In protracted litigation following the granting of a use variance by the NYC Board of Standards and Appeal (BSA) to allow 160 Imlay Real Estate (Imlay) to change the use of a building in an M2-1 zoning district which permits manufacturing, commercial and retail use, to permit a residential use. The use variance was granted following evidence submitted by Imlay that it had, for a period of time, aggressively but unsuccessfully marketed the warehouse; and following the submission of “dollars and cents” proof that the return on equity for as-of-right conforming “manufacturing” uses would be 1.56%, while the return on equity for a nonconforming residential use would be 11.41%. A coalition led by the chamber of commerce challenged the granting of the variance by filing a petition on the last day to do so pursuant to the statute of limitations. The coalition named as respondents the BSA and the City of New York, but not Imlay.
Following one round of litigation to the Court of Appeals, the state high court sent the matter back to the trial court to determine whether failure to name Imlay, which was determined to be a necessary party, was fatal to the action, or whether, pursuant to statute, the proceeding could continue without Imlay. The trial court determined that the proceeding could continue, but the appellate court reversed. Relying on the five factors enumerated in N.Y. CPLR 1001(b) [(1) whether the petitioner has another remedy if the action is dismissed for nonjoinder, (2) the prejudice that may accrue from nonjoinder to the respondent or to the nonjoined party, (3) whether and by whom prejudice might have been avoided or may in the future be avoided, (4) the feasibility of a protective provision, and (5) whether an effective judgment may be rendered in absence of the nonjoined party.] the appellate court concluded that although the first factor weighs in favor of excusing Imlay’s nonjoinder, the remaining four factors do not. Specifically, the court noted that ultimately, it could not be guaranteed that the respondents will protect Imlay’s interests since their interests are different. Imlay is a developer concerned with a potential multi-million dollar loss and the City is concerned with regulatory and administrative issues. The court said that the Coalition could have timely named Imlay as a respondent and that they failed to set forth any reasonable excuse as to why they did not. Lastly, the court found it questionable as to whether an effective judgment could be rendered without Imlay’s participation in the proceeding.
In the Matter of Red Hook/Gowanus Chamber of Commerce v. NYC Board of Standards and Appeals, 2008 WL 740514 (N.Y.A.D. 2 Dept. 3/18/2008).
The opinion can also be accessed at: http://www.courts.state.ny.us/courts/ad2/calendar/webcal/decisions/2008/D18215.pdf
