Page 11 - The Suffolk Lawyer - May 2021 - Vol. 36, No. 3
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REAL ESTATE DEVELOPMENT • SPECIAL SECTION • REAL ESTATE DEVELOPMENT




                      Order Directing Demolition of Multiple Floors of 55-Story Skyscraper

                                                  Reversed Under “Mootness” Doctrine

                                                                           By Jason A. Stern


                 n Committee for Environmentally Sound Development v. Ams- stantially complete” and the “superstructure” was already 53 floors.
                 terdam Avenue Redevelopment Assocs., 2021 WL 786423 (1st On February 27, 2020, the Supreme Court entered judgment in
            I Dep’t March 2, 2021), a recent high-profile decision from the CESD’s favor finding the BSA misinterpreted the DR and Amsterdam
            Appellate Division, First Department, the Court reversed a trial court   waived the mootness argument based on the Stipulation.  Thus, the
            order directing demolition of an unspecified number of floors of a Supreme Court ordered Amsterdam to “remove floors” from the
            55-story condominium building (“Building”) based on a New York Building that exceeded the bulk allowance – i.e., approximately 20
            City (“City”) Zoning Resolution (“ZR”) and the common law doctrine floors needed to be demolished.
            of “mootness.”
               Although the zoning impact of this decision may be limited, the First Department Reverses Supreme Court
            Court’s mootness analysis has broad application to real estate de- Pursuant to “Mootness” Doctrine
            velopment disputes as discussed below.                                      On appeal, the First Department reversed the Supreme Court es-
                                                                                     sentially finding the BSA rationally interpreted the ZR and deference
            55-Story Condominium Building Approved by City                           is owed to the BSA’s interpretation.
               Real estate developer Amsterdam Avenue Redevelopment Asso-               The First Department also held the proceeding to be moot be-
            ciates LLC (“Amsterdam”) purchased 200 Amsterdam Avenue on cause the Building was “substantially complete” and CESD “failed to
            Manhattan’s Upper West Side in 2015 and applied for a construction seek injunctive relief at every step.”  The First Department relied on
            permit from the City’s Department of Buildings (“DOB”).  DOB issued the Court of Appeals holdings in Dreikhausen v. Zoning Bd. Of Ap-
            the permit in May 2017 and after an initial challenge, DOB re-issued peals of City of Long Beach, 98 N.Y.2d 165 (2002), that the “doctrine
            the permit in September 2017 (“Permit”).  Amsterdam began con-           of mootness is invoked where a change in circumstances prevents
            struction in October 2017.                                               a court from rendering a decision that would effectively determine
               Plaintiff  Committee  for  Environmentally  Sound  Development        an actual controversy” and the “chief factor” in evaluating mootness
            (“CESD”) appealed the Permit to the City’s Board of Standards and        in the “construction context” is:
            Appeals (“BSA”) on the ground the lot did not comply with the def-
            inition of “zoning lot” under ZR 12-10(d), because it improperly in-                    [A] challenger’s failure to seek preliminary
            cluded partial tax lots.  DOB defended the Permit on the ground the                 injunctive relief or otherwise preserve the status
            ZR had historically been interpreted to include partial tax lots.  On             quo to prevent construction from commencing or
            September 7, 2018, the BSA denied CESD’s appeal and upheld the                     continuing during the pendency of the litigation.
            Permit.
                                                                                        In this case, the First Department found CESD failed to preserve
            Plaintiff Commences Lawsuit, However, Injunction                         the status quo “at every step” during litigation based on CESD’s fail-
            Is Denied                                                                ure to pursue an appeal of the Supreme Court’s denial of CESD’s in-
               While the BSA decision was pending, in April 2018, CESD com-          junction motion in April 2019.
            menced a declaratory judgment action in the Supreme Court, New              The First Department also considered that Amsterdam acted with
            York County (“Supreme Court”), challenging the Permit and sought         authority from the DOB, that the Building was “substantially com-
            a temporary restraining order (“TRO”) to stop construction.  How-        plete,” and the work could not be undone without “undue hardship.”
            ever, by stipulation dated May 9, 2018 (“Stipulation”), the parties      The First Department also rejected the Supreme Court’s finding that
            agreed the TRO would be “held in abeyance” and Amsterdam would           Amsterdam waived its right to raise mootness based on the Stipu-
            not rely on the Stipulation to argue “mootness.”  Importantly, the       lation, because the extent of the Stipulation was limited by its terms.
            Stipulation was only effective until the “entry of an order or judg-     However, the linchpin of the First Department’s decision was CESD’s
            ment” in that action.                                                    failure to appeal the denial of its injunction motion.
               By decision and order dated March 14, 2019, the Supreme Court            Thus, the First Department reversed the Supreme Court’s decision
            ruled for CESD and remanded the matter back to the BSA.  However,        directing the demolition of multiple floors in the Building and dis-
            no injunction was issued and the decision stated “any requested re-      missed the underlying proceeding.
            lief not expressly addressed by the Court has nonetheless been con-         As this case makes clear, practitioners advising clients in real es-
            sidered and is hereby denied.”  At that time, 22 floors of the Building tate development disputes must be aware of the mootness doctrine
            were completed.                                                          and the potential consequences of failing to seek injunctive relief at
               In April 2019, CESD moved the Supreme Court for a new prelim-         “every step” of litigation.
            inary injunction to halt construction; however, the Supreme Court
            denied the motion.  CESD did not pursue an appeal of this decision.

            Supreme Court Orders Demolition of                                                               Jason A. Stern
            Multiple Floors of the Building                                                                  Partner and Director of Litigation, Weber Law Group, LLP
               In June 2019, the BSA again upheld the Permit; and in July 2019,
                                                                                                              Jason A. Stern is a partner and Director of
            CESD commenced a new Article 78 proceeding in the Supreme Court
                                                                                                               Litigation at Weber Law Group, LLP, which
            challenging same and seeking an order directing the removal of por-
                                                                                                               focuses on Commercial Real Estate, Land Use,
            tions  of  the  Building  exceeding  the  “allowable  bulk  of  17-to-20                          Zoning, Government Relations, Environmental Law
            floors.”    In  response,  Amsterdam  argued  the  proceeding  was                              and Complex Litigation. Mr. Stern can be reached at
            “mooted” because, as of September 2019, the Building was “sub-                               631-549-2000 and jstern@weberlawgroup.com


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