Macmillan, Inc. v. CF Lex Associates

437 N.E.2d 1134, 56 N.Y.2d 386, 452 N.Y.S.2d 377, 1982 N.Y. LEXIS 3433
New York Court of Appeals·Decided June 23, 1982·Published·Cited by 13 cases

Opinion

[389] OPINION OF THE COURT

Jones, J.

“Tract of land” as used in the New York City Zoning Resolution refers to surface land only and does not include buildings erected thereon. Accordingly, even a very substantial space tenant is not a party in interest whose consent is required for an effective declaration of zoning lot restrictions and the attendant zoning lot merger under the resolution.

Plaintiff is a space tenant in the Macmillan Building, a 31-story building located at 866 Third Avenue in the Borough of Manhattan, New York City. Under its lease as amended1 which, subject to the tenant’s exercise of options, runs until 2008, plaintiff occupies 100% of the usable area of the building above the first floor and 95% of the usable area of the building as a whole.

The Macmillan Building occupies the eastern third of the block bounded by Third Avenue on the east, 52nd Street on the south, Lexington Avenue on the west, and 53rd Street on the north. Adjoining the Macmillan Building to the west are two smaller buildings, an eight-story garage to the north (156 East 53rd Street) and a nine-story apartment building on the south (155-161 East 52nd Street). In the western half of the block, facing on Lexington Avenue, is the proposed development lot which is the genesis of the present litigation.

In July, 1981 Campeau Corporation (U.S.), Inc., purchased the Macmillan Building from The John Hancock Mutual Life Insurance Company, thereby succeeding Hancock as plaintiff’s landlord. On September 30, 1981, Campeau, CF Lex Corp. (a general partner of CF Lex Associates, the entity which held title to the development lot), and others, being the holders of separate fee titles to all the underlying land in the block, executed a declaration of zoning lot restrictions to effect a zoning lot merger with respect to the block pursuant to the provisions of the New York City Zoning Resolution as amended. On the same day CF Lex Corp. purchased from Campeau the “air rights” associated with the land on which the Macmillan Building [390] stands for $5,060,000. The objective of the zoning lot merger and the acquisition of these air rights was to enable CF Lex Corp. to erect a larger building on the development lot than could otherwise have been constructed.

In anticipation of these transactions, plaintiff instituted the present action in August, 1981 seeking a declaration that the transfer of air rights by a zoning lot merger of the properties in the block could not be effected without first obtaining the written consent thereto of plaintiff. The contention was that its consent was required because it was a “party in interest” under the zoning resolution.

Defendants moved under CPLR 3211 to dismiss the complaint for failure to state a cause of action, on the ground that plaintiff was not a “party in interest” within the contemplation of the zoning resolution. Supreme Court granted the motions and denied as academic applications by defendants for other relief and cross motions of plaintiff. The Appellate Division reversed the determinations of Supreme Court, reinstated the complaint, temporarily enjoined defendants from proceeding with construction pursuant to the zoning lot merger and the purchase of air rights, and remitted the case to Supreme Court for further proceedings. Defendants appealed to our court pursuant to leave granted by the Appellate Division.2 We now reverse.

Under the New York City Zoning Resolution as amended in 1977, before a tract of land may be treated as a single zoning lot, a written declaration consenting to the zoning lot merger must be executed by each party in interest, unless such a party has waived its right with respect thereto. Once the separate parcels have been so “merged”, the maximum bulk of a building permissible under the zoning resolution is calculated on the basis of the merged zoning lot. Thus, by this means excess square footage associated with an existing building can be made available for use on an adjoining parcel. An “air rights” transfer can thus be effected, making permissible construction on the adjoining parcel of a larger building than would otherwise have been allowable under the resolution. By recourse to these procedures in the present case, defendants sought to [391] acquire air rights associated with the land on which the Macmillan Building stood to enable the construction on the development lot of a larger building than would otherwise have been permissible.

The controversy between the parties is whether plaintiff is a “party in interest” within the prescription of the zoning resolution — if so, the declaration without its participation is unavailing to effect the desired zoning lot merger; if not, the merger is effective and the transfer of the air rights will make possible the desired construction on the development lot. Section 12-10 (subd [d], par [iv] [“zoning lot”] of the zoning resolution provides: “A ‘party in interest’ in the portion of the tract of land covered by a Declaration shall include only (W) the fee owner or owners thereof, (X) the holder of any enforceable recorded interest in all or part thereof which would be superior to the Declaration and which could result in such holder obtaining possession of any portion of such tract of land, (Y) the holder of any enforceable recorded interest in all or part thereof which would be adversely affected by the Declaration, and (Z) the holder of any unrecorded interest in all or part thereof which would be superior to and adversely affected by the Declaration and which would be disclosed by a physical inspection of the portion of the tract of land covered by the Declaration.” Plaintiff asserts that it is a party in interest under one or both of clauses (X) and (Y). This, in turn, depends for present purposes on what is intended by the phrase, “tract of land”. If it refers only to the underlying surface land, plaintiff, having no cognizable interest in the land itself, is not a party in interest; on the other hand if it comprehends the buildings and improvements on the land, plaintiff is the holder of a substantial recorded interest therein and thus is a party in interest.

Free access — add to your briefcase to read the full text and ask questions with AI

Macmillan, Inc. v. CF Lex Associates, 437 N.E.2d 1134, 56 N.Y.2d 386, 452 N.Y.S.2d 377, 1982 N.Y. LEXIS 3433 (N.Y. 1982).

437 N.E.2d 1134 (Macmillan, Inc. v. CF Lex Associates) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Georgetown Co., LLC v. IAC/Interactive Corp.
2024 NY Slip Op 01870 (Appellate Division of the Supreme Court of New York, 2024)
301 E. 60th St. LLC v. Competitive Solutions LLC
190 N.Y.S.3d 327 (Appellate Division of the Supreme Court of New York, 2023)
Matter of Committee for Environmentally Sound Dev. v. Amsterdam Ave. Redevelopment Assoc. LLC
2021 NY Slip Op 01228 (Appellate Division of the Supreme Court of New York, 2021)
Little Cherry, LLC v. Cherry St. Owner LLC
2019 NY Slip Op 5497 (Appellate Division of the Supreme Court of New York, 2019)
Hudson Square Hotel, LLC v. Stathis Enterprises, LLC
140 A.D.3d 664 (Appellate Division of the Supreme Court of New York, 2016)
Harmit Realties LLC v. 835 Avenue of the Americas, L.P.
128 A.D.3d 460 (Appellate Division of the Supreme Court of New York, 2015)
Friedberg v. Comm'r
2011 T.C. Memo. 238 (U.S. Tax Court, 2011)
Manhattan Church of Christ, Inc. v. 40 East 80 Apartment Corp.
55 A.D.3d 416 (Appellate Division of the Supreme Court of New York, 2008)
New York Overnight Partners, L. P. v. Gordon
217 A.D.2d 20 (Appellate Division of the Supreme Court of New York, 1995)
Bella Vista Apartment Co. v. Bennett
154 Misc. 2d 579 (New York Supreme Court, 1992)
873 Third Avenue Corp. v. Kenvic Associates
109 A.D.2d 489 (Appellate Division of the Supreme Court of New York, 1985)