Goldstein v. New York State Urban Development Corp.

921 N.E.2d 164, 13 N.Y.3d 511, 2009 NY Slip Op 8677, 893 N.Y.S.2d 472
New York Court of Appeals·Decided November 24, 2009·No. 178·Published·Cited by 56 cases

Opinions

[517]*517OPINION OF THE COURT

Chief Judge Lippman.

We are asked to determine whether respondent’s exercise of its power of eminent domain to acquire petitioners’ properties for purposes of the proposed land use improvement project, known as Atlantic Yards, would be in conformity with certain provisions of our State Constitution. We answer in the affirmative.

On December 8, 2006, respondent Empire State Development Corporation (ESDC) issued a determination pursuant to Eminent Domain Procedure Law (EDPL) § 204, finding that it should use its eminent domain power to take certain privately owned properties located in downtown Brooklyn for inclusion in a 22-acre mixed-use development proposed, and to be undertaken, by private developer Bruce Ratner and the real estate entities of which he is a principal, collectively known as the Forest City Ratner Companies (FCRC).

According to the record upon which the ESDC determination was based and by which we are bound (see Matter of Levine v New York State Liq. Auth., 23 NY2d 863, 864 [1969]), the development will extend eastward from the junction of Atlantic and Flatbush Avenues, and include blocks now occupied by the subgrade Vanderbilt rail and MTA bus yards as well as certain blocks bordering the yards to the south. The project is to involve, in its first phase, construction of a sports arena to house the NBA Nets franchise, as well as various infrastructure improvements—most notably reconfiguration and modernization of the Vanderbilt Yards rail facilities and access upgrades to the subway transportation hub already present at the site. The project will also involve construction of a platform spanning the rail yards and connecting portions of the neighborhood now separated by the rail cut. Atop this platform are to be situated, in a second phase of construction, numerous high rise buildings and some eight acres of open, publicly accessible landscaped space. The 16 towers planned for the project will serve both commercial and residential purposes. They are slated to contain between 5,325 and 6,430 dwelling units, more than a third of which are to be affordable either for low and/or middle income families.

The project has been sponsored by respondent ESDC as a “land use improvement project” within the definition of the Urban Development Corporation Act ([Act] L 1968, ch 174, [518]*518sec 1, § 3 [6] [c] [McKinney’s Uncons Laws of NY § 6253 (6) (c)]), upon findings that the area in which the project is to be situated is “substandard and insanitary” (see id.; and see also Act § 10 [c] [McKinney’s Uncons Laws of NY § 6260 (c)]) or, in more common parlance, blighted. It is not disputed that the project designation and supporting blight findings are appropriate with respect to more than half the project footprint, which lies within what has, since 1968, been designated by the City of New York as the Atlantic Terminal Urban Renewal Area (ATURA). To the south of ATURA, however, and immediately adjacent to the Vanderbilt Yards cut, are two blocks and a fraction of a third which, although within the project footprint, have not previously been designated as blighted. FCRC has purchased many of the properties in this area, but there remain some that it has been unsuccessful in acquiring, whose transfer ESDC now seeks to compel in furtherance of the project, through condemnation. In support of its exercise of the condemnation power with respect to these properties, some of which are owned by petitioners, ESDC, based on studies conducted by a consulting firm retained by FCRC, has made findings that the blocks in which they are situated possess sufficient indicia of actual or impending blight to warrant their condemnation for clearance and redevelopment in accordance with a section 6253 (6) (c) land use improvement plan, and that the proposed land use improvement project will, by removing blight and creating in its place the above-described mixed-use development, serve a “public use, benefit or purpose” in accordance with the requirement of EDPL 204 (B) (1).

Petitioners’ initial challenge to ESDC’s determination authorizing condemnation of their properties was made in a timely federal court action. The gist of that action was that the disputed condemnation was not supported by a public use and thus violated the Fifth Amendment of the Federal Constitution. In the federal action, petitioners also asserted a pendant state claim, seeking review of the ESDC determination pursuant to EDPL 207. Petitioners’ federal claims were rejected by the Federal District Court (Goldstein v Pataki, 488 F Supp 2d 254 [ED NY 2007]) and the District Court judgment dismissing the complaint was affirmed by the Second Circuit (516 F3d 50 [2008], cert denied 554 US —, 128 S Ct 2964 [2008]). With respect to the state law claim, however, the District Court merely declined to exercise its supplemental jurisdiction (488 F Supp 2d at 291) and, accordingly, its judgment, as affirmed by the [519]*519Second Circuit, dismissed that claim “without prejudice to its being re-filed in state court” (id.). Within six months, petitioners commenced the present proceeding in the Appellate Division, Second Department (see EDPL 207 [A]). The petition alleged two essential, still surviving1 claims: that the proposed taking was not for a “public use” but for the benefit of a private party and thus would be in violation of article I, § 7 (a) of the New York State Constitution and EDPL 207 (C) (1); and that the condemnation proceeding was not in conformity with the State Constitution (see EDPL 207 [C] [1]) for the additional reason that the project it was to advance, although financed with state loans or subsidies, was not limited in occupancy to persons of low income in accordance with the requirement of article XVIII, § 6 of the New York Constitution. In its answer, respondent, while defending the challenged determination on the merits, sought the petition’s dismissal on the ground that it had not been timely brought.

The Appellate Division, although rejecting respondent’s contention that the proceeding was time-barred, found for respondent on the merits (64 AD3d 168 [2d Dept 2009]). It observed that, while the State Constitution, literally read and in its early construction, permitted the taking of property only for “public use,” “public use” had since come to be understood as entailing no more than a dominant public purpose. The Court noted that it was well established that the eradication of blight was such a public purpose and found that ESDC’s blight findings were supported by the area studies contained in the administrative record. As to the contention that the proposed project and, consequently, the condemnation proceeding in its behalf, were not in conformity with article XVIII, § 6, the Appellate Division held that that provision should be read to apply only to projects for the construction of low income housing and not to projects rehabilitating substandard land through improvement, such as Atlantic Yards.

The matter is now before us on petitioners’ appeal as of right on constitutional grounds (CPLR 5601 [b] [1]). Petitioners would have us consider the above-described article I, § 7 and article XVIII, § 6 claims. Respondent, however, contends, as it did before the Appellate Division, that the petition should be dismissed without reaching the merits because it was not filed [520]*520in the Appellate Division within 30 days after the completion of the publication of the challenged findings and determination (see EDPL 207 [A]).

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Goldstein v. New York State Urban Development Corp., 921 N.E.2d 164, 13 N.Y.3d 511, 2009 NY Slip Op 8677, 893 N.Y.S.2d 472 (N.Y. 2009).

921 N.E.2d 164 (Goldstein v. New York State Urban Development Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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