Appellate Division, Third Department affirms dismissal of challenge to SEQRA and site plan approval

While New York courts have repeatedly held that economic injury, by itself, is not within the range of interests protected by the State Environmental Quality Review Act (“SEQRA”), Soc’y of Plastics Indus. v. County of Suffolk, 77 NY2d 761 (1991), economic interests can motivate a business to bring a lawsuit asserting SEQRA claims in hopes of invalidating, or at least delaying, a competitor’s land use approvals.

That’s been true since SEQRA was adopted.

In Webster Associates v. Webster, 59 NY2d 220 (1983), one of the first SEQRA cases to reach the Court of Appeals, a developer asserted SEQRA claims in a successful effort to invalidate the Town of Webster’s approval of a development proposed by a rival developer. Closer to home, when a hotel owner asserted SEQRA challenge to approval of a new hotel project, the Court warned that “the environmental laws should not be perverted into engines of procedural obstructions or manipulative devices for advancing commercial self-interest in the name of the environment.” Weiss v. Planning Bd. of Poughkeepsie, 130 Misc. 2d 381 (Sup. Ct. Dutchess 1985)

And it’s no less true thirty years later.

In Schaller vs. Town of New Paltz Zoning Board of Appeals et al. 2013 NY Slip Op 5027, the Third Department ruled that a lawsuit brought by the owners of a motel in the Town of New Paltz, challenging approvals granted by the Town Planning Board and Zoning Board of Appeals for development of a hotel development on adjoining property, was properly dismissed.

Our firm represented the Planning Board during site plan review, the resulting Article 78 proceeding, and the appeal. While the decision addressed familiar areas of SEQRA litigation, there are lessons that warrant attention.

The hotel developer had applied to the planning board in 2008 for site plan approval of a four story, 92 room hotel, and concurrently applied to the ZBA for a 17 foot height variance. Following a number of public hearings before the ZBA, the project was redesigned to eliminate one floor, reduce the number of rooms, and reduce the height of the building, which in turn reduced the necessary height variance from 17 feet to 6 feet.

The revised plan was then submitted to the Planning Board, and the applicant requested that a coordinated SEQRA review be undertaken.

As SEQRA lead agency, the Planning Board conducted a public hearing and received extensive comment by the public, including the adjoining owner’s planning consultant and counsel. On consideration of the site plan, the project modifications and the SEQRA documentation provide by the applicant, the Board determined that the project would not cause a significant adverse impact and issued a negative declaration.

The ZBA adopted that declaration, and then approved a six-foot height variance that allowed the hotel to incorporate energy conservation measures and a pitched roof and other enhanced architectural features. The adjoining owner challenged the Planning Board’s SEQRA determination and the ZBA’s approval of the variance by bring an Article 78 proceeding in Supreme Court, Ulster County.

The Planning Board then granted conditional final site plan approval to the project, after amending its SEQRA determination to reflect additional issues identified in the site plan process.

At the request of the applicant, the Board also granted conditional site plan approval to a conforming building design, after making an additional SEQRA determination, in the event that the pending Article 78 determined the variance should not have been approved.

The pending Article 78 was amended to add a challenge to the site plan approval granted by the Planning Board.

On view of the record before the Planning Board and ZBA, which ran to more than 1,000 page, Judge Cahill found, and the Third Department agreed, that the record clearly demonstrated the Planning Board had complied with the procedural and substantive requirements of SEQRA, and the SEQRA determination was neither arbitrary nor capricious.

Here, a review of the record establishes that the Planning Board conducted a two-year coordinated SEQRA review of the application which included, among other things, consultation with traffic engineers; review of the expanded long form environmental assessment form, visual assessment form, traffic studies and related submissions; compliance with the comprehensive master plan, an architectural study, a water system and sewage report, and drainage and storm water impact studies; consideration of input from various interested agencies, as well as public comments and concerns received from public hearings and Planning Board meetings, and submissions by interested parties.

The Planning Board conditioned the negative declaration on the applicant’s compliance with various mitigating measures designed to minimize potential environmental impacts, including constructing turn lanes, upgrading traffic signals, adding traffic signage, retention of certain trees for aesthetic purposes and construction of a previously approved water line loop/extension for water supply and sewer purposes.

The Planning Board specifically noted the various environmental impacts it considered in reaching its determination and it took a hard look before concluding that the project would not have a significant impact on the environment.

The Planning Board also provided detailed reasoning and elaboration for its determination in the negative declaration with regard to the lack of significant impacts on traffic and transportation, aesthetics resources, water and sewage resources, endangered species, historic resources, community character and services, and energy resources. Under these circumstances, the Planning Board complied with the procedural and substantive requirements of SEQRA (see 6 NYCRR 617.7) and, accordingly, its determination is not arbitrary or capricious.

The Third Department agreed that the challenge to the ZBA’s decision granting the variance was properly dismissed.

In balancing the benefits to the applicant against the possible detriment to the community, the ZBA specifically referred to documentation in support of its conclusions that, among other things, the variance was not substantial when compared to the nearby buildings, would improve the physical and environmental condition and character of the neighborhood, and was the minimum variance required to promote energy efficiency for both the applicant and the community. As substantial evidence in the record supports the rationale for the ZBA’s determination granting the variance, it will not be disturbed input.

Finally, on turning to the Planning Board ‘s grant of the conditional site plan approvals, the Court found little need for discussion in upholding Supreme Court’s dismissal of the challenge.

Several points warrant comment.

  • Perhaps the most obvious is that when municipal boards have reason to anticipate an action may wind up in the courts, they need to give attention not just to conducting a full and fair review of the application, but documenting that review, both in the written resolutions that memorialize their decision and the record that provides the evidence to support those determinations. Courts are generally unwilling to disturb reasoned decisions that are reached after full and fair consideration, particularly when based on evidence in the record.
  • The two year review process was long and complex. Fortunately, the process was fair, the record was clear and the decisions of both boards, drawn with their assistance of their counsel, were thorough and well-reasoned. While a municipality may not be able to prevent a challenge, a strong legal defense will allow the municipality to prevail.
  • The alternative to mounting a strong legal defense is for the municipality and the applicant to incur the expense and delay of repeating the land use approval process all over again.
  • In this case, the petitioner’s challenge asserted that the extensive proceedings were merely a “sham.” That allegation was belied by the numerous project changes that the developer agreed to incorporate, and by affidavits that demonstrated how the board members on both the planning board and zoning board of appeals worked diligently over the course of two years to help the hotel developer fit a generic Hampton Inn design to the community of New Paltz.
  • As frequently happens when a project requires one or more key variances, the land use review started at the ZBA and an uncoordinated SEQRA review, so that the developer could determine whether it would be feasible to seek the substantial height variance needed for a four story building. The developer was able to incorporate recommendations by the ZBA that allowed the building to be reduced, which in turn was reflected in the SEQRA determinations made by the Planning Board as lead agency.
  • The unusual step of granting conditional site plan approval to an alternative site plan that incorporated a conforming building, should the height variance be invalidated. allowed both applicant and Planning Board some certainty about the outcome of the pending Article 78. As the alternative site plan was the same in all respects except for building height, it also showed that the variance did not allow any added development density on the site.
  • It also required an additional SEQRA determination. There were actually three SEQRA determinations along the way: the first allowed the ZBA to take action; the second addressed the developer’s request for approval in the alternative, allowing a building plan that was conforming as to height, but less attractive and lacking certain energy conservation measures that required additional height, to be constructed if the variance was struck down, and the third clearing up some “issues” raised by the adjoining owner’s counsel.
  • On appeal, the argument was made that the applicant had not demonstrated the project would have sewer service. Leaving aside the lack of legal merit in arguing that the Village Law did not allow the village to contract with the town’s sewer district, because it allegedly only conveyed sewage (a point never mentioned in the course of the PB process), it failed to recognize any irony in the fact that sewer service to the adjoining owner’s property was provided by the very same district. However, as the issue had never been raised before the Planning Board, the Court simply noted the claim was outside the record and dismissed it without further ado.

As the Third Department unanimously affirmed Judge Cahill, and there is no apparent reason for the Court of Appeals to grant leave to appeal, the decisions of the Planning Board and Zoning Board of Appeals should stand.