NY Appellate Court Dismisses Restaurant Owner’s Takings Claim Against City’s Funding Assistance for Competitor’s Renovations

This post was authored by Amy Lavine, Esq. 

A New York appellate court held in August that a city’s decision to provide funding assistance for renovations of a privately owned building did not amount to inverse condemnation or a de facto taking.

The plaintiff owned a restaurant and challenged the city’s decision to award public funds to a nearby property owner to renovate its building and open a new restaurant. The city’s support of the plaintiff’s business competitor, the plaintiff claimed, constituted a de facto taking of his property, misrepresentation, and tortious interference in business relations.

The court dismissed the plaintiff’s claims. As it explained, the plaintiff failed to state a cause of action for inverse condemnation or de facto appropriation because he didn’t allege any restraint on the use of his own property. His claim for negligent misrepresentation also failed, the court explained, because the complaint failed to allege the existence of any special duty on the city’s part. Finally, the plaintiff’s claim of tortious interference with business relations failed because the complaint failed to allege that the city acted with the intention of harming the plaintiff’s business.

 

Mitchell v City of Geneva, 105 N.Y.S.3d 323 (N.Y. A.D 4 Dept. 8/22/19).