Steel Los III, LP v. Power Authority

21 Misc. 3d 707
CourtNew York Supreme Court
DecidedSeptember 15, 2008
StatusPublished
Cited by1 cases

This text of 21 Misc. 3d 707 (Steel Los III, LP v. Power Authority) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Steel Los III, LP v. Power Authority, 21 Misc. 3d 707 (N.Y. Super. Ct. 2008).

Opinion

OPINION OF THE COURT

Thomas P. Phelan, J.

In this special proceeding challenging the condemnation of certain property, petitioners seek judgment declaring that (i) the condemnation was unauthorized or excessive or both; (ii) the condemnation is null and void; and (iii) the condemnation is invalid because the Eminent Domain Procedure Law is unconstitutional on its face and, alternatively, because respondent’s application of EDPL 206 to petitioners unconstitutionally deprived petitioners of their property. Lastly, petitioners seek restoration of all right, title and interest in their property as of the date of the wrongful condemnation and an award of all costs, including attorneys’ fees.

In answer to the amended petition, respondents raised three objections: (1) improper procedure pursuant to CPLR article 78; (2) improper amendment of the petition; and (3) failure to serve the New York Attorney General in violation of CPLR 1012 (b).

Petitioners are the owners of approximately one million square feet of property in Bethpage, New York. That property formerly belonged to Northrup Grumman, and today much of it is leased to others. This proceeding concerns .544 acres of petitioners’ property acquired in 2005 for the development of a fast-track power plant known as Bethpage 3. The sole general partner of petitioner Steel Los III, LP and the president of copetitioner Associated Brook Corp. is Joseph Lostritto.

Petitioners’ property is adjacent to property owned by Calpine Corporation and its affiliates. Calpine is a developer of power plants and a power producer, operating dozens of power plants in North America. Calpine constructed a power plant on its property in 2001 and had been approached by the Long Island Power Authority (LIPA) in 2003 to construct Bethpage 3.

LIPA is the electric utility that provides service to the ratepayers in Nassau and Suffolk Counties and parts of Queens County. It acts as a conduit for the transmission of energy.

Respondent, Power Authority of the State of New York (NYPA), is the state agency responsible for providing wholesale power throughout the State of New York. NYPA owns and operates 16 major electric generating projects and employs a large [709]*709staff with expertise in various areas including permitting, code compliance and property acquisition.

Petitioners commenced an action in April 2005 seeking to enjoin NYPA from condemning its property. This court denied preliminary injunctive relief on the grounds that the court lacked jurisdiction.

By decision dated October 31, 2006, this court’s order was reversed (Steel Los III, LP v Power Auth. of State of N.Y., 33 AD3d 990 [2d Dept 2006]). The Appellate Division, Second Department, determined that this court did have jurisdiction to determine petitioners’ challenge to NYPA’s condemnation of its property, because NYPA had proceeded under one of the exemptions provided in section 206 of the EDPL, enabling NYPA to proceed without compliance with the notice, hearing and determination provisions otherwise required by statute. The appellate court remanded the matter for further proceedings, including conversion of the action into a special proceeding. By order dated February 15, 2007, the action was deemed a special proceeding pursuant to CPLR article 78.

The motion for leave to appeal to the Court of Appeals was dismissed by order dated June 5, 2007 (8 NY3d 998 [2007]).

On June 28, 2007, the notice of petition and petition were served. A verified answer and objection in point of law is dated July 5, 2007, and according to respondent was served by mail on that date. Petitioners served an amended petition on respondent on August 1, 2007, and on the Attorney General on August 2, 2007. The verified answer to the amended petition, containing three objections in point of law, is dated September 4, 2007. By letter dated September 18, 2007, respondent withdrew its third objection in point of law and part of the first objection in point of law.

Respondent’s first objection in point of law is that petitioners have failed to comply with article 78 in that “[t]he amended petition is not supported by any sworn affidavits” and therefore petitioners must be “barred from submitting affidavits, evidence, or argument in reply to respondent’s papers.” A verified pleading may be utilized as an affidavit (CPLR 105 [u]), and, here, the amended petition is verified by Joseph Lostritto. Furthermore, the court notes that CPLR 7804 (d) does not require that affidavits accompany a petition. Based on the foregoing, the first objection in point of law is dismissed.

Respondent’s second objection in point of law is that the amended petition was untimely and therefore a nullity. Here, [710]*710the original answer was mailed on July 5, 2007, and accordingly petitioners’ time to amend as of right extended to July 30, 2007 (CPLR 3025 [a], CPLR 2103 [b] [2]). Under these circumstances service of the amended petition on August 1, 2007 was late. Nevertheless, leave to amend may be granted at any time (CPLR 3025 [b]), and, in the absence of any demonstrated prejudice to respondent from the de minimis delay, the court sua sponte grants petitioners leave to serve the amended petition (Leitner v Jasa Hous. Mgt. Servs. for Aged, 6 AD3d 667 [2d Dept 2004]; see Weck v Brett, 288 AD2d 466 [2d Dept 2001]). Accordingly, the second objection in point of law is dismissed.

In the period 2003 through 2004, LIPA determined that, due to the “drastic energy needs” anticipated for the summer of 2005, a fast-track project involving construction of additional power plants was necessary. In the absence of such a project, the potential shortfall of power endangered not only LIPA customers but the entire northeast power grid, including the City of New York.

In the fall of 2003, LIPA negotiated exclusively with Calpine for construction of an additional power plant. According to the amended petition, in September 2003, in connection with its negotiations with LIPA, Calpine sought to purchase the subject property from petitioners for $1,600,000 (see Calpine letter to Lostritto dated Oct. 23, 2003, annexed as exhibit L in vol IV). Petitioners were not interested in selling the property (petitioners’ supplemental exhibits, exhibit E), noting their critical need for the front parking lot for petitioners’ office tenants.

At some point LIPA ceased exclusive negotiations with Calpine. LIPA issued a public request for proposal (RFP) on February 23, 2004. In the RFP (respondent’s supplemental administrative record, vol III, exhibit 2) LIPA sought an agreement to purchase electricity for 20 years from a power plant not to exceed 79.9 megawatts in generating capacity. The RFP also required a commercial operation date of no later than early summer 2005.

The RFP provided the following regarding the proposed site of the power plant:

“II. a. Site: The generation facility shall be located on a site in Nassau County, Suffolk County or the portion of Queens County known as the Rockaways controlled by [the bidder] through either fee ownership, a land lease, option to lease or purchase, or equivalent demonstration of site control. [The bid[711]*711der] shall provide evidence of such site control in its proposal.” (RFP at 2 [emphasis added].)

The RFP did not require that bidders own the proposed site nor did it require acquisition by LIPA of the proposed site as a prerequisite for a bid.

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Cite This Page — Counsel Stack

Bluebook (online)
21 Misc. 3d 707, Counsel Stack Legal Research, https://law.counselstack.com/opinion/steel-los-iii-lp-v-power-authority-nysupct-2008.