Jacobowitz & Gubits Successfully Defends Town of New Paltz Planning Board in Student Housing Project Litigation

The firm of J&G, LLP successfully represented the Planning Board of the Town of New Paltz in an Article 78 litigation that challenged the planning board’s decision not to approve a significant student housing project as well as the board’s authority to do so.

In 2011, Wilmorite, Inc., a Rochester-based developer, made application to the Town of New Paltz Planning Board to develop Park Point New Paltz, an off-campus residential project that would provide housing for 700 students attending SUNY New Paltz. The applicant and the planning board determined that the size and potential impacts of the project warranted preparation of an environmental impact statement, and the planning board assumed lead agency status to oversee its preparation. George Lithco, of J&G, LLP, represented the planning board during the board’s extensive zoning and SEQR review.

In 2013, after the close of the public hearing on the draft EIS, Wilmorite made application to the Ulster County Industrial Development Agency (IDA) for a special payment-in-lieu-of taxes (PILOT) incentive that exempts “dormitory projects” from real property and other taxes. The planning board retained a consultant to evaluate the impacts of the project on community services.

Upon completion of the SEQRA review, the planning board issued a SEQRA findings statement on the impacts of the project. The findings demonstrated that the project would have significant adverse impacts on community services, including police, fire, emergency medical services and schools, and that unless the project could mitigate those impacts, the planning board determined that it could not approve the project. The IDA later approved the tax exemptions and PILOT agreement, and the planning board then amended its findings to reflect that fact, and adopted a resolution denying the site plan application.

Wilmorite brought an Article 78 proceeding to challenge the planning board’s decision. The suit claimed that the planning board decision was arbitrary, capricious and without support in the record. The suit also claimed that the board’s SEQR findings and project denial overstepped its jurisdictional bounds and intruded on the authority of the IDA. George Lithco, Ben Gailey and Kelly Pressler of J&G, LLP represented the planning board in the litigation.

Judge Melkonian, sitting in Ulster County Supreme Court, dismissed the Article 78 petition in its entirety, ruling that the Planning Board had taken the required ‘hard look’ at Wimorite’s application and reached a decision that was proper and clearly based on the extensive record before it. Contrasting the broad role of the planning board, as lead agency, in evaluating the impacts of the entire action against the limited role of the IDA in approving a tax exemption, Judge Melkonian found that the planning board was obligated to determine the impact of the project and PILOT on the taxing jurisdictions and the critical community services they provide to property owners and residents. Given their respective roles and jurisdictions, Judge Melkonian noted that it was entirely possible that two involved agencies, such as the planning board and the IDA, could reach different conclusions about the merits of an action. While the planning board has no authority to dictate whether a PILOT should be approved or on what terms, SEQRA does require the board to make findings and consider those findings when taking action.

“This case highlights the importance of involving counsel and other professionals at strategic points in the environmental review process, particularly when a land-use action is complex, has significant impacts, and changes over time,” said George Lithco of J&G. “As local governments struggle with tax caps, higher costs for municipal services and stagnant property tax revenues, some development projects can have significant impacts on important community services. By taking an active role in the SEQRA process, we were able to help the board understand those impacts so that potential issues will be avoided. This outcome is significant for the Town of New Paltz,” he continued.