Posted by: Patricia Salkin | July 5, 2009

Town’s Request for Supplemental Information Related to Downsizing of Shopping Mall Upheld

After more than eleven years of legal wrangling, the New York Court of Appeals denied cert, finally closing the chapter and letting stand a holding that the Town’s request for a Supplemental Environmental Impact Statement (“SEIS”) in response to a developer’s submission of a mitigated development plan was not arbitrary and capricious.  The Second Department held that “[t]he Town Board, as the lead agency, ‘may require a supplemental EIS, limited to the specific significant adverse environmental impacts not addressed or inadequately addressed in the [original] EIS that arise from:  (a) changes proposed for the project; (b) newly discovered information; or (c) a change in circumstances related to the project.’” Oyster Bay Assocs. Ltd. P’ship v. Town Board of Oyster Bay, 58 A.D.3d 855, 859, 874 N.Y.S.2d 492, 496 (2d Dep’t 2009) (citing, 6 NYCRR 617.9[a][7][i]).

The original Application was submitted on January 21, 1998 by developer Oyster Bay Associates Limited Partnership (“Developer”) to the Town Board, by which the Developer sought to construct a 960,000 square foot shopping mall on the 39 acre Property located in a Light Industry Zoning District.  The property was formerly owned by the Cerro Wire and Cable Company, which conducted certain industrial manufacturing at the property.  While no zoning variances were required for the project, a special use permit was required by the Town Code to develop the proposed shopping mall.  The size of the mall was subsequently reduced to 860,000 square feet, prior to the issuance of the Final Environmental Impact Statement (“FEIS”).

The Town Board designated itself as the lead agency as authorized by the New York State Environmental Quality Review Act (SEQRA) in light of the fact that the proposed project may have a significant environmental impact.  The Town’s Environmental Quality Review Commission (“TEQR Commission”) held a public hearing on the Application and issued its initial SEQRA findings in June, 2000.  The initial SEQRA findings were favorable to the Developer in that they supported the project on virtually every consideration raised during the SEQRA process and identified in its Draft Environmental Impact Statement (“DEIS”) and FEIS.  Subsequent to the issuance of the TEQR Commission’s SEQRA findings the Town Board held a public hearing and kept the record open for thirty days for additional comment and rebuttal.  Local civic organizations and other groups voiced strong opposition to the proposed development.  Thereafter, Town Board asked the TEQR Commission to consider the information received during and subsequent to the Town Board hearing.  On January 1, 2001, The TEQR Commission rescinded its initial findings and issued revised SEQRA findings that found the project would cause adverse effects on traffic, crime, quality of life and density. (see, Oyster Bay Assocs. Ltd. P’ship v. Town Board of Oyster Bay, 2002 WL 343582927 (NY Sup. Ct., Suffolk Co. 2002).  As a result of the revised SEQRA findings, the Developer offered to reduce the size of the proposed mall to 750,000 square feet.  On May 8, 2001 the Town Board issued its own findings, adopting substantially all of the TEQR Commission’s revised SEQRA findings, and rejected the Developer’s offer to reduce the size of the mall as untimely and insufficient and denied the Application.

 The First Round

In July 2001, the Developer commenced an Article 78 proceeding in New York State Supreme Court to review the Town’s denial of the Application.  By Order dated July 8, 2002, the Supreme Court held that the Town “failed to identify what evidence it relied upon in deviating from the TEQR Commission’s initial SEQRA recommendation” and vacated the Town Board’s denial.  The Supreme Court remanded the matter to the Town Board to consider the Developer’s offer to reduce the size of the mall to 750,000 square feet.  The Town Board appealed and on March 3, 2003, the Second Department affirmed the Supreme Court decision and agreed that the Town’s decision to reject the Developer’s Application was arbitrary and capricious and that the Town did not present sufficient evidence for the SEQRA deviation.(see, Oyster Bay Assocs., 58 A.D.3d at 857, 874 N.Y.S.2d at 494-95).

The Second Round

By Order dated November 25, 2003, the Supreme Court granted the Developer’s motion for judgment pursuant to CPLR 7806 and ordered the Town to issue a building permit for the construction of the 860,000 square foot mall.  The Town appealed.  By order dated September 12, 2005, the Second Department reversed the November 25, 2003 decision, stating that its prior March 3, 2003 decision only affirmed the lower court ruling in so far as it remitted the matter back to the Town Board, and did not order the issuance of a special use permit and a building permit for the 860,000 square foot mall.(see,Oyster Bay Assocs. Ltd. P’ship v. Town Board of Oyster Bay, 21 A.D.3d 964, 801 N.Y.S.2d 612 (2d Dep’t 2005)).  The lower court erred in its 2003 ruling directing the town to issue a special use permit and building permit in the absence of a request for this relief (see, Oyster Bay Assocs. Ltd. P’ship, 58 A.D.3d at 858, 874 N.Y.S.2d at 497).

The Third Round

For the third time, the Developer sought relief from the Supreme Court to have the Town Board issue a special use permit and site plan approval for the 860,000 square foot mall.  By Order dated June 11, 2007, the Supreme Court denied the petition. (see, Oyster Bay Assocs. Ltd. P’ship v. Town Board of Oyster Bay, 15 Misc.3d 1147(A), 841 N.Y.S.2d 821 (NY Sup.  Ct. Suffolk 2007) In its decision, however, the Supreme Court ordered the Town to “follow through on the [Developer’s] offer to mitigate impacts by reducing the Application to a 750,000 square foot shopping mall as noted in the prior Court Orders.” (see, Oyster Bay Assocs. Ltd. P’ship, 58 A.D.3d at 858, 874 N.Y.S.2d at 497.) 

On September 25, 2007, the Town Board issued a decision denying the Developer’s Application for the 860,000 square foot mall and stated that it would consider the mitigated plan for the 750,000 square foot mall, provided that the Developer submit the SEIS in connection therewith to address environmental issues that had not been resolved to date.  The Town Board’s request for the SEIS caused yet more litigation when the Developer petitioned the Supreme Court (for a fourth time) to have the Town accept the TEQR Commission’s initial SEQRA findings issued in 2000.  By Decision dated June 9, 2008, the Supreme Court ordered the Town to accept the TEQR’s initial findings, issue the special use permit for the proposed 750,000 square foot mall and review the Developer’s site plan without delay.  Once again, the Town appealed. 

The Fourth Round

In January 2009, the Appellate Division reversed the Supreme Court ruling, finding that the Town Board’s decision to require the SEIS in response to the Developer’s mitigation of the original development plans was not arbitrary and capricious.(see, 58 A.D.3d 855, 874 N.Y.S.2d 492 (2d Dep’t 2009)).  The Court said that “The primary purpose of SEQRA is “to inject environmental considerations directly into governmental decision making.”  Further, the Court noted that under SEQRA, the Courts are limited to “whether the agency identified the relevant areas of environmental concern, took a hard look at them and made a ‘reasoned elaboration’ of the basis for its determination.”   

The Town Board, while it was “authorized to seek the advice and assistance of other agencies such as TEQR Commission,” it was, as the lead agency, responsible for the ultimate approval of the project and it held the principal responsibility for the final determination in connection with SEQRA. The Town Board took a “hard look” at the relevant environmental areas of concern, properly identified post-FEIS submissions, which “supported its deviation from the TEQR Commission’s SEQRA findings” and, as such, its request for SEIS was proper.  A SEIS, “limited to the specific significant adverse environmental impacts not addressed or inadequately addressed in the EIS that arise from: (a) changes proposed for the project; (b) newly discovered information; and (c) a change in circumstances related to the project” may be required by the lead agency (citing, 6 NYCRR 617.9(a)(7)(i)).  Due to the changes to the Developer’s plan, specifically, the reduction in the square footage of the proposed project, the lower Court’s order directing the Town to issue a special use permit without the affording the Town the opportunity to review the SEIS “deprived the Town Board of the right to meaningfully consider a revised site plan . . . .”  The Second Department’s January 2009 decision was reaffirmed by the same court in April 2009, and on June 30, 2009, the Court of Appeals denied the Developer’s motion for leave to appeal.  

 Conclusion

More than a decade after the Application was submitted and a host of procedural twists and turns initiated by both the Developer and the Town, this project has been sent back by the Courts for the Developer to continue the zoning approval process.  In a Newsday article dated April 8, 2009 a spokesperson for the Developer stated that the “attorneys were reviewing the decision and trying to determine the next course of action.” (see, Court: Syosset mall project must restart permit process,  http://www.newsday.com/news/local/nassau/ny-1ima110912633857apr08,0,607756,print.story).   The Town Supervisor, on the other hand, “applauded [the Appellate Court] ruling.”  The Developer’s options have seemingly run out with the recent Court of Appeals decision and it must submit the SEIS to the Town for review.  To be sure, we can expect more legal challenges as the Developer continues through the zoning process, eleven and one-half years after it started.

Oyster Bay Assocs. Ltd. P’ship v. Town Board of Town of Oyster Bay, 2009 WL 1852089 (NY, 6/30/2009).

Special thanks to Keith P. Brown, Esq. of Brown & Altman, LLP in Melville, NY for this posting.


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