Petition for Writ of Certiorari — West 41st Street Realty LLC v. New York State Urban Development Corporation, Dba Empire State Development Corporation

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a | Supreme Court i

NO@- 910 DEC 11 2008

IN CAP tCE OF trie CLERK

Supreme Court of the Mnited States

OCTOBER TERM, 2002

WEST 41ST STREET REALTY LLC, EMM

REALTY CORP., and TIMES SQUARE GARAGE, LTD.,

Petitioners,

NEW YORK STATE URBAN DEVELOPMENT CORPORATION

d/b/a EMPIRE STATE DEVELOPMENT CORPORATION,

42ND ST. DEVELOPMENT PROJECT, INC., 632 EIGHTH ~

AVENUE ASSOCIATES, LLC, ROMACK REALTY we

CORP., and THREE O REALTY LLC,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

COURT OF APPEALS OF THE STATE OF NEW YORK

—

PETITION FOR A WRIT OF CERTIORARI

GUY MILLER STRUVE

Counsel of Record

LORILEE A. VAUGHAN

JEREMY KUDON

DAVIS POLK-& WARDWELL

450 Lexington Avenue

New York, New York 10017

(212) 450-4192

Counsel for Petitioners

Questions Presented

1. May the respondents, consistently with the Due Process

and Takings Clauses of the United States Constitution, use the

eradication of “blight”-as the purported public purpose for

condemning the petitioners’ property and giving it to another

private party to develop, when the petitioners wish to develop

their own property, and any residual “blight” is the result of the

respondents’ own actions in preventing the petitioners from

developing their property?

2. Do the respondents’ actions in preventing the develop-

ment of the petitioners’ property for more than two decades,

followed by their attempt to use the undeveloped condition of

the property as the basis for turning it over to another private

party to develop, violate the petitioners’ rights under the Due

Process and Takings Clauses of the United States Constitution?

{

Statement Pursuant to Supreme Court Rule 29.6

Petitioners West 41st Street Realty LLC, EMM Realty Corp.,

and Times Square Garage, Ltd. are privately-owned entities.

They have no parent corporations, and there is no publicly held

company that owns 10% or more of their stock.

iii

TABLE OF CONTENTS

PAGE

ON i

Statement Pursuant to Supreme Court Rule 29.6 .... li 4

gt. SRR a Ree neem - ill

TABLE OF AUTHORITIES ...................... Vv

CN ei CL eee ie Pevets coy, l

ee ee ee * 2

Constitutional Provisions Involved...........:... 2

WI gs eek ce eee cl. 3

A. The Times Square Redevelopment Project .... . 3

B. Respondents’ Refusal to Permit the Owners to

Develop Site 8 South .................... 6

C. Respondents’ Decision to Condemn Site 8 South

for the Benefit of the New York Times........ 8

tee Dedsions Below ...................... 12

REASONS FOR GRANTING THE WRIT ........ 13

POINT I — The Taking Is Unconstitutional Because It Is

Being Carried Out for the Private Purpose of

Substituting One Private Developer for Another,

Not for the Purported Public Purpose of Eliminat-

RG ets ee oe 13

POINT II — The Taking Is Unconstitutional Because It Is

Based Upon Respondents’ Unconstitutional

Decades-Long Prevention of the Development of

he a ll ie ec 16

EA a a a 20

APPENDIX A — Order of the Court of Appeals of the

State of New York, dated September 12, 2002 . . la

APPENDIX B — Decision and Order of the Supreme

Court of the State of New York, Appellate Divi-

sion, First Department, dated June 20, 2002 .... 3a

APPENDIX C — Pertinent Excepts From the Original

Petition Filed in the Supreme Court of the State of

New York, Appellate Division, First Department... 12a

TABLE OF AUTHORITIES

; Cases

99 Cents Only Stores, Inc. v. Lancaster Redevelopment

Agency, No. CV 00-07572, 2001 WL 811056 (C.D.

ee | Be | ar eee ey eee es Ce oe

250 West 41st St. Realty Corp. v. New York State Ur-

ban Dev. Corp., 277 A.D.2d 47, 715 N.Y.S.2d 407

(1st Dep’t 2000), /eave to appeal denied, 96 N.Y.2d

705, 746 N.E.2d 187, 723 N.Y.S.2d 132 (2001) ..

250 West 41st Street Realty Corp., et al. v. New York

State Urban Development Corporation, et al., Index

NO. i2aaere? CR B6098)) 5s oc ccs

Berman v. Parker, 348 U.S. 26 (1954) ............

Chicago, St. P., M. & O. Ry. v. Holmberg, 282 U.S. 162

AO. ck neni te es oe

In re Tuthill, 163 N.Y. 133, 57 N.E. 303 (1900) .....

Jackson v. New York State Urban Dev. Corp., 67

N.Y.2d 400, 494 N.E.2d 429, 503 N.Y.S.2d 298

(WOR css Ae eee

Jensen v. City of New York, 42 N.Y.2d 1079, 369

N.E.2d 1179, 399 N.Y.S.2d 645 (1977) .........

People v. Schmidt, 216 N.Y. 324, 110 NE. 945

CEPR ni Sew to hk 04 tees ake ee,

Prestonia Area Neighborhood Ass'n v. Abramson, 797

ee PU EE 5 5 bv se ecw eee bbs

Riggs v. Palmer, 115 N.Y. 506, 22 N.E. 188 (1889) . .

Rindge Co. v. County of Los Angeles, 262 U.S. 700

"| Gis Data RRS lis ESL eran eras

18-19

PAGE

Rosenthal & Rosenthal, Inc. v. New York State

Urban Dev. Corp., 771 F.2d 44 (2d Cir. 1985), cert.

denied, 475 U.S. 1018 (1986) ................ 4

Southwestern Illinois Development Auth. v. National

City Environmental, L.L.C., 199 Ill. 2d 225, 768

N.E.2d 1, cert. denied, 123 S. Ct. 88 (2002) ..... 15

St. Morris Assocs. v. McMorran, 35 A.D.2d 997, 318

N.¥.3.20 TSU CaS TC Pe oo ETS 17

Thompson v. Consolidated Gas Utils. Corp., 300 U.S.

Fo CER OD canes. aie dp recs Scan Ae eee 13, 15-16

Tolksdorf v. Griffith, 464 Mich. 1, 626 N.W.2d 163

COUPEE 5 akc ch:v des vaes «ee cerk eee 15

Urbanizadora Versalles, Inc. v. Rivera Rios, 701 F.2d ~

FOS CRG BOE v6 bbe 0 ake kee 17-18

Constitutional Provisions,

Statutes and Rules

7.0: CRE BE Be oh cick u's de eSiethemedies 2, 13, 16

U.S. Ce GD cs «oa os a 0 te ce 2, 16

SE, nk Os 0 Gate eb eee eee 2

FE UBB Ps ie 5s Ra dh cok es ae 2

SE EBL... BO hited crisis. KS Shiv she cae ees 2

I CT BE BORE 6.608 8 eS ee ee 2

Supreme Court Rule 14.1(g)(1) ... 2... 0... ee. 12

Supreme Court Rule 29.4(c) ...............00005 2

N.Y. Eminent Domain Procedure Law § 207 ....... 12

vii

Other Authorities

Charles V. Bagli, Companies Get Second Helping of

Tax Breaks, The New York Times, Oct. 17, 1997, p.

Pe I Ee ch ei nics saat bis nes 5

IN THE

Supreme Court of the United States

OCTOBER TERM, 2002

WEST 41ST STREET REALTY LLC, EMM

REALTY CORP., and TIMES SQUARE GARAGE, LTD.,

Petitioners,

NEW YORK STATE URBAN DEVELOPMENT

CORPORATION d/b/a EMPIRE STATE DEVELOPMENT

CORPORATION, 42ND ST. DEVELOPMENT PROJECT,

INC., 632 EIGHTH AVENUE ASSOCIATES, LLC,

ROMACK REALTY CORP., and THREE O REALTY LLC,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

COURT OF APPEALS OF THE STATE OF NEW YORK

PETITION FOR A WRIT OF CERTIORARI

Opinions Below

The order of the Court of Appeals of the State of New York,

dated September 12, 2002, dismissing the petitioners’ appeal

from the decision and order of the Supreme Court of the State

of New York, Appellate Division, First Department, is not

officially reported, and is reproduced in Appendix A (1a-2a).

The decision and order of the Supreme Court of the State of

New York, Appellate Division, First Department, dated June

20, 2002, is reported at 298 A.D.2d 1, 744 N.Y.S.2d 121, and

is reproduced in Appendix B (3a-11a).

Jurisdiction

The order of the Court of Appeals of the State of New York

sought to be reviewed was entered on September 12, 2002.

This petition is timely under 28 U.S.C. § 2101(c) and Supreme

Court Rule 13.1, because it is being filed within 90 days of the

entry of the order sought to be reviewed. This Court has

jurisdiction to review the order of the New York State Court of

Appeals pursuant to 28 U.S.C. § 1257(a). Because 28 U.S.C.

§ 2403(b) may apply, the Attorney General of the State of New

York is being served with a copy of this petition pursuant to

Supreme Court Rule 29.4(c).

Constitutional Provisions Involved

The Fifth Amendment to the United States Constitution reads

in pertinent part as follows:

“No person shail . . . be deprived of life, liberty, or

property, without due process of law; nor shall

private property be taken for public use, without just

compensation.”

Section 1 of the Fourteenth Amendment to the United States

Constitution reads in pertinent part as follows:

“ .. [N]or shall any State deprive any person of life,

liberty, or property, without due process of law... .”

Statement of the Case

A. The Times Square Redevelopment Project

The Times Square Redevelopment Project is a long-running

project of The City of New York (the “City”) and the respon-

dent New York State Urban Development Corporation d/b/a

Empire State Development Corporation (“UDC”) to redevelop

the Times Square area of Manhattan (R. 71).’

The Times Square Redevelopment Project was initiated by a

Memorandum of Understanding dated June 27, 1980 between

the UDC and the City (R. 86-89). The Memorandum of

Understanding stated that the Times Square area, loosely

defined as the area “in the vicinity of 42nd Street and 7th and

8th Avenues,” was “marked by street crime, substandard and

insanitary conditions, undesirable uses and physical and social

blight,” warranting “public action to cause the replanning,

clearance, reconstruction, redevelopment and rehabilitation of

the Project Area” (R. 86).

The UDC and the City divided the Project area into twelve

numbered “sites” (R. 94). Site 8 South, which is the subject of

this case, comprises the property across the street from the Port

Authority Bus Terminal, bordered by 41st Street on the north,

40th Street on the south, and Eighth Avenue on the west, and

extending east of Eighth Avenue approximately one-half block

(R. 71; see R. 136).

On or about October 4, 1984, the UDC made its initial

determination and findings approving the Project and authoriz-

ing the UDC to acquire, by condemnation if necessary, any real

property within the Project area (R. 90-143). The central focus

of the Project, as described in the 1984 determination and

! “R.” citations are to the printed Record in the Supreme Court of the

State of New York, Appellate Division, First Department.

findings, was the construction of new office buildings on

Broadway and Seventh Avenue abutting Times Square, and the

reconstruction of the theaters located on the north and south

sides of the midblock of 42nd Street between Broadway and

Eighth Avenue (R. 94-96). With respect to Site 8 (consisting of

Site 8 South and Site 8 North, a smaller tract located on the east

side of Eighth Avenue between 41st and 42nd Streets), the 1984

determination and findings envisioned the construction of a

merchandise mart linked to the Port Authority Bus Terminal by

a pedestrian bridge across Eighth Avenue (R. 95, 99, 136).

The UDC’s 1984 determination and findings were upheld by

the courts. See Jackson v. New York State Urban Dev. Corp.,

67 N.Y.2d 400, 494 N.E.2d 429, 503 N.Y.S.2d 298 (1986). See

also Rosenthal & Rosenthal, Inc. v. New York State Urban Dev.

Corp., 771 F.2d 44, 45-46 (2d Cir. 1985), cert. denied, 475 U.S.

1018 (1986). In upholding the 1984 determination and find-

ings, the courts approved the UDC’s finding that the Times

Square Redevelopment Project as a whole served a public

purpose, although they did not address the issue of whether or

not there was a public purpose for the merchandise mart

proposed for Site 8. See Jackson v. New York State Urban Dev.

Corp., supra, 67 N.Y.2d at 424-25, 494 N.E.2d at 440-41, 503

N.Y.S.2d at 309-10. ;

On or about April 18, 1990, the UDC took title by condem-

nation to nine of the 13 acres within the Project area, including

four office building sites, eight theaters, and three other mid-

block parcels (R. 72, 144). The UDC did not, however, take

title to any portion of Site 8 (R. 72). Indeed, the merchandise

mart which the 1984 determination and findings proposed for

Site 8 was never built.

On or about January 27, 1994, the UDC issued a new

determination and findings confirming and updating its 1984

determination and findings (R. 144-162). The 1994 determina-

tion and findings no longer proposed to proceed with the

construction of a merchandise mart on Site 8. The 1994

determination and findings did not make a definitive finding

with respect to the ultimate use of Site 8 South. Indeed, they

did not even make a finding that Site 8 South would necessarily

be taken as part of the Times Square Redevelopment Project at

all. Instead, they listed a number of possible alternatives for

Site 8 South, including:

(1) A “wholesale mart/office building” with bridges

over Eighth Avenue and 41st Street (R. 146, 159); or

(2) Two or more “residential buildings” aggregating

approximately 1.0 million square feet and housing about

1,700 to 2,000 residents (R. 159); or

(3) Letting the Times Square Redevelopment Project

expire in 2015 without taking and developing Site 8 South

at all (R. 159, 160).

While the respondents were thus keeping the fate of Site 8

South in suspense, positive changes in the New York real estate

market in general, and in the Times Square arez in particular,

made the “blight” that the respondents had previously found to

exist in the Times Square area in 1984 a thing of the past. As

stated by The New York Times, “[b]lighted is not a word that

anyone would use to describe Times Square today... .”

Charles V. Bagli, Companies Get Second Helping of Tax

Breaks, The New York Times, Oct. 17, 1997, p. Al, col. 5, p.

B2, col. 1. These developments have removed any possible

question as to the willingness of developers to develop Site 8

South without any assistance from government (see, e.g., R.

182-185, 273, 274, 277-278, 299-300).’

2 The attractiveness of Site 8 South for development is confirmed by

the fact that Site 8 North, just across the street from Site 8 South, has

recently been purchased by a Milstein family entity for almost three times

The respondents implicitly acknowledged the significance of

these positive changes by admitting publicly in 1994 that it

might not be necessary for them to take Site 8 South at all (R.

159, 160). Nevertheless, as described below, the respondents

refused to permit the petitioners and other landowners in Site 8

South to develop their property, despite repeated attempts on

their part to do so.

B. Respondents’ Refusal to Permit the Owners to

Develop Site 8 South |

From the inception of the Times Square Redevelopment

Project in 1980, the pendency of the Project, and the UDC’s

announced intention te take Site 8 South by condemnation,

have prevented petitioners and the other landowners in Site 8

South from developing their properties (R. 72). In the face of

the looming prospect of condemnation, it is impossible to

arrange the financing and the long-term tenant commitments

necessary for a major office building development (R. 272,

277). This interference with petitioners’ ability to develop their

properties continued unabated after 1994, despite the UDC’s

public admission in 1994 that it might in the end never seek to

acquire Site 8 South at all (R. 72-73).

In an effort to regain the ability to develop their properties,

250 West 41st Street Corp., a former owner of the lot later

owned by petitioner West 41st Street Realty LLC, and peti-

tioner Times Square Garage, Ltd. commenced an action on

statutory grounds against the UDC and others in the Supreme

Court, New York County (R. 73). 250 West 41st Street Realty

Corp., et al. v. New York State Urban Development Corpora-

tion, et al., Index No. 112828/97 (R. 163-181). The UDC and

the other defendants, far from agreeing to permit the landown-

the price per square foot that the Times has agreed to pay for Site 8 South

(R. 298-299, 318, 413-414, 767).

ers of Site 8 South to develop their properties, vigorously

defended the action (R. 73). The action eventually resulted in

a determination that the UDC retained the statutory right to

condemn Site 8 South. 250 West 41st St. Realty Corp. v. New

York State Urban Dev. Corp., 277 A.D.2d 47, 715 N.Y.S.2d

407 (ist Dep’t 2000), leave to appeal denied, 96 N.Y.2d 705,

746 N.E.2d 187, 723 N.Y.S.2d 132 (2001).

In early 1999 Gary Barnett, the Managing Member of

petitioner West 41st Street Realty LLC, on behalf of petitioners

and other owners of the majority of the square footage included

in Site 8 South, contacted UDC and expressed interest in

developing the Site on terms which would include the payment

of fair market value for the Site (R. 74). Mr. Barnett confirmed

this offer in a letter dated March 5, 1999 (R. 182-185), in which

he described the capabilities of the developer of which he is

President, Intell Management and Investment Company:

“Intell Management and Investment Company is a

national organization which has owned, managed and

developed nearly 8 million square feet of office, retail

and residential projects located throughout the United

States. We are also presently developing the Planet

Hollywood Hotel in Times Square, a 50 story, 500

room hotel and retail project on Broadway and 46th

Street. We are building the Planet Hollywood project

without any tax incentives from the City or State.”

(R. 185.)

By a letter dated March 17, 1999, 42DP rejected this offer

(R. 186). This letter stated that “the State and-the City’s current

thinking is to engage in a competitive process to select the

developer” (id.).

C. Respondents’ Decision to Condemn Site 8 South

for the Benefit of the New York Times

Contrary to its previously statec intention of engaging in a

competitive process to select a developer for Site 8 South, the

UDC in October 1999 commenced unilateral negotiations with

the New York Times (the “Times”) regarding the possibility of

relocating the headquarters of the Times from West 43rd Street

to Site 8 South (R. 74). After its negotiations with the New

York Times became known, the UDC refused to permit other

interested developers to participate in those negotiations or to

submit alternative proposals (R. 75).

In June 2000, the UDC and 42DP entered into a Memoran-

dum of Understanding with the Times and its chosen developer,

Forest City Ratner Companies, pursuant to which the UDC

would acquire Site 8 South by exercising its power of eminent

domain and (through 42DP) would lease the Site to the Times

and Ratner, which would construct an office building on the

Site having an announced square footage of approximately

1,370,000 square feet (R. 75).

On September 4, 2001, the UDC and 42DP issued a notice of

a hearing with respect to the proposed acquisition and develop-

ment of Site 8 South (R. 187-194). In the notice, the UDC and

42DP stated in a single conclusory sentence that the proposed

condemnation would serve a public use, which the notice stated

was “to continue and reinforce the revitalization of the area, to

promote economic and social benefits to the City of New York,

and to restore a blighted, deteriorated, substandard, insanitary

and underutilized site to full productive use” (R. 193). The

notice failed to disclose that any remaining “blight” in Site 8

South would already have been removed by the development of

the Site if the respondents had simply allowed the owners of

Site 8 South to develop their properties (R. 75-78).

On September 24, 2001, the UDC and 42DP held a public

hearing on the proposed condemnation of Site 8 South (R. 195-

316). Each of the petitioners appeared at the public hearing in

opposition to the proposed condemnation (R. 76). Among other

things, the petitioners drew the attention of the UDC and 42DP

to the lengthy and unconstitutional suspension of the petition-

ers’ right to develop their property, and to the absence of any

factual basis for a finding of public use (id.).

For example, Gary Bamett, the Managing Member of

petitioner West 41st Street Realty LLC and the President of

Intell Management and Investment Company, stated at the

hearing: |

“In terms of the process, for nearly twenty years

the UDC has kept the land in Site 8 South on hold.

No developer has been able to develop and no prop-

erty owner has been able to develop their property

because of the cloud that they’ve kept on it.

“No compensation has been paid to any of the

property owners so far.

“And, in fact, UDC has said they could keep it

another ten years and perhaps not even take it at the

end of the day.

“Any law that permits this kind of conduct on the

part of a government agency is unconstitutional and

we believe that the UDC should not be able to rely on

an unconstitutional law to take Intell’s property now.

“In terms of the public purpose of these proceed-

ings and of the condemnation, we certainly feel very

strongly — Intell has plans to develop the property,

and this property would already have been developed

without the UDC. It’s a canard to think that the only |

way this property would get developed is if UDC

takes it.” (R. 272-273.)

Samuel Brach, the President of petitioner Times Square

Garage Ltd., spoke to the same effect:

“. . . I approached the czar through UDC, Mr.

Gargano. I presented him a plan. I arranged to have

a developer, presented him a plan and asked him

what he would likely okay the plan to develop.

“He told me he would let me know.

“And that happened about three years ago. -Never

happened.

“Because I’m not New York Times. .. .

“T ask the Board to reject this because it is not fair,

it’s not right, it’s unconstitutional, because after all

we bought it before and we should have the right to

choose a developer to develop the property.” (R.

274-275.)

Similarly, Robert C. Lapin, the President of petitioner EMM

Realty Corp., stated:

“Since 1984, my property has been in limbo. On

one hand, I could never develop it because UDC

could have condemned it at any time. But on the

other hand, the UDC refused to formally condemn it

and pay me for the property.

“For seventeen years then I have been without

compensation for the many opportunities I have lost

to develop my land.

“If the plan goes forward, the UDC will be re-

warded for tying up Site 8 South for nearly twenty

years without paying anyone for all of the opportuni-

ties lost.

“Any law that allows property to be frozen for this

long is unfair and, I believe, unconstitutional. The

State should not permit this plan to go forward.” (R.

298.)

“Just walk around this area and you will find that

the blight, unsanitary and underutilized area no

longer is a factor to consider under the label of public

use.

“In ali regards, this is a gigantic giveaway of the

public’s funds and private property to The New York

Times and Forest City Ratner.

“If both of these entities want this property, they

should negotiate in the democratic way with the

owners.” (R. 299-300.)

On or about November 30, 2001, more than two months after

the hearing was concluded, the UDC issued the determination

and findings which are under review herein (R. 317-326).

In its determination and findings, the UDC did not contradict

in any way the facts stated by the petitioners at the public

hearing (R. 78). In particular, the UDC did not deny that for

more than two decades it has made it impossible for petitioners

and the other landowners in Site 8 South to develop their

properties (see id.). Nor did the UDC deny that any residual

“blight” in Site 8 South would have been eradicated by the

development of the property if the UDC had simply permitted

such development to proceed (see id.).

In the determination and findings, the UDC did not retract

the admission in the September 4, 2001 notice of public hearing

that “significant strides have been made in eliminating the

blighted conditions in the Times Square area” (R. 193; see R.

319). However, the UDC reiterated the conclusory finding in

the September 4, 2001 public notice that the proposed condem-

nation of Site 8 South was necessary to remove “blight” in the

Site (R. 319).

D. The Decisions Below

Pursuant to Section 207 of the New York State Eminent

Domain Procedure Law (“EDPL”), the petitioners sought

review of the UDC’s determination and findings by filing an

original petition for review in the Supreme Court of the State of

New York, Appellate Division, First Department (R. 65-85).

The petition set forth the constitutional claims which are

presented herein, and expressly relied upon the Fifth and

Fourteenth Amendments to the United States Constitution, as

well as upon the corresponding provisions of the New York

State Constitution (12a-13a).*

By an order dated February 19, 2002, the Appellate Division

stayed the UDC’s determination and findings pending the

hearing and determination of the petition.

In a decision and order dated June 20, 2002, the Appellate

Division confirmed the UDC’s determination and findings (3a-

lla). The Appellate Division acknowledged that the “[p]eti-

tioners argue that the proposed taking should be barred because

the benefit inures to a private party, viz. the New York Times”

(6a). The court stated that “our review on this point is limited

to ascertain whether the project is rationally related to a

conceivable public purpose” (9a), and upheld the proposed

condemnation under this highly deferential standard of review

as a means of eliminating “blight” (10a).

The Appellate Division also acknowledged that the petition-

ers had argued that the proposed taking was “in violation of due

* Pursuant to Supreme Court Rule 14.1(g)(1), the First and Second

Claims of petitioners’ original petition for review in the Appellate Division

are reproduced in Appendix C (12a-13a).

process protections of the state and federal constitutions on the

ground that the UDC itself created any ‘blight’ which justifies

condemnation since the UDC made it impossible for the owners

to reap the value of their land during the last twenty years” (6a).

Ignoring the uncontradicted evidence before it (see pp. 6-7, 9,

10 supra), the court stated that the record was “devoid” of

evidence that the UDC had prevented the owners from develop-

ing their property (10a-1 1a).

The petitioners appealed as of right on constitutional grounds

to the New York State Court of Appeals. On September 12,

2002, the Court of Appeals dismissed the appeal “upon the

ground that no substantial constitutional question is directly

involved” (2a).

REASONS FOR GRANTING THE WRIT

POINT I

The Taking Is Unconstitutional Because It Is Being

Carried Out for the Private Purpose of Substituting One

Private Developer for Another, Not for the Purported

Public Purpose of Eliminating “Blight”

It is a fundamental principle of federal constitutional law that

“one person’s property may not be taken for the benefit of

another private person without a justifying public purpose, even

though just compensation be paid.” Thompson v. Consolidated

Gas Utils. Corp., 300 U.S. 55, 80 ( 1937) (Brandeis, J.) (cita-

tions omitted). See also, e.g., Chicago, St. P, M. & O. Ry. v.

Holmberg, 282 U.S. 162, 167 ( 1930) (Stone, /.); U.S. Const.

Amdt. 5 (“[NJor shall private property be taken for public use,

without just compensation.”). The question of whether the

“ On August 19, 2002, the taking was consummated. This does not

moot the present proceeding, however, because the taking can and will be

annulled if this Court should hold it to be unconstitutional.

requisite public use exists is one which the courts — and not the

condemning agency — must ultimately decide. See, e.g., Rindge

Co. v. County of Los Angeles, 262 U.S. 700, 705 (1923).

Here the purported public use is the elimination of “blight”

through the development of the property. While this Court has

held that the elimination of blight through urban redevelopment

may constitute a public purpose which justifies a taking, see

Berman v. Parker, 348 U.S. 26, 32-36 (1954), the critical

distinguishing fact in the present case is that the owners

themselves wish to develop their own property, but have been

prevented from doing so by the respondents.

Where this is true, the elimination of “blight” per se can no

longer ccustitute the public purpose required to justify the

taking under the Constitution. Since the property will be

developed under either scenario, thereby eliminating any

remaining “blight,” it is not enough merely to say that the

elimination of “blight” is in the public interest. This is particu-

larly true where, as here, the uncontradicted record evidence is

that there is a “thriving real estate market” in the Project area

(R. 406), and that any remaining “blight” would already have

been eliminated by the owners themselves if the respondents

had only permitted them to develop their own property (see pp.

6-7, 9, 10 supra). In this connection, the issue is not whether

there was “blight” more than 20 years ago when the Times

Square Project was first begun; the issue is whether there is

“blight” that prevents private development of the property

today.

The real public purpose issue in this case is not the elimina-

tion of “blight.” Rather, the real public purpose issue in this

case is whether or not it is a constitutionally sufficient public

purpose for the state to take property from a private owner who

wishes to develop it in order to give it to another private party

who also wishes to develop it.

There is a clear conflict among the lower courts on this issue.

In this case, the courts below have answered this question in the

affirmative. Other recent decisions have answered the same

question in the negative. See, e.g., 99 Cents Only Stores, Inc.

v. Lancaster Redevelopment Agency, No. CV 00-07572, 2001

WL 811056, at *4-*5 (C.D. Cal. 2001) (striking down the

proposed taking of one retailer’s property to satisfy the private

expansion demands of another retailer), appeal docketed, No.

0156338 (9th Cir. Aug. 10, 2001); Southwestern Illinois

Development Auth. v. National City Environmental, L.L.C., 199

Ill. 2d 225, 235-42, 768 N.E.2d 1, 7-11 (condemnation of

private property to be conveyed to a private corporation to

expand its parking lot was not for a primarily public use), cert.

denied, 123 S. Ct. 88 (2002); Prestonia Area Neighborhood

Ass'n v. Abramson, 797 S.W.2d 708, 711-12 (Ky. 1990) (taking

of property to benefit another private party is invalid); Tolksdorf

v. Griffith, 464 Mich. 1, 11, 626 N.W.2d 163, 169 (2001)

(taking of property for a private road was not for a public

purpose).

The importance of this question is difficult to overstate. In

any case where the owner of property proposes to develop it,

the argument can be made that by that very fact the owner has

admitted that the property is “blighted,” at least in the sense that

it is not yet being used for its highest and best use. If this fact

alone is enough to authorize the state to step in and take the

property for the benefit of another private developer, then the

result will be that the state will be authorized to designate its

own preferred developer for any property whose owner has

proposed to develop it. Such a sweeping assertion of the power

to take private property from one person in order to give it to

another cannot be reconciled with the command of the Consti-

tution that “one person’s property may not be taken for the

benefit of another private person without a justifying public

purpose, even though just compensation be paid.” Thompson

> 16

v. Consolidated Gas Utils. Corp., supra, 300 U.S. at 80.

This Court has never decided the question whether a claim of

“blight” is sufficient to entitle a state to take private property

from its owner who wishes to develop it and to give the

property to another private person to develop instead. No such

question was presented in Berman v. Parker, supra, and no

such question was presented in any other case decided by this

Court. This Court should grant certiorari in order to resolve

this important question. j

Any breach in the constitutional wall of prohibition against

the taking of private property for private purposes creates the

danger that politically influential entities will be able to enlist

the cooperation of the state to take the property of others for

their own private ends. Th*s danger is well illustrated by the

present case, in which one of the world’s wealthiest and most

influential newspapers has persuaded the respondents to

expropriate the property of the petitioners for its new world

headquarters. This Court should reaffirm that this is not a

constitutionally permitted use of the condemnation power.

POINT If

The Proposed Taking Is Unconstitutional Because It Is

Based Upon Respondents’ Unconstitutional Decades-Long

Prevention of the Development of Site $ South.

The Due Process Clause, as well as the Takings Clause, of

the United States Constitution applies to all proposed condem-

nation proceedings. See, e.g., In re Tuthill, 163 N.Y. 133, 143-

44,57 N_E. 303, 306-07 (1900) (Gray, J.).

It is a violation of due process for a state to prevent the

owners of private property from developing their property for

an indefinite period. See, e.g., Jensen v. City of New York, 42

N.Y.2d 1079, 1080-81, 369 N.E.2d 1179, 1179-80, 399

N.Y.S.2d 645, 646-47 (1977) (depriving a property owner of

}

8 yaa RC AT MON OEY LONGO RIS ENE NER LRAS LAOOE Se ee ae

the use of her property for an indefinite period constitutes a

deprivation of property without due process of law); St. Morris

Assocs. v. McMorran, 35 A.D.2d 997, 998, 318 N.Y.S.2d 121,

123 (2d Dep’t 1970) (“The rights of a property owner to the

lawful use of his property may not be indefinitely deferred upon

the ground that the property might, at some future time, be

required for public use. [Citations omitted.]’).

In the present case, the respondents have prevented the

petitioners from developing Site 8 South for more than two

decades (see pp. 6-7, 9, 10 supra). The respondents’ threat of

condemnation alone was sufficient to prevent the development

of the property, because it made it impossible to secure the

financing and tenant commitments necessary for a major office

building development (see p. 6 supra). But the respondents did

not rely solely on the overhanging threat of condemnation to

prevent the development of Site 8 South; they also took active

measures to make sure that the Site could not be developed.

Among other things, the respondents litigated state-law

statutory issues all the way to the New York Court of Appeals

in order to maintain their control over the Site (see pp. 6-7

supra), and rebuffed a formal offer by the landowners of Site 8

South to develop the Site at no cost to the State or City (see p.

7 supra). The respondents did all this despite the fact that they

had no specific plans for the development of Site 8 South, and

despite the fact that they had admitted publicly in 1994 that they

might never decide to take Site 8 South at all (see pp. 5-7

supra).

In light of the foregoing facts - which are undisputed in the

record — it cannot be seriously questioned that the respondents’

decades-long prevention of the development of Site 8 South

was and is a violation of the due process of law which is

safeguarded by the United States Constitution. See, e.g.,

Urbanizadora Versalles, Inc. v. Rivera Rios, 701 F.2d 993, 996-

97 (1st Cir. 1983) (reviewing authorities, and holding that a 14-

year cloud of condemnation “exceeds every available indication

of what the duration of a reasonable and constitutional freeze

might be” (footnote omitted)).

The Appellate Division implicitly recognized that the

indefinite prevention of development violates due process of

law, but it sought to avoid the application of this principle by

saying that the record was “devoid of evidence” that the

petitioners were prevented from developing their property (10a-

lla). But the unrebutted and uncontradicted evidence in the

record was that the threat of condemnation made it impossible

for the owners to secure the financing and the long-term tenant

commitments necessary for a major development of this kind

(R. 183, 272, 277).

Thus the record compels the conclusion that the petitioners

have been unconstitutionally prevented by the respondents from

developing their property. This, in turn, further confirms that

the proposed condemnation of Site 8 South is unconstitutional,

because the respondents’ purported justification for the pro-

posed condemnation — the alleged persistence of “blight” on the

Site — is a direct result of the respondents’ own unconstitutional

prevention of the development of the Site. Therefore, to permit

the respondents to use this pretext to condemn Site 8 South at ~

this time would be to permit them to profit from a situation

which has been created by their own unconstitutional acts.

To permit this would be to violate a fundamental principle of

justice. As Judge (later Justice) Cardozo wrote in People v.

Schmidt, 216 N.Y. 324, 341, 110 N.E. 945, 950 (1915):

“The principle is fundamental that no man shall be

permitted to profit by his own wrong. It enters, by

implication, into all contracts and all laws. [Citation

omitted]... .”

See also, e.g., Riggs v. Palmer, 115 N.Y. 506, 511-12, 22 N.E.

188, 190 (1889).

Thus, even if the respondents would otherwise be constitu-

tionally entitled to condemn Site 8 South for the benefit of the

New York Times under the pretext of eliminating “blight,” the

condemnation would violate the owners’ constitutional rights

because any remaining “blight” on the Site is the direct result of

the respondents’ unconstitutional course of action in preventing

the petitioners from developing their property for a period of

more than two decades.

CONCLUSION

For the reasons set forth above, the Court should grant a writ

of certiorari to review the order of the Court of Appeals of the

State of New York, dated September 12, 2002, dismissing the

petitioners’ appeal from the decision and order of the Supreme

Court of the State of New York, Appellate Division, First

Department, dated June 20, 2002.

Dated: New York, New York

December 11, 2002

Respectfully submitted,