PSC, LLC v. City of Albany Indus. Dev. Agency

200 A.D.3d 1282

158 N.Y.S.3d 379

In the Matter of PSC, LLC, Petitioner,

v.CITY OF ALBANY INDUSTRIAL DEVELOPMENT AGENCY et al., Respondents.

532952

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: October 13, 2021

Decided and Entered: December 9, 2021

Tabner, Ryan & Keniry, LLP, Albany (Brian M. Quinn of counsel), for petitioner.

Hodgson Russ LLP, Albany (Charles W. Malcomb of counsel), for City of Albany Industrial Development Agency, respondent.

Young/Sommer LLC, Albany (Joseph F. Castiglione of counsel), for Capitalize Albany Corporation and another, respondents.

Before: Egan Jr., J.P., Lynch, Pritzker and Colangelo, JJ.

MEMORANDUM AND JUDGMENT

Pritzker, J.

Proceeding initiated in this Court pursuant to EDPL 207 to review a determination of respondent City of Albany Industrial Development Agency condemning 11 parcels of petitioner's real property for a mixed-use redevelopment project.

In August 1988, petitioner's predecessors in interest entered into a lease agreement whereby they agreed to lease 10 of their properties "for parking and or other lawful purpose[ ]" at a base rate of $8,500 per month with such rate to increase by $1,000 per month every five years for 50 years. Eventually, the lease was assumed by the Albany Convention Center Authority, and it was then transferred to respondent Liberty Square Development, LLC. Liberty Square is a wholly-owned subsidiary of respondent Capitalize Albany Corporation, a municipal corporation that "serv[es] as the City of Albany's economic development arm." In 2019, Capitalize Albany received a grant of over $10 million in order to acquire real estate across eight acres of land in an area of the City of Albany known as Liberty Square – an area that Capitalize Albany describes as blighted and economically underutilized – in order to carry out an economic redevelopment plan involving a mixed-use development concept called for by the Capital Region Economic Development Council's Capital 20.20 regional development strategy. Capitalize Albany was able to acquire all but 0.88 acre of land in that area through private transactions. The remaining 0.88 acre consisted of 11 parcels of petitioner's property (hereinafter the properties) that are used for parking – 10 of which were the subjects of the aforementioned lease. Despite attempts to purchase the properties, Capitalize Albany was unable to do so.

Capitalize Albany submitted an application to respondent City of Albany Industrial Development Agency (hereinafter the Agency) requesting that the Agency use its power of eminent domain to acquire the properties (see General Municipal Law § 903–a ). The Agency held a public hearing via Zoom, at which it presented the project and accepted comments and documents from the public, including petitioner's counsel. In January 2021, the Agency approved the use of eminent domain to acquire the properties for Capitalize Albany and Liberty Square, issuing a determination and findings resolution and a negative declaration pursuant to the State Environmental Quality Review Act (see ECL art 8 [hereinafter SEQRA]) in support of its decision. Petitioner commenced this proceeding in this Court pursuant to EDPL 207 seeking to annul the Agency's determination, and respondents answered.

We begin by examining petitioner's claims that the Agency's determination should be annulled due to several procedural errors: (1) that the Agency relied on additional evidence, a short environmental assessment form, after closing the public hearing; (2) that the Agency closed the public hearing before issuing a SEQRA determination; and (3) that the hearing was conducted in violation of the Public Officers Law and Executive Order 202.1 because it took place on Zoom and did not provide an adequate way for the public to view or listen to the meeting. It is well established that the condemnor is required to make its determination in accordance with the statutory procedures set forth in EDPL article 2 and ECL article 8, and this Court's review of a condemnor's determination includes whether such procedures were followed (see EDPL 207[C][3] ; Matter of Johnson v. Town of Caroga, 162 A.D.3d 1353, 1354, 79 N.Y.S.3d 368 [2018] ). Nevertheless, it is the party challenging the condemnation who "bear[s] the burden of establishing that the determination ... was violative of any of the applicable statutory criteria" ( Matter of Johnson v. Town of Caroga, 162 A.D.3d at 1354, 79 N.Y.S.3d 368 [internal quotation marks and citations omitted]; see Matter of Rafferty v. Town of Colonie, 300 A.D.2d 719, 721, 752 N.Y.S.2d 725 [2002] ).

Initially, petitioner's contention that the Agency received the short environmental assessment form and considered it after the public hearing is belied by the record, which shows that the form was submitted as part of Capitalize Albany's application to the Agency, well in advance of the public hearing. Second, there is no statutory requirement that a SEQRA determination be made in advance of the public hearing, and, in fact, such declarations appear to be frequently made alongside the determination and findings of public benefit – after the public hearing (see e.g. Matter of Johnson v. Town of Caroga, 162 A.D.3d at 1353–1354, 79 N.Y.S.3d 368 ; Matter of Davis Holding Co., LLC v. Village of Margaretville, 55 A.D.3d 1101, 1102, 865 N.Y.S.2d 736 [2008] ). Lastly, although agencies are required to make "reasonable efforts to ensure that meetings are held in an appropriate facility [that] can adequately accommodate members of the public who wish to attend such meetings" ( Public Officers Law § 103[d] ), the Agency was permitted to hold a hearing via Zoom, as laws relating to the attendance of in-person meetings were suspended in light of the COVID–19 pandemic so long as "the public ha[d] the ability to view or listen to such proceeding and that such meetings [we]re recorded and later transcribed" (Executive Order [A. Cuomo] No. 202.1 [ 9 NYCRR 8.202.1 ]), which was done here.

Petitioner also asserts that the taking was invalid for several alternative reasons. As relevant here, "[i]n the context of [an] EDPL 207 proceeding, this Court's scope of review is limited to whether the proceeding was constitutional, whether the acquisition was within the condemnor's statutory authority ... and whether a public use, benefit or purpose will be served by the proposed acquisition" ( Matter of Johnson v. Town of Caroga, 162 A.D.3d at 1354, 79 N.Y.S.3d 368 [internal quotation marks and citations omitted]; see Matter of 225 Front St., Ltd. v. City of Binghamton, 61 A.D.3d 1155, 1156, 877 N.Y.S.2d 486 [2009] ). The party challenging the condemnation "bear[s] the burden of establishing that the determination was without foundation and baseless, or that it was violative of the applicable statutory criteria" ( Matter of Johnson v. Town of Caroga, 162 A.D.3d at 1354, 79 N.Y.S.3d 368 [internal quotation marks and citations omitted]; see Matter of Rafferty v. Town of Colonie, 300 A.D.2d at 721, 752 N.Y.S.2d 725 ).

Petitioner first argues that the taking was excessive and unnecessary because there was no evidence that the properties are in a state of blight or disrepair or that the taking of petitioner's 0.88 acre was necessary to develop the remaining seven acres already owned by Liberty Square. Petitioner also argues that the public notice was too speculative to be proper because Capitalize Albany did not yet have any specific plans for redeveloping the area and that, without knowing the specific manner in which the properties will be used, it is impossible to determine whether they will be used for a public purpose. "Upon judicial review, if an adequate basis for a determination that a public purpose [will be] served is shown and the objector cannot show that the determination was without foundation, the agency's determination should be confirmed" ( Matter of Board of Coop. Educ. Servs. of Albany–Schoharie–Schenectady–Saratoga Counties v. Town of Colonie, 268 A.D.2d 838, 841, 702 N.Y.S.2d 219 [2000] [internal quotation marks, brackets and citations omitted]). What constitutes a public purpose is defined broadly and "encompasses any use which contributes to the health, safety, general welfare, convenience or prosperity of the community" ( Matter of 225 Front St., Ltd. v. City of Binghamton, 61 A.D.3d at 1157, 877 N.Y.S.2d 486 [internal quotation marks and citations omitted]; accord Matter of Johnson v. Town of Caroga, 162 A.D.3d at 1355, 79 N.Y.S.3d 368 ). Further, "[a]reas of economic underdevelopment and stagnation may be considered blighted so as to support the taking of vacant and underutilized properties located therein" ( Matter of Court St. Dev. Project, LLC v. Utica Urban Renewal Agency, 188 A.D.3d 1601, 1602, 136 N.Y.S.3d 588 [2020] ).

In support of the application, Capitalize Albany submitted a comprehensive "Concept Plan Report," which was prepared to provide "an analysis of the fiscal, economic, and other impacts anticipated to be catalyzed by a conceptual plan for redevelopment" in the Liberty Square area (hereinafter the report). The report said that, since the properties were not contiguous but were centrally located within the planned project site, "they are necessary to achieve the full economic, community and other benefits under" the conceptual plan. The report noted that the current site was "dominated by surface parking lots in significant disrepair" and contained "long-vacant buildings which have been flagged as ‘unsafe’ for emergency responders to enter" and that the area has been known as "The Dead Zone" or "the parking lot district." Further, the report examined in detail each of the seven blocks that make up the planned project area and it was noted that the parking lots and buildings on all blocks were "in poor condition" and buildings were in significant disrepair, including one building that had to be demolished "following a catastrophic structural failure of the roof." The...