Petition for Writ of Certiorari — 383 Madison Associates v. City of New York et al
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Supreme Court, U.S.
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IN THE
Supreme Court of the United States
OCTOBER TERM, 1993
383 MADISON ASSOCIATES.
Petitioner,
Ve
CITY OF NEW York, et al..,
Respondents.
Petition for a Writ of Certiorari to the
New York Supreme Court,
Appellate Division, First Department
PETITION FOR A WRIT OF CERTIORARI
WILLIAM T. COLEMAN, JR.
Counsel of Record
DEBRA A. VALENTINE
HILARY R. HEGENER
O’ MELVENY & MYERS
555 13th Street, N.W.
Suite 500 West
Washington, D.C. 20004
(202) 383-5325
Attorneys for Petitioner
WILSON - EPgsS PRINTING Co.. INC. - 789-0096 - WASHINGTON, D.C. 20001
QUESTIONS PRESENTED
The 1967 landmark designation of Grand Central Ter-
minal deprived its owners of 1.7 million square feet of
existing development righis. To avoid a constitutional
taking claim, New York City amended its Zoning Resolu-
tion in 1969 to allow unused deve: pment rights to be
transferred to any property then linked to the landmark
site by a series of lots having the same ownership as the
landmark site. In 1969, 383 Madison Avenue was ad-
mittedly an eligible receiving site for these transferable
development rights (“TDRs”). Petitioner is the owner by
purchase of 1.5 million square feet of the Terminal’s
TDRs. New York City denied Petitioner’s application to
use 800,000 of these TDRs at its 383 Madison Avenue
site. The state court upheld the denial based on its con-
clusion that (1) a permit seeker has no property interest
to protect from unconstitutional invasion, (2) the 383
Madison Avenue site no longer qualified as a receiving
site since years after 1969 an intervening lot was sold to
a third party, and (3) the development proposal would
exceed an arbitrary bulk limitation. The court below
ignored Petitioner’s interest in its property right—the
TDRs—and instead focused on whether 383 Madison
had an absolute right to the permit. Moreover, neither
the arbitrary bulk limitation, which the City’s own Zon-
ing Resolution precludes, nor the same ownership re-
quirement, as applied, bear any re!l<tionship to a legiti-
mate state purpose. The Questions Presented, therefore,
are:
(1) Whether Petitioner has a constitutionally pro-
tected property interest in the Terminal TDRs,
such that application of permit conditions to
those TDRs raises constitutional Guestions.
(2) Whether the City’s denial of Petitioner’s permit
application constituted a taking by impermis-
sibly burdening the use of the TDRs without
(i)
es
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substantially advancing a legitimate government
interest.
Whether the City’s denial of Petitioner’s permit
application violated substantive due process be-
cause it was based on conditions not reasonably
related to a legitimate government interest.
ili
PARTIES TO THE PROCEEDINGS AND
RULE 29.1 STATEMENT
Petitioner is 383 Madison Associates, a New York lim-
ited partnership.
Respondents are the City of New York, the New York
City Planning Commission, the New York Landmarks
Preservation Commission, Sylvia Deutsch, Denise M.
Scheinberg, Salvatore C. Gagliardo, Marilyn Mammano,
William Garrison McNeil, and Daniel T. Scannell.
TABLE OF CONTENTS
QUESTIONS PRESENTED
PARTIES TO THE PROCEEDINGS AND RULE 29.1
STATEMENT
TABLE OF AUTHORITIES
OPINIONS BELOW
JURISDICTION
CONSTITUTIONAL PROVISIONS, STATUTES AND
REGULATIONS INVOLVED
STATEMENT
A. The Penn Central Litigation
B. 383 Madison’s Special Permit Application
C. Proceedings Below
REASONS FOR GRANTING THE WRIT
I. INTRODUCTION
Il. 383 MADISON HAS A CONSTITUTIONALLY
PROTECTED PROPERTY INTEREST IN
THE TERMINAL TDRS
Il. THE REGULATORY BURDEN IMPOSED BY
THE SPECIAL PERMIT PROCESS FAILS TO
SUBSTANTIALLY ADVANCE A_ LEGITI-
MATE STATE PURPOSE AND WORKS A
TAKING OF VALUABLE PROPERTY
A. The “Adjacent Lot” Requirement
RB. The “Unduly Increase” Bulk Requirement
IV. THE PERMIT PROCEDURE DEPRIVED
383 MADISON OF SUBSTANTIVE DUE
PROCESS
CONCLUSION
(Vv)
10
13
14
vi
TABLE OF AUTHORITIES
CASES Page
383 Madison Assocs. v. City of New York, 82 N.Y.
26 T46 (UOG ee 1
383 Madison Assocs. v. City of New York, 193
A.D.2d 518 (1993) NS ee 2
Agins v. Tiburon, 447 U.S. 255 Oe 13
(1908) ce 22
Board of Regents v. Roth, 408 U.S. 564 (1972) 12
Carolan v. City of Kansas City, Mo., 818 F.2d 178
(Sth Civ, SOs ee . 22
Chinese Staff & Workers Ass’n v. New York, 68
N.Y.2d 359 (1986) noone. ccccccecccecoeeececoece 18
Greenbriar, Ltd. v. City of Alabaster, 881 F.2d
1570 (11th Cir.), reh’g denied, en banc, 893 F.2d
346 (100) ee 22
Hodel v. Irving, 481 U.S. 704 « Oe 11
Jacobs, Visconsi & Jacobs v. City of Lawrence, 927
F.2d 1111 (10th Cir.1991) 22
Morton v. Mancari, 417 U.S. 535 |) a 18
New Burnham Prairie Homes v. Village of Burn-
ham, 910 F.2d 1474 (7th Cir. eee 22
Nollan v. California Coastal Comm’n, 483 U.S. 825
(1907) ....cwcsibedpa ate. passim
Penn Central Transp. Co. v. New York City, 438
U.S. 106 (0G ee passim
Perry v. Sindermann, 408 U.S. 598 (1972) ............. 13
Robert Lee Realty v. Village of Spring Valley, 61
N.Y 2d S00 (10 18
vii
TABLE OF AUTHORITIES—Continued
Page
RRI Realty Corp. v. Incorporated Village of South-
ampton, 870 F.2d 911 (2d Cir.), cert. denied,
493 U.S. 893 (1989) ....... 1 eh Bt REET SORE AD PO passim
Seawall Assocs. v. New York, 74 N.Y.2d 92, cert.
denied, 498 U.S. 976 (1989) ................................. 12,13
SEC v. Chenery Corp., 318 U.S. 80 Scan 18
Shelton v. City of College Station, 780 F.2d 475
(5th Cir.), cert. denied, 477 U.S. 905 (1986) and,
cert. denied, 479 U.S. 822 (1986) ............0000000 0. 22
Silver v. Franklin Tp. Bd. of Zoning Appeals, 966
ey ee ee es ED 22
Sudarsky v. City of New York, 779 F. Supp. 287
(S.D.N.Y. 1991), aff'd mem., 969 F.2d 1041 (2d
Cir. 1992), cert. denied, —— U.S. , 113
MED ARTE aan a ie aS 12
WEOK Broadcasting Corp. v. Planning Bd. of
Lioyd, T9 N.Y .2d S78 (1992) ............................-.. es 18
CONSTITUTION
ny Is MU nn cee vouuconmeonmersusecseuswess 2
Utes Comat, Armed. ATV, SY on ccccecececocecccccccccecceess 2
STATUTES AND REGULATIONS
Re Se | ee 2
New York City Administrative Code, Title XXV,
PE A SRR 2,3
State Environmental Quality Review Act
(“SEQRA”), N.Y. Envtl. Conserv. Law
I a Fi 4
Saniete Resolution of the City of New York, gg 74-
79, 74-791, 74-792, 81-211 and 81-212............ passim
IN THE
Siyirene Court of the United States
OCTOBER TERM, 1993
No. 93-
383 MADISON ASSOCIATES,
y Petitioner,
City OF New York, et al..
Respondents.
Petition for a Writ of Certiorari to the
New York Supreme Court,
Appellate Division, First Department
PETITION FOR A WRIT OF CERTIORARI
383 Madison Associates (hereafter “383 Madison” or
383”) respectfully petitions for a writ of certiorari to
review the judgment of the New York Supreme Court,
Appellate Division, First Department, in this case.
OPINIONS BELOW
The order of the New York Court of Appeals denying
383 Madison’s appeal as of right, dated September 14,
1993, is reported at 82 N.Y.2d 748. That court’s Jan-
uary 11, 1994 decision denying 383’s appeal by permis-
sion has not yet been reported. These decisions are re-
printed in the attached Appendix’ at 47a and 48a,
respectively.
‘ ”
1 Page citations to materials in the Appendix appear as “—a.
The Supreme Court, Appellate Division, First Depart-
ment entered its decision and order on May 20, 1993.
[he decision was reported at 193 A.D.2d 518 and is re-
printed in the Appendix at la.
The November 1, 1991 order and judgment of the
Supreme Court, New York County, and the underlying
decision of August 6, 1991 were not reported and are re
printed in the Appendix at 5a and 10a, respectively.
JURISDICTION
On september 14, 1993, the New York Court of Ap
peals entered its judgment denying 383 Madison's appeal
as of right from a decision by the New York Supreme
Court, Appellate Division, First Department. On Novem-
vember 3, 1993, 383 Madison sought leave from the New
York Court of Appeals to appeal by permission. While
the latter motion was under consideration, Justice Thomas.
on December 1, 1993, granted 383 Madison’s applica
tion for an extension of time within which to file a peti
tion for a writ of certiorari. Pursuant to Justice Thomas’
order, the time within which to file was extended to Feb-
ruary JI, 1994. On January 11, 1994, the New York
Court of Appeals entered its judgment denying 383’: ap
peal by permission. The jurisdiction of this Court te re
view the judgment of the New York Supreme Court,
Appellate Division, First Department, is invoked under
28 U.S.C. § 1257 (1988).
CONSTITUTIONAL PROVISIONS, STATUTES
AND REGULATIONS INVOLVED
United States Constitution, Amendment V: Amend-
ment XIV, § |.
New York City Administrative Code, Title XXV. ch. 3
(1986) (“Landmarks Preservation Law” ).
Zoning Resolution of the City of New York & S 74-79,
74-791, 74-792, 81-211 and 81-212.
The relevant regulatory provisions are set out in the
Appendix at 49a-56a.
STATEMENT
A. The Penn Central Litigation.
In 1967, the City of New York (hereafter “City”),
pursuant to its Landmarks Preservation Law, N.Y.C.
Admin. Code, ch. 3, § 25-301 et seg. (1986), designated
Grand Central Station and its Station Lot (together “Ter-
minal”) landmarks. This Court has previously found that
“{wlhile the [Landmarks Preservation] law does place
special restrictions on landmark properties as a necessary
feature to the attainment of its larger objectives, the
major theme of the law is to ensure the owners of any
such properties both a ‘reasonable return’ on their invest-
ments and maximum latitude to use their parcels for pur-
poses not inconsistent with the preservation goals.” Penn
Central Transp. Co. v. New York City, 438 U.S. 104,
110 (1978) (“Penn Central”). This landmark designa-
tion, however, severely restricted the Terminal owners’
prospects for further developing their prime midtown
commercial site, which had been eligible for roughly 1.7
million square feet of additional development as of right
under the applicable zoning ordinances. In response to
protests by the Terminal owners that the landmark desig-
nation had “taken” this lucrative development right for
public use without just compensation, the City amended
its Zoning Resolution. Under the terms of the new pro-
visions, ZR §§ 74-79, 74-791, 74-792, and 74-793,’ the
Terminal received as compensation approximately 1.7
million transferable development rights (“TDRs”). See
Stipulation, Penn Central Transp. Co. v. New York City,
Index No. 14763/69 (Sup. Ct. N.Y. Co., 1974), rev'd
50 A.D.2d 265 (1st Dep’t 1975), affd 42 N.Y.2d 324
(1977), affd 438 U.S. 104 (1978).
2Zoning Resolution § 74-793 establishes the requirements for
the instrument of transfer and is not at issue in this case.
The TDR system is designed to compensate landmark
owners by granting them the right to develop on nearby
properties the square footage denied them by the land-
mark designation. (49a). Each TDR represents U
right to surpass applicable zoning limits on neighborin
properties by one square foot. TDRs are, therefore,
valueless unless they are freely alienable or transferable
to third parties for use at nearby “receiving” sites. How
ever, unlike development as of right—such as would
have been available at the Grand Central Terminal site
prior to its landmark designation—development through
the use of TDRs is heavily burdened with regulatory con
ditions that. if not applied fairly and for legitimate rea
ons. diminish the utility and hence the value of the
TDRs.
The 1968 Zoning Resolution amendments that created
TDRs not only limited the number of potential receiving
sites. but also circumscribed TDR use at those sites.
Specifically, pursuant to ZR § 74-79, the City limited
TDR transfers to physically “adjacent lots”’—that 1s, lots
contiguous, directly across a street or cater-corner to the
landmark. Pursuant to ZR § 74-791, the City created a
special permit process to vet TDR use.”
Further limits on TDR use were incorporated in ZR
74-792. Under this section. the City (1) imposed a
twenty percent cap on the amount of floor space that
could be added to a site eligible to use the Terminal
TDRs (ZR & 74-792(2)(d)). (2) made approval of
TDR use subject to a City finding that such use “will
not unduly increase the bulk of any new development,
density of population or intensity use of any block” (ZR
* When the State of New York passed the State Environmental
Quality Review Act (““SEQRA”) in 1975, which requires the prep
aration of an Environmental Impact Statement (“EIS”) to eval
environmental effects of a proposed development, the EIS
was made a component of the special review process. N.Y. Envtl.
Conserv. Law § 8-0101 et seq. (1988).
74-792(5)(a)), and (3) conditioned TDR use on a
City finding that the applicant has in place a “program
for continuing maintenance [that] will result in the pres-
ervation of the landmark” (ZR § 74-792(5)(b) ).'
Convinced that the Landmarks Preservation Law and
its accompanying regulations created a system that would
never serve its supposed compensatory end, the Terminal
owners sued the City in the Supreme Court of the State
Of New York, County of New York (hereafter “New
York Supreme Court”). The complaint, filed October 7,
1969, alleged, inter alia, that the landmark designation
constituted a violation of due process and a taking.
Bowing to these allegations, in 1969, the City crafted
two amendments to its Zoning Resolution, each of which
aimed to increase the eligible market for and hence the
compensatory value of the TDRs. The first amendment
expanded the definition of “adjacent lot” so as to include
lots then linked to the landmark (e.g., the Terminal) by
a series of lots having the “same ownership”’—as well as
lots contiguous to or opposite them (hereafter “Chain
Amendment”). ZR § 74-79 (49a-50a). The second
amendment repealed the previously enacted restriction
that capped TDR use at twenty percent of the floor area
developable “as of right.” ZR § 74-792 (50a-5Sla).
Throughout the Penn Central litigation, the City touted
these 1969 amendments, stating, “[t]he 1969 amend-
ments to the Zoning Resolution were expressly intended
to expand the number of sites that could receive transfers
of development rights from the Grand Central Terminal
site.” Brief for Appellees’ at 31, Penn Central Transp
4In 1982, the City added a further condition requiring the City
Planning Commission (“CPC”) to establish
that any disadvantages to the surrounding area caused by
reduced access of light and air will be more than offset by the
advantages of the landmark’s preservation to the local com-
munity and the City as a whole...
ZR § 74-792(5) (2). See 5la.
6)
Co. v. New York City, 438 U.S. 104 (1978) (No. 77
444). To give substance to its claims, the City empha
sized that, due to the repeal of the floor cap, “approval
was almost certainly forthcoming,” id. at 32, for the im
minent sale and use of 1.3 million TDRs (almost twice
the amount and bulk at issue here) at the site of the
former Biltmore Hotel, two blocks from the 383 Madison
Avenue site involved in this case.
This display of civic expansiveness prevailed. In 1978,
this Court held that the landmark designation of the Ter-
minal was not a taking. 438 U.S. 104. The majority
noted that “the class of recipient lots was expanded” by
the 1969 amendments and observed that “at least eight”
midtown properties “are eligible to be recipients of devel
opment rights afforded the Terminal by virtue of land
mark designation.” /d. at 115. The Court took particu-
lar note of the fact that the 1969 amendments permitted,
“in highly commercialized areas like midtown Manhat-
tan, the transfer of all unused [Terminal] development
rights to a single parcel.” Id. at 114-115 (citation
omitted) (emphasis added).° These assumptions led the
Court to term the Terminal TDRs “valuable” “rights.”
Id. at 137. But then came reality.
B. 383 Madison’s Special Permit Application.
The regulatory framework that this Court optimis-
tically assumed would allow for ready transferability of
the Terminal TDRs has not met expectations. Virtually
all of the development potential represented by the Ter-
minal TDRs has languished for the past fifteen years, in
spite of serious efforts to use them at nearby sites. The
City’s treatment of the Terminal TDRs has mocked the
5In ZR § 81-211, the City subsequently formalized its expressed
policy of allowing all TDRs to be added to a single building on an
adjacent lot. That section expressly states that there is “No limit”
on TDR use at a single site. (55a). In addition, ZR § 81-212 states
that the “No limit” policy supersedes the “bulk and density” cri-
terion in ZR 74-792(5) (a). (56a).
Penn Central Court’s fundamental assumptions and evis-
cerated these “valuable” “rights.”
Since 1983, when it purchased 1.5 million TDRs from
the owners of Grand Central Terminal, 383 Madison has
been caught in the City’s regulatory web. In 1986, 383
Madison and the Terminal owners applied to the City
Planning Commission (“CPC”) for a permit to transfer
approximately 800,000 Terminal TDRs to the 383 Madi
on Avenue site, an eligible “adjacent lot” when the
Chain Amendment was passed. Three years later, after
multiple and costly obstructions and delays, the City de-
nied 383’s permit application. (New York City Planning
Comm'n Rep. No. C 870193 ZSM (August 23, 1989) )
(2la). The City found that the 383 Madison Avenue
ite was no longer an eligible “adiacent lot” because Penn
Central, years after the 1969 amendments, had broken
the chain of common ownership by selling one or more
of the surface lots between 383 Madison Avenue and the
Terminal, although Penn Central retained title to the sub-
urface fees. (44a). The City also found that 383’ pro-
posal (1) would unduly increase the bulk and density of
population (2) lacked an adequate program to preserve
the landmark: and (3) would have a disproportionate
impact on access of surrounding sites to light and air
(44a-45a)
C. Proceedings Below.
On August 24, 1989, 383 filed a claim for $480 mil-
mages with the Comptroller for the City of
New York. When the Citv failed to timely respond, 383
initiated this action by filing a complaint in the Supreme
Court of the State of New York. 383 alleged. inter alia.
that the City’s refusal to permit the use of Terminal TDRs
at 383 Madison Avenue had. under the circumstances of
e, effected an unconstitutional taking and a depri-
vation of pronerty without substantive or procedural due
8
process of law. Ccmplaint of 383 Madison Associates,
383 Madison Assoc’s v. City of New York, (N.Y. Sup.
Ct., N.Y. Co., Oct. 30, 1989) (Index No. 23621/89).
On November 1, 1991, the trial court entered its order
and judgment, which affirmed the City’s decision. The
court concluded that the City’s administrative findings
had a “rational basis” and were not “arbitrary and ca-
pricious.” (8a-9a). The court cursorily rejected 383’s
constitutional challenges.
On appeal, the Appellate Division rejected as lacking
a “rational basis” the lower court’s findings that 383
Madison’s plans (1) would unduly increase the density
of population; (2) lacked an adequate program to pre-
serve the Terminal; and (3) would unduly impact the
access of surrounding sites to light and air. (3a). The
Appellate Division upheld, under rational basis scrutiny,
only the City’s interpretation of the “adjacent lot” provi-
sion and the “unduly increase” bulk provision, as applied.
On these bases, the court affirmed the City’s ultimate de-
cision. (2a). In upholding the decision below, the Ap-
pellate Division dismissed 383’s constitutional arguments,
stating that “since [383 Madison] did not have a property
right to the grant of a special permit, their [sic] constitu-
tional claims must be rejected.” (3a-4a).
On June 21, 1993, 383 Madison noticed an appeal as
of right to the New York Court of Appeals. Following
sua sponte review, the Court of Appeals denied the ap-
peal by order dated September 14, 1993. (47a). Peti-
tioner’s subsequent appeal by permission was denied by
order dated January 11, 1994. (48a).
9
REASONS FOR GRANTING THE WRIT
I. INTRODUCTION.
This case, which has ties to this Court’s 1978 Penn
Central decision, presents important takings issues that
the New York state courts dismissed in a way that con-
flicts with prior applicable decisions of this Court. It
also presents important questions concerning the appli-
cation of substantive due process scrutiny to land regu-
lation cases that have not been, but should be, settled
by this Court.
In Penn Central, this Court recognized that TDRs
were “valuable” “rights.” 438 U.S. at 137. But in this
case, the New York state courts have ignored the con-
stitutional impact of that pronouncement by focusing, not
on the property owner’s right in the TDRs, but on
whether the TDR owner has a right to the special per-
mit that governs their use. The convoluted logic of the
court below appears to be that if an agency has discre-
tion to deny a permit, applicants such as 383 have no
constitutional interest in the outcome of those procedures.
(3a-4a). More specifically, the City’s short-circuited rea-
soning, which the court below adopted, is as follows:
The special permit process places discretionary authority
to grant or deny use of Terminal TDRs in the City
Planning Commission. This grant of discretion negates
383’s claim to a protected property interest and _there-
fore insulates the permit-granting process from a consti-
tutional substantive due process challenge. Moreover,
because 383 cannot claim a property interest in the per-
mit, it has no takings argument.
This argument conveniently ignores one essential fact
the permit process would never have been initiated
without 383’s underlying property interest in Terminal
TDRs. Rather than looking to the existence of discre-
tion, the court below ought to have considered whether
the agency’s discretion in app/ying permit conditions im-
1)
permissibly burdened that underlying property interest.
By sleight of hand. the City and the court below shifted
the rights analysis so as to circumvent the true constitu
tional questions and conflict with this Court's assump-
tions in Penn Central. 438 U.S. 104.
This Court also needs to settle whether the ill-con-
ceived substantive duc process analysis underlying the
denial of 383’s constitutional claims should be sanctioned.
This analysis was explicitly borrowed from the Second
Circuit, which has institutionalized a focus on agency
discretion as the touchstone for substantive due process
claims in the land use context. See RRI Realty Corp. y.
Incorporated Village of Southampton, 870 F.2d 911, 919
(2d Cir.), cert. denied, 493 U.S. 893 (1989). Because
permit processes are by their very nature imbued with dis-
cretion, however, this construct ensures that a special per-
mit applicant cannot but lose on any constitutional
claims. Several circuits have adopted this truncated ap
proach to substantive due process. See, infra, at page 22.
Others have focused, by contrast, on the nature of the
process and whether the land-use decision failed to ad-
vance legitimate state interests. See, infra, at page 22.
This split among the circuits, which affords some liti-
gants the full protection of a due process analysis, while
denying it to others, is a matter meriting resolution by
this Court.
II. 383 MADISON HAS A CONSTITUTIONALLY PRO-
TECTED PROPERTY INTEREST IN THE TERMI-
NAL TDRS.
The cornerstone of 383 Madison’s constitutional argu-
ments is its property interest in approximately 1.5 million
Terminal TDRs. The lower court steadfastly refused to
acknowledge that property interest, assuming instead that
the existence of discretion in the TDR permit-granting
process somehow erased property rights. (3a-4a). But
this is wholly inconsistent with this Court’s analysis in
Penn Central. 438 U.S. 104. For if Terminal TDRs are
1 |
not constitutionally protected, this Court would not have
ubjected the Terminal’s landmark designation—which
prevented the theretofore allowed use of those very de
velopment rights over the Terminal—to constitutional
takings scrutiny in that case. Indeed, although the Court
found, in Penn Central, that the Terminal’s landmark
designation did not effect a taking. it stressed that the
lDRs constitute “valuable” “rights” that “und ubtedly
mitigate whatever financial burdens the law has imposed
f
on {the Terminal owners].” ° /d. at 137.
[his Court and other courts have repeatedly confirmed
that development rights are property and that regulatory
interierence with those rights may raise constitutional
oncerns. See, e.g., Hodel v. Irving, 481 U.S. 704, 715
1987) (holding that each component of a fee interest
there, the right to bequeath—is a free-standing property
interest, so that the abrogation of such a right. standing
yne, without regard to its comparative value in relation
to the whole, may well be sufficient to constitute a tak
ing); Penn Central, 438 U.S. at 143 n.5 (Rehnquist, J.
dissenting) (“This Court has previously held that the ‘air
rights over an area of land are property for purposes of
the Fifth Amendment) (citations omitted). In Nollan
Calttornia C MaSTa ( minn LX 4 [ ‘5 $25 ( 1987). this
Court r ‘cognized that restrictive conditions on de\ clop-
ment rights implicate constitutionally protected property
iterests—even when the use of those rights is subject to
The ( t held Penn Central that the landmark designation
lid t effect a taking, ecause “|t/ne restrictions imposed DY
the Landmarks Preservation Law) are substantially related to the
promotion of the general welfare and not only permit reasonable
beneficial use of the landmark site but also afford appellants oppor
tunities further to enhance not only the Terminal site proper
through regulated use of the TDRs! but also other properties
through transfer or sale of the TDRs!.” 438 U.S. at 138. Because
Penn Central involved a facial attack on the Landmarks Preserva-
tion Law, the Court did not have occasion to address the constitu-
nality of the regulatory conditicns as applied to the use of Ter-
| 5
approval in a permit process. Thus, when presented with
the California Coastal Commission’s attempt to condition
a building permit that would allow further development
on plaintiffs’ agreement to grant an easement across their
property, this Court sustained a takings challenge to the
Commission’s actions. The New York courts have also
recognized that development rights are entitled to con-
stitutional protection. See Seawall Assocs. v. New York,
74 N.Y.2d 92, 109-11, cert. denied, 493 U.S. 976 (1989)
(“development rights . . . are, standing alone, valuable
components of the ‘bundle of rights’ making up fee tn-
terests”) (citation omitted ).
Ignoring these precedents, the Appellate Division re-
lied on the reasoning in Sudarsky v. City of New York,
779 F. Supp. 287, 294-297 (S.D.N.Y. 1991), aff'd mem.,
969 F.2d 1041 (2d. Cir. 1992), cert. denied, ——— USS.
—, 113 S. Ct. 1059 (1993), to dismiss 383’s constitu-
tional claims, “since plaintiff did not have a_ property
right to the grant of a special permit. . .” (3a). The
Appellate Division missed the point. It is because 383
Madison has a property right in the T7DRs that the courts
should subject the conditions imposed on their use to
constitutional scrutiny. There is no doubt that Sudarsky
efficiently resolves the problem of burgeoning federal case-
loads in the land use and property development area by
allowing constitutional arguments to be bypassed and dis-
missed, as they were by the court below. But, while effi-
ciency is a beguiling goal, it should not be enlisted to deny
the existence of property rights, here the TDRs.
Interestingly, the analytical framework set out in Sud-
arsky was not developed in either the takings or the
substantive due process context, although, as exemplified
in this case, it now enables the New York courts to evis-
cerate claims under either constitutional rubric. Sudarsky
and the cases that spawned it evolved out of this Court’s
analysis of procedural due process claims in the at-will
employment context. See, e.g., Board of Regents v. Roth,
13
408 U.S. 564 (1972); Perry v. Sindermann, 408 U.S. 593
(1972). Those cases did not involve traditional property
interests but centered on whether plaintiffs were cntitled to
particular procedures under the regulatory framework that
created and governed the terms of their temporary em-
ployment positions. In Roth, for example, this Court
found that the petitioner did not have a property interest
in re-employment sufficient to require the University au-
thorities to give him a hearing when his one-year employ
ment contract was not renewed. 383 Madison also seeks
constitutional scrutiny of certain regulatory conditions,
but unlike in Roth and Perry, there is an underlying prop
erty right, the existence of which is beyond cavil.
The Sudarsky court’s myopic focus on permit-granting
discretion cannot negate the fact that 383’s development
rights are protectable property interests. Accordingly, this
Court should examine the constitutionality of the reguia
tory scheme pursuant to which the City denied 383 Mad-
ison’s proposal for use of its Terminal TDRs.
lil. THE REGULATORY BURDEN IMPOSED BY THE
SPECIAL PERMIT PROCESS FAILS TO SUBSTAN-
TIALLY ADVANCE A LEGITIMATE STATE PUR-
POSE AND WORKS A TAKING OF VALUABLE
PROPERTY.
This Court’s recent cases hold that government regula-
tion that significantly burdens a property interest will
constitute a taking unless it “substantially advances” a
legitimate state interest. Agins v. Tiburon, 447 U.S. 255,
260 (1980). See also Nollan, 483 U.S. at 834; Seawall
Assocs., 74 N.Y.2d at 107, 111. To meet this heightened
constitutional scrutiny, a land use regulation must reflect
an “essential nexus” between its means and its end.
Nollan, 483 U.S. at 837. This is accomplished here only
if the conditions imposed on the use of the Terminal
TDRs serve the same end that the initia! ‘andmark des-
ignation and development prohibition served, id.; namely,
14
Preservation of the Grand Central Station landmark. in
the context of orderly city planning without Imposing
undue hardship on the landmark or TDR owners. See
Penn Central, 438 U.S. at 109. 110, 113-114 (Land
marks Preservation Law designed to foster Civic pride,
protect landmarks, ensure owners of landmarked proper
Hes a “reasonable return” and provide Opportunities to
transter development rights to other parcels). But the
application of the permit conditions—the “adjacent lot”
and “unduly increase” bulk requirements—which — the
court below upheld, fails to mect this test.
A. The “Adjacent Lot” Requirement.
The City’s interpretation of the “adjacent lot” pro
vision, which was upheld by the court below. fails to
promote any conceivable, legitimate governmental pur
pose, much less one related to the original purpose of pre
serving and enhancing the landmark without unduly bur-
dening its owners. ZR § 74-79 defines “adjacent lot” as
a lot contiguous, opposite or cater-corner to either the
landmark site or—as established in the 1969 Chain
Amendment—to a “lot in a series of lots held in the same
ownership as the landmark site.” As this Court noted
in Penn Central, “the law governing the conditions under
Which transfers from landmark parcels could occur was
liberalized” in 1969, “apparently to ensure that the Land-
marks Law would not unduly restrict. the development
options of the owners of Grand Central Terminal.” 438
U.S. at 114. But the interpretation of “adjacent lot”
adopted here is inconsistent with this Court’s recognition
that the principal aim of the 1969 Chain Amendment was
lo provide economic relief to TDR holders. See also
1969 Amendments to the Zoning Resolution, City Plan-
ning Commission, November 5, 1969 Cal. No. 32, CP-
20938 (“[t]he amendments will provide economic relicf
to the owner of a landmark building .. .”) (57a). The
City’s interpretation would require that the receiving site
for TDRs be linked to the Terminal by a chain of com-
15
mon lot ownership measured not as of 1969 but at the
time of the proposed TDR transfer and use. Not only
is this interpretation improper as a matter of regulatory
construction, but it also fails to establish any constitu
tionally valid nexus.
The City’s gloss—which requires that an “adjacent lot”
be in a chain of lots under the “same ownership” at the
time of the TDR transfer—would have enhanced the
utility of the Terminal TDRs in 1969, but not in 1978.
when Penn Central was decided, not in 1983 when 383
purchased the TDRs, and not now. In 1969 Penn Central
was the common owner of a significant number of lots
in the vicinity of the Terminal. However, bankruptcy pro
ceedings in the early to mid-1970s forced Penn Central to
sell off its surface ownership in the surrounding properties.
Consequently, the interpretation of “same ownership”
that the court below adopted stripped the Chain Amend
ment of all value. There are no properties that meet the
miserly interpretation of “same ownership” endorsed here.
Given that the City passed the Chain Amendment to en
hance the opportunities for transfer of Terminal TDRs.
the current interpretation of the “same ownership” re
quirement is in no way consonant with—much less does
it substantially advance—its supposed compensatory pur
pose. Cf. Nollan 483 U.S. at 834. To the contrary, the
City has successfully flouted its promise to increase TDR
use and transferability.
To the extent that the Chain Amendment was intended
to promote planning goals, the interpretation of “same
ownership” adopted below thwarts that aim as well. Just
as the City could not have foreseen, in 1969, that Penn
Central would be forced to sell off most of its real estate
holdings, the City could not have assessed with certainty
the pattern of real estate ownership at any point in time,
save one—the time of the passage of the Chain Amend-
ment. For that reason, the identification of “adjacent
lots” based on “same ownership” should be measured as
16
of that moment. Only at that one moment did the City
know the potential receiving lots for the Terminal TDRs;
from that point forward chains of common ownership
could be constructed in myriad directions extending one
block or ten, depending on the fortuity of real estate
investment.
In fact, the City’s 1989 report proposing regulations to
create a new Special Sub-District in the Grand Central
Terminal Area admits that the “same ownership” require-
ment (as interpreted by the City and adopted below)
serves no planning purpose. The proposal states: “[c]ur-
rent zoning regulations permit [transferable] development
rights to be distributed over an area defined primarily by
the terminal’s complicated ownership patterns rather than
by a plan based upon appropriate planning concerns.”
(New York Department of City Planning, November
1989 NYC DCP #89-45) (63a). Thus, by the City’s
own admission, the required constitutional nexus to or-
derly city planning and preservation concerns is lacking
if “same ownership” is measured at the time of TDR
transfer rather than at the time of enactment of the
Chain Amendment.
B. The “Unduly Increase” Bulk Requirement.
The “unduly increase” bulk requirement stands on even
weaker constitutional footing and contravenes the City’s
own regulation, ZR § 81-211. The City has tried to make
a talisman of floor area ratio (hereafter “FAR”),’ as
evidenced by the New York State Supreme Court’s nod
to the City’s contention that 383’s proposed building “is
7 Floor Area Ratio is a number computed by dividing the total
floor area of a building by the total surface area of the zoning lot.
The larger the lot, the smaller the FAR increase corresponding to a
fixed amount of additional floor space. Thus, the addition (as 385
proposed) of 800,000 square feet of floor space at a site could
produce a FAR of 33 or 20, depending on the size of the lot sup-
porting the structure. FAR is thus a somewhat artificial measure of
bulk.
17
at 33.15 FAR more than twice the as of right bulk in
this extremely congested area... .” (19a). The City’s
Zoning Resolutions and policy declarations, however,
highlight the fact that this FAR consideration, the sole
predicate for the Appellate Division’s determination that
383 Madison’s proposal would “unduly increase” bulk
(2a-3a), serves no legitimate government purpose.
The “unduly increase” bulk condition, contained in
ZR § 74-792 passed in 1969, is applicable to “all dis-
tricts” except for a few not relevant here. (49a, 50a). It
provides a rule of general applicability, authorizing the
City to make bulk impact determinations for TDR use
but proffering no guidance as to how such determinations
are to be made. In 1982, however, the City passed ZR
§ 81-211 containing a detailed matrix specifying the FAR
allowable in each district. (53a-55a). While both the
City and the court below have treated FAR as an appro-
priate proxy for bulk, they have categorically refused to
apply ZR § 81-211 as the appropriate indicator of what
constitutes “undue” bulk in a given district. In choosing
to ignore ZR § 81-211, the City and the court below have
both contravened the governing regulatory scheme and
failed to interpret the “unduly increase” bulk require-
ment in a way that substantially advances a legitimate
governmental purpose. See also ZR § 74-792(5)(a)
(recognizing that advantages of landmark preservation
will necessarily be counterbalanced by increased develop-
ment of surrounding area through TDR use). (51a).
The matrix in ZR § 81-211 could not be more resolute:
The entry corresponding to transfers of TDRs from land-
marks to adjacent lots in the C5-3 district (the district
encompassing the Terminal and 383 Madison Avenue)
indicates that there is “No limit” on the “Maximum
amount of transferable development rights (FAR) from
a landmark zoning lot that may be utilized on an ‘ad-
jacent’ receiving lot.” (55a). As if that pronouncement
were insufficiently clear, ZR § 81-212 explicitly provides
18
that any conflict between the “No limit” provision of
ZR § 81-211 and any provision of ZR § 74-79 (including
S 74-792(5)(a)) must be resolved in favor of § 81-211.
(56a). There is thus no doubt that § 81-211 was meant
to be read in conjunction with § 74-792 and that the
“No limit” policy controls and supersedes the City’s gen-
eral authority under § 74-792 to determine whether a
development proposal will “unduly increase” bulk. The
City may not conduct its review of the “undue” bulk re-
quirement as if ZR S$ 81-211 and 81-212 did not exist.
SEC v. Chenery Corp., 318 U.S. 80, 94 (1943) (“an
order may not stand if the agency misconceived the
law’).” Even if the Zoning Resolution had failed to pro-
vide such a well-blazed interpretive trail, under accepted
principles of statutory construction, a specific reference
within a later statute prevails over the general, earlier
statute to the extent of any inconsistency. Morton Vv.
Mancari, 417 U.S. 535, 550-551 (1974).
While the Appellate Division acknowledged the exist-
ence of ZR § 81-211, it then dismissed it out of hand:
8 ZR §$ 81-211 provides: “Wherever there is an inconsistency be-
tween any provision in Section 74-79 and the table in Section 81-
211. the table in Section 81-211 [stating “No Limit’] shall apply.”
9New York courts, in common with those elsewhere, have uni-
formly held that each agency is encouraged and, at times, obliged
to issue regulations establishing reasonable limits on the agency’s
discretion. Robert Lee Realty v. Village of Spring Valley, 61 N.Y.2d
892. 893-94 (1984) (“standards for issuance of such a permit may
not... be so general or imprecise as to leave issuance of a permit
to the unchecked discretion of the issuing authority”). Section
81-211 clearly establishes such limits. Having duly issued a regula-
tion that clearly limits the City’s discretion to restrict the use of
TDRs on a single site, the City may not now conduct its ‘undue
bulk” review as if that regulation did not exist. See Chinese Staff
& Workers Ass’n v. New York, 68 N.Y.2d 359, 361-68 (1986)
(rejecting agency decision where State Environmental Quality
Review Act review failed to follow own regulations); WEOK
Broadcasting Corp. v. Planning Bd. of Lloyd, 79 N.Y.2d 373, 383
(1992) (where agency determination “ig affected by an error of
law... the agency’s determination may be annulled”).
19
“Even if plaintiff's property were adjacent to the Termi-
nal, we would have rejected its reading of Section 81-211
to the extent such would deprive the City of regulatory
authority over the concentration of transferable develop-
ment rights on a single site.”'® (2a). By declaring, in
effect, that § 81-211 may be deprived of all natural mean-
ing in order to preserve the City’s unbounded discretion
to “evaluate development at any site in terms of standard
zoning criteria,” (2a), the court below contravenes both
fundamental principles of Statutory construction, see Ex-
xon Corp. v. Board of Standards & Appeals, 128 A.D.2d
289, 295 (1987), appeal denied, 70 N.Y.2d 614 (1988)
(“effect and meaning must, if possible, be given to the
entire statute and every part and word thereof”) (cita-
tions omitted), and the clearly expressed governmental
goal of balancing preservation interests with the need to
allow TDR use. See Penn Central, 438 U.S. at 110.
113-14.
In any event, even prior to the promulgation of ZR
§ 81-211, the City had convinced this Court of its will-
ingness to approve “in highly commercialized areas like
midtown Manhattan, the transfer of all unused develop-
ment rights to a single parcel.” Penn Central, 438 US.
at 114. The City repeated this “No limit” view in its
report proposing regulations to create a new Special Mid-
town District: “In the highest density commercial Mid-
town districts, an eligible receiving lot can. regardless of
the existing scale of development, accept transfer of any
amount of additional density from a landmark... . These
provisions are all carried forward [from Section 74-792]
into the proposed special Midtown District regulations
‘The Appellate Division’s assertion is also substantively mis-
guided. Since a single “adjacent” lot can receive no more TDRs
than a single granting lot is eligible to supply, ZR § 81-211 ensures
that over-development (greater than as of right) on the receiving
site is equal to and counterbalanced by the “underdevelopment” on
the (landmark) sending site.
20
without change.” (City Planning Commission, March 16,
1982 Cal. No. 1, N 820253 ZRM, at 26) (60a).
By upholding the rejection of 383’s permit application
based on an arbitrary FAR limitation that conflicts with
the City’s public declarations and a clear regulatory man-
date, the court below not only failed to promote legiti-
mate state interests, it violated those interests. Cf. Nollan,
483 U.S. at 837 (“constitutional propriety disappears,
however, if the condition substituted for the prohibition
utterly fails to further the end advanced as the justifica-
tion for the prohibition”). As with the “adjacent lot” re-
quirement, the City failed to apply the “unduly increase”
bulk requirement so as to achieve the overall goals of
balancing underdevelopment on the landmark site with
additional development elsewhere. Thus, the means-end
relationship required under Nollan is conspicuously
lacking.
Ultimately, the court below dismissed 383’s takings
arguments by conflating the substantive due process anal-
ysis of Sudarsky with takings analysis. But the permit-
granting agency’s discretionary authority is in no way
dispositive of 383’s takings claims. Significantly, the
Sudarsky court itself applied the full takings clause scru-
tiny mandated by Nollan in analyzing the burdens im-
posed by the permit process there. The Appellate Divi-
sion’s cursory dismissal of 383’s constitutional arguments,
by contrast, suggests that the court failed even to consider
an appropriate takings analysis. Had it done so, the
Appellate Division would have determined that the chal-
lenged conditions of “adjacent lot” and “undue bulk,” as
applied, were neither effective to substantially advance
legitimate state interests, see Nollan, 483 U.S. at 834, nor
reasonably necessary to effectuate a substantial govern-
ment purpose. Penn Central, 428 U.S. at 127.
21
IV. THE PERMIT PROCEDURE DEPRIVED 383 MADI-
SON OF SUBSTANTIVE DUE PROCESS.
The New York Court of Appeals has held that “[a]
zoning ordinance is unreasonable, under traditional police
power and due process analysis, if it encroaches on the
exercise of private property rights without substantial re-
lation to a legitimate governmental purpose.” Fred F.
French Investing Co. v. New York, 39 N.Y.2d 587, 596,
cert. denied, and appeal dismissed, 429 U.S. 990 (1976).
The appropriate constitutional scrutiny would thus have
inquired whether the City’s application of the “adjacent
lot” and “unduly increase” bulk requirements encroached
on 383’s property rights in its TDRs but maintained the
required relation to a legitimate government purpose.
Nonetheless, the court below treated 383’s substantive due
process argument as dismissively as its takings claim,
commenting, not on whether the permit conditions, as
applicd, furthered a legitimate government purpose, but
on the irrelevant fact that “plaintiff did not have a prop-
erty right to the grant of a special permit...” (3a).
As explored above, the Appellate Division borrowed
this permit entitlement analysis from the Second Circuit.
Even the Second Circuit, however, has questioned the very
reasoning and relevance of this analysis in the land-use
context. In RRI Realty, 870 F.2d 911, the court noted
that “[a]fter 1972, some courts considering constitutional
challenges to land regulation began their inquiry by citing
Roth and asking whether the plaintiff had a ‘clear entitle-
ment’ to the approval he was seeking from the land use
regulating body.” /d. at 915 (citations omitted). But
the court allowed that its adherence to this approach
might be misguided:
It is not readily apparent why land regulation cases
that involve applications to local regulators have ap-
plied the Roth entitlement test to inquire whether an
entitlement exists in what has been applied for—
whether a zoning variance, a business license, or a
building permit—instead of simply recognizing the
owner’s indisputable property interest in the land he
22
owns and asking whether local government has ex-
ceeded the limits of substantive due process in regu-
lating the plaintiff’s use of his property by denying
the application arbitrarily and capriciously.
Id. at 917. While acknowledging that the entitlement test
engendered a focus on the wrong property interest, the
RRI court, nevertheless, declined to break with precedent.
No matter how questionable, “Yale Auto Parts [Inc. v.
Johnson, 758 F.2d 54 (2d Cir. 1985),] and its progeny
have committed this Circuit to the ‘entitlement’ inquiry in
land use regulation cases.” Jd. at 918.
Several other circuits have imported this ill-suited en-
titlements analysis to address substantive due process con-
cerns in land use cases, looking, as the Second Circuit
does, to the discretion conferred on the permit-granting
agency to determine the presence of a protectable prop-
erty interest. See Biser v. Town of Bel Air, 991 F.2d
100, 103-04 (4th Cir.), cert. denied, U.S. ——,
114 S. Ct. 182 (1993); Silver v. Franklin Tp. Bd. of
Zoning Appeals, 966 F.2d 1031, 1036 (6th Cir. 1992):
Carolan v. City of Kansas City, Mo., 813 F.2d 178 (8th
Cir. 1987). Others have assessed the rationality of the
regulation as applied to the interest at stake. See Jacobs,
Visconsi & Jacobs v. City of Lawrence, 927 F.2d 1111,
1119 (10th Cir. 1991); Greenbriar, Ltd. v. City of
Alabaster, 881 F.2d 1570, 1577 (11th Cir.), reh’g
denied, en banc, 893 F.2d 346 (1989); Bello v. Walker,
840 F.2d 1124, 1128-1130 (3d Cir.), cert. denied, 488
U.S. 851 (1988), and cert. denied, 488 U.S. 868 (1988);
Shelton v. City of College Station, 780 F.2d 475 (5th
Cir.), cert. denied, 477 U.S. 905 (1986), and cert. denied,
479 U.S. 822 (1986). The disharmony among the cir-
cuits on this issue has been attributed in at least one case
to the lack of guidance from this Court. See New Burn-
ham Prairie Homes y. Village of Burnham, 910 F.2d
1474, 1480 n.5 (7th Cir. 1990) (“It must be acknowl-
edged frankly that the Supreme Court has yet to set the
contours of any substantive due process right with respect
to property interests.” ).
ry
}
—
~
3
Added to the confusion among the circuit courts is the
fact that the New York state courts, contrary to prior hold-
ings, have now seen fit to apply entitlements analysis not
only to due process claims but also, implicitly, to takings
claims such as 383’s as well. The bounds of substantive
due process and the contours of the relevant constitutional
analysis in the land-use context are ripe for resolution by
this Court. As discussed above, the circular reasoning of
Sudarsky, as adopted by the Appellate Division, eliminates
any evaluation of constitutional claims and forestalls any
consideration of the claimed arbitrary nature of the per-
mit process. For had the Appellate Division undertaken
the proper inquiry, it would have found no relationship—
much less a rational one—between the restrictive “adja-
cent lot” and “unduly increase” bulk conditions applied
here and the stated goals of the Landmarks Preservation
Law and accompanying sections of the Zoning Resolution
as understood by this Court in Penn Central. Unless
checked by this Court, entitlements analysis as exempli-
fied in Sudarsky threatens to eliminate review of valid
constitutional claims in the land use context.
CONCLUSION
For the foregoing reasons, the petition for a writ of
certiorari should be granted.
Respectfully submitted,
WILLIAM T. COLEMAN, JR.
Counsel of Record
DEBRA A. VALENTINE
HILARY R. HEGENER
O’MELVENY & MYERS
555 13th Street, N.W.
Suite 500 West
Washington, D.C. 20004
(202) 383-5325
February 11, 1994 Attorneys for Petitioner
APPENDICES
TABLE OF CONTENTS OF APPENDIX
APPENDIX A Page
Decision and Order of the New York Supreme
$ Court Appellate Division, First Department in 383
; Madison Assoc’s v. City of New York, 193 A.D.2d
‘3 HR (1st ay n't Vay AUP 1995)
APPENDIX B
Order and Judgment of the Supreme Court of the
tate of »® Yor ‘ vy York ( int Index oO
2 GP 1] RO { ip 7“. ‘ "4 ( . () 4 a 1991) 5A
2 APPENDIX C
4 aya . 7 of tne }tp? ] f ( > in? of rne “tate »f Ne V
3 York NevV York Count Index No 29021 /89
a
A (< . Ct NY. ( \ ( 91) iUa
APPENDIX D
3 New York Citv P Co n Re NO. ¢
4 we
> 870193 ZSM (A >, 19% 21a
4
b ; ,
APPENDIX FE
r ()) ler »T t f N ¢ i rw (4 ul T | Appe ! le? Y
4 ppea wo V SZ 5 i »d (4% ept 14 193) 17a
;
: APPENDIX Ff
¥
a Der s10n ind Orde oT tne Ni \ rk Court ]
% Appeals denying appeal ermission, Motion No
; 1250 (J 1, 1994) isa
APPENDIX H
1969 Zoning Resolution Amendment, City Planning
Commission, November 5, 1969/Cal. No. 32, CP-
A
20938
ii
TABLE OF CONTENTS—Continued
Page
APPENDIX I
Proposal to Establish a Special Midtown District,
City Planning Commission, March 16, 1982/Cal.
No. 1, N 820253 ZRM 59a
APPENDIX J
Proposal to Establish a Special Grand Central
Area Sub-District, New York Department of City
Planning, November 1989/NYC DCP #89-45 6la
la
APPENDIX A
NEW YORK SUPREME COURT
APPELLATE DIVISION
FIRST DEPARTMENT
49063
383 MADISON ASSOCIATES,
Plaintiff-A ppellant,
-against-
City OF NEw York, et al.,
Defendants-Respondents.
Rosenberger, J.P., Kupferman, Asch, Rubin, JJ.
Order and judgment (one paper), Supreme Court, New
York County (Eugene Nardelli, J.), entered November 1,
1991, which, inter alia, declared the denial of plaintiff's
application for a special permit was not improper as a
matter of administrative or constitutional law, unani-
mously modified, on the law, to the extent of declaring
that there is no rational basis for defendants’ determina-
tions that the disadvantages covered by reduced light and
air would not be offset by the advantages of the preserva-
tion of Grand Central Terminal as a landmark, that plain-
tiff's proposal for the continuing maintenance of the Ter-
minal would not result in its preservation, and that the
proposed transfer of transferable development rights would
unduly increase population density, and otherwise af-
firmed, without costs.
Plaintiff owns a building site in the vicinity of Grand
Central Terminal, a designated landmark, and together
with successors in interest of the Penn Central Corpora-
tion, applied to the City Planning Commission for a
2a
special permit allowing for the transfer of transferable
development rights to be used to develop a 74-story build-
ing on plaintiff's site.
The application was rejected after a protracted process
marked by numerous unjustified delays in violation of 6
NYCRR 617.8 requiring co-lead agencies to take appro-
priate action within 30 days, and that occasioned at least
two proceedings by plaintiff to compe! municipal agen-
cies to act. In one such proceeding following a three-year
delay, Supreme Court ordered the relevant city agencies to
certify that plaintiff's draft environmental impact state-
ment was complete. The application was finally rejected
on verious statutory and regulatory grounds, only some
of which were valid. We modify the judgment to delete
those paragraphs confirming determinations that have no
rational basis in the record.
Because a pattern of common ownership that once
joined this property and those intervening with the Ter-
minal has been disrupted by sales of the parcel as well as
the intervening lots by Penn Central and its successors
in interest, the property is not a site “adjacent” to the
landmarked Terminal within the meaning of Part 74 of
the New York City Zoning Resolution. Therefore, it 1s
not includable within the class of properties eligible to
receive transferable development rights, and plaintiff may
not avail itself of the provisions of the “chain amend-
ment” set forth in section 74-79 of the Zoning Resolution.
Even if plaintiff's property were adjacent to the Termi-
nal, we would have rejected its reading of section 81-211
to the extent such would deprive the City of regulatory
authority over the concentration of transferable develop-
ment rights on a single site. This section is not incon-
sistent with the authority of the City’s zoning agencies
to evaluate development at any site in terms of standard
zoning criteria (see, Matter of Cicenia v Zoning Board
of Appeals, 157 AD2d 722, 725). Since the site is zoned
for a floor area ration of 15, but the proposed develop-
3a
ment would have required a floor area ratio in excess of
33, a rational basis exists for the determination that the
concentration of these transferable development rights at
this site would increase the bulk of the site out of propor-
tion to the surrounding neighborhood.
However, we reject the City’s contention that the pro-
posed development would disproportionately impact on
the access of surrounding sites to air and light. Com-
ments by the City Planning Commission itself made in
the late 1960’s when the concept of the transferable de-
velopment rights was being debated, which emphasized
that the landmarked area would create a “saucer of light”
that likely would offset a loss of light if the development
rights were to be transferred, undermines the very findings
presently made by that agency. Since transferable devel-
opmeni rights originally were envisioned as a trade-off,
shifting as-of-right development to adjacent sites, we find
no basis to conclude that the facts of this case would have
created a burden greater than that originally contem-
plated. We also reject the administrative determination
that the increase of approximately 4900 pedestrians, in a
vicinity populated daily by some 700,000 workers, posed
the threat of a dispreportionate impact. Finally, the re-
port of the Landmarks Preservation Commission failed to
identify in concrete terms what additional reasonable
Steps would have been required for plaintiff, who is not
a lessee of the Terminal and is not presently charged
with a duty of maintenance, to ensure maintenance of
this landmark. While the City may require applicants to
assume maintenance responsibilities of landmarks as a
condition of a special permit, it is not clear why the Land-
marks Preservation Commission seemed determined to
relieve the Metropolitan Transit Authority, an independ-
ent third party, of its obligation as lessee of the Terminal
to maintain the Terminal by reposing direct responsibility
for such with plaintiff.
Finally, since plaintiff did not have a property right to
the grant of a special permit, their constitutional claims
4a
must be rejected (see, Sudarski v City of New York, 779
F Supp 287, 297, affd, 969 F2d 1041, cert denied, 113
§ Ct 1059).
THIS CONSTITUTES THE DECISION AND OR-
DER OF THE SUPREME COURT, APPELLATE DI-
VISION, FIRST DEPARTMENT
ENTERED: May 20, 1993
5a
APPENDIX B
SUPREME COURT
OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
At IAS Part 2 of the Supreme Court of the State of
New York held in and for the County of New York, this
7th day of October, 1991
PRESENT: Hon. EUGENE L. NARDELLI, J.S.C.
Index No. 23621/89
383 MADISON ASSOCIATES,
os. Plaintiff,
City oF New York, NEw York CITY PLANNING CoM-
MISSION, NEW YORK LANDMARKS PRESERVATION COM-
MISSION, SYLVIA DEUTSCH, individually and as Chair-
person of New York City Planning Commission and
Director of Department of City Planning, DENISE
M. SCHEINBERG, individually and as Vice-Chairperson
of New York City Planning Commission, SALVATORE C.
GAGLIARDO, MARILYN MAMMANO, WILLIAM GARRISON
McNEIL, AND DANIEL T. SCANNELL, individually and
as Commissioners of New York City Planning Com-
mission
‘ Defendants.
ORDER & JUDGMENT
Plaintiff 383 MADISON ASSOCIATES having com-
menced an action seeking a declaratory judgment that 383
Madison Avenue is eligible to receive transferable develop-
ment rights “TDR’s” from Grand Central Station and
that defendants’ refusal to allow such a transfer is a viola-
6a
tion of plaintiff's due process and equal protection rights
as well as an unconstitutional taking of property and seck-
ing 480 million dollars in damages and defendants having
answered and moved for summary judgment dismissing
the complaint and plaintiff having cross moved for a con-
tinuance to permit disclosure, and the matter having reg-
ularly come on before the Honorable Eugene L. Nardelli,
[AS Part 2 of the Court held at the Courthouse thereof,
located at 60 Centre Street, New York, New York on
October 31, 1990 and
Now upon reading and filing the Summons dated Octo-
ber 30, 1989; the Complaint verified on October 27,
1989, and Exhibits thereto: the Answer verified on Feb-
ruary 20, 1990; Defendants Notice of Motion for Sum
mary Judgment dated February 20, 1990; the Affidavit
of Con Howe sworn to on February 20, 1990, and Ex-
hibits thereto; the Affidavit of David Todd sworn to on
February 15, 1990, and Exhibits thereto; the Affirmation
of Virginia Waters dated February 16, 1990, and Exhibits
thereto; all in support of the motion for summary judg-
ment; Plaintiff's Notice of Cross Motion for a Continuance
to Permit Disclosure dated July 26, 1990; the Affidavit of
J. Michael Harty sworn to on July 25, 1990, and Exhibits
thereto; the Affidavit of Frederick W. Rovet sworn to on
July 25, 1990, and Exhibits thereto; the Affidavit of Vern
J. Bergelin sworn to on July 25, 1990, and Exhibits
thereto; all in opposition to the motion for summary judg-
ment and in support of the motion for a continuance; the
Reply Affirmation of Virginia Waters dated October 17,
1990, and Exhibits thereto; the Affidavit of Gail Ben-
jamin sworn to on October 17, 1990, and Exhibits thereto;
the Affidavit of Mark London sworn to on October 17,
1990. and Exhibits thereto; the Affidavit of Michael S.
Graham sworn to on October 5, 1990, and Exhibits
thereto; all in support of the motion for summary judg
ment: the Reply Affidavit of Robert F. Kramer sworn to
on October 30, 1990, and Exhibits thereto, in opposition
Ta
to the motion for summary judgment and in support of
the motion for a continuance; the Reply Affirmation of
Virginia Waters dated November 2, 1990, in support of the
motion for summary judgment; the Notice of Motion of
the Municipal Art Society of New York (“MAS”) to In-
tervene and of MAS, the National Center for Preserva-
tion Law, the National Trust for Historic Preservation in
the United States and the New York Landmarks Con-
servancy, Inc., to Participate as Amici Curiae, dated
June 15, 1990; the Affidavit of Howard G. Sloane sworn
to on June 15, 1990; the Affidavit of Kent L. Barwick
sworn to on May 23, 1990; the Proposed Answer of MAS
verified on May 23, 1991; all in support of this motion;
and the Affidavit of Vern J. Bergelin sworn to on October
17, 1990, in opposition to the motion to intervene;
And plaintiff having appeared by William T. Coleman,
Jr., of OMELVENY & MYERS, its attorneys; and de-
fendants having appeared by VICTOR A. KOVNER Cor-
poration Counsel of the City of New York (Virginia
Waters, of Counsel) and amici curiae having appeared by
William FE. Hegarty, counsel for MAS, all on October 31,
1990, and this Court after due deliberation having filed its
memorandum decision dated August 6, 1991, it is
ORDERED, that the motion of the Municipal Art
Society of New York, Inc., to intervene as a defendant in
this action 1s denied, and it is further
ORDERED, that the Municipal Art Society of New
York, Inc., the National Center for Preservation Law,
the National Trust for Historic Preservation, and the New
York Landmarks Conservancy, Inc., are granted leave to
participate in this action as amici curiae, and it is further
ORDERED, that plaintiff's cross-motion for a continu-
ance to permit disclosure is denied, and it is further
ORDERED, ADJUDGED and DECLARED that the
parcel of land located at 383-385 Madison Avenue in the
Borough of Manhattan in the City of New York and oc-
8a
cupying the entire city block bounded by Madison Ave-
nue. 47th Street, Vanderbilt Avenue and 46th Street is
not “adjacent” to Grand Central Terminal or to the lot
on which the Terminal stands within the meaning of sec-
tion 74-79 of the Zoning Resolution of the City of New
York (“ZRCNY § 74-79”), and it is further
ORDERED, ADJUDGED and DECLARED that de-
fendants’ denial of plaintiff’s application for a Special Per-
mit to transfer approximately 787,000 square feet of de-
velopment rights from the Grand Central Terminal to the
383-385 Madison Avenue site was neither irrational, nor
arbitrary, nor capricious, nor affected by any error of
law, and it is further
ORDERED, ADJUDGED and DECLARED that there
is a rational basis in the record for defendants’ determina-
tion that the proposed transfer of development rights
would unduly increase the bulk of the new development,
the density of population and the intensity of use to the
detriment of the occupants of buildings on nearby blocks,
and it is further
ORDERED. ADJUDGED and DECLARED that there
‘< a rational basis in the record for defendants’ determina-
tion that the disadvantages to the surrounding area caused
by reduced access of light and air would not be more
than offset by the advantages of the Terminal’s preserva-
tion as a landmark, and it is further
ORDERED, ADJUDGED and DECLARED that there
is a rational basis in the record for defendants’ determina-
tion that plaintiff's proposed program for the continuing
maintenance of the landmark Terminal would not result
in preservation of the Terminal, and it is further
ORDERED. ADJUDGED and DECLARED that sum-
mary judgment is granted to defendants on plaintiff's
claim that defendants’ denial of plaintiff's application
deprived plaintiff of its property without substantive due
process of law, and it is further
9a
ORDERED, ADJUDGED and DECLARED that sum-
mary judgment is granted to defendants on plaintiff's
claim that defendants’ denial of plaintiff's application de-
prived plaintiff of its property without procedural due
process of law, and it is further
ORDERED, ADJUDGED and DECLARED that sum-
mary judgment is granted to defendants on plaintiff’s
claim that defendants’ denial of plaintiff’s application ef-
fected an unconstitutional taking of private property for
public use without just compensation, and it is further
ORDERED, ADJUDGED and DECLARED that sum-
mary judgment is granted to defendants on _ plaintiff’s
claim that defendants’ denial of plaintiff’s application de-
nied plaintiff equal protection of the law, and it is further
ORDERED, ADJUDGED and DECLARED that in
all other respects plaintiff’s complaint is dismissed.
ENTERED
s/ E.T.N.
J.S.C.
s/ Norman Goodman
Clerk
[Filed Nov. 1, 1991]
10a
APPENDIX C
SUPREME COUR]
OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
IAS PART 2
Index #23621 89
383 MADISON ASSOCIATES,
Plaintiff,
-against-
City or New York, New York City PLANNING COM-
MISSION. NEW YORK LANDMARKS PRESERVATION COM
MISSION, SYLVIA DEUTSCH, individually and as Chair-
person of New York City Planning Commission and
Director of Department of City Planning, DENISE M.
SCHEINBERG, individually and as Vice-Chairperson of
New York City Planning Commission, SALVATORE ©
rrrpo. MARILYN MAMMANO, WILLIAM GARRISON
Mon ind DANIEL T. SCANNELL, individually and
I
Co ioners of New York City Planning Com-
Defendants.
Defendants in this declaratory judgment action arising,
in essence, out of the Landmark status of Grand Central
Terminal (the “Terminal”), move for summary judgment
dismissing the complaint on the grounds that there are
no genuine material issues of fact and they are entitled to
‘udement in their favor as a matter of law (motion se
001). Plaintiff cross-moves for a continuance
nt to CPLR & 3212(f) to permit disclosure. In a
lla
companion motion (motion sequence no. 002) the Mu-
nicipal Arts Society of New York, Inc. (“MAS”) moves
pursuant to CPLR §§ 1012 and 1013 to intervene and
the National Center for Preservation Law, the National
Trust for Historic Preservation in the United States and
the New York Landmarks Conservancy, Inc. join in the
motion of MAS and seek to join in MAS’s Memorandum
of Law as amici curiae. Defendants’ motion is granted
and plaintiff's cross-motion is denied. The motion of MAS
and the other entities seeking, respectively, to intervene
and amici curiae status is denied as to intervenor status
and granted as to amicus status for MAS and for the
above named entities to join as amici curiae.
The Terminal was designated a landmark and the city
block it occupies a landmark site under the New York
City Landmark Preservation Law (“Landmark Law”) on
September 21, 1967. Plaintiff, 383 Madison Avenue As-
sociates (“383”), brought this action against the City of
New York (the “City”), the New York City Planning
Commission (“CPC”), New York Landmarks Preserva-
tion Commission, Sylvia Deutsch, individually and as
chairperson of CPC and Director of the Department of
City Planning (“DCP”), Denise M. Scheinberg, individ-
ually and as Vice-Chairperson of CPC, and Salvatore C.
Gagliardo, Marilyn Mammano, William Garrison McNeil,
and David T. Scannell, individually and as Commissioners
of CPC, seeking judgment declaring 383s property at 383
Madison Avenue, occupying an entire city block bounded
by Madison Avenue, 47th Street, Vanderbilt Avenue and
46th Street (the “383 Property”), to be eligible to receive
the transferable development rights (“TDRs”) from the
Terminal to enable 383 to build a 74 story office tower
that would be the fourth highest building in New York
City, declaring certain of the several grounds for defend-
ants’ disapproval of the application filed for the special
permit to transfer the TDRs to 383 to be illegal and un-
constitutional, enjoining CPC to issue a special permit for
anette
}2a
the transfer of the TDRs to 383 for use in its proposed
development and from taking certain possible future ac-
tions, and awarding damages for defendants’ arbitrary and
capricious frustration and obstruction of the development
of the 383 Property since its inception. In its five causes
of action plaintiff alleged, in substance, that: (1) dis-
approval of 383’s application for the TDRs was based on
an interpretation of Zoning Resolution 74-79 (“ZR74-
79”) that is erroneous on several grounds as are CPC’s
alternative grounds as to the bulk of the proposed build-
ing, population density and use intensity, light and air
effects and continuing Terminal maintenance plans, that
these determinations were irrational, arbitrary and capri-
cious and 383 has been denied procedural due process
thereby; (2) 383 has been denied substantive due process
in what is essentially alleged to be a consistent pattern of
arbitrary and capricious refusal by CPC to permit any
TDRs to be transferred for construction of any building
that would use a significant number of the 1,700,000
available Terminal TDRs on either the 383 Property, the
Fermina’ itself or, for example, the Post Office Property
wned by the United States Postal Service and leased to
Sterling Equities, not a party to this action, thus depriving
383 of a substantial property interest without due process
of law in a pattern that will continue unless defendants’
‘ctions are restrained and set aside; (3) the actions of
4efendants, by going beyond the scope of permissible reg-
ulation, have made the designation of Terminal and its
lot a taking of property for public use without due process
of law and just compensation as to Terminal’s owner, New
York and Harlem Railroad Company (“NYHRR"), a
subsidiary of Penn Central Corp. (“Penn Central”), and
383 as, respectively, contract vendor and vendee; (4)
that 383 was denied equal protection of the law in that
the program it submitted for maintaining the landmark,
which was identical to one accepted where Terminal
TDRs were transferred to another site, was found inade-
quate by defendants; and (5) defendants’ actions violated
l3a
42 USC §§ 1981 and 1983. Defendants’ answer denied
the material allegations of the complaint and interposed
ten affirmative defenses which include the grounds on
which their motion for summary judgment relies.
Defendants and the amici curiae have submitted memo-
randa of law as well as copies of documents, records and
other material which in exhaustive and meticulous detail
show that as to the first cause of action, CPC had valid
reasons for net issuing the special permit to 383. Its de
termination was rational on four separate grounds each
of which would have been sufficient reason in itself for
denying the permit. The second through fifth causes of
action are also shown to be without merit.
The four grounds cited and then summarized as find-
ings in the CPC Resolution disapproving the grant of the
special permit to 383 are that: (1) 383 is not an adjacent
lot and that the application is not legally eligib'e for not
meeting the requisite ownership requirements; (2) trans-
fer of the TORs as planned wi'l unduly increase the bulk,
density of population and intensity of use to the detriment
f occupants of buildings on nearby blocks; (3) unn itga-
ble adverse environmental impacts; (4) the proposed pro-
sram for continuing maintenance of the landmark is in-
sufficient.
There is no question but that pursuant to ZR74-79 as
amended in 1969 (the “Chain Amendment”) to, inter
alia. extend transferability of TDRs from the Terminal,
383 is not an adjacent lot. ZR74-79 provides in pertinent
part:
For the purposes of this Section, the term “adjacent
lot” shall mean a lot which is contiguous to the lot
occupied by the landmark building or other structure
or one which is across a street and opposite to the
lot occupied by the landmark building or other struc-
ture or, in the case of a corner lot, one which fronts
on the same street intersection as the lot occupied by
l4a
the landmark building or other structure. It shall
also mean in the case of lots located in C5-3, C5-5,
C6-6. C6-7 or C6-9 Districts a lot contiguous or one
which is across a street and opposite to another lot
or lots which except for the intervention of streets or
street intersections form a series extending to the lot
occupied by the landmark building or other struc-
ture. All such lots shall be in the same ownership
(fee ownership or ownership as defined under zoning
lot in Section 12-10 (DEFINITIONS).
It is undisputed that the 383 Property is not contiguous
to. across the street and opposite to, or cater-corner to
the Terminal lot. nor were the owners of the intervening
zonine lots joined in the application as parties in interest
pursuant to Zoning Resolution 12-10 (“ZR12-10") to
satisfy the statutory definition of “adjacent” with respect
to the intervening lots. Moreover, 383 contends—and de-
fendants concede—that when the Chain Amendment be-
came effective in 1969, the 383 Property was an adjacent
lot by virtue of a chain of common ownership; in 1969
Penn Central owned 22 other properties near the Termi-
nal, including 383 Madison Avenue. During the 1970's,
as part of bankruptcy proceedings, Penn Central sold a
number of these properties, including 383 Madison Ave-
nue. However, 383 contends that pursuant to ZR74-79
adjacency was permanently fixed at the time the Chain
Amendment was adopted, cannot change with changes in
ownership. and is not to be determined as of the time of
transfer of TDRs: that NYHRR owns a continuous fee
chain of subsurface tax lots reaching from the Terminal
lot to the 383 lot. and ZR74-79 does not require common
ownership of a surface—rather than a subsurface—inter-
est in such lots; that CPC’s determination of non-
adjacency of the 383 Property and its non-eligibility to
receive Terminal TDRs deprives 383 of property without
substantive due process; and, finally, 383 urges that even
if defendants’ interpretation of ZR74-79 is not an uncon-
l5a
stitutional taking and is otherwise correct, they are
estopped from applying their interpretation.
Each of 383’s contentions as to “adjacent” status is
without merit. There is no evidence in the language of
7R74-79 or its legislative history that “adjacent” status
was frozen as of the effective date of the Chain Amend-
ment so that a site eligible to receive TDRs in 1969 has
a vested right thereto regardless of changes in ownership
of intervening lots. The pertinent language of ZR74-79,
if read as in normal usage, indicates that “the same own-
ership” refers to conditions at the time of application for
the requisite special permit. Moreover, in specific in-
stances where a zoning resolution is intended to provide
for specific rights to be determined and frozen as of its
effective date or other specific date, the language is ex-
plicit to that effect (see, e.g. ZR12-10 Zoning Lot [al],
[b]; ZR12-10 Railroad or transit air space; ZR25-32;
7R77-03): thus it is reasonable to conclude that the
absence of a reference to such date in ZR74-79 is inten-
tional. The chain of “the same ownership” at the time
of application for a special permit for transfer of TDRs
also ensures that where ZR74-792(3)(c) is applicable its
conditions may be met. CPC’s reading of ZR74-79 also
conforms to its construction by the New York State
Court of Appeals in the “Landmark Litigation” com-
menced in 1969 by Penn Central against the City of New
York challenging the constitutionality of the New York
City Landmarks and Preservation Law as applied to it,
and concluded in 1978 when the United States Supreme
Court held the landmark designation of the Terminal
constitutional (Penn Central Transportation Co. Vv. City
of New York, 50 AD2d 265, aff'd. 42 NY2d 324, affd.
438 US 104). In the Landmark Litigation the Court of
Appeals refers to the 8 parcels owned by Penn Central
after the sale of certain properties in the course of the
bankruptcy proceeding rather than to all those owned in
1969 at the time the Chain Amendment was added to
l6a
ZR74-79, as possible receiving sites for Terminal TDRs
(42 NY2d at 334).
Nor can 383’s contentions as to subsurface tax lots
confer adjacent status upon the 383 Property. Develop-
ment rights are an inherent attribute attribute of owner-
ship of the surface of property (Macmillan, Inc. v. CF
Lex. Associates, 56 NY2d 386). This concept is re-
flected throughout the language and plain meaning of
various sections of the New York Zoning Resolution.
Zoning lots are the regulatory units used throughout the
New York City Zoning Resolution and are the basic
measure for calculating compliance; for example, bulk
calculations, based on Floor Area Ratios (“FARs”) are
determined by the surface area of the zoning lot (ZR12-10
Floor area ratio; Newport Associates Vv. Solow, 30 NY2d
263, 265, cert. denied 410 US 931). Moreover, the
very concept of TDRs relates to surface rights as to a
zoning lot, and their availability and precise quantity is
calculated on the basis of the dimensions of a zoning lot
and other zoning factors totally unrelated to tax lots.
Thus the underground tax lots are irrelevant to the mat-
ter of adjacency as defined in ZR74-79.
Plaintiff's arguments that defendants are collaterally
and equitably estopped from applying their interpretation
of ZR74-79 is also unavailing to defeat the motion for
summary judgment. As to collateral estoppel, 383 asserts
that the bankruptcy court, by approving Penn Central’s
sales of certain adjacent properties, determined that the
sales did not diminish the number of eligible receiving
sites for TDRs since absent such determination, approval
would have involved “reducing the value of—indeed mak-
ing a nullity of—the TDRs.” (Plaintiffs Memorandum
of Law, July 26, 1990, pp. 52-53). This contention is
presented in purely speculative and conclusory terms, with
not even a hint of any evidentiary showing that this issue
was litigated and decided in the bankruptcy proceeding.
Nor is plaintiff's statement as to the reduction of the
17a
value of the TDRs shown to be true. On these as on other
issues, 383 has failed to lay bare its proof of evidentiary
facts to show a bona fide issue requiring trial; defendants
have made out a prima facie basis for a grant of sum-
mary judgment and conclusory allegations cannot defeat
defendants’ motion (Zuckerman v. City of New York,
49 NY2d 557, 562: Albouyeh v. County of Suffolk, 96
AD2d 543, 545, aff'd. 62 NY2d 681). As to equitable
estoppel, the City of New York was merely a creditor in
the bankruptcy proceeding and had neither a legal nor
equitable duty to protect Penn Central’s best interest, and
it was in Penn Central’s best interest at the time to sell.
It was a business decision made by Penn Central with
knowledge of what its effects would be. That it was a
knowing decision is evident in testimony elicited, in the
course of the Landmark Litigation, from Frederick W.
Rovet (“Rovet”), then an officer of Penn Central and
currently general counsel to plaintiff. In his testimony
Rovet indicated that he was aware that the sale of inter-
vening properties would break the chain of ownership
and limit the number of adjacent lots. Similarly, Penn
Central’s post-trial proposed findings of fact and conclu-
sions of law and its post-trial memorandum in that litiga-
tion named four adjacent sites that would still be eligible
to receive TDRs upon approval by the Bankruptcy Court
and completion of the then proposed sale of certain other
properties. In 1983 Penn Central corresponded with
DCP, querying as to whether certain lots, including the
383 Property lot, were adjacent properties, and was
informed at that time that they were not. The contract
between 383 and NYHRR provides that if during various
stages of proceedings 383 Madison Avenue is determined
not to be an adjacent zoning lot within ZR74-79, 383 has
the right to terminate the contract. Thus, no basis for an
equitable estoppel against the City has been established.
More significantly, as a matter of law, the doctrine of
equitable estoppel may not be invoked against the City:
18a
We have held many times that estoppel is not
available against a governmental agency in the exer-
cise of its governmental functions (Matter of City of
New York v. City Civ. Serv. Comm., 60 NY2d 436,
449; Granada Bldgs. v. City of Kingston, 58 NY2d
705, 708; Public Improvements v. Board of Educ.,
56 NY2d 850, 852; Matter of Hamptons Hosp. &
Med. Center v. Moore, 52 NY2d 88, 93, supra;
Matter of Galanthay v. New York State Teachers’
Retirement System, 50 NY2d 984, 986; Board of
Supervisors Vv. Ellis, 59 NY 620, 625). And. as
was made clear in Moore (52 NY2d, at p 93, n 1),
such exception as has been made to that rule is of
“very limited application: and has been “addressed
to an unusual factual situation.” (Mrr. of Daleview
Nursing Home v. Axelrod, 62 NY2d 30, 33).
The fact situations in the exceptional cases cited by 383
are inapposite here.
CPC’s denial of the special permit sought by 383 was
valid also on the basis of the failure of 383’s proposal to
meet the limiting criteria in ZR74-792 which are applica-
ble on transfers of TDRs pursuant to ZR74-79 as amended
in 1969. The amendment, inter alia, eliminated the 20%
cap on the quantity of TDRs that could go to a receiving
site to permit more bulk than allowable as of right in a
zoning district. The allowable bulk, as expressed in
FARs, is the maximum numerical factor by which square
footage of a zoning lot on which a building is to stand
may be multiplied to determine the amount of useable
floor area that may be constructed on the lot (ZR12-10
Floor area ratio). The subject district is zoned at 15
FAR and subject to no cap pursuant to ZR74-79: how-
ever, CPC's action on the application was appropriately
subjected to the pertinent ZR74-792(5) criteria:
5. As a condition of permitting such transfers of
development rights, the Commission shall make the
following findings:
19a
(a) That the permitted transfer of floor area
or variations in the front height and setback
regulations will not unduly increase the bulk of
any new development, density of population or
intensity of use in any block to the detriment of
the occupants of buildings on the block or
nearby blocks, and that any disadvantages to the
surrounding area caused by reduced access of
light and air will be more than offset by the
advantages of the landmark’s preservation to
the local community and the City as a whole,
and
(b) that the program for continuing mainte-
nance will result in the preservation of the
landmark.
The City Planning Commission shall give due con-
sideration to the relationship between the landmark
building and any new buildings developed on the
adjacent lot regarding materials, design, scale, and
location of bulk.
The Commission may prescribe appropriate condi-
tions and safeguards to minimize adverse effects on
the character of the surrounding area.
Thus, the proposed 74 story building, which is at 33.15
FAR more than twice the as of right bulk in this ex-
tremely congested area, was found not to be in compli-
ance with ZR74-792(5)(a) on grounds of excessive bulk
and density. In addition, on these papers defendants have
shown that there was a rational basis for finding that the
program for continuing maintenance for preservation of
the landmark (ZR74-792 [5][b]) was inadequate and
that the environmental review of 383’s project was not
biased, arbitrary and capricious or in violation of due
process—on the contrary, the numerous adverse impacts
found upon conclusion of the environmental review pro-
20a
cedures pursuant to SEQRA and CEQR and disapproved
under ULURP had a rational basis.
The Court has reviewed and found baseless and with
out merit the remaining contentions asserted by 383,
including such constitutional claims as, inter alia, the de
nial of substantive due process. On its cross-motion for a
continuance to permit disclosure pursuant to CPLR
3212(f) plaintiff has failed to demonstrate the circum
stances necessitating discovery and to indicate the valid
and material matters to be discovered. Thus the cross
motion is unavailing to defeat summary judgment
(Chemical Bank v. PIC Motors Corp., 58 NY2d 1023,
1026). Nor has 483 shown the existence of any triable
factual issues.
Accordingly, summary judgment is granted to the ex
tent of declaring judgment in defendants’ favor as to the
eligibility of the 383 Property as a receiving site for
Terminal TDRs, as wel! as on the substantive due process
claim and other constitutional claims asserted, and in all
other respects the complaint is dismissed.
Settle judgment accordingly.
Dated: August 6th, 1991
s/ E.T.N.
j.S.C.
2la
APPENDIX D
CITY PLANNING COMMISSION
August 23, 1989/Calendar No. 32
C 870193 ZSM
IN THE MATTER OF an application submitted by the New
York and Harlem Railroad Company and 383 Madison
Avenue Associates/First Boston, Inc. for the grant of
a special permit pursuant to Sections 197-c and 200 of
the New York City Charter and Section 74-79 of the
Zoning Resolution to allow the transfer of development
rights (787,335 square feet) from a lot occupied by
Grand Central Terminal, a landmark building, to a lot
bounded by Madison Avenue, East 46th Street, Vander-
biit Avenue and East 47th Street (Block 1282, Lot
21), and allow the maximum permitted floor area on
such lot to be increased on the basis of such transfer
of development rights to facilitate the development of
a 74-story office building on the above-mentioned lot in
a C5-3 district, within the Special Midtown District,
Borough of Manhattan, Community District 5
The application for the special permit was filed by the
New York and Harlem Railroad Company and 383 Madi-
son Avenue Associates First Boston, Inc., on August 28,
1986 to permit the transfer of 787,335 square feet from
a lot occupied by Grand Central Terminal to a lot
bounded by Madison Avenue, East 46th Street, Vander-
bilt Avenue and East 47th Street, pursuant to Section 74-
79 of the Zoning Resolution, to allow the maximum per-
mitted floor area ratio on such lot to be increased from
15 to 33.15 FAR on the basis of such transfer of develop-
ment rights
BACKGROUND
Original Application
Che application for 383 Madison Avenue was submitted
to the City Planning Commission on August 28, 1986 and
included the following proposed actions:
C 870193 ZSM—To permit the transfer of 787, 335
square feet of floor area from Gri ind Central Terminal to
383 Madison Avenue, a modification of height and set-
back regulations to permit the strect wi all of the proposed
building along Vanderbilt Avenue to be increased 10
fect above the maximum permitted 90-foot height limit,
and an authorization to waive retail continuity regulations
of Section 81-42 of the Zoning Resolution.
N 870194 ZRM—A text amendment to Section 81-44 of
the Zoning Resolution which would permit curb cuts for
loading docks on all Midtown avenues which are less than
75-feet wide (including Vanderbilt Avenue ).
N 870195 ZRM-—A text amendment to Section 81-42 of
7 Zoning Resolution which would permit the City Plan-
ning Commission to authorize aivers of retail require-
ments on certain designated midtown avenues when cer-
tain pedestrain- oriented transit improvements were in-
cluded as part of the project.
Prior to certification, the proposal and applications were
vised as follows:
© Curb cuts for loading docks, originally proposed to be
located on Vanderbilt Avenue, were relocated to East
46th and East 47th Streets. With this revision, the
proposed text amendment to permit curb cuts on
Vanderbilt Avenue and other narrow Midtown avenues
was unnecessary, and the application for this text
amendment (N 870194 ZRM) was withdrawn on
March 29, 1985.
23a
° The proposed height of the street wall along Vanderbilt
Avenue was reduced from 100 feet to 90 feet, eliminat
ing the need for the requested height and setback
modification. This request was withdrawn on March
29, 1988
During the course of the Uniform Land Use Review Pro
cedure, the applicant withdrew the proposal for the text
change to permit the Commission to authorize waivers of
retail requirements and the request for the authorization
The applicant revised building plans to bring the project
into conformance with Section 81-42 as currently written,
removing the need for these actions
Previous Governmental Actions Concerning Grand Cen
tral Terminal
Grand Central Terminal was designated a New York City
Landmark by the Landmarks Preservation Commission on
August 2. 1967, and this designation was confirmed by
the New York City Board of Estimate on September 21,
1967.
In 1979, the City Planning Commission and Board of
Estimate approved a special permit (780404 ZSM) pur
suant to Section 74-79, allowing the transfer of 74,665
square feet of development rights from the Terminal to
Philip Morris, Incorporated, for a 26-story office develop
rent across from the Tern inal at East 42rd Street and
Park Avenue. That development, which inciuded a Cov-
ered Pedestrian Space and an improved connection [to
adiacent transit facilities, contains 448,000 square teet ol
Ad
floor area and the FAR is not quite 21.6
In 1982. the New York City Planning Commission en-
acted the Midtown Special District which reduced the
maximum permitted density without a special permit in
East Midtown. including the Grard Central area, from
18 FAR (15 FAR as-of-right plus 3 FAR bonus) to 16
Far (15 FAR as-of-right plus | FAR bonus )
24a
Report of the Landmarks Preservation Commission
Pursuant to Section 74-791 of the Zoning Resolution, a
report from the Landmarks Preservation Commission 1s
required as part of the application. On October 14, 1987,
the Landmarks Preservation Commission adopted and for-
warded to the City Planning Commission a report on this
proposal which found that due to the proposal’s location,
four blocks from Grand Central Terminal, the proposal’s
architectural relationship to the Terminal could not be
evaluated: and that an adequate program for the continu-
ing maintenance of the Terminal had not been provided.
Pre-Certification Lawsuit
While the Draft Environmental Impact Statement (DEIS)
was being prepared and reviewed, the co-applicants
brought an Article 78 proceeding in State Supreme Court,
seeking an order that the DEIS be certified so the public
review process could begin. Pursuant to the judgment of
the Supreme Court, New York County, entered June 6,
1988, as affirmed by Order of the Appellate Division,
First Department, entered November 1, 1988, motion for
leave to appeal to the Court of Appeals, denied April 4,
1989 (“Court Order”), the Planning Commission certi-
fied the ULURP applications as complete and officially
referred them to the appropriate community boards. In
certifying the DEIS and the applications, both the Depart-
ments of Environmental Protection and City Planning and
the City Planning Commission, respectively, stated their
beliefs that, for reasons stated in the Record on Appeal,
the documents were not complete.
PROJECT DESCRIPTION
The basic maximum floor area permitted on the site of
383 Madison Avenue is 649,665 square feet (43,211-
square-foot lot area X 15 FAR). The applicant seeks to
add an additional 787,335 square feet of floor area by
25a
transferring development rights from Grand Central
Terminal to permit a development with a maximum of
1,437,000 square feet of floor area.
The project under consideration is a 74-story, 1,029-foot-
high office building located on the block bounded by Madi-
son Avenue, Vanderbilt Avenue, and East 46th and East
47th streets in Midtown Manhattan. The net zoning floor
area of the building under consideration is 1,435,620
square feet (33.15 FAR). Total gross floor area above
grade is 1,606,024 square feet which includes 124,900
square feet for mechanical floor area (eight percent of the
total floor area). The applicant has requested permission
to transfer floor area above the amount specified for the
actual building shown on submitted plans to permit some
flexibility in laying out deductible mechanical floor area.
The difference between the maximum permissible building
using the transfer of development rights (1,437,000 square
feet) and the proposed building as shown on plans
(1,435,620 square feet) is 1,380 square feet.
Within the building, there would be nine trading and re-
lated support trading floors, 54 office floors, six floors for
“skylobbies” and accessory commissary uses and four
floors for primarily mechanical uses. The ground floor
would be used for circulation, access and loading docks
for the building and would include 5,804 square feet of
retail space as required under Section 81-42 of the Zon-
ing Resolution.
Subsequent to certification, the applicants revised the
application to bring the proposed building into compliance
with Section 81-40 and 81-42 of the Midtown Special
District. These revisions included the addition of retail
uses along Madison Avenue, an arcade of 3,012 square
feet along Madison Avenue and corner arcades of 999
square feet each at the intersections of both East 46th
and East 47th streets and Vanderbilt Avenue. With these
revisions, the applicant proposed to use 1,435,620 square
feet of the total requested proposed maximum floor area.
26a
Below grade, there would be two levels, a concourse level
and a sub-basement. The concourse level would include
some retail uses and proposed connections to future transit
improvements which are discussed below. The project
would include two curb cuts for service to loading docks,
one each on East 46th and East 47th streets.
As part of the project, the applicant has proposed several
pedestrian circulation improvements including a stairway
and escalator connection from the concourse level of the
building to the East 47th Street passageway of the Gr ind
Central Terminal North End Access Project. The North
End Access Project, proposed by Metro-North and in-
tended to be publicly funded, would develop a network of
passageways to allow direct access to Metro-North com-
muter rail platforms from Park Avenue. The MTA and
Metro-North are assembling a funding package, and con-
struction would not start until funding had been secured.
Application plans also show a proposed extension of the
existing Roosevelt Passageway connection with Grand
Central Terminal. The proposed extension would lengthen
the existing pet iy by one block and would include
4 stairwa entrance to the tunnel at the corner of Van-
derbil! Aca and East 46th Street within the property
line within the corner arcade. The applicant has indicated
that it would construct and maintain this extension.
ENVIRONMENTAL REVIEW
This application (C870193 ZSM), was reviewed pursuant
to the New York State Environmental Quality Review
Act (SEORA), and the SEQRA regulations set forth in
Volume 6 of the New York Code of Rules and Regula-
tions. Section 617.00 et seq.. and the New York City
Environmental Quality Review (CEQR) procedures set
forth in Executive Order 91 of 1977. The designated
CEOR number is 85-098M.
The applicant nrepared a Draft Environmental Impect
I
Statement (DE'!S) which was certified as complete on
27a
April 17, 1989 by the Department of Environmental Pro-
tection and the Department of City Planning pursuant to
Court Order. Pursuant to the SEQRA regulations and the
CEOR procedures, a joint pubtic hearing was held on the
DEIS on July 26, 1989. The public hearing was held in
conjunction with the public hearing on the related Uni-
form Land Use Review Procedure (ULURP) item (C
870193 ZSM). The Final Environmental Impact State-
ment (FEIS) was completed, and a Notice of Com-
pletion of the FEIS was issued on August 12, 1989. The
Notice of Completion for the FEIS identified the following
potential significant adverse effects, and the proposed miti-
gation measures as well as those adverse impacts for
which no mitigation measures were feasible.
Historic Resources
The program of continuing maintenance of the Terminal
would not be adequate as proposed, due to lack of an ef-
fective means of ensuring provision of cyclical conditions
reports, work programs, or regularly scheduled mainten-
ance reports. Neither the Landmarks Preservation Com-
mission (LPC), nor the owner, therefore, can be assured
that potential problems which might be identified in such
reports will be corrected, nor can an adequate basis be
provided on which the Chairman of LPC can make recom-
mendations for expenditures of the income or corpus of
the Trust fund. This situation cannot be readily changed
because of the existing lease with the Metropolitan Trans-
portation Authority. (The Zoning Resolution requires
the City Planning Commission to find that an adequate
maintenance plan exists as a condition of transfer of the
TDRs. )
Urban Design, Visual Impacts, and Neighborhood
Character
There would be a significant increase in building height
and bulk on the site as a result of the proposed project.
28a
Buildings in the immediate vicinity of the site to the east,
south, and west are for the most part older and considet
ably lower. The proposed project would be significantly
taller than most of the surrounding structures and, there
fore, would be inconsistent with the existing neighborhood
characte
Shadows
Existing shadow patterns would increase with the greater
penetration by the proposed building of the sky exposure
plane. Although most of the new shadows would fall on
the roofs and sides of existing buildings, additional shadow
coverage would occur at street level. Sections of Madison
\venue, Park Avenue, 46th Street, and 47th Street would
be additionally shaded. The plaza of 345 Park Avenue,
a public open space, would be significantly affected for
about one and one-half hours during the spring and fall
months, and a portion of the 48th Street plaza of Tower
49 would also be affected for about one hour during those
months. Shadows reaching other open spaces in the area
would be incorporated in intervening shadows from othet
buildings
Open Space and Recreational Facilities
The study area’s worker population of approximately
697,000 employees would increase by approximately
4.900 with the proposed development. This increase in
the number of employees would increase open space de-
mands of the daytime population, thereby exacerbating the
existing gross deficiency of open space in the area and
resulting in a significant negative impact on open space.
The proposed building will provide no additional public
outdoor open space.
Traffic
The project would result in 57 significant impacts; 29 links
during the AM peak, 4 links during the mid-day peak,
and 24 links during the PM peak. Additionally, the
29a
project would result in significant worsenings at 4 loca-
tions; 2 during the AM peak and 2 during the PM peak.
At... seven of those locations, the project induced sig
nificant impacts that are both unmitigated and unmiti
gatable as listed below
Fifth Avenue SB at 47th Street (AM Peak Hour) *
Fifth Avenue SB at 42nd Street (AM Peak Hour)”*
17th Street WB at Fifth Avenue (AM Peak Hour) *
45th Street WB at Lexington Avenue (AM Peak
Hour );
Fifth Avenue SB at 46th Street (PM Peak Hour);
48th Street EB at Fifth Avenue (PM Peak Hour);”*
and
417th Street WB at Fifth Avenue (PM Peak Hour )*
(the asterisks indicate that Traffic Enforcement
Agents are currently posted at these locations. )
For the remaining 50 locations the following mitigation
measures are proposed for the significant trafic impacts
projected as a result of the impact assessment. These
proposed mitigations assume that the 42nd Street Transit
way project is not implemented
Signal retimings of one second are required at the follow-
ing intersections in the morning peak period:
Lexington Avenue at 44th Street;
Fifth Avenue at 48th, 45th, 44th, 41st, 57th to 49th
Streets
Sixth Avenue at 43rd, 44th, and 45th Streets; |
48th Street at Park Avenue and 3rd Avenue;
47th Street at Park Avenue;
46th Street at Lexington Avenue;
45th Street at Lexington Avenue;
42nd Street at Vanderbilt and Lexington Avenues;
and
4ist Street at Lexington Avenue
30a
Signal retimings of two seconds are required at the fol-
lowing intersection in the morning peak period
Fifth Avenue at 46th Street
Signal retimings of one second are required at the fol
lowing locations during the midday pe: ik period
iRth Street at Park Avenue,
16th Street at Madison Avenue, and
18th Street at 3rd Avenue
Signal retimings of one second are required at the fol
lowing intersections during the afternoon pe: ik period:
Le ton Avenue at 42nd Street:
Madison Avenue at 49th Street;
rifth Avenue at 46th, 45th, 44th 13rd, 42nd, 41st,
and 40th to iKth streets:
12th Street: at Park, Fifth and Third Avenues
{7th Street at Park and Fifth Avenues,
46th Street at Madison, Lexington, and Third and
Fifth Avenues; and
Ist Street at Lexington Avenue
The above re-timing actions oe would be shifts of
signal timing from the intersects approaches which
have. excess green time to the ceeded requiring ada:
tional capacity. With the 42nd Street Transitway in
place, the project-generated vehicular traffic would result
in significant traffic impacts on 24 links during the AM
peak hour. 2 links in the Midday peak hour, and 21
links in the PM peak hour (as compared with 29, 3, and
99 links without the 42nd Street Transitway during the
AM. Midday. and PM peak hours, respectively)
Pedestrian
A significant impact on the Roosevelt passageway at the
revolving door would result from increased pedestrian
traffic to Grand Central Station's subways and Metro-
North commuter trains.
3la
There would also be significant impacts during maximum
surges in the crosswalks adjacent to the proposed build-
ing during all peak hours which could be mitigated by
widening the crosswalks.
Air Quality
The project as proposed would result in significant ad-
verse impacts due to carbon monoxide emissions. New
violations of the Clean Air Act would be caused by the
project and would exacerbate existing violations.
With the proposed project and with proposed traffic
mitigations, receptors at the following six locations would
not be in compliance with the State Implementation Plan
(SIP). Those with asterisks (*) would also become new
“hot spots.” The other three locations are currently des-
ignated as hot spots
Madison Avenue between 44th and 50th Streets.
Fifth Avenue between 46th and 47th Streets.*
Fifth Avenue and 47th Street (intersection ).
Fifth Avenue and 46th Street (intersection ).”
47th Street between Lexington and Fifth Avenues. *
46th Street between Lexington and Fifth Avenues.
Receptors at the following three locations remain in com-
pliance with the State Implementation Plan with the pro-
posed project.
Vanderbilt Avenue between 46th and 47th Street.
47th Street between Fifth and Sixth Avenue.
46th Street between Sixth and Fifth Avenue.
With respect to the New York City’s criteria, the air
quality analysis shows that the de minimis increment (of
0.5 ppm) would be exceeded at six of the nine air quality
sites analyzed and that mitigation would be required at
these locations. A mitigation analysis showed, however,
that readily available mitigation measures would not be
effective in fully mitigating these impacts. Therefore,
32a
these significant impacts are unmitigated and unmitigat
able, and the project with mitigation would not be in
conformance with the SIP
Re net tal Impac Is
Phe proposed project would generate a substantial num
ber of jobs for the City during construction. and a sub
stantial number of permanent jobs. The proposed project
would also raise tax revenues for New York City and
State
UNIFORM LAND USE REVIEW
This application was certified by the City Planning Com
mission on April 17, 1989, pursuant to Court Order, and
was duly referred to Community Board 5S in Manhattan
along with the related non-ULURP text change applica
tion (N 870195 ZRM) in accordance with Article 3 of
the Uniform Land Use Review Procedure (ULURP)
rules. The proposed text change would allow the Cits
Planning Commission to authorize waivers of require-
ments tor retail uses along certain avenues in the Mid
town Special District
This non-ULURP text change was also sent to Commu
nity Boards 4, 6. and & and the Manhattan Borough
Board for their information and review
Community Board Public Hearine
Community Board 5 held a public hearing on this appli-
cation on June 8, 1989 and adopted a resolution recom-
mending disapproval by a vote of 23 in favor and none
in Opposition with 3 abstentions. Community Board 5
opposed the project because the proposed transfer does
not meet the requisite findings of Section 74-79 in that
it does unduly increase the bulk, the density of popula-
tion and the intensity of use; that it does not have a
program for continuing maintenance and therefore can-
not result in the preservation of the landmark: and that
ta
the disadvantages to the surrounding area are extreme
Although Community Board 5 had supported other trans
fers under Section 74-79 in the past as valuable tools in
the preservation of landmarks, in the absence of any plan
to preserve the landmark, it found that the disadvantage
cannot be said to be offset by any such plan
Because the proposed text change (N 870195 ZRM) wa
withdrawn before the community board held its publi
hearing, it was not reviewed or considered
City Planning Commission Public Hearing
On June 19, 1989 (Calendar No. 11). the City Planning
Commission scheduled July 5, 1989 for a public hearing
on this application (C 870193 ZSM). The hearing wa
duly held on July 5. 1989 (Calendar No. 43). The hear
ing was continued on July 26, 1989 (Calendar No
At the July 5S hearing there were three speakers in favor
of the application and none in opposition
A speaker representing the New York and Harlem Rail
road Company, the owner of Grand Central Terminal
and co-applicant, asserted that the company had a cor
titutionally protected right to realize the value of the
Terminal’s development rights and that the applicant
have attempted to negotiate with the city to develop ar
alternative plan designed to accommodate both the need
of the city and to realize the value of the Terminal’s
development rights. In response to the community board’s
assertion that the proposed building is too big, the
speaker said that no development rights would be created
and that new bulk would not be added to the communit
Instead, he argued that the application seeks only to
transfer development rights which currently exist and
which could have been used at the Terminal site itself
were it not landmarked. In response to assertions by
DCP staff that the site at 383 Madison is not an eligible
7 T ; y . : rr L, . ated ry eo " s >} TY ary a an od
receiving site for the transfer of development rights from
4a
Grand Central Terminal under Section 74-79 of the Zon
ing Resolution, the speaker disagreed with the depart
ment’s position that subsurface fee ownership of parcels
between the Terminal and the development site does not
constitute the chain-of-ownership required under Section
74-79. The speaker reiterated the railroad’s position that
the sub-surface fees have been used for railroad purpos
have been recognized as tax lots, and have been leased
to third parties, and consequently are lots under Ss
74-79
chon
The speaker also disagreed with the conclusion of the
Landmarks Preservation Commission relating to the con
tinuing maintenance of Grand Central Terminal and the
applicants’ proposed maintenance plan. The speaker as
serted that the applicants’ proposed plan, which contrib
utes additional money to a previously existing fund es
tablished in 1979, was adequate
The speaker submitted a statement and supporting docu
ments which further detailed these arguments
A second speaker, representing 383 Madison Associates,
the developer of 383 Madison and a co-applicant, also
expressed his concern that the Terminal’s owner not be
denied the use of development rights from Grand Central,
adding that there should be just compensation if use 1s
denied. The speaker asserted that the approximately 1.7
million square feet of Grand Central Terminal’s develop-
ment rights must be placed somewhere and that the re
sulting overall density of the neighborhood would not be
greater no matter how the development rights are dis-
persed. The speaker also noted that the applicants’ pro-
posed maintenance plan, which consists of a contribution
to a maintenance plan previously approved by the Land-
marks Preservation Commission and the City Planning
Commission in 1979, should be considered acceptable to-
day. The speaker also asked the City Planning Commis-
sion to prepare and make public plans for distributing
the 1.7 million square feet of the Terminal’s development
rights.
35a
The third speaker, also a representative of the developer,
asked the Commission and department to make public
the reasoning behind department staff position that the
site at 383 Madison was not eligible to receive the trans
fer of development rights from Grand Central Terminal.
The hearing was continued until July 26, 1989 (Calendar
No. 51). At the hearing on July 26, 19%9 there were
no speakers, and the hearing was closed.
CONSIDERATION
After considering the eligibility and merits of the appli-
cation, the Commission has determined that it cannot
approve this project. The Commission notes that these
issucs Of eligibility and merit have been long outstand-
ing and have been raised by the community board, the
Landmarks Preservation Commission, the Department of
City Planning and the Law Department well prior to
certification of this application.
Subsequent to certification, the project was found to have
omitted pedestrian circulation clements required by Sec-
tion %1-40 of the Zoning Resolution (Mandatory Dis-
trict Plan Elements of the Midtown Special District).
Additionally, during the course of the Uniform Land Use
Review Procedure, the application withdrew the proposal
for the text change and the request for the authoriza-
tion. The applicant revised building plans to bring the
project into conformance with Section 81-42 as currently
written, removing the need for these actions.
The Commission also notes that at certification the Draft
Environmental Impact Statement was, in the opinion of
the Departments of Environmental Protection and City
Planning, incomplete and that considerable doubt had been
established in terms of its accuracy, particularly with
respect to traffic, transportation, noise and air quality.
During the preparation of the Final Environmental [m-
pact Statement, the applicant was required to submit com-
pletely new analyses for these and other issues. The
36a
EPEIS disclosed that the project would generate numerous
significant: environmental impacts which had not been
identified in the Draft Environmental Impact Statement.
These impacts are discused in the environmental portion
of this report.
Ineligibility under Section 74-79 of the Zoning Resolution
The Commission has been advised by its Counsel that
this application is not cligible under Section 74-79 be
cause the underlying requirements of the section have
not been met. We concur. The tert of the Zoning Reso
lution permits the transfer of development rights from
landmark sites to adjacent lots, which are defined in CS-3
and other zones where 1S FAR is permitted as lots *
across a street and opposite to another lot or lots which
except for the intervention of streets or street Intersections
form a series extending to the lot occupied by the land
mark building or other structure. All such lots shall be
in the same ownership (fee ownership or ownership as
detined under zoning lot in Section 12-10)." Thus, the
basis of any application pursuant to this section is a serics
(or “chain”) of common ownership between the land
mark lot and the receiving lot, and none of the docu-
mentation submitted by the applicant proves that the
requisite chain has been established.
At the pubile hearing and in written submissions, the
co-applicants have argued that 383 Madison Avenue is
eligible as an adjacent lot to receive development rights
from Grand Central Terminal because, in their view, sub-
surface “tax lots” qualify as lots within Section 74-79
and therefore, their ownership of a series of these sub-
surface tax lots between Grand Central Terminal and 383
Madison Avenue constitutes the requisite chain.
We do not agree with this position. Under the Zoning
Resolution, it is zoning lots that are the essential means
of regulating land use throughout the city. The primacy
of the zoning lot concept is the backbone of the Resolu-
tion and the basic measure used in calculating compliance
37a
with zoning. Development rights are attributes of the
surface area of a zoning lot. Therefore, the consistent
use of the term “lot” makes clear that the bulk calcula
tions are based on the surface area of each tract of land,
not the subsurface. We note that many of the Resolu
tion's definitions, set forth in Section 12-10, incorporate
the term “zoning lot” via a shorthand use of the term
“lot.” Examples of this drafting feature are the terms
lot area,” “lot area per room, and “lot coverage.”
Phe Commission also notes that there is no definition of
the term “lot” and that when the Zoning Resolution re
fers to a tax lot, tt uses the term “a lot of record,” as
in the Section 12-10 definition of zoning lot
[Ihe Commission concludes that the drafters similarly
used the term “adjacent lot” in Section 74-79, while in
tending it to mean “adjacent zoning lot In analyzing
whether there is a legally-complying chain of ownership
of the intervening lots between the sending and re
ing sites, therefore, our inquiry focuses on whether the
relevant intervening zoning lots are in common ownership
In this case, the ownershi
subsurface fee interests which do not include right
the surface of the land, and which do not otiierwise join
the partics-in-interest who control the ability to develop
these lots in accordance with zoning Staff has informed
the applicant that the transfer would be eligible under
Section 74-79 if the appropriate intervening parties-in-
interest joined in the application as required by Section
12-10. The co-applicants have chosen not to join the
rr
parties-in-interest
4
Based on the foregoing, the Commission concludes that
the instant application does not qualify under Section 74
79 of the Zoning Resolution
Plannine Issues
In reviewing this application tne ( mmission caretu
considered the pia! 7’ and densitv issues that are raiser
:
by this application Decause these are Matters which the
38a
City Charter mandates as our responsibility. Even if the
proposed transfer were legally cligible, we would none
theless be compelled to deny the application because of
the excessive bulk and density proposed
The application requests the transfer of 787,335 square
fect of development rights from Grand Central Terminal
to be placed on top of the 649,665 square feet allowed at
383 Madison Avenue as-of-right. This transfer would
result in a building with a maximum of 1,437,000 square
feet or 33 FAR, more than twice the FAR permitted by
the zoning in the Grand Central area. The Commission
notes that before 1961, even when New York City’s Zoning
Code included no absolute controls limiting the density of
commercial development, buildings were rarely constructed
with densities greater than 25 FAR. In the Grand Cen
tral area the Chrysler Building, built in 1928, was the
densest at 26 FAR.
The Grand Central district is one of the most heavily
developed parts of Midtown, enjoying the benefits of easy
accessibility by mass transit from other parts of the city
and the region, and is a major generator of jobs for the
entire city. The Commission recognizes that high density
development within reasonably prescribed limits 1s ap-
propriate for the Grand Central district and contributes
to its continued vitality.
However, the Commission has had a long and firm record
of placing maximum limits on permissible density in
Midtown and throughout the city, based on its historical
concern about the ill effects of excessive congestion and
over-crowding.
In 1961, the City Planning Commission revised zoning
in Midtown Manhattan to include density controls which
placed a maximum as-of-right-density of 15 FAR to limit
over-building, particularly in the Midtown Manhattan
core and the Grand Central area where most post-war
construction was occurring. These overall limits were
seen as a way of encouraging office development to spread
39a
to a wider area of the Central Business District and re-
lieve pressure on overburdened transit facilities.
The Commission permitted greater densities only through
floor area bonuses with a maximum of 18 FAR for pro
viding plazas and street level open spaces to bring light
and air into streets surrounded by tall buildings and to
provide a more attractive and open street environment
Subsequently, in the late 1960s and 1970s, the Commis
sion introduced Special Purpose Districts in Midtown and
elsewhere throughout the city to address planning and
urban design issues particular to specific settings. In
Midtown, the Theatre District and the Fifth Avenue Dis-
trict permitted densities up to 21.6 FAR, the highest in
the city, only if various specific designated amenities were
provided.
In 1982, when the City Planning Commission developed
the Midtown Special District, the Commission designated
East Midtown as an area for “stabilization,” lowering
the permitted density in Midtown from a maximum 18
FAR (15 FAR as-of-right plus 3 FAR bonus) to 16
FAR (15 FAR as-of-right plus | FAR bonus), a reduc-
tion of 2 FAR, and in certain parts of East Midtown,
from 18 FAR to 13 FAR (12 FAR as-of-right plus |
FAR bonus). The Commission undertook this action
to relieve development pressures and ease congestion and
overcrowding in East Midtown. The Commission reaf
firmed its policy on limiting density as recently as 1988
when it reviewed the Midtown District, confirming that
many of the district’s goals were being met, including a
shift of development from East Midtown to the West
Side.
Notwithstanding the Commission’s authority under Sec-
tion 74-79 to permit the transfer of development rights
without limits as to density, the Commission has never
approved a development in Midtewn whose density is
greater than 21.6 FAR over a single zoning lot. (The
ele
40a
Philip Morris Building, which incorporates the first devel-
opment rights transfer from Grand Central Terminal, was
approved with a maximum density no greater than 21.6
FAR.) Nor can the Commission contemplate reversing
itself on its stabilization policy by permitting a 33.15
FAR building without due and careful consideration of
its implications for East Midtown and the Grand Cen
tral area.
At the public hearing, the applicant stated that the pro
posal effectively created no new floor area, and intro
duced no additional density to the neighborhood beyond
that contemplated by the Commission when the area was
rezoned in 1982. The Commission understands this as-
sessment but notes that the issue here is not the addition
of new floor area to the neighborhood, but its severe
concentration at one location, and on one relatively small
site. With this proposal, 4,900 workers and visitors
(twice the number an as-of-right building would house )
will add to already existing congestion in this area.
While the applicant has proposed steps to alleviate this
problem for its own block by providing an arcade along
Madison Avenue, corner arcades on East 47th and East
46th streets at Vanderbilt Avenue, and two transit con-
nections for building occupants and the general public,
the additional congestion created by this building would
spill over to crosswalks, other blocks, and already con-
gested transit facilities in the neighborhood. The pro-
posal to extend the Vanderbilt Passageway as a way of
alleviating some of this sidewalk congestion does not rec-
ognize that the passage is already congested at peak
hours.
The Commission is unable to make the finding which is
a prerequisite to the grant of a special permit under Sec-
tion 74-791 (5)(a) of the Zoning Resolution, “that the
permitted transfer of floor area . . Will not unduly in
crease the bulk of any new development, density of popu-
lation or intensity of use in any hlock to the detriment
4la
of the occupants of buildings on the block of nearby
blocks, .. 2°
Environmental Issues
The Commission notes that the FEIS discloses that the
project would create significant adverse impacts, some ol
which cannot be mitigated. We are particularly con
cerned that, as stated in the Notice of Completion, at
seven locations, the traffic impacts area unmitigatable and
that the project “would result in significant adverse im-
pacts due to carbon monoxide emissions,” creating new
violations of the Clean Air Act that “would exacerbate
existing violations.” The Commission notes that th
project, with the proposed traffic mitigation, would not
conform with the State Implementation Plan (SIP), as
three locations would become “hot spots.” The Commis
sion is also concerned that a building as high as that pro
posed “would be inconsistent with the existing neighbor
hood character,” that the proposed building would exa
erbate the “existing gross deficiency of open space in the
area . . resulting in a significant negative impact on
open space,” and that, “significant impact on the Roose-
velt passageway at the revolving door would result from
increased pedestrian traffic to Grand Central Terminal
subways and Metro-North Commuter trains.”
The Commission is aware that the applicants have sub
mitted additional proposals for mitigation; however, the
CEOR staff found that there was no factual basis from
which to conclude that these proposed measures wouid
be effective
Landmarks Report
The Commission has reviewed the report of the Land
marks Preservation Commission dated October 14, 19%
which expressed concerns regarding the lack of an ade
,
quate program for continuing Maintenarice tO assure the
preservation of the landmark. The applicants proposed
42a
program, which has not been revised since the Landmarks
Preservation Commission and Community Board 5 ex-
pressed their concerns in 1987, consists primarily of a
fund to be contributed to the Grand Central Terminal
Trust by the owners of the Terminal, in the amount of
five percent of the total payment received from the de-
veloper for the purchase of development rights. This
Trust was established in 1979 to receive funds from the
sale of 75.000 square feet of development rights from
Grand Central Terminal to Philip Morris, Incorporated,
for a 26-story office building at Park Avenue and East
42nd Street. The Trust’s purpose is to provide funds for
certain maintenance and repairs of the Terminal which
are in the interest of its preservation. In addition to the
creation of the Trust, Penn Central, as owner of the land-
mark, agreed to preserve and maintain the landmark in
accordance with the landmarks preservation law, to en-
force provisions of its lease with the MTA (lessee of the
Terminal and responsible for its maintenance) to main-
tain the Terminal and to request that the MTA regularly
submit work programs to the owner and Landmarks Pres-
ervation Commission for their review. The Landmarks
Preservation Commission noted in its October 14. 1987
report that no work programs OF reports had been sub-
mitted to the Landmarks Preservation Commission, stat-
ing that, “. . . in the absence of a clear process whereby
the [Landmarks Preservation] Commission is provided
with a present conditions report, work program and regu-
larly scheduled maintenance reports neither it, nor the
owner, can be assured that potential problems which
might be identified in such reports are addressed and cor-
rected.” Penn Central's contribution to the Trust in
1979, representing five percent of the total funds realized
from the transfer of development rights from Grand Cen-
tral Terminal, was approximately $1 12,000. The current
application, also a contribution of five percent of the
funds realized from the proposed transfer, would involve
» contribution of approximately $2,200,000.
43a
The City Planning Commission concurs with the Land-
marks Preservation Commission’s finding “. . . that the
program for continuing maintenance based solely on a
further contribution of five percent of the proceeds to the
Trust and confirmation that [Penn Central] shall continue
to enforce the maintenance provisions of the MTA lease
without indicating how it intends to implement the
confirmation, is not sufficient to assure the preservation
of the Landmark.” The City Planning Commission,
which must weigh the benefits of the landmark’s preserva-
tion against the disadvantages of the concentration of
excess bulk and density and must determine whether the
application includes a maintenance program, cannot find
either that the preservation program as presented, offsets
the disadvantages to the surrounding area, or that there
is a program that will result in the preservation of the
landmark.
The Commission has, for some time, recognized the nec-
essity of formulating a comprehensive planning frame-
work in the Grand Central area which would guide devel-
opment in a manner appropriate to the scale and char-
acter of the area and would build upon and enhance the
area’s transit and transportation infrastructure. The
Commission envisions a planning framework that would
also reflect the development rights that now exist at the
landmark Grand Central Terminal. Staff has been work-
ing on the development of such a framework and is pre-
paring a discussion document for public comment.
FINDINGS
Pursuant to Section 74-79 of the Zoning Resolution, the
City Planning Commission may permit the transfer of
development rights to an adjacent lot. if it makes the fol-
lowing findings:
“(a) That the permitted transfer of floor area or
variations in the front height and setback regulations
will not unduly increase the bulk of any new devel-
44a
opment, density of population or intensity of use in
any block to the detriment of the occupants of build-
ines on the bloc’ or nearby blocks, and that any
disadvantages to the surrounding area caused by re-
duced access of light and air will be more than offset
by the advantages of the landmark’s preservation to
the local comm:nity and the City as a whole, and
(b) that the program for continuing maintenance
will result in the preservation of the landmark.
(c) That in the case of landmark sites owned by
the City, State or Federal Government, transfer of
development rights shall be contingent upon provi-
sion by the applicant of a major improvement of the
public pedestrian circulation or transportation §sys-
t¢ém in the area.”
r
\n adiacent lot is one “. . . which is across a street and
onnosite to another lot or lots which except for the in-
tervention of streeis or street intersections form a series
or other structure. All such lots shall be in the same
ownership (fee ownership or ownership as defined under
-oning lot in Section 12-10).”
The Commission finds that 383 Madison Avenue is not
in adjacent lot and that the application is not legally
‘ligible because it docs not meet the requisite ownership
requirements. The Commission is unable to make find-
ines (a) and (b) of Section 74-79 and finds that the
transfer of 787,335 square feet of floor area from Grand
Central Terminal to the site at 383 Madison Avenue
would unduly increase the bulk, density of population
and intensity of use to the detriment of the occupants of
buildings on nearby blocks, and that the disadvantages
to the surrounding area caused by reduced access to light
and air are not offset by the advantages of the landmark’s
preservation to the local community and the city as a
whole, and that the proposed program for continuing
45a
maintenance does not result in the preservation of the
landmark. Finding (c) of Section 74-79 does not apply.
RESOLUTION
RESOLVED, that having considered the Final Environ-
mental Impact Statement, for which a Notice of Comple-
tion was issued on August 12, 1989, with respect to this
application (CEQR No. 85-098M), the City Planning
Commission finds that the proposed actions do not suffi-
ciently minimize or avoid adverse environmental impacts
and that the potential mitigative measures that have been
identified are only capable of mitigating a portion of the
disclosed adverse impacts.
Based on the environmental determinations and the con-
sideration described in this report, the Commission has
determined that this application does not warrant ap-
proval, and adopted the following resolution on August
23, 1989 (Calendar No. 32).
RESOLVED, by the City Planning Commission, pursuant
to Sections 197-c and 200 of the New York City Charter,
that the application (C870193 ZSM) for the grant of a
special permit pursuant to Section 74-79 of the Zoning
Resolution to allow the transfer of development rights
(787,335 square feet) from a lot occupied by Grand
Central Terminal, a landmark building, to a lot bounded
by Madison Avenue, East 46th Street, Vanderbilt Avenue
and East 47th Street (Block 1282, Lot 21), and allow
the maximum permitted floor area on such lot to be in-
creased on the basis of such transfer of development
rights to facilitate the development of a 74-story office
building on the above-mentioned lot in a C5-3 district,
within the Special Midtown District, Borough of Man-
hattan, Community District Five is DISAPPROVED.
Pursuant to Section 200 of the New York City Charter,
the action by the City Planning Commission in this mat-
46a
ter is final. The report is forwarded to the Secretary of
the Board of Estimate for information and filing.
Sylvia Deutsch, Chairperson
Denise M. Scheinberg, Vice-Chairperson
Salvatore C. Gagliardo, Marilyn Mammano, William
Garrison McNeil, Daniel T. Scannell, Commissioners
47a
APPENDIX E
STATE OF NEW YORK
COURT OF APPEALS
At a session of the Court, held at Court of Appeals
Hall in the City of Albany on the fourteenth day of
September 1993
Present, HON. JUDITH S. Kaye, Chief Judge, presiding
Mo. No. 1023 SSD 59
383 MADISON ASSOCIATES,
Appellant,
Vv.
City OF NEw York, et al.,
Respondents.
The appellant having filed notice of appeal in the above
title and due consideration having been thereupon had,
it is
ORDERED, that the appeal be and the same hereby
is dismissed without costs, by the Court sua sponte, upon
the ground that no substantial constitutional question is
directly involved.
's’ Stuart M. Cohen
STUART M. COHEN
Deputy Clerk of the Court
48a
APPENDIX F
STATE OF NEW YORK
COURT OF APPEALS
At a session of the Court, held at Court of Appeals
Hall in the City of Albany on the eleventh day of Jan
uary 1994
Present, Hon. Jupiru S. Kaye, Chief Judge, presiding
1-14 Mo. No. 1250
383 MADISON ASSOCIATES,
Appellant,
City oF NEw York, et al.,
Respondents.
A motion for leave to appeal to the Court of Appeals
in the above cause having heretofore been made upon the
part of the appellant herein and papers having been sub-
mitted thereon and due deliberation having been there-
upon had, it is
ORDERED, that the said motion be and the same
hereby is denied with one hundred dollars costs and
necessary reproduction disbursements.
Judge Titone took no part.
s’ Donald M. Sheraw
DONALD M. SHERAW
Clerk of the Court
49a
APPENDIX G
ZONING RESOLUTION PROVISIONS INVOLVED
74-79
Transfer of Development Rights from Landmark Sites
In all disiricts except RI, R2, R3, R4, or RS Districts or
Cl or C2 Districts mapped within such districts, for new
developments or enlargements, the City Planning Com-
mission may permit development rights to be transferred
to adjacent lots from lots occupied by landmark buildings
or other structures, may permit the maximum permitted
floor area on such adjacent lot to be increased on the
basis of such transfer of development rights, may permit,
in the case of residential developments or enlargements,
the minimum required open space or the minimum lot
area per room to be reduced on the basis of such transfer
of development rights, may permit variations in the front
height and setback regulations and the regulations gov-
erning the size of required loading berths, and minor
variations in plaza, arcade and yard regulations, for the
purpose of providing a harmonious architectural relation-
ship between the development or enlargement and the
landmark building or other structure.
For the purposes of this Section, the term “adjacent lot”
shall mean a lot which is contiguous to the lot occupied
by the landmark building or other structure or one which
is across a street and opposite to the lot occupied by the
landmark building or other structure or, in the case of a
corner lot, one which fronts.on the same Street intersec-
tion as the lot occupied by the landmark building or other
structure. It shall also mean in the case of lots located
in C5-3, C5-5, C6-6, C6-7 or C6-9 Districts a lot con-
tiguous or one which is across a street and opposite to
another lot or lots which except for the intervention of
streets or Street intersections form a series extending to
50a
the lot occupied by the landmark building or other struc-
ture. All such lots shall be in the same ownership (fee
ownership or ownership as defined under zoning lot in
Section 12-10).
The grant of any special permit authorizing the transfer
and use of such development rights shall be in accord-
ance with all the regulations set forth in Sections 74-
791 (Requirements for application), 74-792 (Conditions
and limitations), and 74-793 (Transfer instruments and
notice of restrictions).
74-791
Requirements for application
An application to the City Planning Commission for a
grant of a special permit to allow a transfer of develop-
ment rights and construction based thereon shall be made
by the owners of the respective zoning lots and shall in-
clude: a site plan of the landmark lot and the adjacent
lot including plans for all development on the adjacent
lot; a program for the continuing maintenance of the land-
mark; and such other information as may be required
by the City Planning Commission. The application shall
be accompanied by a report from the Landmarks Preser-
vation Commission.
A separate application shall be filed for each independent
“adjacent lot” to which development rights or [sic] being
transferred under this Section.
74-792
Conditions and limitations
3. When “adjacent lots” are located in C5-3, C5-5, C6-6,
C6-7 or C6-9 districts and are to be developed with
5la
commercial buildings the following conditions and limi-
tations shall apply:
(a) the maximum amount of floor area that may
be transferred from any zoning lot occupied by a
landmark building, shall be the maximum floor area
allowed by Section 33-120.5 for commercial build-
ines on said landmark zoning lot, as if it were un-
developed, less the total fleor area of all existing
buildings on the landmark zoning lot.
(b) for each such adjacent zoning lot the increase
in floor area allowed by the transfer of development
rights under this Section shall be over and above the
maximum floor area allowed by the applicable dis-
trict regulations.
(c) the Commission may require where appropriate,
that the design of the development include provisions
for public amenities such as, but not limited to, open
public spaces, subsurface pedestrian passageways
leading to public transportation facilities, plazas and
arcades.
5. As a condition of permitting such transfers of de-
velopment rights, the Commission shall make the follow-
ing findings:
(a) That the permitted transfer of floor area or
variations in the front height and setback regula-
tions will not unduly increase the bulk of any new
development, density of population or intensity of
use in any block to the detriment of the occupants
of buildings on the block or nearby blocks, and that
any disadvantages to the surrounding area caused
by reduced access of light and air will be more than
offset by the advantages of the landmark’s preser-
vation to the local community and the City as a
whole, and
52a
(b) that the program for continuing maintenance
will result in the preservation of the landmark.
(c) That in the case of landmark sites owned by the
City, State or Federal Government, transfer of de
velopment rights shall be contingent upon provision
by the applicant of a major improvement of the
public pedestrian circulation or transportation sys-
tem in the area.
The City Planning Commission shall give due considera
tion to the relationship between the landmark building
and any new buildings developed on the adjacent lot
regarding materials, design, scale, and location of bulk.
The Commission may prescribe appropriate conditions
and safeguards to minimize adverse effects on the char
acter of the surrounding area.
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56a
81-212
Special provisions for transfer of development rights from
landmark sites
The provisions of Section 74-79 (Transfer of Develop-
ment Rights from Landmark Sites) shall apply in the
Special Midtown District subject to the modifications set
forth in this Section and Sections 81-254 (Special permit
for height and setback modifications), 81-266 (Special
permit for height and setback modifications ) and 81-747
(Transfer of development rights from landmark
theatres).
The provisions of Section 74-79 pertaining to the mean-
ing of the term “adjacent lot” in the case of lots located
in C5-3, C5-5, C6-6, C6-7 or C6-9 Districts are modified
to apply in the Special Midtown District where the “ad-
jacent lot” is in a C5-3, C6-6, C6-7, [C5-3.5,] C6-5.5,
C6-6.5 or [6-7.5] C6-7T District.
The provisions of paragraph 3 of Section 74-792 as ap-
plied in the Special Midtown District shall be subject to
the restrictions set forth in the table in Section 81-211 on
the development rights (FAR) of a landmark “granting”
lot for transfer purposes.
Wherever there is an inconsistency between any provision
in Section 74-79 and the table in Section 81-211, the
table in Section 81-211 shall apply.
81-213
Developments or enlargements on landmark sites
The provisions of Section 74-712 (Developments or en-
largements on landmark sites in certain districts), are
applicable in C5-3, C6-6 [,] and C6-7 [, C5-3.5, C6-6.5
and C6-7.5] Districts where such districts are located
within the Special Midtown District and
* * * *
57a
APPENDIX H
CITY PLANNING COMMISSION
November 5, 1969/Cal. No. 32
CP-20938
IN THE MATTER OF amendments, pursuant to Sec-
tion 200 of the New York City Charter of the Zoning
Resolution of The City of New York, relating to Sections
33-120.5 74-79, 74-791, 74-792 and 74-793 concerning
transfer of development rights from landmark sites.
On motion, the following favorable report, as modified,
was unanimously adopted:
November 5, 1969.
To Secretary, Board of Estimate from City Planning Com-
mission:
Pursuant to Section 200 of the New York City Char-
ter, the City Planning Commission on October 8, 1969,
Cal. No. 13, authorized a public hearing on amendments
of the Zoning Resolution of The City of New York, re-
lating to sections 74-79, 74-791, 74-792, and 74-793
concerning the transfer of development rights from a
landmark site as follows:
* * * *
The purpose of these amendments is to make available
a method of retaining and maintaining landmark build-
ings which the Landmarks Preservation Commission and
the Board of Estimate have designated worthy of preser-
vation. The amendments will provide economic relief to
the owner of a landmark building by permitting the trans-
fer of development rights from a landmark site to adja-
cent lots or to any of a chain of adjacent lots in the same
ownership as the landmark site.
58a
\ landmark may be located on a lot where the Zoning
Resolution would perm?! a much larger building to be
constructed and where intensive development is appro
priate and economically desirable. The present use of the
land may not represent its economic potential. The
amendments will permit an owner of a landmark to real
ize the value of the land by transferring unused floor area
potential to appropriate locations in order to preserve the
landmarks.
Any transfer of development rights under these amend-
ments would be subject to the grant of a special permit
by the City Planning Commission and the Board of Esti
mate and would require that safeguards be taken to avoid
adverse effects on the character of the surrounding area.
The amendment was therefore modified, after the public
hearing, to make clear that this amendment is applicable
only in C5-3, C5-5, C6-6, C6-7 and C6-9 Districts.
+ * * 7
59a
APPENDIX I
CITY PLANNING COMMISSION
March 16, 1982/Cal. No. 1
N 820253 ZRM
N 820253 ZRM (A)
Amendment of the Zoning Resolution, pursuant to Sec-
tion 200 of the New York City Charter, relating to
Article VIII, Chapter 1, Section 31-00, and miscellan-
eous changes in other sections for establishing a Special
Midtown District which contains growth, stabilization
and preservation areas.
The proposed amendment of the Zoning Resolution
and the related amendment of the Zoning Map would
establish a Special Midtown District containing growth,
Stabilization and preservation areas. The amendments
are a response to the over-concentration of development
that has become a source of deep concern to community
boards, civic organizations, the development community
and the general public. These amendments are intended
to encourage the growth of Midtown to the west and
south, and to ease development pressures on its con-
gested, highiy-developed East Side core. The major fea-
tures of the amendments are summarized below.
I. SUMMARY OF MAJOR FEATURES
& < « «K
4. Landmark Transfers. e existing zoning regula-
tions encourage landmark preservation by allowing Land-
marks to transfer development rights to adjacent lots.
Such transfers may extend through a chain of ownership
—
60a
to a receiving lot contiguous with or across the street
from the landmark granting site. In the highest density
commercial Midtown districts, an eligible receiving lot
can, regardless of the existing scale of development, ac-
cept transfer of any amount of additional density from a
landmark. Limits are placed only on the amount that any
granting site can transfer. These provisions are all car-
ried forward into the proposed special Midtown District
regulations without change.
In Midtown the unused development rights above a
landmark which may be transferred are limited by the
FAR 18 maximum, consisting of a base FAR 15 plus an
FAR 3 plaza bonus, available under the current zoning.
* * * *
6la
APPENDIX J
Grand Central Area
Proposal for a Special Sub-District
Edward I. Koch, Mayor
City of New York
New York Department of City Planning
Sylvia Deutsch, Director
Con How«w, Executive Director
November i989
NYC DCP #89-45
62a
Planning Context
A critical planning and development issue is the potential
impact that the use of development rights from Grand
Central Terminal could have on the surrounding area.
As a designated New York City landmark, the terminal
could potentially transfer some or all of its approxi-
mately 1,700,000 square feet of unused development
rights. The current transfer mechanism, Section 74-79
of the Zoning Resolution, permits transfers to those sites
immediately adjacent to the landmark or a chain of own-
ership. This mechanism was used in 1979 when the City
Planning Commission and Board of Estimate approved
a special permit for the conveyance of 74,655 square feet
of development rights from Grand Central Terminal to
the site of the former Airlines Terminal Building on
the southwest corner of 42nd Street and Park Avenue
to facilitate the construction of the Philip Morris head-
quarters. The approved special permit allowed for a
447,930 square foot building (21.6 FAR).
In taking a broader view of a potential transfer of de-
velopment rights from Grand Central Terminal, the fol-
lowing { tors must be considered:
® Due to the termina’’s relatively low density and
large footprint, a substantial amount of develop-
ment rights is available for transfer.
1In addition to the terminal building itself, there are four other
designated New York City landmarks within a few blocks of the
terminal complex: the Helmsley Building between 45th and 46th
streets at Park Avenue, the Chrysler Building on the northeast
corner of 42nd Street at Lexington Avenue, the Chanin Building
on the southwest corner of 42nd Street and Lexington Avenue,
and the French Building at 45th Street and Fifth Avenue. All but
the terminal building contain more floor area than is now permitted
by zoning and therefore do not have any development rights to
transfer.
63a
* Current zoning regulations permit dev «pment
rights to be distributed over an area de*iied pri-
marily by the terminal’s complicated ownership
patterns rather than by a plan based upon ap-
propriate planning concerns.
* Currently the 74-79 special permit mechanism
does not place a specific limit on the amount of
development rights which may be transferred to
any one parcel. The amount of transfer per-
mitted is at the discretion of the City Planning
Commission ani the Board of Estimate in ac-
cordance with the required findings of Section
74-792.
Opportunities to expand Grand Central Terminal’s
valuable pedestrian circulation network have not
been maximized.
Collectively, these circumstances make it clear that the
current regulations could lead to an ad hoc series of
applications for the transfer of development rights from
the terminal under Section 74-79. In order to provide
a comprehensive planning framework to govern the trans-
fer of development rights from landmarks, City Planning
proposes a new Grand Central Sub-District within the
Special Midtown District. The following objectives would
be achieved by the plan:
* Formation of a m-sre rational method for distributing
development rights.
* Reinforcement of the established character of the
Grand Central area.
* * * *
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.