The Matter of Bowers Development v. Oneida County Industrial Development Agency

• Court: New York Court of Appeals
• Decided: December 14, 2023
• Docket: 89
• Status: Published

Opinion

State of New York MEMORANDUM Court of Appeals This memorandum is uncorrected and subject to revision before publication in the New York Reports.

No. 89 In the Matter of Bowers Development, LLC et al., Respondents, v. Oneida County Industrial Development Agency et al., Appellants.

Paul J. Goldman, for appellants. Michael A. Fogel, for respondents. Iroquois Healthcare Association, Inc., County of Oneida, New York State Economic Development Council, Inc., amici curiae.

MEMORANDUM:

The order of the Appellate Division should be reversed, with costs, the matter

remitted to the Appellate Division for consideration of issues raised but not determined by

that Court, and the certified question answered in the negative.

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Respondent Oneida County Industrial Development Agency (OCIDA) exercised its

statutory eminent domain powers to condemn a parcel of property owned by petitioner

Rome Plumbing & Heating Supply Co., Inc., which was the subject of a contract of sale to

petitioner Bowers Development, LLC. Respondent Central Utica Building, LLC (CUB)

planned to build a medical office building on an adjoining property and requested that

OCIDA exercise its authority to take the property so that CUB could build a parking facility

that would serve the medical office building during the day, and the public during off-

hours. The medical office building itself would be used predominantly to house private,

rent-paying doctors’ offices and “other commercial and/or retail tenants to provide

complementary services.” The remaining portion was to be used as an ambulatory surgery

center, also as a paying tenant. OCIDA determined it had the authority to take the property

because “the surface parking to be constructed on the . . . [p]roperty is a commercial use

within OCIDA’s statutory authority.”

In an EDPL article 2 proceeding for review of the condemnor’s section 204

determination, “[t]he scope of review is very limited—the Appellate Division must ‘either

confirm or reject the condemnor’s determinations and findings,’ and its review is confined

to whether (1) the proceeding was constitutionally sound; (2) the condemnor had the

requisite authority; (3) its determination complied with SEQRA and EDPL article 2; and

(4) the acquisition will serve a public use” (Matter of City of New York [Grand Lafayette

Props. LLC], 6 NY3d 540, 546 [2006], quoting EDPL 207 [C]). “If an adequate basis for

a determination is shown ‘and the objector cannot show that the determination was

“without foundation,” the agency’s determination should be confirmed’ ” (Matter of

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Waldo’s, Inc. v Village of Johnson City, 74 NY2d 718, 720 [1989], quoting Matter of

Jackson v New York State Urban Dev. Corp., 67 NY2d 400, 418 [1986]; see Long Is. R.R.

Co. v Long Is. Light. Co., 103 AD2d 156, 168 [2d Dept 1984], affd 64 NY2d 1088 [1985]).

General Municipal Law § 858 (4) grants industrial development agencies the power

to “acquire by purchase, grant, lease, gift, pursuant to the provisions of the [EDPL], or

otherwise and to use, real property or rights or easements therein necessary for its corporate

purposes.” “The purposes of [an industrial development] agency are to promote, develop,

encourage[,] and assist in the acquiring, constructing, reconstructing, improving,

maintaining, equipping[,] and furnishing industrial, manufacturing, warehousing,

commercial, research, renewable energy[,] and recreation facilities” (General Municipal

Law § 858). The question here is whether OCIDA appropriately determined that taking

the property was necessary for a “commercial” purpose.

As a general matter, a parking facility used by the customers of a profit-making

business plainly has a “commercial” purpose. Petitioners nevertheless argue, and the

Appellate Division majority held, that the parking facility was not “commercial” because

it was for “hospital” or “health-related facility” purposes (see 211 AD3d 1495, 1496

[2022]; cf. 1981 Ops Atty Gen 55; 1980 Ops Atty Gen 139). However, the proposed use

of the property as a parking facility was not for such purposes. The proposed parking

facility functioned simply to satisfy the need for parking created by the medical office

building and provide public parking at night. The proposed use did not serve any

healthcare-related function. Moreover, though some paying tenants of the medical office

building provided healthcare services, the building itself was an office building with space

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leased out to paying tenants. Even assuming some of its paying tenants could qualify as

“hospitals” or “health-related facilities,” this would not negate the commercial nature of

the office building as a whole (see 211 AD3d at 1503 [Curran, J., dissenting]). OCIDA

therefore had a rational basis for concluding that the use of the property was for a

“commercial” purpose (see Matter of Kaur v New York State Urban Dev. Corp., 15 NY3d

235, 244, 257-259 [2010]; see also Matter of Goldstein v New York State Urban Dev.

Corp., 13 NY3d 511, 526 [2009], citing Kaskel v Impellitteri, 306 NY 73, 78 [1953]), and

its determination was not “without foundation” (see Grand Lafayette Props. LLC, 6 NY3d

at 546).

Given that the Appellate Division did not reach petitioners’ other arguments, we

remit to that Court to consider those arguments in the first instance (see J.P. Morgan Sec.

Inc. v Vigilant Ins. Co., 37 NY3d 552, 569 [2021]; Schiavone v City of New York, 92 NY2d

308, 317 [1998]).

Order reversed, with costs, matter remitted to the Appellate Division, Fourth Department, for consideration of issues raised but not determined by that Court and certified question answered in the negative, in a memorandum. Chief Judge Wilson and Judges Rivera, Garcia, Singas, Cannataro, Troutman and Halligan concur. Decided December 14, 2023

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