Scott E. Mollen

Land Use—NYC Board of Standards and Appeals Decision Overturned—Zoning Resolution “Open Space” Requirements—Dissenting Opinion Would Defer to the BSA

Petitioners appealed from a trial court judgment which dismissed their Article 78 petition. The petitioners sought to annul a resolution of the NYC Board of Standards and Appeals (BSA). The BSA decision upheld the issuance of a building permit by of the NYC Dept. of Buildings (DOB), for construction of a nursing home. The Appellate Division (court) stated that the subject dispute “brings to light…the unavoidable tension between urban development and quality of life in neighborhoods that make up the unique fabric of New York City, an already densely populated metropolis.” The specific issue was “whether this construction would violate the ‘open space’ mandate embodied in the NYC zoning resolution (ZR).”

The subject property is located on a “superblock.” The site includes three 16-story “residential buildings” and several other buildings. The ZR required that there be 230,108 sq. ft. of required minimum open space. The ZR defined “open space” as “that part of a zoning lot, including courts or yards, which is open and unobstructed from its lowest level to the sky and is accessible to and usable by all persons occupying a dwelling unit…on the zoning lot (ZR §12-10).” The ZR provides that a zoning lot “may or may not coincide with a lot as shown on the official tax maps.”

Under the 1961 ZR, a zoning lot may consist of “land that was entirely under the control of a single owner or a long-term lease.” The court stated that where there’s a single owner, the assumption is that such owner who controls the entire zoning lot, “would be capable of providing open space access to the entire zoning lot” and that the 1961 ZR “did not contemplate the possibility that a zoning lot could consist of multiple parcels under different ownership and control, with each parcel subject to its own unique conditions governing open space access.”

In 1977, City Planning Commission (CPC) eliminated the requirement that a zoning lot be held in “single ownership.” The ZR now permits “multi-ownership and control on a single zoning lot to ensure protection of all parties with interests in multiple buildings on the zoning lot.” The 1977 change to the definition of “zoning lot” gave rise to the subject dispute as to how “reconcile the ‘open space’ definition (access to all) with a ‘zoning lot’ that is improved with multiple buildings.”

The BSA chairperson had stated that “in the context of a large zoning lot with multiple buildings under separate ownership, open space accessible and usable by residents of every building on such zoning lot was not feasible or practicable.” The chair noted that if there were owners of townhouses on a multibuilding zoning lot, such owners would “understandably, be reluctant to let residents of other buildings on the lot into their backyards….”

In June 2007, the property owner or its affiliate, (owner), obtained a building permit (permit) from DOB to build inter alia, a 29 story apartment tower (apartment tower). Neighbors and residents challenged the permit. They argued that pursuant to the ZR “open space” requirement, the open space had to be “accessible to and usable by all persons occupying a dwelling unit…on the zoning lot….” The apartment tower contemplated a roof garden that would only be accessible to its residents and the roof garden was “included in the calculation of open space required under the (ZR).” The “exclusive roof garden” was to have a pool, sundeck and lawn.

Thus, the apartment tower residents would be able to utilize the “exclusive roof garden” and also have the use and enjoyment of the zoning lot’s open space used by residents of the other buildings. However, the residents of the other buildings, would “merely have access to the general open space, but would not be permitted” to use the exclusive roof garden in the apartment tower. “Without inclusion of the roof garden in the calculation, the required minimum open space would not be met, and the project would not receive a construction permit, effectively terminating the (apartment tower) project.” The DOB had approved the inclusion of the roof garden in the open space calculation. The BSA affirmed that decision to issue the permit (2009 Resolution).

The BSA had “accepted DOB’s assertion ‘that ZR §§23-14 and 23-142 require open space with respect to a building, rather than to the zoning lot as a whole, and therefore [is] satisfied by the permit application which provides the required amount of open space to each building on the zoning lot’…. Thus, DOB used, and BSA approved, a building-by-building methodology to calculate the open space ratio for the apartment tower. They noted that the “‘ZR §12-10 definition of open space’ does not specify that open space on a multiple building dwelling lot must be common, centralized space that is shared by all occupants of the zoning lot….”

The DOB, BSA and the owner reasoned that “neither ZR §§12-10, 23-14, nor any other provision of the (ZR), expressly concerns a condition involving multiple buildings on a zoning lot, nor requires that open space on a multi-building zoning lot be shared space that is commonly accessible to all occupants of a zoning lot.” The BSA had noted that, “‘[a]s each of the existing buildings is allocated an amount of open space that is in excess of that which would be required under the (ZR) if they were located on separate zoning lots, it cannot be seen how those residents would be deprived of an equitable share of open space by the proposed building.’”

Opponents had commenced an Art. 78 proceeding, challenging the BSA’s decision. In 2009, the parties settled the matter and the apartment tower was completed. Two years later, the New York City Council enacted CPC proposed amendments to the ZR. Those amendments included changes to the open space calculations.

After the 2011 amendments, the owner sought to utilize land that had been used as a parking lot. The owner agreed with the subject applicant to exchange the parking lot for another parcel of land that the applicant owned. The applicant intended to build a 20-story nursing home building (nursing home) on the parking lot. The exchange was conditioned on, inter-alia, the applicant obtaining a permit from the DOB for the nursing home building. The applicant stated that the zoning lot’s open space exceeds the required minimum open space by 10,223 sq. ft. The applicant proposed 230,726 sq. ft. of open space for the zoning lot, asserting that the open space exceeded by 618 sq. ft. the required minimum open space of 230,108 sq. ft. The nursing home would be 275 feet high and would use 10,431 sq. ft. of open space for an accessible roof garden.

The applicant, recognizing the prior open space controversy, proposed that its nursing home’s “covered roof…children’s play area and…meditation garden” (roof facilities) “would be ‘accessible to and usable by all persons occupying a dwelling unit…on the zoning lot.’” The DOB approved the application on condition that the open space be “accessible and usable to all persons occupying the residential units on the zoning lot at all times….” The applicant proposed that the roof facilities would be fenced and entry would be “controlled as every resident of the zoning lot will be provided with a card key to access these spaces.”

The petitioners unsuccessfully argued, inter-alia, that the nursing home would violate the ZR’s open space requirement. The DOB granted a permit and the BSA affirmed the DOB’s decision.

The BSA rejected the petitioners’ argument that building a community facility building “that does not require open space affects the open space requirement on a site which also contains residential buildings (which do have an open space requirement) where, as here, the site contains the minimum open space required.’” The BSA relied on its 2009 Resolution, which had utilized a “building-by-building methodology” and “concluded that in the case of a multi-building zoning lot, the open space definition could be read to allow some open space to be reserved for the residents of a single building as long as the residents of each building on the zoning lot have access to at least the amount of open space that would be required under ZR §23-142 if each building were on separate zoning lots.”

The BSA reasoned that since the “definition of open space itself has not changed and because the CPC did not intend to change the open space requirement, subsequent to the 2009 Appeal, (the 2011 amendment) does not dictate any change in the Board’s or DOB’s analysis since the prior appeal.” The BSA emphasized that “the text was amended in 2011, after the 2009 Appeal and CPC had an opportunity to clarify an intent to restrict the open space.”

The petitioners commenced the subject Art. 78 proceeding, seeking to annul the BSA’s determination and revoke the DOB’s permit. They argued that the apartment tower could no longer be considered open space and cannot be included in calculating the required open space for the zoning lot. They contended that even if the roof garden constituted open space and complied with the ZR when the apartment tower was built in 2009, “the roof garden presently does not fall within the definition of open space.” The petitioners asserted that the 2011 zoning resolution “amendments eliminated any claim to ambiguity in the interpretation of what constitutes open space under ZR §§23-14 and 23-142, and that pursuant to these amendments the (apartment tower’s) roof garden” should not be included in calculating the applicant’s proposed building’s open space ratio.”

A trial court had dismissed the Art. 78 proceeding. The Appellate Division reversed. The court held that the petition was not barred by the doctrines of collateral estoppel and statutes of limitations. The court reasoned that the subject petition challenged the grant of a permit “for a different building on the zoning lot, and rel[ied] on amendments to relevant provisions of the (ZR) enacted subsequent to BSA’s 2009 Resolution, the prior final determination….”

The court explained that if the apartment tower’s open space allotment was eliminated from the applicant’s open space analysis, the nursing home would not satisfy the required minimum open space and would violate the ZR. The salient issue was “whether under the 2011 amendments, DOB and BSA can count (the apartment tower’s) exclusive roof garden’s open space square footage…in determining the zoning lot’s required minimum open space so as to permit the construction of the (the nursing home) building….”

The court noted that the 2009 resolution “utilized for the first time the building-by-building methodology in calculating the open space ratio for a zoning lot consisting of multiple buildings, nearly 30 years after the 1977 amendment to the zoning lot definition in which ‘open space’ and ‘zoning lot’ coexisted during that period without incident until the (apartment tower’s) dispute.” The owner and applicant emphasized that “a reading of the 2011 amendments demonstrates that the City Council did not eliminate the ambiguity between open space and a multi-building zoning lot when it removed the term ‘building’ and replaced it with ‘zoning lot.’” The DOB and BSA agreed with the applicant’s “statutory interpretation” and continued “to apply the building-by-building methodology to the…open space calculation so as to include the (apartment tower’s) open space square footage.”

The petitioners countered “that the 2011 amendments to ZR §§23-24 and 23-142 made clear that the open space calculation and determination are to be conducted based on the entire zoning lot as a whole, and not on a building-by-building basis.”

The court explained that BSA’s “interpretation of the (ZR’s) terms must be given great weight and judicial deference, particularly where the interpretation involves specialized ‘knowledge and an understanding of underlying operational practices or entails an evaluation of factual data and inferences to be drawn therefrom,’ provided that the interpretation is neither irrational, unreasonable nor inconsistent with the governing statute….” The court further noted that where a question is one of “pure statutory interpretation ‘dependent only on accurate apprehension of legislative intent, there is little basis to rely on any special competence or expertise of the administrative agency and its interpretive regulations are…to be accorded much less weight….’”

Here, the court concluded that interpretation of the 2011 amendments “does not implicate DOB’s and BSA’s knowledge and understanding of operational practices or entail an evaluation of factual data and inferences to be drawn therefrom. The resolution is one of pure statutory reading and analysis.” Accordingly, the court declined to defer to the BSA interpretation.

The court then held that the ZR §12-10 definition of “open space” as being “accessible to and usable by all persons occupying a dwelling unit…on the zoning lot”, “unambiguously requires open space to be accessible to ‘all residents of any residential building on the zoning lot, not only the building containing the open space in question.’” The 2011 amendments “eliminated all references to ‘building’ and replaced it with ‘zoning lot’.” (ZR §§23-14 and 23-142).

The court also cited “the identical change in the definition of ‘open space ratio’ in ZR §12-10.” The court further stated that the “impracticality of allowing the residents of one building on a zoning lot to have access to, and use of, open space located on the rooftop of another building on the zoning lot is obvious.” Thus, the court held that the 2011 amendments bar the use of the building-by-building methodology.

The legislative history did not indicate an intent to alter the aforementioned building-by-building methodology. However, the court stated that legislative history “should not be confused with legislative intent, as the two are not coextensive with each other….” The court stated that [w]hen the statute’s language is clear, resort to extrinsic evidence to glean Legislature’s intent is not necessary….” The court asserted that the lack of legislative history as to the “2011 Amendments’ elimination of ‘building’ and replacing the term with ‘zoning lot’, cannot be deemed an acceptance of the building-by-building methodology, particularly where the new statutory language is clear and unambiguous.” Accordingly, it held that the permit should be revoked and the dismissal of the petition should be reversed.

A dissenting opinion noted that the nursing home “will have no practical effect on the zoning lot’s compliance with open space requirements, as it neither increases the overall amount of open space needed for the lot as a whole nor displaces existing open space needed to comply with this ZR.” The dissent opined that the petitioners were attempting to halt the nursing home project by “attempting to resurrect and collaterally attack the 2009 resolution determining that (apartment tower) complied with open space requirements.” The dissent viewed such argument as untimely and barred by the settlement of the 2009 Article 78 proceeding, which was dismissed with prejudice more than six years earlier.

The dissent argued that based on the ZR at the time of the 2009 resolution, “there was a rational basis to conclude that (apartment tower) complied with open space requirements.” The dissent reasoned that no ZR provision “expressly concerns a condition involving multiple buildings on a zoning lot, nor requires that open space on a multi-building zoning lot be shared space that is commonly accessible to all occupants of the zoning lot.”

The dissent further asserted that to the “extent the 2011 amendments changed the open space requirements”, that change “could only apply prospectively” since “retroactive application of these changes could potentially cause havoc throughout the city as a multitude of challenges might be commenced against buildings that formerly complied with the pre-2011 ZR.” Thus, the dissent stated that even if the apartment tower was a noncompliant building, “which it is not, such noncompliance would be deemed legal and may continue….”

The dissent noted that the BSA is comprised of five experts in “land use and planning, is the…administrative authority charged with enforcing the (ZR)” and its “interpretation of the statute’s terms must be given great weight and judicial deference, so long as the interpretation is neither irrational, unreasonable nor inconsistent with the governing statute….” It asserted that the BSA had a rational basis for its determination, the ZR was “not clear and unambiguous” and ZR§§12-10, 23-14 and 23-142 must all be read together, with each provision given effect. The dissent also cited the ZR §12-10 definition of open space in 2009 and 2015, and emphasized that at all times the ZR “left intact that open space may be provided on a roof, including the roof of a community facility building and a building containing residents.”

The dissent also noted “roofs on residential buildings are only accessible to those who live within such building.” Additionally, ZR §12-10 includes “yards” and “courts” within the definition of open space and “courts” include “inner courts” which are defined elsewhere “as being bound by building walls, or walls and not lines.” The dissent stated that presumably, “some of these yard and courts may also be accessible only by residents of a particular building on the lot.” The dissent believed that the 2009 and 2011 amendments did not address “open space requirements for zoning lots containing multiple buildings.”

The dissent stated that although “unclear and conflicting language in ZR §12-10 and the related provisions would not be consequential when there’s a single residential building on a zoning lot, as all residents would have access to shared spaces, including roofs, yard, courts and the like, where, as here, there are multiple buildings under different ownership and control on a single zoning lot, ZR §12-10 does not provide one clear answer.”

Based on the its belief that language of the ZR is ambiguous, the dissent asserted that the BSA had “rationally determined that the best practical reading of ZR §12‑10 when faced with multiple buildings under different ownership and control on a single zoning lot is to permit some open space to be reserved for residents of a single building, so long as the zoning lot as a whole has the minimum amount of open space required, and residents of each building on the lot have access to at least the amount of space that would be required if each building were separate or on a separate lot.”

The dissent wrote that notwithstanding the statute’s “clear ambiguity and the requisite deference that should be afforded BSA’s interpretation…the majority somehow ignores that the discrepancies, conflicts and silence presented by the sections when read in conjunction with each other, and when each part is given meaning. Instead, the majority focuses only on the amended language which replaced the term ‘building’ with ‘zoning lot’ to conclude that on a multi-building zoning lot the open space ratio cannot be calculated on a building-by-building basis.”

The dissent further noted that although the CPC was aware of the BSA’s interpretation of open space in the 2009 resolution, no changes have been made to the definition of open space and the definition of open space has been “unchanged for more than five decades for zoning lots owned and controlled by a single owner.” It argued that the 1961 ZR “never considered the possibility of a zoning lot made up different parcels controlled by different ownership” and therefore it is incorrect for the majority to state that the language on the ZR §12-10 “which remains unchanged since 1961, unambiguously requires opens space to be available to ‘all residents of any residential building on a zoning lot, not only the building containing the open space in question.’” The dissent concluded that ZR §12-10 embodies “internal inconsistences and is ambiguous when read in conjunction with ZR §23-14 and ZR §23-142” and therefore, deference to the BSA’s expertise is warranted.

The dissent also noted that as a community facility, the nursing home was permitted by the ZR to provide open space on the roof and was not required to provide additional open space on the zoning lot. The dissent stated that the legislative history related to 2011 amendments is relevant “since the amendments did not alter the definition of open space and ZR §12-10, in particular, the inclusion of roof space as ‘open space’, and did not provide how to calculate the required open space for a zoning lot containing multiple buildings.” Thus, the dissent asserted that it was “impossible to say that either the statutory language or the Legislature’s intent is clear and unambiguous.” Finally, the dissent reasoned that if the Legislature had sought to reject the BSA’s 2009 methodology, “it could have explicitly provided for that in the amended version of the regulations. Yet it chose not to do so.”

Comment: This case reaffirms that generally, courts should defer to the expertise of the BSA with respect to interpretation of the zoning resolution and if there is any rational basis for a BSA decision, that decision should be upheld, even if a court would have reached a different conclusion. The exception is that when statutory language is clear and unambiguous, there is no need to defer to the special expertise of the BSA. Here, the majority and dissent disagreed as whether the statutory language was so clear and unambiguous, that deference was unnecessary. These cases often implicate another legal principle, i.e., that since zoning laws are in derogation of the Common Law, any ambiguity must be construed against the municipality and in favor of the property owner. As noted, the majority concluded in this case that there was no ambiguity.

Matter of Peyton v. NYC Bd. of Standards and Appeals, App. Div., 1st Dept., Case No. 161972/15, Decided Oct. 16, 2018, Oing, JJ. Renwick, J.P., Webber, JJ. concur. Tom, JJ. dissents.

  Scott E. Mollen is a partner at Herrick, Feinstein.