In a case of first impression, an appeals court in New York dealt a blow to the expansion plans of Columbia University which include the use of eminent domain to acquire the last batch of properties in the project footprint. Proposed in 2003, the project will expand the University’s 36-acre campus by building an additional 6.8 million square feet of space for classrooms, research facilities, administration, housing, and parking, including redeveloping 17-acres in the West Harlem neighborhood of “Manhattanville” from W. 125th to W. 133rd streets. The expansion plan, which will also include 2 acres of public open space, is estimated to cost Columbia University approximately $6.3 billion, and is scheduled to take place in two phases, with Phase 1 scheduled for completion by 2015 and Phase two scheduled for completion by 2030. While Columbia now owns or controls almost all of the parcels in the project area, the owners of a gas station and the owner of a self-storage business challenged the State’s exercise of eminent domain on behalf of the private university. The appellate division handed down a 3-2 decision that held, among other things, that the government’s use of eminent domain in this case was unconstitutional under both the federal and state constitutions.
Referring to Columbia as an “elite private university,” the Court said that the proposed expansion did not have the required “civic purpose” to support the government’s exercise of eminent domain for what the Empire State Development Corporation labeled as a “mixed use development land use improvement and civic project.” The Court explains that the statutory definition of “civic use” does refer to educational uses, but that the final clause, “or other civic purposes,” restricts the educational purposes qualifying for a “civic purpose.” Acknowledging that this is a case of first impression in New York, the Court has no problem distinguishing this project from other, non-educational civic projects such as the New York Stock Exchange project that showed substantial public benefits, as opposed to the benefits here directed at Columbia which the Court believes to be the sole beneficiary. The Court basically challenges the State Legislature to address this issue by stating, “Where we to grant civic purpose status to a private university for purposes of eminent domain, we are doing that which the Legislature has explicitly failed to do…”
The Court found the Urban Development Corporation Act unconstitutional as applied since the law contains no standards for determining what constitutes “substandard and insanitary” conditions to support a finding of blight. The Court acknowledged that although the words are not necessarily uncinstitutionally vague, that alone does not end the inquiry, and that here, the application of the standard has resulted in “ad hoc and selective enforcement.” Labeling the blight designation in this case “mere sophistry,” after reviewing the studies and reports that had been commissioned since 2002 to examine the conditions of properties in the project area, the Court concluded that there was no independent credible proof of blight, and that the City and the State engineered a blight finding in an effort to claim a public purpose. In fact, the Court goes through detail pointing out inconsistencies in the blight findings and specifically focuses on one consultant study that “led to the preposterous summary of building and sidewalk defects…” which “…reveals the idiocy of considering things like unpainted block walls or loose awning supports as evidence of a blighted neighborhood. Virtually every neighborhood in the five boroughs will yield similar instances of disrepair that can be captured in close-up technicolor.”
The Court also points to “the folly of underutilization” and urges that “The time has come to categorically reject eminent domain takings solely based on underutilization.” The Court explains that using underutilization as a blight condition, “transforms the purpose of blight removal from the elimination of harmful social and economic conditions in a specific area to a policy affirmatively requiring the ultimate commercial development of all property regardless of the character of the community subject to urban renewal.”
Perhaps the most important aspect of the decision is the Court’s careful examination of Justice Kennedy’s concurring opinion in Kelo, and the finding that this case is an example of what Kennedy warned about – situations where “improper motive in transfers to private parties with only discrete secondary benefits to the public.” Judge Catterson recounts Justice Kennedy’s test for pretext: 1) city’s awareness of a depressed condition; 2) formulation of a comprehensive development plan; 3) substantial commitment of public funds; 4) city’s review of a variety of development plans; and 5) city’s choice of a private developer from a group of applicants rather than picking a particular transferee beforehand. While all of these elements were present in the Kelo case, in the Columbia case, Judge Catterson finds that: 1) when the City and State started to look at the expansion project, the area was not depressed; 2) there was no comprehensive development plan to address area-wide economic depression; 3) no public funds were being used to support the project – Columbia is paying for 100% of the project; 4) no competing plans were submitted – although the community board submitted a 197-a plan that acknowledged the importance of the expansion project, the plan clearly indicated no support for the use of eminent domain; and 5) the ultimate beneficiary of the project was predetermined from the beginning – Columbia University.
Given the 3-2 decision, coupled with the recent State High Court decision in Atlantic Yards that yielded a different result (albeit with a totally different fact pattern), it is certain that this case will be up on appeal.
Kaur v. New York State Urban Development Corporation, 2009 WL 43484872 (N.Y.A.D. 1 Dept. 12/3/2009).
The opinion can be accessed at: http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08976.htm
Read the New York Times editorial here
Read more about the opinion in Bloomberg news here