NY Appellate Court Annuls Local Law Rescinding a Rezoning Five Years Later Finding it was Arbitrary and Capricious

Petitioner Loudon House LLC acquired certain real property in the Town of Colonie upon which it wished to build a 24–unit condominium development. The property was zoned for single family residential use and, in 2007, Loudon House sought to have the property rezoned and placed in a planned development district where the project would be considered a permissible use. Respondent Town Board of the Town of Colonie approved the rezoning in 2007 but conditioned the approval upon the property being “developed as a multi-family complex with no more than 24 residential condominium apartment units in 1 building.” Petitioner BCI Construction, Inc. obtained a building permit for the project and commenced construction in 2008. However, the Town Board restored the property’s original zoning after a public hearing conducted in July 2012. Petitioners then commenced this combined CPLR article 78 proceeding and action for declaratory judgment, seeking to annul the new local law. The trial court dismissed the petition and declared the local valid and this appeal followed.

Town of Colonie Land Use Law § 190–72 permitted the Town Board to rescind a planned development district and restore a property to its prior zoning under limited circumstances. The Town Board did not make the factual findings required by section 190–72, however, and the Town Attorney made clear that the Town Board was not relying upon that section in enacting the 2012 Local Law. The court therefore found that the Town Board acted in an arbitrary and capricious manner by disregarding the provisions of the Colonie Land Use Law in enacting the 2012 local law. As to the due process and equal protection claims, Loudon House had a vested property interest that was impacted by the 2012 Local Law, however, nothing in the record suggested that the actions of the Town Board rose to the level of a constitutional violation, i.e., that they were “so outrageously arbitrary as to constitute a gross abuse of governmental authority”. Accordingly, the dismissal of these claims was affirmed, and the holding declaring the newer local law valid was reversed.

Loudon House LLC v Town of Colonie, 2014 WL 7391487 (NYAD 3 Dept. 12/31/2014)

The opinion can be accessed at: http://decisions.courts.state.ny.us/ad3/Decisions/2014/518852.pdf