East Thirteenth Street Community Ass'n v. New York State Urban Development Corp.

189 A.D.2d 352, 595 N.Y.S.2d 961, 1993 N.Y. App. Div. LEXIS 3524
CourtAppellate Division of the Supreme Court of the State of New York
DecidedApril 8, 1993
StatusPublished
Cited by12 cases

This text of 189 A.D.2d 352 (East Thirteenth Street Community Ass'n v. New York State Urban Development Corp.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
East Thirteenth Street Community Ass'n v. New York State Urban Development Corp., 189 A.D.2d 352, 595 N.Y.S.2d 961, 1993 N.Y. App. Div. LEXIS 3524 (N.Y. Ct. App. 1993).

Opinion

OPINION OF THE COURT

Asch, J.

In 1968, the City took title, by condemnation, to a lot measuring approximately 150 by 200 feet located between 13th and 14th Streets and Third and Fourth Avenues. The site now contains a parking lot and three vacant boarded-up buildings.

[356]*356In 1991, H.E.L.P., a nonprofit sponsor of housing for homeless families, expressed interest in acquiring the lot to build a facility which would permanently house the homeless. Its proposed program provided for the construction of a 14-story building containing 96 apartments erected above an on-site community center on the 13th Street portion of the parcel. Forty-seven of the 96 apartments would be reserved for families of low income (earnings of less than $25,000 annually), and 49 apartments would be available to formerly homeless families, with preference given to those from the community. The development would also include a two-story commercial/ retail structure constructed without charge by H.E.L.P. for the City.

To achieve these results, H.E.L.P., as project manager, organized the HHSC 13th Street Development Corporation (HHSC) to run the facility. Funds for the construction were to be furnished jointly by the City and State through the Housing Finance Agency of New York State (HFA) pursuant to article III-A of the Private Housing Finance Law. In addition to City and State funding, the developers expected Federal low-income housing tax credits to provide approximately $8,000,000 for operating reserves and for educational, day care and job training programs.

Because of the "red tape” associated with any municipal project and the normal attendant delay that could be expected, and also because HFA lacked the power of eminent domain which would cut through this bureaucratic red tape and delay, the New York State Urban Development Corporation (UDC) was enlisted as a participant.

On February 20, 1992, the UDC adopted a general project plan for the development and gave notice of a public hearing which was held in July. The public was provided with specific details of the development and comments were invited. Thereafter, the public was given an additional 30 days to make any further comments. After this period, in August of 1992, the UDC issued a determination and findings, based on the plan, the comments received, both pro and con, and "all other relevant documents”.

Thereafter, petitioners who consist of local condominium boards, tenants and residents of nearby buildings brought this original proceeding pursuant to EDPL 207 which provides for review by the Appellate Division of the determination and findings of a condemnor.

[357]*357The petitioners first assert that the proposed acquisition is not within the UDC’s statutory jurisdiction or authority, since it is acting merely as an "expeditor” for HFA and is lending its override powers merely to facilitate evasion of local laws. In essence, petitioners are contending that respondent is "lending” its name and extraordinary powers to other parties who realistically have a primary stake and interest in the project greater than the UDC, and that this is outside the scope of the respondent’s authority.

Even accepting this characterization of the respondent’s role and activities in this project, does not dictate the conclusion that the UDC is acting in excess of its statutory jurisdiction and authority. As the respondent notes, the actions complained of are not only proper but precisely the sort of activity for which the UDC was created. In Wein v Beame (43 NY2d 326), a complex plan among the City, the UDC, a private developer and the bankrupt owner of the Commodore Hotel, was projected. It provided for the purchase of the hotel and its renovation by the developer, its sale to the UDC for a nominal sum and the subsequent lease-back of the hotel to the developer by the UDC for a 99-year period. Yet, the Court of Appeals held, inter alia: "[P]laintiff is, of course, presented with an insurmountable obstacle in the fact that the property will obtain tax exempt status not by any claimed or alleged invalid legislation enacted by the city council, but rather by virtue of the purchase of the hotel by the UDC. Plaintiff seeks to overcome this difficulty by characterizing the UDC as a 'straw man’, with no real interest in or connection with the project, which has been brought into the plan solely as a means of providing a tax exemption which the city could not grant directly. Plaintiffs attempt to so easily avoid the inconvenient fact of UDC participation in the plan is of no avail. It is not for us to speculate as to the motive for the UDC’s participation, nor to delineate the amount of active participation which is necessary to denominate a particular project a UDC project. Here, UDC will be the owner of the building, and it is enough that UDC has chosen to participate in a project which is designed to combat otherwise inevitable urban blight, and which is thus clearly in accordance with the benign purposes of the Legislature in creating UDC (see L 1968, ch 174, § 2).” (Wein v Beame, supra, at 331.)

The Legislature has expressly declared the statutory purpose: "to be the policy of the state to promote the safety, health, morals and welfare of the people of the state and to [358]*358promote the sound growth and development of our municipalities through the correction of such substandard, insanitary, blighted, deteriorated or deteriorating conditions, factors and characteristics by the clearance, replanning, reconstruction, redevelopment, rehabilitation, restoration or conservation of such areas, and * * *

"For these purposes, there should be created a corporate governmental agency to be known as the 'New York state urban development corporation’ which, through issuance of bonds and notes to the private, investing public, by encouraging maximum, participation by the private sector of the economy, including the sale or lease of the corporation’s interest in projects at the earliest time deemed feasible, and through participation in programs undertaken by the state, its agencies and subdivisions, and by municipalities and the federal government, may provide or obtain the capital resources necessary to acquire, construct, reconstruct, rehabilitate or improve such industrial, manufacturing, commercial, educational, recreational and cultural facilities, and housing accommodations for persons and families of low income, and facilities incidental or appurtenant thereto, and to carry out the clearance, replanning, reconstruction and rehabilitation of such substandard and insanitary areas.” (McKinney’s Uncons Laws of NY, § 6252 [New York State Urban Development Corporation Act (UDC Act) § 2; L 1968, ch 174, § 1] [emphasis added].)

The petitioners assert that where the UDC acts under its "substandard and insanitary” area clearance powers, as it purports to do in this project, clearance must be its primary purpose, and no other purpose, including building for the homeless, will justify its involvement.

It is clearly evident from the holdings of the Court of Appeals (see, e.g., Matter of Waybro Corp. v Board of Estimate, 67 NY2d 349; Wein v Beame, supra) and the express language of the statute creating the respondent agency, cited in part above, that the UDC is not limited to projects in which it is the prime mover.

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Cite This Page — Counsel Stack

Bluebook (online)
189 A.D.2d 352, 595 N.Y.S.2d 961, 1993 N.Y. App. Div. LEXIS 3524, Counsel Stack Legal Research, https://law.counselstack.com/opinion/east-thirteenth-street-community-assn-v-new-york-state-urban-development-nyappdiv-1993.