first floor and served in the mortuary
chapel. Ten homeless persons are housed nightly in the
narthex. : |
In 1967, finding that “St. Bartholomew’s Church and
Community House have a special character, special historical
and aesthetic interest and value as part of the development, heri-
tage and cultural aspects of New York City,” the Landmarks
Preservation Commission of the City of New York (the
“Commission”) designated both buildings as “landmarks” pur-
suant to the Landmarks Law. This designation prohibits the
alteration or demolition of the buildings without approval by the
Commission. See N.Y.C. Admin. Code § 25-305(a)(1)(
1985).
The Church did not object to the landmarking of its
property. In December 1983, pursuant to what is now New
York City Administrative Code Section 25-307, the Church
4
wvTFre
applied to the Commission for a “certificate of appropriateness”
permitting it to replace the Community House with a fifty—nine
story office tower. This request was denied as an inappropriate
alteration. In December 1984, the Church filed a second appli-
cation, scaling down the proposed tower to forty-seven stories.
This application was also denied.
_ The Church thereafter filed a third application under a
different procedure. Pursuant to Sections 2074.0 and 207-8.0
of the New York City Administrative Code,’ commonly known
as the “hardship exception,” it sought a certificate of appropri-
ateness for the forty-seven story tower on the ground of the
Community House’s present inadequacy for church purposes.
The Church’s application was the subject of a series of public
hearings before the Commission in late 1985 and early 1986. At
those hearings, the Commission gathered evidence from various
interested parties, including expert testimony and written
reports regarding the adequacy of the Community House for the
Church’s charitable programs, the necessity and cost of struc-
tural and mechanical repairs for the Church building and
Community House, and the Church’s financial condition.
Following the public hearings, the Commission convened in
Executive Session, open to the public, on several occasions in
February 1986. At these meetings the Commission discussed
the Church’s application, accepted further submissions from
interested parties, and took testimony and reports from its own
pro bono experts. On February 24, the Commission voted to
1: Now found at Section 25-309, the provision states that a certificate of
appropriateness shall be granted to a not-for-profit applicant who shows, inter
alia, that such
improvement has ceased to be adequate, suitable or appropri-
ate for use for carrying out both (1) the purposés of such
owner to which it is devoted and (2) those purposes to which
it had been devoted when acquired unless such owner is not
{[sic] longer engaged in pursuing such purposes.
N.Y.C. Admin. Code § 25-309(a)(2)(c)(1985).
he
deny the application because the Church had failed to prove the
necessary hardship. Several months later the Commission
issued a lengthy written determination detailing the reasons for
its denial.
On April 8, 1986, the Church brought the instant action
for declaratory and injunctive relief and damages pursuant to 42
U.S.C. § 1983. The complaint set forth a host of constitutional
claims. It alleged that the Landmarks Law, facially and as
applied to the Church, violates both the free exercise and estab-
lishment clauses of the First Amendment by excessively burden-
ing the practice of religion and entangling the government in
religious affairs. It also alleged that the Landmarks Law vio- -
lates the equal protection and due process clauses of the
Fourteenth Amendment because it applies different standards to
charitable and commercial institutions respectively and consti-
tutes a taking of property without just compensation. In addi-
tion, the Church alleged a variety of procedural due process vio-
lations and brought a pendent state law claim alleging that the
Church should have been granted a certificate of appropriate-
ness under New York law.
The Church moved for partial summary judgment on its
claims of facial unconstitutionality. Defendants cross—moved
for summary judgment on all claims. The district court granted
summary judgment to defendants with respect to the issues of
facial unconstitutionality only. On the First Amendment
claims, the court ruled that the Landmarks Law “creates no
more than an incidental burden on the practice of religion” and
that entanglement doctrine was not applicable. On the equal
protection claim, the court ruled that the different hardship tests
applied to charitable and commercial organizations were
rational. Finally, it held that the notice and hearing provisions
of the Landmarks Law comport with constitutional standards of
due process.
The district court then held a bench trial with respect to
the claims that the Landmarks Law is unconstitutional as
applied to the Church. The parties agreed that the evidentiary
atin
record before the district court would be limited to the evidence
presented to the Commission, contained in a twenty-three
volume appendix. In considering the Church’s takings claim,
the court adopted the standard articulated by New York State
courts: An unconstitutional taking exists “where the landmark
designation [of property owned by a charitable organization]
would prevent or seriously interfere with the carrying out of the
charitable purpose of the institution.” St. Bartholomew's
Church vy. City of New York, 728 F. Supp. 958, 966-967
(S.D.N.Y. 1989)(opinion and order)(citing Society for Ethical
Culture v. Spatt, 51 N.Y.2d 449, 454-55, 415 N.E.2d 922, 925,
434 N.Y.S.2d 932, 935 (1980); Lutheran Church in America v.
City of New York, 35 N.Y.2d 121, 131, 316 N.E.2d 305, 311,
359 N.Y.S.2d 7, 16 (1974)). The district court applied the
same test to the claim of an unconstitutional burden on religion.
It thus stated, “[I])n this case, the First Amendment inquiry is
identical in scope to the Fifth Amendment inquiry, since to pre-
vail on either claim plaintiff must prove that it can no longer
carry out its religious mission in its existing facilities.” Jd. 728
F. Supp. at 966-967.
The district court then examined the record before the
Commission in order to determine whether the Church had
proved by a preponderance of the evidence that it can no longer
carry out its charitable purpose in its existing facilities. The dis-
trict court found that it had not, for three basic reasons. First, it
ruled that the Church had failed to demonstrate that the
Community House is insufficient to accommodate the various
programs currently based there. Second, it found that the
Church had exaggerated the cost of the necessary repairs to the
structural and mechanical systems of the Church building and
Community House. Third, the court held that the Church hau
failed to prove that it cannot afford to make the necessary
repairs and renovations to its buildings. Having concluded that
the Church had not carried its burden of demonstrating that the
Landmarks Law precludes it from continuing its activities in its
existing facilities, the district court rejected the Church’s First
and Fifth Amendment claims and entered judgment for
defendants.
On appeal, the Church renews its free exercise and tak-
ings claims and argues that the district court’s factual findings
were clearly erroneous.
In the course of proceedings, the district court denied a
motion to intervene on the side of defendants made by several
individual parishioners and the Committee to Oppose the Sale of
St. Bartholomew’s Church Incorporated, a group of
St. Bartholomew’s members and others opposed to commercial
development of the Church’s property. It held that the proposed
intervenors had no ownership interest in the property at issue
and that their participation would interfere with the efficient
administration of the litigation. See St. Bartholomew’s Church
v. City of New York, No. 86 Civ. 2848 (JES), slip op.
(S.D.N.Y. Oct. 27, 1986)(order denying motion to intervene).
A year later, after the parties agreed «hat the trial in the instant
action should be conducted solely on the record before the
Commission, the proposed intervenors renewed their motion,
which was again denied. See St. Bartholomew’s Church v. City
of New York, No. 86 Civ. 2848 (JES), slip op. (S.D.N.Y.
Apr. 6, 1988)(order denying motion to intervene). The pro-
posed intervenors appeal from this ruling. —
2. The district court treated the Church’s remaining procedural due process
and state law claims as abandoned, because the Church had disavowed any
interest in having a new hearing before the Commission, the only relief avail-
able to remedy these claims.
DISCUSSION
Sections 1 and 2 of this portion of the opinion reject the
Church’s free exercise and takings claims. Our discussion
assumes the affirmance of the district court’s factual findings as
detailed in section 3.
. 1. The Free Exercise Claim
) The Church argues that the Landmarks Law substantially
) burdens religion in violation of the First Amendment as applied
| to the states through the Fourteenth Amendment. In particular,
| the Church contends that by denying its application to erect a
| commercial office tower on its property, the City of New York
and the Landmarks Commission (collectively, “the City”) have
impaired the Church’s ability to carry on and expand the minis-
terial and charitable activities that are central to its religious
mission. It argues that the Community House is no longer a
sufficient facility for its activities, and that the Church’s finan-
cial base has eroded. The construction of an office tower similar
to those that now surround St. Bartholomew’s in midtown
Manhattan, the Church asserts, is a means to provide better
space for some of the Church’s programs and income to support.
and expand its various ministerial and community activities.
The Church thus argues that even if the proposed office tower
will not house all of the Church’s programs, the revenue gener-
ated by renting commercial office space will enable the Church
to move some of its programs—such as sheltering the
homeless—off-site. The Church concludes that the Landmarks
| Law unconstitutionally denies it the opportunity to exploit this
means of carrying out its religious mission. Although the
Landmarks Law substantially limits the options of the Church
to re*se revenue for purposes of expanding religious charitable
activities, we believe the Church’s claims are precluded by
Supreme Court precedent.
As the Court recently stated in Employment Division v.
Smith, __ U.S. ___, 110 S.Ct. 1595, 108 L.Ed.2d 876 (1990),
the free exercise clause prohibits above all “‘governmental
-10-
regulation of religious beliefs as such.”” Jd. 110 S.Ct. at 1599
(quoting Sherbert v. Verner, 374 U.S. 398, 402, 83 S.Ct. 1790,
1793, 10 L.Ed.2d 965 (1963) and citing cases). No one seri-
ously contends that the Landmarks Law interferes with substan-
tive religious views. However, apart from impinging on religious
beliefs, governmental regulation may affect conduct or behavior
associated with those beliefs. Supreme Court decisions indicate
that while the government may not coerce an individual to adopt
a certain belief or punish him for his religious views, it may
pursuant to its general regulatory powers. For example, in
Smith the Court held that the free exercise clause did not pro-
hibit the State of Oregon from applying its drug laws to the reli-
gious use of peyote. See 110 S.Ct. 1595. Cf. United States v.
Lee, 455 U.S. 252, 102 S.Ct. 1051, 71 L.Ed.2d 127 (1982).
The synthesis of this caselaw has been stated as follows:
“(T]he right of free exercise does not relieve an individual of the
obligation to comply with a ‘valid and neutral law of general
applicability on the ground that the law proscribes (or
prescribes) conduct that his religion prescribes (or proscribes).””
Smith, 110 S.Ct. at 1600 (quoting Lee, 455 US. at 263 n.3, 102
S.Ct. at 1058 n. 3 (Stevens, J., concurring)). The critical dis-
tinction is thus between a neutral, generally applicable law that
happens to bear on religiously motivated action, and a regula-
tion that restricts certain conduct because it is religiously
oriented. See id. 110 S.Ct. at 1599.
The Landmarks Law is a facially neutral regulation of
general applicability within the meaning of Supreme Court
decisions. It thus applies to “[a]ny improvement, any part of
which is thirty years old or older, which has a special character
or special historical or aesthetic interest or value.” N.Y.C.
Admin. Code § 25-—302(n)(1986).
It is true that the Landmarks Law affects many religious
buildings. The Church thus asserts that of the six hundred land-
marked sites, over fifteen percent are religious properties and
over five percent are Episcopal churches. Nevertheless, we do
it.
not understand those facts to demonstrate a lack of neutrality or
general applicability. Because of the importance of religion, and
of particular churches, in our social and cultural history, and
because many churches are designed to be architecturally
attractive, many religious structures are likely to fall within the
neutral criteria—having “special character or special historical
or aesthetic interest or value”—+set forth by the Landmarks
Law. N.Y.C. Admin. Code § 25-302(n)(1986). This, however,
is not evidence of an intent to discriminate against, or impinge
on, religious belief in the designation of landmark sites.
The Church’s brief cites commentators, including a
former chair of the Commission, who are highly critical of the
Landmarks Law on grounds that it accords great discretion to
the Commission and that persons who have interests other than
the preservation of historic sites or aesthetic structures may
influence Commission decisions.’ Nevertheless, absent proof of
the discriminatory exercise of discretion, there is no constitu-
tional relevance to these observations. Zoning similarly regu-
lates land use but it is hardly a process in which the exercise of
discretion is constrained by scientific principles or unaffected by
selfish or political interests, yet it passes constitutional muster.
See Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114,
71 L.Ed. 303 (1926).
The Church argues that landmarking and zoning differ in
that landmarking targets only individual parcels while zoning
affects larger segments. However, the Landmarks Law permits
the designation of historic districts, see N.Y.C. Admin. Code
§ 25—303(a)(4)(1986), while all zoning laws provide for vari-
ances for individual sites. Even if the two forms of regulation
bear the different characteristics asserted by the Church, those
3. The Landmarks Law made a cameo appearance in a recent best-selling
novel as a vehicle for political retaliation against a clerical official seeking to
develop Church property. See T. Wolfe, Bonfire of the Vanities, 569 (1987)
(“Mort? You know that church, St. Timothy's? ... Right .. LANDMARK
THE SON OF A BITCH!”).
~]2-
eC ee Va 2?
differences are of no consequence in light of Penn Central
Transportation Company v. New York City, 438 U.S. 104, 98
S.Ct. 2646, 57 L.Ed.2d 631 (1978). There, the Court stated:
[L]andmark laws are not like discriminatory, or
‘reverse spot,’ zoning: that is, a land-use decision
which arbitrarily singles out a particular parcel for
different, less favorable treatment than the neigh-
boring ones. In contrast to discriminatory zoning,
which is the antithesis of land—use control as part
of some comprehensive plan, the New York City
law embodies a comprehensive plan to preserve
structures of historic or aesthetic interest when-
ever they might be found in the city....
Id. at 132, 98 S.Ct. at 2663 (citation omitted).
It is obvious that the Landmarks Law has drastically restricted
the Church’s ability to raise revenues to carry out its various
charitable and ministerial programs. In this particular case, the
revenues involved are very large because the Community House
is on land that would be extremely valuable if put to commercial
uses. Nevertheless, we understand Supreme Court decisions to
indicate that neutral regulations that diminish the income of a
religious organization do not implicate the free exercise clause.
See Jimmy Swaggart Ministries v. Board of Equalization, __
US. ___, 110 S.Ct. 688, 107 L.Ed.2d 796 (1990); Hernandez v.
Commissioner, __._ US. __, 109 S.Ct. 2136, 104 L.Ed.2d 766
(1989). The central question in identifying an unconstitutional
burden is whether the claimant has been denied the ability to
practice his religion or coerced in the nature of those practices.
In Lyng v. Northwest Cemetery Protective Ass'n, 485 U.S. 439,
108 S.Ct. 1319, 1326, 99 L.Ed.2d 5 4 (1988), the Court
explained,
It is true that ... indirect coercion or penalties on
the free exercise of religion, not just outright
prohibitions, are subject to scrutiny under the
First Amendment.... This does not and cannot
imply that incidental effects of government pro-
grams, which may make it more difficult to prac-
tice certain religions but which have no tendency
to coerce individuals into acting contrary to their
religious beliefs, require government to bring for-
ward a compelling justification for its otherwise
lawful actions. The crucial word in the constitu-
tional text is “prohibit” ...
We agree with the district court that no First Amendment viola-
tion has occurred absent a showing of discriminatory motive,
coercion in religious practice or the Church’s inability to carry
out its religious mission in its existing facilities. Cf. Yonkers
Racing Corp. v. City of Yonkers, 858 F.2d 855, 872 (2d Cir.
1988).
In sum, the Landmarks Law is a valid, neutral regulation
of general applicability, and as explained below, we agree with
the district court that the Church has failed to prove that it
cannot continue its religious practice in its existing facilities.‘
4. The Church also argues that the Landmarks Law involves an excessive
degree of entanglement between church and state in violation of the establish-
ment clause. The district court dismissed this argument as irrelevant in the
present context, reasoning that the entanglement doctrine applies only to
instances of government funding of religious organizations. However, in
Jimmy Swaggart Ministries the Supreme Court considered an entanglement
claim in the context of government taxation of the sale of religious materials
by a religious organization. The Court found no constitutional violation, as the
regulation imposed only routine administrative and recordkeeping obligations,
involved no continuing surveillance of the organization, and did not inquire
into the religious doctrine or motives of the organization. See 110 S.Ct. at
697-99. These same factors are of course largely true of the Landmarks Law.
The only scrutiny of the Church occurred in the proceedings for a certificate of
appropriateness, and the matters scrutinized were exclusively financial and
architectural. This degree of interaction does not rise to the level of unconsti-
tutiona] entanglement.
ft.
2. The Takings Claim
The Church also claims that the Landmarks Law so
severely restricts its ability to use its property that it constitutes
confiscation of property without just compensation in violation
of the Fifth and Fourteenth Amendments.’ However, the
Supreme Court’s decision in Penn Central compels us to hold
In Penn Central, the Supreme Court held that the appli-
cation of New York City’s Landmarks Law to Grand Central
Terminal did not effect an unconstitutional taking. See 438
US. at 138, 98 S.Ct. at 2666. That famous beaux arts style
train station, located in midtown Manhattan (just sight blocks
from St. Bartholomew’s Church) was designated 2 landmark in
1967. See id. at 115-16, 98 S.Ct. at 2654-55. Shortly thereaf-
ter, Penn Central Transportation Company (“Penn Central’),
principal owner of the Terminal, in order to increase its income,
sought to build a high-rise office tower atop the Terminal. The
Landmarks Commission, however, denied the proposal because
““lq]juite simply, the tower would overwhelm the Terminal by its
sheer mass.”” Jd. at 118, 98 S.Ct. at 2656 (quoting the record on
appeal). The Supreme Court squarely rejected Penn Central’s
claim that the building restriction had unconstitutionally
“taken” its property. Central to the Court’s holding were the
facts that the regulation did not interfere with the historical use
of the property and that that use continued to be economically
viable:
[T]he New York City law does not interfere in
any way with the present uses of the 7 erminal. Its
designation as a landmark not only permits but
contemplates that appellants may continue to use
5. The Fifth Amendment provides in part, “nor shall private property be
taken for public use, without just compensation,” U.S. Const. amend. V, and
is applicable to the states through the Fourteenth Amendment. See Chicago,
B. &Q. R. Co. v. Chicago, 166 U.S. 226, 17 S.Ct. 581, 41 L.Ed. 979 (1897).
ft.
the property precisely as it has been used for the
past 65 years: as a railroad terminal containing
office space and concessions. So the law does not
interfere with what must be regarded as Penn
Central’s primary expectation concerning the use
of the parcel. More importantly, on this record,
we must regard the New York City law as permit-
ting Penn Central not only to profit from the
Terminal but also to obtain a “reasonable return”
on its investment.
Id. at 136, 98 S.Ct. at 2665.
Applying the Penn Central standard to property used for
charitable purposes, the constitutional question is whether the
land—use regulation impairs the continued operation of the prop-
erty in its originally expected use. We conclude that the
Landmarks Law does not effect an unconstitutional taking
because the Church can continue its existing charitable and reli-
gious activities in its current facilities. Although the regulation
may “freeze” the Church’s property in its existing use and pre-
vent the Church from expanding or altering its activities, Penn
Central explicitly permits this. In that case, the Landmarks
Law diminished the opportunity for Penn Central to earn what
might have been substantial amounts by preventing it from
building a skyscraper atop the Terminal. Here it prevents a
similar development by the Church—one that, in contrast to the
proposal to build an office tower over Grand Central Terminal,
would involve the razing of a landmarked building—at least so
long as the Church is able to continue its present activities in the
existing buildings. In both cases, the deprivation of commercial
value is palpable, but as we understand Penn Central, it does not
constitute a taking so long as continued use for present activities
is viable.
The Church offers several arguments to distinguish Penn
Central, but we find them unavailing. First, it argues that while
Penn Central stipulated that it was able to earn a “reasonable
return” on the Termin... sve. under the regulation, see 438 U.S.
at 129, 98 S.Ct. at 2662, in this case, the use of the Community
House for commercial purposes would yield an estimated return
of only six percent. Even if true, this fact is irrelevant.
“Reasonable return” analysis was appropriate to determine the
viability of the existing commercial use of the Terminal but has
no bearing on the instant matter because the existing use of the
Community House is for charitable rather than commercial
purposes. So long as the Church can continue to use its property
in the way that it has been using it—to house its charitable and
religious activity— there is no unconstitutional taking.
Second, the Church notes that it presented a second pro-
posal for a smalier building to the Commission, but Penn
Central did not. This hardly makes any difference. Just as the
Commission in Penn Central remained open to a building addi-
tion that “‘would harmonize in scale, material and character,’
438 U.S. at 137, 98 S.Ct. at 2666 (quoting record on appeal),
with the Terminal, it invited appellant to propose an addition to
the Community House in the instant matter. Finally, we reject
as unsupported appellant’s argument that in Penn Central the
property owner continued to enjoy valuable, transferable rights
to develop the airspace above the Terminal, see 438 U.S. at 137,
98 S.Ct. at 2666, while the Church’s development rights have
little value. See Section 3(a) infra.‘
6. Appellant urges further that application of the Landmarks Law to the
Church dees not substantially advance a legitimate state interest. See Nollan
v. California Coastal Comm'n, 483 U.S. 825, 834-35, 107 S.Ct. 3141,
3146-47, 97 L.Ed.2d 677 (1987). While land use restrictions must be
reviewed in the context of the individual property in question, see Nectow v.
City of Cambridge, 277 US. 183, 48 S.Ct. 447, 72 L.Ed. 842 (1928), the
same government interest held to be valid in Penn Central—“preserving struc-
tures and areas with special historic, architectural or cultural significance,”
438 US. at 129, 98 S.Ct. at 2662—is equally applicable here.
=| a
3. Findings of the District Court
The principal factual finding of the district court—one
central to its rejection of the Church’s free exercise and takings
claims—was that the Church “failed to show by a preponder-
ance of the evidence that it can no longer conduct its charitable
activities or carry out its religious mission in its existing
facilities.” St. Bartholomew's Church v. City of New York, 728
F. Supp. 958, 974-75 (S.D.N.Y. 1989)(opinion and order).
The Church claims that the Community House is an inad-
equate facility in which to carry out the various activities that
presently comprise the Church’s religious mission and charitable
purpose. It further claims that it cannot afford to make the
needed repairs and renovations to the Community House and
Church building. It concludes that it must be allowed to replace
the Community House with a revenue—generating office tower.
The district court was unconvinced. It found that the Churct
failed to prove that the Community House is fundamentally
unsuitable for its current use and that the cost of repair and
rehabilitation is beyond the financial means of the Church.
Appellant argues on appeal that these findings were clearly
erroneous. Fed.R.Civ.P. 52(a); Anderson v. Bessemer City, 470
US. 564, 574-75, 105 S.Ct. 1504, 1511-12, 84 L.Ed.2d 518
(1985); Sygma Photo News, Inc. v. High Society Magazine, 778
F.2d 89, 95-96 (2d Cir. 1985). We disagree.
a. Adequacy of the Community House
The Church claims that the amount and configuration of —
usable space in the Community House is insufficient to accom-
modate the Church’s various programs. It relies principally
upon an analysis of space in the Community House by Walker
Associates, an interior design firm hired by the Church.
Presented to the Commission in three written reports and
related oral testimony (collectively, “the Walker Report’’), this
study concluded that the demands for space by the Church’s
various programs exceeded the capacity of the Community
House. additionally, the Walker Report stated that renovation
46
or expansion was impractical due to the structural inflexibility
of the building.
The district court discredited the Walker Report. With
regard to space, there is no dispute that the Community House
currently is too small. The Walker Report found that 8000
square feet of extra space is needed. The Commission placed
the deficiency at about 4500 square feet.’
Fatal, however, to the Church’s claim is the absence of
any showing that the space deficiency in the Community House
cannot be remedied by a reconfiguration or expansion that is
consistent with the purposes of the Landmarks Law. The
Walker Report assumed that the Community House had an out-
moded structure that precluded such an option. In fact, the
building has a modern, light steel frame structure and was
designed so that two additional floors could easily be added.
Moreover, the Commission has indicated that it would be recep-
tive to a proposal from the Church for such an addition. While
expanding the amount of available space in the Community
House may not provide ideal facilities for the Church’s
expanded programs, it does offer a means of continuing those
programs in the existing building. Certainly the intermediate
option of limited expansion must be thoroughly explored before
jumping to replacement with a forty-seven story office building.
7. The Walker Report determined that the total space required in the
Community House is 41,500 square feet, as against 33,500 square feet of
available useable space. The Commission accepted the figure for require-
ments, but estimated the available useable space at approximately 37,000
square feet.
8. For instance, the existing building cannot readily accommodate the larger
gymnasium or greater theater wing space sought by the Church.
~19--
b. Cost of Repair and Rehabilitation
The Church also argues that the necessary repairs to the
physically deteriorating Church building and Community House
would be prohibitively expensive. It relies on a study of the
mechanical systems and exteriors of those buildings prepared by
O’Brien, Krietzburg and Associates, a construction management .
firm, and submitted to the Commission through written reports
and oral testimony (collectively, “the OKA Report”). The
OKA Report estimated that it would cost approximately $11
million over two years to bring the buildings’ mechanical, elec-
trical, and plumbing systems into proper working order and to
repair the buildings’ exteriors.
The district court also rejected this conclusion, faulting
the OKA Report for being biased in favor of replacement over
rehabilitation, ignoring actual conditions at the property site,
and using an inappropriate method of estimating costs. Further,
the district court pointed to contradictory evidence presented to
the Commission, both by persons opposing the proposed develop-
ment and by neutral consultants. Based on this information, the
court found $3 million “phased in over a period of several years”
to be a reasonable estimate for repairs and replacement.
On appeal, the Church does not seriously defend the $11
million estimate contained in the OKA Report. Instead, it
accepts the $3 million estimate for the work that it covers, but
argues that this figure disregards certain “major elements of
cost.” In particular, the Church asserts that an additional
$500,000 is necessary for life safety measures, $647,000 for
repair of the church organ, and $360,000 for architectural and
engineering fees. The City counters that the life safety addi-
tions would unnecessarily exceed building code requirements,
that organ repair is not a proper expense for this proceeding,
and that design fees would be negligible.
We need not rule on this dispute over approximately $1.5
million because it is not crucial to the district court’s operative:
factual finding. As our discussion in the next section indicates,
-20-
CEN ery TA et See ee Sa a ng A Te lt I We ne tee MeN yo Ae Oe eg DR OE ae See ee OE er eae
even if the potential cost of repairs totaled $4.5 million, the
Church has not adequately demonstrated that it is unable to
meet this expense. Thus, the district court’s central finding that
the Church had failed to prove that it cannot continue in its
existing facilities does not hinge on whether any portion of this
$1.5 million was excluded from its estimate of repair costs.
c. The Church’s Finances
As a corollary to its claim that repair and rehabilitation of
the Church building and Community House would be too costiy,
the Church argues that its financial condition does not allow it
to make the necessary improvements and also continue its other
programs. The district court, however, found that appellant had
failed adequately to prove this assertion, a finding that is not
clearly erroneous.
The Church has three primary sources of support and
revenue: contributions in the form of pledges and offerings col-
lected at worship services, income earned on investments, and
fees charged for participation in activities conducted under its
sponsorship. Investment income is derived from the Church’s
investment portfolio, known as the Consolidated Church Fund,
the value of which stood at nearly $11 million at the end of
1984. The principal of this endowment consists of funds
received as gifts or bequests. In addition, the Church’s endow-
ment includes a Properties Fund, representing resources in
Church-owned property at acquired cost, net of depreciation,
and a miscellaneous General Fund. Combined, these funds
totaled just under $3.5 million at the end of 1984, giving the
Church an overall endowment of about $14.3 million at that
time. Over the decade preceding 1985, the Church’s sources of
revenue have sporadically kept pace with expenses, exceeding
them in 1975, 1977, 1980, 1983 and 1984, and falling behind in
1976, 1978, 1979, 1981, and 1982. On the whole, the Church
had only a slight net deficit over this period.
The Church’s principal argument is that a major
improvement expenditure of the type required to repair and
efina
renovate the Church building and Community House would
severely damage this “precarious” balance of revenues and
expenses. Because such an expenditure would come from
endowment funds, the Church contends, future investment
income will inevitably decline as the result of a depleted
portfolio. Such a decrease in future revenues, it concludes, will
produce “severe deficits.”
While a reduced principal will yield less investment
income, the Caurch has not demonstrated that its budget cannot
withstand building improvement expenditures under a reason-
able financing procedure. For example, as the district court
noted, withdrawals from the endowment might be made gradu-
ally to minimize lost investment income, or the Church might
borrow against its endowment, and repay the loan over an
extended period of time. Appellant has offered no financial pro-
jections or cash flow analyses to prove that these financing
methods are not feasible. Without such data, the district court’s
finding that the Church failed to prove prospective financial
hardship is not clearly erroneous.
We also cannot ignore the paucity of evidence offered by
the Church to show that other forms of revenue are not
available. Its claim that a capital fundraising drive already has
been exhausted as a financing possibility is undercut by evidence
that longtime members of the congregation cannot recall any
such drive. Also, evidence before the Commission indicated that
the transferable development rights for the airspace above the
Church property are, contrary to the Church’s claim, not
worthless.
Finally, the Church argues that even if its endowment
could withstand a building project, it is not at liberty to with-
draw large sums for that purpose because of legal restrictions on
the use of its investment funds. In particular, it urges that
Section 717 of the New York Not-For-Profit Corporation Law
prohibits the Church from expending the sums necessary to
undergo a building project. That provision, however, does no
more than impose upon the Church a fiduciary duty of care to
a, |,
manage the congregation’s money in a prudent and responsible
fashion, see N.Y. Not-for-Profit Corp. Law §§ 513, 717
(McKinney Supp. 1990), and would be implicated only if the
expenditures in question would unacceptably impair the
_ Church’s financial condition.’
4. The Motion to Intervene
The proposed intervenors argue that the district court
should have granted their motion to intervene on the side of the
defendants at trial. We may reverse the denial of a motion to
intervene only for “abuse of discretion.” See United States v.
Hooker Chemical & Plastics, 749 F.2d 968, 990 (2d Cir.
1984). No such abuse is present here. The district court prop-
erly denied intervention as of right under Fed.R.Civ.P. 24(a)(2)
because the proposed intervenors lack any legally protectable
interest in this matter. Under New York law, as a Protestant
Episcopal Church, St. Bartholomew’s is a corporate body
placed in the trusteeship of its church wardens and vestrymen.
See New York Religious Corporation Law § 41 (McKinney
Supp. 1990). To the extent that the proposed intervenors are
members of the parish, they enjoy only the right to vote in the
election of the church wardens and vestrymen. See id. § 43.
Thus, the Rector, Wardens and Members of the Vestry is the
proper party to litigate the constitutionality of encumbrances
placed on Church property. 3g ‘
Nor did the district court abuse its discretion by denying
permissive intervention under Rule 24(b). It was eminently
reasonable to conclude that intervention only would complicate
9. Although the Church also points to Section 513 of the Not-for-Profit
Corporation Law, which deals with the administration of assets received for
specific purposes, see N.Y. Not-for-Profit Corp. Law § 513 (McKinney
Supp. 1990), it concedes that donor—imposed restrictions are not a “principal
constraint” preventing the improvement of its property. It does not challenge
the district court’s finding that enough of the Church’s funds are unrestricted
so as to allow it to undertake a building project.
the litigation, and thereby “unduly delay ... the adjudication of
the rights of the original parties.” Fed.R.Civ.P. 24(b).
CONCLUSION
- For the reasons stated above, we affirm both the judgment
of the district court in favor of the defendants—appellees and the
order of that court denying the motion to intervene.
—24-
The RECTOR, WARDENS, AND MEMBERS
OF THE VESTRY OF ST. BARTHOLOMEW’S
CHURCH, Piaintiff,
v.
CITY OF NEW YORK, AND LANDMARKS
PRESERVATION COMMISSION OF THE
CITY OF NEW YORK, Defendants.
No. 86 Civ. 2848 (JES).
United States District Court, S.D. New York.
Dec. 13, 1989.
As Amended Jan. 24, 1990.
728 F. Supp. 958
Church sued city Landmarks Preservation Commission,
seeking determination that statute under which Commission had
denied church’s application of certificate of appropriateness to
tear down activities building portion of designated landmark
complex and replace it with high-rise office building which
would be used in part for church activities, on grounds that stat-
ute violated church’s First, Fifth and Fourteenth Amendment
rights. The District Court, Sprizzo, J., held that: (1) statute
did not violate free exercise clause; (2) statute did not involve
government in excessive entanglement with affairs of church;
(3) statute did not violate equal protection rights of church by
imposing different standards for granting certificates in the
cases of commercial and charitable entities; (4) statute did not
deprive church of its procedural due process rights; and (5) stat-
ute was not unconstitutional as applied, as church failed to
demonstrate that it could not use existing facilities, with
affordable rehabilitation, to satisfy its religious needs.
Judgment for Commission.
Mudge, Rose, Guthrie, Aiexander & Ferdon, New York
City (Douglas M. Parker, Judah Gribetz, Howard
W. Goldstein, George A. Pierce, of counsel), Henry
P. Monaghan, Kent Greenawalt, James G. Glazebrook,
Chancellor of St. Bartholomew's Church, New York City, for
plaintiff.
Cadwalader, Wickersham & Taft, New York City
(Donald G. Glascoff, Jr., Joseph Polizzotto, Lisa J. Sotto, of
counsel), for amicus curiae in support of plaintiff (New York
State Interfaith Commission on Landmarking of Religious
Property).
Cusack & Stiles, New York City (George
J. McCormack, of counsel), for amici curiae in support of plain-
tiff (Roman Catholic Archdiocese of New York).
Hurley, Kearney & Lane, Brooklyn, N.Y. (Kevin
M. Kearney, of counsel), for amici curiae in support of plaintiff
(Roman Catholic Archdiocese of Brookiyn).
Jeffrey R. Notarbartolo, Brooklyn, N.Y., for amicus
curiae in support of plaintiff (Committee of Denominational
Executives).
Peter L. Zimroth, Corp. Counsel of the City of New
York, New York City (Jonathan L. Pines, Lucy A. Cardwell,
Asst. Corp. Counsels, of counsel), for defendants.
Simpson, Thacher & Bartlett, New York City (John
J. Kerr, David W. Sussman, Elizabeth P. Johnson, of counsel),
for amici curiae in support of defendants (The New York
Landmarks Conservancy, Nat. Trust for Historic Preservation,
Nat. Center for Preservation Law, Preservation Action, Fine
Arts Federation, Preservation League of N.Y. State, and
Women’s City Club of New York, Inc.).
Mannarino Bader Bloom Fischer & Woll, P.C., New
York City (Gerald D. Fischer, of counsel), for amicus curiae in
support of defendants (Committee to Oppose the Sale of
St. Bartholomew’s Church, Inc.).
John Sexton, Norman Dorsen, New York City, for amicus
curiae in support of defendants.
Cahill Gordon & Reindel, New York City (William E.
Hegarty, Howard G. Sloane, David F. Freedman, of counsel),
for amici curiae in support of defendants (The New York
Landmarks Conservancy, National Trust for Historic
Preservation, National Center for Preservation Law,
Preservation Action, Fine Arts Federation, Preservation League
of New. York State, and Women’s City Club of New York,
Inc.).
OPINION AND ORDER
SPRIZZO, District Judge:
: Plaintiff, the Rector, Wardens and Members of the
Vestry of St. Bartholomew’s Church bring this action pursuant
to 42 U.S.C. § 1983, for declaratory and injunctive relief and
for damages. Plaintiff contends that defendants, City of New
York and the Landmarks Preservation Commission of the City
of New York (“Commission”), have violated its rights under the
First, Fifth and Fourteenth Amendments to the United States
Constitution, and under the laws of the State of New York. The
Court has, by agreement of the parties, held a bench trial on the
evidence previously submitted to the Commission in 1985 and
1986. After reviewing that evidence de novo and considering
the law applicable thereto, the Court makes the following find-
ings of fact and conclusions of law pursuant to Fed.R.Civ.P.
52(a)”
10. The parties have set forth the evidence submitted to the Commission in
the form of a twenty-three volume appendix (“App.”). References to that evi-
==
BACKGROUND >
St. Bartholomew’s Church is a Protestant Episcopal
Church organized under the laws of the State of New York as a
non-profit religious corporation. The Church building, designed
by Bertram Goodhue, was completed in 1919, and is located on
the east side of Park Avenue between East 50th and East 5ist
Streets in the City of New York. See 8 App. 2540; 10
App. 3432. Next to the church building is a seven floor com-
munity house constructed by Goodhue’s successor firm during
the years 1926-28. See 8 App. 2540, 10 App. 3433; 11
App. 4062. The community house provides, in combination
with the church building, a home for a variety of social and reli-
gious activities in which the Church is engaged." In addition to
the two structures, the Church’s Park Avenue property is
improved by a garden and terrace area. See 11 App. 4062.
In March of 1967, the church, the exterior of the commu-
nity house and the surrounding property were designated as
landmarks by the Commission, a designation plaintiff did not
then oppose.” See 8 App. 2540. Subsequently, however, plain-
tiff filed two applications with the Commission seeking a
Certificate of Appropriateness under what is now N.Y. City
Admin.Code § 25-307." The first such application, filed in
dence in this Opinion are to the volume and page number of that appendix,
e.g., 1 App. 246 refers to appendix volume one at page 246.
11. Among other things, the community house provides athletic facilities,
including a pool and basketball court, a theatre, a pre-school for sixty stu-
dents, meeting rooms, kitchen and dining facilities and office space. The
church building, in conjunction with the community house, provides clothing,
meals and sleeping quarters for the homeless. See 10 App. 3433-35.
12. The Church’s ability to alter or demolish the buildings is restricted by a
landmark designation. Any such alteration requires the approval of the
Commission. See N.Y.Admin.Code § 25-305(a)(1).
13. Section 307(a) provides in relevant part: “the commission shal] determine
whether the proposed work would be appropriate for and consistent with the
Bs
December 1983, sought permission to tear down the community
house and erect in its place a fifty—nine story office tower. See
Affidavit of Gene Norman (“Norman Aff.) at 4 21. This
application was denied as an inappropriate alteration on June
21, 1984. See id. at ¢ 25. The second application, filed in
December 1984, sought to demolish the community house in
favor of a forty-seven story office tower. See id. at | 27; 8
App. 2470. This application was also denied as inappropriate on
August 26, 1985. See Norman Aff. at ¢ 29. After the denial
of plaintiff's second application, a further application to build
the forty-seven story tower was made on September 3, 1985, on
grounds of insufficient return pursuant to sections 2074.0 and
207-8.0 of the New York City Administrative Code.“ See 10
App. 3234.
The Commission held public hearings on plaintiffs third
application on October 29, 1985, December 3, 1985, and
January 21, 1986. See 2 App. 321; 3 App. 704; 4 App. 1114.
At those hearings the Commission heard testimony from all
interested parties, including expert witnesses who testified
regarding the suitability of the community house to its charita-
ble purpose, the extent and cost of necessary structural and
mechanical repairs for both the church and community house,
and the state of the Church’s finances. In addition, the
effectuation of the purposes of this chapter.”
14. Section 207-8.0(a)(2)(c), now found at § 25-309(a)(2)(c), provides that
a certificate of appropriateness on the ground of insufficient return shall be
granted when the applicant shows, inter alia, that: “such improvement has
ceased to be adequate, suitable or appropriate for use for carrying out both (1)
the purposes of such owner to which it is devoted and (2) those purposes to
which it had been devoted when acquired unless such owner is no
engaged in pursuing such purposes.” In addition, New York law requires that
a certificate of appropriateness be granted where failure to do so would
“prevent or seriously interfere” with the applicant’s ability to carry out its
charitable purpose. See Society for Ethical Culture v. Spatt, 51 N.Y.2d 449,
454-55, 415 N.E.2d 922, 925, 434 N.Y.S.2d 932, 935 (1980); Lutheran
Church in America v. City of New York, 35 N.Y.2d 121, 131, 316 N.E.2¢
305, 311, 359 N.Y.S.2d 7, 16 (1974).
fp.
to the
public, on February 6, 11, 18, 20, and 24, 1986 to discuss
L
|
i
|
mination denying the application. See id. at 4 68; 19 App.
6448.
Thereafter, plaintiff brought the instant action alleging
the following constitutional claims: 1) that the landmark laws
are facially unconstitutional to the extent they impact the prop-
erty of any church because they interfere with the free exercise
of religion in violation of the First Amendment; 2) that the land-
mark laws are facially unconstitutional because they treat chari-
table and commercial institutions differently in violation of the
equal protection clause of the Fourteenth Amendment; 3) that
the landmark laws are unconstitutional as applied to
St. Bartholomew’s as a consequence of the Commission’s denial
of their applications for a certificate of appropriateness, because
that denial interfered with the free exercise of religion and
because the denials constitute a taking of property without com-
pensation; 4) that the landmark laws both facially and as
applied to St. Bartholomew’s violate the establishment clause
by requiring an intrusive examination of the church’s internal
affairs in the hardship application process; 5) that the landmark
laws both facially and as applied violate the doctrine of substan-
tive due process by depriving the Church of its property’s rea-
sonable income production without a compelling state interest;
6) that the legal standards for designation of a landmark and for
granting a certificate of appropriateness are impermissibly
vague in violation of the due process clause of the Fourteenth
Amendment; 7) that the lack of cross—-examination of witnesses
in the certificate of appropriateness procedure, the vagueness of
the Commission’s first two denial letters, the Commission’s fail-
ure to consider economic hardship in the second application and
the Commission’s failure to allow plaintiff to submit responses
to the Commission’s witnesses all constitute due process
violations. In addition, plaintiff brought state law claims for
Article 78 relief alleging that the Church should have been
granted a certificate of appropriateness under New York law."
Plaintiff then moved for partial summary judgment on its
claims of facial unconstitutionality, and defendant cross—moved
for summary judgment.’ These motions were later supple-
mented to add the issue of whether plaintiff's Article 78 claims
were justiciable in a federal forum. The Court ruled on these |
motions in open court. Those rulings are recapitulated below in
section I.”
15. Plaintiff could have sought review of the Commission’s factual and legal
determinations in at Article 78 proceeding in New York State Supreme Court
but elected not to do so. See N.Y.Civ.Prac. L.& R. § 7801 (McKinney
1981).
16. In addition to moving for summary judgment on plaintiff's claims of facial
unconstitutionality defendants asserted that plaintiff's as applied claims were
insufficient as well because plaintiff still retained some viable economic use of
its property.
17. In addition to the summary judgment motions in this case, a motion to
intervene on the side of the defendants was made by the Committee to Oppose
the Sale of St. Bartholomew's (“Committee”), a group of church members
opposed to the development project. The Court determined that intervention
as of right was not appropriate because the members of the Committee had no
ownership interest in the Church property itself, but at best only had the right
to vote on the development issue in an intra-church proceeding. The Court
also denied permissive intervention as a matter of discretion because, quite
aside from the jurisdictional problems caused by such intervention, that inter-
- vention would have seriously interfered with the parties’ desire to expeditiously
well have led to collateralization of the issues and further discovery. See infra
Discussion at II. In addition, the Court was persuaded that affording amicus
curiae status to the putative intervenors provided an adequate substitute for
_ >
OE OS EES ee ee Ne Se ee | =. s —~ *
> ae oe a Se ee ee ee et ee eee
: 2 OF Sth tg aig EE Be i om Fee — ;
. ek Nam hes A tas Foe
eS — eee eS eee ee ahs —a. —
- i i el ng Min tee el intial
DISCUSSION
L Plaintiff's Claims of Facial Unconstitutionality
A. First Amendment Claims
The Court rejects plaintiff's contention that the landmark
laws unconstitutionally interfere with the free exercise of the
religious beliefs of any church that is designated a landmark.
The gravamen of plaintiff's free exercise claim is that by
restricting a church’s ability to use its property as it wishes in
support of its religious or charitable mission, the landmark laws
impermissibly burden the exercise of religious belief.
That claim lacks merit. A statute abridges the free exer-
cise of religion when it coerces the affected individuals into vio-
lating their religious beliefs or when “[it] penalize{s] religious
activity by denying any person an equal share of the rights, ben-
efits and privileges enjoyed by other citizens.” Lyng v.
Northwest Indian Cemetery Protective Ass'n., 485 U.S. 439,
449, 108 S.Ct. 1319, 1325, 99 L.Ed.2d 534 (1988); see also
Tony & Susan Alamo Found. v. Secretary of Labor, 471 U.S.
290, 303, 105 S.Ct. 1953, 1962, 85 L.Ed.2d 278 (1985);
Sherbert v. Verner, 374 U.S. 398, 402, 83 S.Ct. 1790, 1792, 10
L.Ed.2d 965 (1963). A substantial interference with the free
exercise of religion may also occur where church property is
taken, even by condemnation, for state purposes. Cf. Yonkers
Racing Corp. v. City of Yonkers, 858 F.2d 8°°, 871 (2d
Cir.1988), cert. denied, __ US. __., 109 S.Ct. 1527, 103
L.Ed.2d 833 (1989).
However, the mere possibility that a church may at some
time want to make a different use of its landmarked property
creates no more than an incidental burden on the practice of
religion that does not “require the state to come forwari with a -
compelling reason justifying its actions.” See Yonkers, supra,
permissive intervention.
858 F.2d at 871. Therefore, the designation of church buildings
as landmarks does not in and of itself violate the free exercise
clause." This is especially true since the landmark designation
does not deprive the Church of the right to seek a certificate of
appropriateness to alter its property if the nature of that prop-
erty is such that it no longer can be used to carry out its reli-
gious or charitable mission.
Plaintiff also contends that because the New York statu-
tory and judicial tests for determining when a certificate of
appropriateness may be granted on the grounds of hardship
require an intrusive examination into the finances and internal
workings of the Church, those tests, both on their face and as
applied to St. Bartholomew’s, result in an excessive entangle-
ment between government and religion in violation of the estab-
lishment clause. While the establishment clause does prohibit
excessive entanglement between government and religion, see
Lemon v. Kurtzman, 403 U.S. 602, 619, 91 S.Ct. 2105, 2114,
29 L.Ed.2d 745 (1971), that doctrine has normally been applied
in factual situations in which state aid to religious institutions
requires extensive and continuous monitoring of church activi-
ties to ensure that government financing is being used solely for
secular purposes. See id.; see also NLRB v. Catholic Bishop of
Chicago, 440 U.S. 90, 502-03, 99 S.Ct. 1313, 1319-20, 59
L.Ed.2d 533 (1979). That doctrine has no applicability where,
as here, the government must make an inquiry into church
finances for the limited purpose of determining the validity of a
church’s claim of financial hardship.
18. The Court also rejects plaintiff's contention that whenever a law has any
impact upon a religious institution it must be justified by a compelling state
interest. A compelling state interest is only required when the law impermissi-
bly burdens the free exercise of religion. See Yonkers, supra, 858 F.2d at
871. Absent such a burden the state need only show a rational basis for the
legislation. The New York landmark laws have such a rational basis. See
Pern Central Transp. Co. v. New York City, 438 U.S. 104, 129, 98 S.Ct.
2646, 2661, 57 L.Ed.2d 631 (1978). Thus, plaintiff's substantive due process
claims are without merit as well.
B. Equal Protection Claims
Plaintiff alleges that because the landmark laws provide
different hardship tests for commercial and charitable entities
clause. Because the Court has already found that the laws do
not on their face impermissibly bu: 2n religion, any differences
in treatment need only be justifiea by a rational basis.”
As a threshold matter it should be noted that the equal
protection clause only protects persons who are similarly situa-
ted from disparate treatment. Therefore, the differences
between commercial entities and charitable institutions render
that argument dubious at best. In any event, those differences
clearly provide the state with a rational basis for treating those
entities differently.
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Since the hardship test for commercial enterprises is
based upon the ability to earn a reasonable return from its prop-
erty, it is obvious that a similar standard could not be applied to
an entity which exists for charitable and not commercial
purposes.” Indeed, it would make little sense, and might in fact
be irrational, to apply the charitable test to a commercial prop-
erty or the commercial test to a charitable property. It follows
that the so called disparity in treatment is nothing more than a
reasonable effort by the state to afford hardship relief to both
classes of entities based upon criteria specifically tailored to the
nature of each.
19. Plaintiff also argues that its equal protection rights have been violated
because the landmark laws treat landmarked and non—landmarked churches
differently. This argument is at best an attack upon the general rationality of
the landmark laws, an attack foreclosed by Penn Central, supra.
20. N.Y. City Admin.Code § 207-8.0(a)(1)(a), now § 25-309(a)(1)(a), per-
mits commercial property to obtain a certificate of appropriateness on the
ground of insufficient return if, inter alia, the landmarked building “is not
capable of earning a reasonable return.”
-34-
C. Due Process Claims —
Plaintiff also argues that the legal standards for designat-
ing a landmark and for granting a certificate of appropriateness
are impermissibly vague and give the Commission virtually
unfettered discretion in making its decisions. Therefore plaintiff
argues the laws do not comport with the minimum requirements
of procedural due process.
At the very least, due process requires notice and an
opportunity to be heard. See Mathews v. Eldridge, 424 US.
319, 332-33, 96 S.Ct. 893, 901, 47 L.Ed.2d 18 (1976). The
landmark laws unquestionably meet that standard in that they
provide a property owner with adequate notice of the law’s
requirements and with the opportunity for an extensive hearing,
especially in view of the interpretation placed upon those laws
by the courts of New York. See, e.g., Society for Ethical
Culture v. Spatt, 51 N.Y.2d 449, 454-55, 415 N.E.2d 922, 925,
434 N.Y.S.2d 932, 935 (1980); Lutheran Church in America v.
City of New York, 35 N.Y.2d 121, 131, 316 N.E.2d 305, 311,
359 N.Y.S.2d 7, 16 (1974). It follows that since a reasonable
person can and should know what standards must be met in
bringing an application for a certificate of appropriateness or in
opposing a landmark designation, those statutes are not imper-
missibly vague. See Maynard v. Cartwright, 486 U.S. 356, 361,
108 S.Ct. 1853, 1858, 100 L.Ed.2d 372 (1988).
While it is true that the procedures available at a land-
mark hearing are not the same as those available at a civil trial,
that is not what due process requires. See Mathews, supra, 424
US. at 333, 96 S.Ct. at 901. Moreover, under New York law
there is a right to judicial review of Commission decisions in the
state court system, see supra note 6, a circumstance that further
supports the rejection of plaintiff's due process claims.” See
21. There is no need to resolve the merits of plaintiff's contention that the
Commission violated its procedural due process rights during the hardship
hearing. Those alleged defects could have, and should have, been addressed
x.
Williamson County Regional Pianning Comm’n v. Hamilton
Bank, 473 U.S. 172, 194-95 & n. 14, 105 S.Ct. 3108, 3120-21
& n. 14, 87 L.Ed.2d 126 (1985).
In sum, the Court rejects plaintiff's contentions that the
landmark laws are unconstitutional on their face as to all
churches, and grants summary judgment for defendants as to
those claims.
Il. The Trial of this Action
Although concluding that partial summary judgment
should be granted for defendants on plaintiff's claims of facial
unconstitutionality, the Court held a trial with respect to
plaintiff's claim that the landmark laws were unconstitutional as
applied. Plaintiff's contentions in that regard are twofold: (1)
that because it could no longer carry out its religious mission in
its existing facilities the denial of its hardship application consti-
tuted a taking of its property without just compensation; and (2)
the denial of that application constituted an impermissible
burden on the exercise of its religious beliefs.
Initially, the Court was of the view that it could have a
trial de novo and consider facts not before the Commission in
deciding whether the landmark laws had been unconstitutionally
applied to plaintiff. Subsequently, the Court reconsidered this
view and concluded that it would be inappropriate to predicate a
through an Article 78 proceeding in state supreme court. Moreover, plaintiff
has expressly disclaimed any desire to have the matter returned to the land-
mark commission for a new hearing, which is the only relief that would be
appropriate even if the Court were to accept plaintiff's argument that this
hearing, as opposed to the standard applicable to such proceedings in general,
deprived the church of procedural due process. In view of that circums‘ance,
the Court will treat that claim as abandoned. For the same reason, the Court
will not decide the merits of whether Article 78 relief can constitute « claim
cognizabie in a federal court, an issue that has caused some difficu!ty.
Compare Cooney v. American Horse Shows Ass'n, 495 F. Supp. 424, 433
n. 7 (S.D.N.Y. 1980) with Herrmann v. Brooklyn Law School, 432 F. Supp.
236, 239-40 (E.D.N.Y. 1976).
finding of unconstitutionality on facts which the Commission
never had an opportunity to consider, especially since under the
statutory scheme, a new application for hardship exemption can
be made at any time based upon additional facts.” Therefore,
the Court, as requested and consented to by the parties,” will
evaluate this claim solely on the basis of the record before the
Commission.” However, since the Court is presented with a
22. Indeed, it would hardly be consistent with the principles of comity and
federalism that require a federal court to abstain where a remedy may be pro-
vided by state law without reaching the constitutional issues, see Railroad
Comm'n v. Pullman Co., 312 US. 496, 500-501, 61 S.Ct. 643, 645, 85 L.Ed.
971 (1941), for this Court to deprive the Commission of the opportunity con-
ferred upon it by state law to determine whether new facts support plaintiff's
hardship application as a matter of state law.
23. The putative intervenors did not either request or consent to that
procedure.
24. Defendants contend that under University of Tennessee v. Elliot, 478 US.
788, 106 S.Ct. 3220, 92 L.Ed.2d 635 (1986), the Court must not only confine
itself to the administrative record, but must also give preclusive effect to the
factual findings of the Commission. Elliot requires that when a state agency
acting in a judicial capacity resolves disputed issues of fact properly before it
which the parties have had an adequate opportunity to litigate, federal courts
must give the agency’s factfinding the same preclusive effect to which it would
be entitled in the courts of that state. See id. at 798-99, 106 S.Ct. at
3225~26.
However, whether a proceeding is to be regarded as judicial for pur-
poses of Elliot preclusion is a question of federal law. Moreover, the fact that
a proceeding may meet the minimum requirements of due process does not
necessarily require that it be afforded preclusive effect. In addition, state law
must require that the proceeding be afforded preclusive effect before the fed-
eral issue need even be reached. The Court is unpersuaded that, as 2 matter of
federal law, landmark proceedings should be regarded as quasi-judicial in
nature. Indeed, they are more akin to town meetings than judicial proceed-
ings, in that all may be heard regardless of the relevance of their testimony,
evidentiary rules do not apply, and questioning by the attorneys for the inter-
ested parties is not permitted.
In any event, it does not appear that New York law would require that
a decision of the Commission be given preclusive effect. Under New York
- -
claim of constitutional deprivation, it must make a de novo
review of that evidence.”
law, a proceeding is quasi-judicial and therefore entitled to preclusive effect if
the agency is authorized to act in an adjudicatory fashion, the procedures it
employs are sufficient to permit confidence that the facts and issues were fully
tested, and the parties reasonably expected to be permanently bound by the
result reached. See Allied Chemical v. Niagara Mohawk Power Corp., 72
N.Y.2d 271, 276-77, 528 N.E.2d 153, 155, 532 N.Y.S.2d 230, 232 (1988),
cert. denied, ___ US. , 109 S.Ct. 785, 102 L.Ed.2d 777 (1989).
Where, however, an agency makes findings based upon conditions which are
subject to change and further review, New York is not likely to give those pro-
ceedings preclusive effect. See id. An application for a certificate of appropri-
ateness based on hardship appears to be such a proceeding. There is no limit
on the number of applications which may be made, and an applicant's eco-
nomic condition, which is likely to change over time, will affect the likelihood
of success of the application. Thus, an application once denied may be pur-
sued again with a different result at a future date.
Moreover, in a case decided by the New York Court of Appeals prior
to the Elliot decision, that court found that Landmark designation hearings
are not quasi-judicial for purposes of determining what type of Article 78
review they will receive. See Lutheran Church in America, supra, 35 N.Y.2d
at 128 n. 2, 316 N.E.2d at 309 n. 2, 359 N.YS.2d at 13 n. 2. The Court
based that holding upon the fact that designation proceedings are not adver-
sary hearings involving cross-examination. See id. Certificate of appropriate-
ness hearings share these characteristics.
25. It is, of course, plaintiff's burden to prove by a preponderance of the evi-
dence that its constitutional rights have been violated on the basis of that
record, even though some of the evidence at the hearing may not have been
admissible at a federal civil trial.
IIL. Plaintiff's Unconstitutional As Applied Claims
A. Just Compensation Claims
Plaintiff's claim of unconstitutionality as applied depends
upon plaintiff's ability to prove that it can no longer carry out its
religious mission and charitable purpose in its existing facilities
because those facilities are inadequate and because it cannot
afford to expend the sums necessary to make those facilities
adequate. It is that circumstance that underlies plaintiff's
contention that the denial of its hardship application deprived it
of its property without just compensation in violation of the
Fifth Amendment and abridged its right to freely exercise its
religious belief in violation of the First Amendment.
At the outset it should be noted that the Supreme Court
has never passed upon the constitutionality of a regulation, such
as the landmark laws, as applied to the property of a charitable
or religious institution. However, in dealing with commercial
property, the Supreme Court has recognized that there is no
magic formula for determining when a taking has occurred. See
Penn Central Transp. Co. v. New York City, 438 U.S. 104,
123-24, 98 S.Ct. 2646, 2658-59, 57 L.Ed.2d 631 (1978).
Factors of particular significance, however, are the economic
impact of the government action, i.c., its interference with legiti-
mate investment expectations, and the character of the govern-
mert action, ¢.g., is the action a physical taking or a land use
regulation. See id. at 124, 98 S.Ct. at 2659. These factors must
be evaluated in light of the overriding rule that the Fifth
Amendment contemplates continued use of a property as it was
used in the past, and thus permits no substantial interference
with the property owner’s primary investment expectations or
reasonable beneficial use. See id. at 136, 98 S.Ct. at 2665.
While the concept of legitimate investment expectation is
not directly transferable to a charitable or religious institution,
the concepts of reasonable beneficial use and the owner’s
primary expectations are equally applicable to both. Moreover,
_39-
the New York Courts have developed a takings standard for
charitable institutions embodying these concepts that is a consti-
tutionally acceptable standard for determining when there has
been a taking of charitable property, i.c., where the landmark
designation would prevent or seriously interfere with the carry-
ing out of the charitable purpose of the institution. See Society
for Ethical Culture, supra, 51 N.Y.2d at 454-55, 415 N.E.2d at
925, 434 N.Y.S.2d at 935; Lutheran Church in America, supra,
35 N.Y.2d at 131, 316 N.E.2d at 311, 359 N.Y.S.2d at 16.
Therefore, the Court adopts this test to determine whether
plaintiff's Fifth Amendment rights were violated as a conse-
quence of the denial of its hardship application.
B. Free Exercise Claim
Assuming arguendo that plaintiff's charitable work is the
exercise of religion for First Amendment purposes, plaintiff
must prove that it can no longer carry out this work in its exist-
ing facilities to sustain its free exercise claim. See Lyng, supra,
108 S.Ct. at 1326; Yonkers, supra, 858 F.2d at 871-72. Thus,
in this case, the First Amendment inquiry is identical in scope to
the Fifth Amendment inquiry, since to prevail on either claim
plaintiff must prove that it can no longer carry out its religious
mission in its existing facilities.
The Court has examined the record before the
Commission in an effort to determine if plaintiff has proved by a
preponderance of the evidence that it can no longer carry out its
charitable purpose in its existing facilities. For the reasons that
follow, the Court finds that plaintiff has failed to carry that
burden, and that judgment must be entered for the defendant.
C. Findings of Fact
Plaintiff contends that the community house is an inade-
quate structure for carrying out the Church’s religious mission
and charitable purpose. Plaintiff further alleges that both the
community house and the church are in an advanced state of
disrepair and cannot be rehabilitated for less than $11 million.
Thus, plaintiff argues it can only rehabilitate the Church and
carry out its charitable purpose if it is allowed to demolish the
_ community house, build the office tower in its place, and reap
the revenues therefrom. Finally, plaintiff contends that its
finances are in such a deplorable state that even if the two build-
ings could be rehabilitated for less than $11 million, it cannot
afford to spend more than a minimal sum upon such work. The
Court will address each of these contentions in turn.
1. Adequacy of Community House Space
Plaintiff's first factual contention concerns the amount of
the space contained in the community house, and the configura-
tion of that space in relation to the needs of the Church’s
programs. Plaintiff contends that the evidence shows that: the
usable space available in the community house is insufficient to
accommodate the variety of activities that compete for the
space; that it wishes to expand its existing programs but cannot
do so given those space constraints; that it is forced to conduct
activities in spaces that are inappropriate for those activities;
and that renovation of the interior of the community house is
impractical and not feasible.
Plaintiff relies primarily upon an analysis of the use and
configuration of the community house space undertaken at
plaintiff's request by Walker Associates, an interior design
firm. In addition to the testimony of its president, Keith
Keppler, see 2 App. 462; 15 App. 5275, Walker submitted three
reports to the Commission, see 10 App. 3429; 14 App. 4843; 16
26. A focal point of plaintiff's contention in this regard is its claim that it is
forced to carry out its feeding program for the homeless from the church mor-
tuary chapel, and thus must carry food from the community house kitchen
downstairs and the length of an entire city block to reach the church. In addi-
tion, the Church contends that it cannot continue to provide shelter for the
homeless in the church narthex because that space is inappropriate, and
because it can only provide shelter for ten persons per night in that area. See
2 App. 380, 382-85.
—41-
App. 5586. In those reports and testimony, Walker concluded
that the community house is not adequate, suitable or appropri-
ate for the purposes to which it is devoted. See 10
App. 3431-32. Walker found that the community house lacked
sufficient usable space, that the existing usable space was ineffi-
ciently designed and poorly distributed, and that the multiplicity
of uses of that space created scheduling conflicts.” See id.
In addition, Walker concluded that the building’s struc-
ture was outmoded and inflexible, and that renovation of the
structure’s interior was impractical and prohibitively expensive
due to the massive structural systems within the building, the
clevator shafts and support structures, and the impossibility of
demolishing thick load bearing walls. See id. at 3432. In sum,
Walker found that the Church could only continue to success-
fully carry out its charitable and social activities by moving to
another more suitable facility, and that the proposed forty-seven
story office tower was such a facility. See 4 App. 1321-22; 10
App. 3432.
However, the Court, based upon flaws in Walker’s meth-
odology and upon conflicting evidence, finds that Walker’s con-
clusions are incorrect, and that plaintiff has failed to prove by a
preponderance of the evidence that the community house is
unsuitable for its current use.
The credibility and accuracy of Walker’s findings are
undercut by several factors. First, it is clear that Walker did not
attempt to examine the building plans of the community house
before it determined that the building could not be easily
altered. See 3 App. 916. If it had done so, it would have found
that in fact the building does not contain massive load bearing
walls, but instead is a light steel frame structure that is easily
27. Specifically, Walker found that the community house contained a net
usable area of approximately 38,000 sq. ft., that the Church programs
required a usable area of approximately 46,000 sq. ft., leaving a space deficit
of approximately 8,000 sq. ft. See 2 App. 492.
-42-
susceptible to alteration.” See 4 App. 1240; 16 App. 5721-22.
Second, Walker based its finding of inadequate usable space
upon calculations appropriate to a commercial office building,
the area of Walker’s expertise, and not upon calculations appro-
priate to plaintiffs facility. See 6 App. 1956; 7 App. 2186.
Third, measuring the adequacy of space in an existing building
was an unusual task for Walker, which was used to projecting
space for designs of proposed buildings.
In addition, Walker conducted its study by asking ques-
tions of the heads of each program using the facility, and, unsur-
prisingly, found that each program head thought he or she
needed more space. See 14 App. 4853. Moreover, examination
of the questionnaires used reveals that they fail to distinguish
between program needs and mere desires for expansion.
Furthermore, Walker presented no evidence of objective obser-
vations of how the facility is actually used over time. The Court
finds therefore that Walker’s conclusions are without adequate
factual support.
Moreover, other evidence demonstrates that the commu-
nity house is adequate for the purposes to which it is devoted.
Weekly building activity schedules, if anything, supported the
conclusion that the community house’s space was in fact under-
utilized, that many of the rooms were not used at all during the
day, or were used by very few, and that no scheduling conflicts
were apparent. See 12 App. 4431-33; 13 App. 4736.” In fact,
the Church was able to rent out some of its space to area busi-
nesses, and has formed a special committee to increase those
rentals. See 13 App. 4733-34. Moreover, although plaintiff
28. For this reason, and because it was unsupported by any evidence, the
Court also rejects Walker’s contention that interior renovation of the commu-
nity house would cost approximately $3.4 million.
29. Testimony also indicated tha: Church membership, and membership in
the community club, a primary user of the community house, has been steadily
declining. See 12 App. 4389-91.
-43-
complained that it could accommodate only sixty pupils in its
preschool, it has an occupancy permit for one hundred pupils,
and therefore underutilizes the capacity of even its preschool
facilities. See 7 App. 2223; 15 App. 5786.
Walker’s conclusion that the community house is ineffi-
ciently configured is belied by the fact that it failed to consider
inexpensive methods of reconfiguring large rooms, for example,
by installing removable room partitions. Finally, the
Commission’s own calculations reveal that even accepting
Walker’s estimate of the space needed to conduct current activi-
ties, the community house’s space deficiency was much lower
than Walker’s estimate, and that any deficiency could be made
up at relatively low cost by utilizing the basement as a storage
area. See 17 App. 5800.
The credibility of plaintiff's evidence is further undercut
by the fact that its proposed new building, which reverses the
proportion of space above and below ground in the existing facil-
ity, would be only marginally better, if at all, in terms of usable
space, see 3 App. 893-94, and significantly inferior in many
other respects such as the quality of the below ground environ-
ment, the choked single access point of the office building
lobby,” and the absence of any plan to encompass the ministry
to the homeless in the new structure, which oddly enough is a
program that plaintiff asserts it does not have adequate space
for in the present structure.” See 7 App. 2201-10. In sum,
plaintiff's reliance upon the Walker report and the Court’s
30. Plaintiff complained that the community house’s two entrances, providing
access space of 700 sq. ft., are inadequate, but the proposew building has a
single access point with an area of 450 sq. ft., and must be shared with the
rest of the occupants of the forty-seven story tower. See 7 App. 2201.
31. In addition, plaintiff has failed to show why the existing community house
dining facilities, or even the auditorium, could not replace the church mortu-
ary chapel as the site of the breakfast feeding program for the homeless. Both
of those facilities are much closer to the kitchen and are never used in the
morning.
rejection of that report supports the conclusion that plaintiff has
failed to show by a preponderance of the evidence that the com-
munity house is an inadequate structure for conducting its
activities.”
2. Required Exterior and Mechanical Repairs
Plaintiff's second major factual contention is that the
community house and the church building both require a com-
plete overhaul and replacement of existing mechanical systems,
and substantial repair and replacement of exterior structural
systems at a cost of approximately $11 million. Plaintiff's sole
support for this proposition is a study of the mechanical systems
and the building exteriors undertaken in 1985 by O’Brien,
Krietzburg and Associates (“OKA”’), a firm of professional con-
struction managers, submitted through two reports, see 10
App. 3281; 14 App. 4951, and the testimony of OKA’s presi-
dent, James O’Brien, see 2 App. 413; 4 App. 1205, 1341. In
formulating its recommendations, OKA relied upon the report
of Edwards & Zuck, P.C., who evaluated the plumbing,
mechanical and electrical systems, see 10 App. 3367, the report
of Caine, Farrell & Bell, architects, who examined the exteri-
ors, see id. at 3388, and the report of Barr & Barr, Inc., build-
ers, who provided cost estimates of the repairs. See id. at 3396.
Based upon these three reports, OKA concluded that poor
maintenance programs in the past have caused the overall
exterior physical condition of the buildings to seriously
32. In fact, the Church did not commission the Walker space study until the
Spring of 1985, long after plans for the new building had been drawn. See 4
App. 1307. This fact supports the view that the Church’s claim that the build-
ing is inadequate was an afterthought designed to provide another argument
for demolishing the building after its first two attempts to get the proposed
construction approved had failed. This point was aptly made by Commissioner
Halsband: “in this case the new building was made in the absence of a
program—the ;/ogram was done last—and that whole intermediate step of
comparing what you’ve got to what you need seems to never to [sic] have been
expressed....” 6 App. 1936. %
-45-
deteriorate, and that the buildings’ mechanical systems were
outdated and in some cases inoperative. See id. at 3286-87.
OKA’s prescription for these ills involves virtually complete
replacement of mechanical, electrica] and plumbing systems and
significant replacement of exterior elements. See id. at
3298-3366. Rehabilitation of existing systems was not
considered. The total cost of these repairs and replacements was
estimated by OKA to be $11,663,500, on the assumption that
construction was to be completed within two years. See 14 App.
4956-63.
The Court does not find OKA’s assessment persuasive for
the following reasons. First, it is clear from the testimony of
Ronald Alexander, a former vestryman in charge of the
Church’s building committee, that OKA was told to maximize
the cost of estimates to the greatest defensible extent, and that
OKA undertook to do just that by advocating replacement over
rehabilitation wherever! possible. See 3 App. 724. Moreover,
OKA admitted a bias in favor of replacement,” and indeed had
little experience in rehabilitating older buildings. In addition,
OKA did not rely on a full set of plans and specifications in
evaluating necessary repairs. See 4 App. 1367-68. Instead,
OKA relied solely on the reports of other firms who were not
called to testify before the Commission.
These reasons would be a sufficient basis to re’sct OKA’s
conclusions. There is, however, ample additional evidence to
show that not only did OKA grossly overestimate the amount of
work required, but that its method for allocating costs to that
work is seriously flawed. For example, OKA recommended
wholesale replacement of the church’s front steps and the blue
stone steps leading from Park Avenue to the terrace. See 10
App. 3312. However, other evidence showed that only the top
platform of the church steps and one of the blue stone steps
33. For example, Mr. O’Brien stated that in his view he would “come in and
gut the whole thing, because there was nothing worth saving.” 4 App. 1349.
-46-
“
- —
required replacement. See 5 App. 1641. Similarly, OKA
advocated replacement of all of the sidewalk when only part of
the sidewalk was cracked and in need of repair.
In estimating the required roof repairs, OKA ignoréd-the
fact that individual tiles could be reused in repairing the tile
roofs, see 5 App. 1681-82, and that several of the flat roofs had
been recently replaced and thus did not need to be replaced
again. See 5 App. 1687; 13 App. 4656-57. All of these facts
tend to show that the OKA report was not based upon careful
examination and consideration of what repairs were truly neces-
sary, but instead upon the presumption that all problems should
be solved by complete replacement. See 12 App. 4632. Thus,
the Court finds OKA’s evaluation of necessary exterior repairs
incredible and unpersuasive. a
Similar flaws are apparent in OKA’s evaluation of neces-
sary repairs to the buildings’ interior mechanical systems. Since
OKA claimed to rely on Edwards & Zuck, it is especially perti-
nent to note that OKA in faet departed from the recommenda-
tions of that report. For example, while Edwards & Zuck rec-
ommended retaining and modifying existing ductwork in the
community house, see 10 App. 3371, OKA estimated that most
of the ductwork had to be replaced. See id. at 3349-50.
This selective reliance on Edwards & Zuck supports the
inference, absent some other basis for the estimate, that OKA
was guessing at what repairs were truly necessary. This infer-
ence is supported by other OKA estimates as well. For example,
OKA advocated wholesale replacement of the electrical systems,
ignoring the fact that much of that work had already been
accomplished. See 6 App. 2033; 10 App. 3361-62. Indeed,
OKA did not even know that there were no outstanding fire
code violations, and therefore made recommendations which
incorrectly assumed that the auditorium balcony and the church
basement had not been brought up to fire code standards. See
10 App. 3308-11. Similarly, OKA’s sprinkler system estimate
ignored areas of the community house that already had sprinkler
—47-
systems, and included costs for a sprinkler system based upon a
square footage estimate for the entire building.
Moreover, OKA’s report evidenced a total lack of famil-
iarity with what could be accomplished by retaining and refur-
bishing existing mechanical systems. Rather than undertaking a
detailed analysis of the plumbing, electrical and heating ventila-
tion and air conditioning systems to determine what could be
salvaged, OKA simply opted to replace it all. In so doing OKA
ignored, for example, the advantages to be gained by retaining
the direct current electrical systems, and the virtually unlimited
service life of older properly maintained equipment. See 16
App. 5749.
In sum, it is clear from OKA’s report that their object was
not to determine what repairs were truly necessary or required,
but to maximize the amount of work and the cost of that work.
There is simply no other explanation, and none has been offered,
for OKA’s wholesale reliance upon replacement and complete
rejection of rehabilitation, especially since there is abundant evi-
dence that many of the systems examined could in fact be
rehabilitated.
Quite aside from the defects in OKA’s analysis noted
above, OKA’s method of estimating costs is highly
questionable. In estimating costs, OKA relied first upon the
cost estimates of Barr & Barr, and second upon its own com
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