ROGER D.

MCDONOUGH JUDGE

October 8, 2010

STATE OF NEW YORK SUPREME COURT

ALBANY COUNTY JUDICIAL CENTER - ROOM 3 ALBANY, NEW YORK 12207

(518) 285 - 8776

FAX: (212) 457-2697

Robert L. Sweeney, Esq. Whiteman, Osterman & Hanna LLP One Commerce Plaza

Albany, New York 12260

Re:

Index No.:

Historic Albany Foundation v DiLello, et al. 843-10

Dear Counselor:

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BOIES, SCHILLER & FLEXNER LLP STEVEN M. CONNOLLY LAW CLERK

ERIN M. GOLEN SECRETARY

Enclosed for filing, please fmd a Decision, Order and Judgment in this matter.

Thank you for your attention to this matter.

Very truly yours,

jl,n, Cy

Steven M. Connolly

Enclosure

cc: w/enclosure

Boies, Schiller & Flexner, LLP John J. Reilly, Corporation Counsel

STATE OF NEW YORK SUPREME COURT

COUNTY OF ALBANY

HISTORIC ALBANY FOUNDATION, INC. and WILLIAM J. RUSCH,

Petitioners,

DECISION, ORDER and JUDGMENT

-against-

Index No.: 3414-10

RJI No.: 01-10-100459

NICHOLAS A. DILELLO, Building Commissioner of the City of Albany, RAYMOND JOYCE, JR., CHAIRMAN; CYRIL CLAYTON; RYAN HANCOX; MARCUS PRYOR; and EDWARD R. TRANT, constituting THE PLANNING BOARD OF THE CITY OF ALBANY, and THE FORT ORANGE CLUB,

Respondents.

(Supreme Court, Albany County All Purpose Term)

Appearances:

BOIES, SCHILLLER & FLEXNER LLP Attorneys for Petitioners

(George F. Carpinello, Esq., of Counsel) 10 North Pearl Street, 4th Floor

Albany, NY 12207

WHITEMAN, OSTERMAN & HANNA LLP Attorneys for Respondent The Fort Orange Club (Robert L. Sweeney, Esq., of Counsel)

One Commerce Plaza

Albany, New York 12260

JOHN 1. REILL Y CORPORATION COUNSEL Attorney for City Respondents

(Jeffery V. Jamison Esq., Assistant Corp. Counsel) City Hall-Room 106

Albany, New York 12207

City of Albany

Roger D. McDonough, J.:

Petitioners bring this Article 78 proceeding to invalidate the January 21, 2010 decision of respondent Planning Board of the City of Albany ("Planning Board") to grant a permit to respondent Fort Orange Club ("Fort Orange") to demolish buildings owned by Fort Orange which are located at 118-120 Washington Avenue, Albany, N ew York, and the May 27, 2010 decision of the Planning Board to allow such demolition without the approval of the City of Albany Historic Resources Commission ("HRC"), claiming that these decisions were arbitrary, capricious and otherwise improper, and were made without the preparation of a full environmental impact statement pursuant to the State Environmental Quality Review Act ("SEQRA"). Respondents Fort Orange and the City of Albany oppose the petition.' The Court conducted oral argument on June 8, 2010. The matter is now fully submitted.

Background

Fort Orange owns the premises located at 118-120 Washington Avenue in the City of Albany ("subject premises"). The premises were purchased by Fort Orange in 2005. Petitioner Historic Albany Foundation, Inc. ("HAF") is a not-for-profit corporation. HAF cites as its primary goals the preservation of the City of Albany's historic structures and the maintenance of its historic districts. Petitioner Rusch is a member ofHAF, and is alleged to own property in the vicinity of the Fort Orange Club.

Petitioners, in the instant action, describe the subject premises as being "contributing structures to a proposed historic district to be listed on the National Register of Historic Places." They also note that the subject premises abut the Center SquarelHudson Park Historic District, a district previously included in the National Register of Historic Places. It is undisputed, however, that the subject premises are not currently in a State or Federal Historic District, nor are

1 By Order to Show Cause, petitioners also requested a preliminary injunction enjoining respondent Fort Orange from demolishing, or taking steps to demolish, the buildings owned by Fort Orange. Respondent Fort Orange opposed said application, while respondent City of Albany expressed "no opposition" to the application for a preliminary injunction during the pendency of the Article 78 proceeding.

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they registered on the State or Federal Historic Registers.

In March of2008, Fort Orange applied to the Planning Board and the Zoning Board for the City of Albany ("Zoning Board") for permission to expand its main structure by the addition of a new athletic facility, to upgrade and expand available on-site parking, and to demolish the subject premises. Included in Fort Orange's application was an environmental assessment form ("EAF").

. In response, the Planning Board, with the consent of other interested City agencies, designated itself as lead agency pursuant to SEQRA. In May 2008, the Planning board adopted the EAF submitted by Fort Orange, and declared the proposed demolition of the subject premises a Type I action under SEQRA. As required in Type I actions, the Planning Board conducted the requisite "hard look" at potential adverse environmental impact associated with the proposed project, including the demolition of the subject premises, and thereafter issued a negative declaration of environmental significance, obviating the need for a full environmental impact statement ("EIS").

Prior to receiving final Planning Board approval for the proposed project, Fort Orange withdrew its application, and submitted an amended proposal that did not include the demolition of the subject premises. On October 9, 2008, the Planning Board issued a negative declaration as to the amended proposal pursuant to SEQRA, and approved the modified project.

In October 2009, Fort Orange again proposed the demolition of the subject premises. On November 6, 2009, Fort Orange applied to the Building Commissioner of the City of Albany ("Building Commissioner") for permission to demolish the subject premises. The matter was referred to the Planning Board. Fort Orange then brought an Article 78 proceeding challenging the Building Commissioner's actions and inactions. HAF sought to intervene in the Article 78 proceeding. Supreme Court Justice Joseph C Teresi dismissed the proceeding in a Decision and Order issued on November 23,2009, concluding that the action was premature due to Fort Orange's failure to demonstrate that it had suffered an "actual concrete injury".

During the pendency of Fort Orange's application to the Building Commissioner, the City of Albany Common Council passed an ordinance which established new procedures for obtaining a demolition permit ("Demolition Ordinance"), effective November 25, 2009. Section

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4 of the Demolition Ordinance provides that:

[A ]ny application for a demolition permit pending from the date of enactment of this provision until its effective date shall be referred to the Planning Board for final action before any demolition permit shall be granted by the Commissioner of Buildings. In reviewing any such application, the Planning Board shall not authorize any demolition of a building found to have significant architectural, archeological or historical importance ... unless there would be an economic hardship that is not self-created that would result from any delay in the demolition pending the effective date of this ordinance.

Following the Building Commissioner's referral of Fort Orange's demolition application to the Planning Board, the Board received written submissions, conducted a public meeting on December 30,2009 (at which it received public comment), and received additional written submissions. Thereafter, the Planning Board rendered a decision on January 21, 2010. Therein, the Planning Board reaffirmed and ratified its prior negative declaration under SEQRA, and approved the demolition conditioned upon: 1) approval of an area variance for the parking lot by the Zoning Board; 2) the issuance of a Certificate of Appropriateness by the City of Albany Historic Resources Commission ("HRC") for the proposed streetscape design; and 3) final site plan approval by the Planning Board. It is noteworthy that the Planning Board's decision applied the standard set forth in Section 4 of the Demolition Ordinance to Fort Orange's "pending" application. Although the Board specifically rejected the applicability of the conditions found in the first two sections of the Demolition Ordinance to Fort Orange's "pending" application, the Planning Board nonetheless specifically considered the factors set forth in Section 375- 40(H)(1)(a-f)and relied upon such evaluation as the basis for its determination, pursuant to Section 4, as to the architectural, archeological or historical importance of the subject premises.

Immediately thereafter, petitioners and another individual commenced an Article 78 proceeding challenging the Planning Board's decision. Acting Supreme Court Justice Richard M. Platkin dismissed this proceeding by Decision and Order issued on February 10,2010. Justice Platkin concluded that the action was premature because the conditions set by the Planning Board for the issuance of a demolition permit had not yet been met.

On March 24, 2010, the Zoning Board granted the area variance to Fort Orange. The next day, March 25,2010, the Planning Board again reaffirmed and ratified its earlier SEQRA

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negative declarations after a review of all correspondence and submissions submitted to the Board, including information regarding the proposed creation of a "lower Washington Avenue Historic District".

On April 29, 2010, HAP sent correspondence to the Planning Board asserting that a significant and historically important woman, Beulah Bailey Thull, had once resided at 118 Washington Avenue. In response, on May 27, 2010, the Planning Board, while acknowledging the achievements of Ms. Bailey Thull, once again reaffirmed and ratified its earlier SEQRA negative declarations. At the same time, the Planning Board amended their January 21, 2010 decision by changing the timing of the HRC approval of the proposed streetscape design from "prior to demolition" to "[p [rior to commencement of construction". The instant proceeding ensued.

This Litigation

In this Article 78 proceeding, petitioners challenge respondent Planning Board's January 21,2010 and May 27, 2010 decisions. Specifically, petitioners contend that the January 21, 2010 decision was: 1) arbitrary and capricious and inconsistent with the standards governing the determination of a demolition permit pursuant to the Demolition Ordinance; 2) that the Planning Board's decisions were made without the preparation of a full EIS as required by SEQRA; and 3) that the May 27, 2010 decision was arbitrary and capricious because: (a) proper notice was not given; (b) the public was not given an opportunity to be heard; (c) it was made after the Planning Board improperly went into executive session; and (d) was not taken as a result of any reasoned reconsideration.

With the filing of their petition, petitioners also sought a Temporary Restraining Order by virtue of an Order to Show Cause. This Court (Acting Justice Gerald W. Connolly) executed said Order to Show Cause and Temporary Restraining Order on May 27,2010. Said Order to Show Cause made the preliminary injunction application returnable on June 8, 2010. On that date, all parties were permitted oral argument on the preliminary injunction issue and the amount of the undertaking if said injunction was granted. The Court reserved on the petitioner's request for a preliminary injunction, and that request is now mooted by the issuance of this decision and order.

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Discussion

A. Petitioners' Challenge to the Demolition Permit Authorization

In their first cause of action, the petitioners assert that "[t]he action of the Planning Board in granting the demolition permit is arbitrary and capricious because the Board did not take into account the factors listed in the Demolition Ordinance ... " Respondents reject this assertion, claiming it to be defective on its face', and unsupported by the law or facts. Upon a full review of the record, the Court finds petitioners' first cause of action to be without merit.

Courts must "accord great deference to a planning board's interpretation of a zoning ordinance, and [the boards's] determination will be upheld if it has a rational basis and is supported by substantial evidence." Matter of North Country Citizens for Responsible Growth, Inc. v. Town of Potsdam Planning Bd., 39 AD3d 1098, 1099 (3rd Dept. 2007). Indeed, a reviewing court "is bound to examine only whether substantial evidence supports the determination of the board, [and where such] substantial evidence exists, a court may not substitute its own judgment for that of the board, even if such a contradictory determination is itself supported by the record." Matter of Retail Prop. Trust v. Board of Zoning Appeals of Town of Hempstead, 98 NY2d 190, 196 (2002).

The crux of petitioners' argument here is that the Planning Board acted in an arbitrary and capricious manner because it "did not take into account the factors listed in the Demolition Ordinance ... " While both petitioners and respondents spend a great deal of time and paper arguing whether the language of the Demolition Ordinance required the Planning Board to review Fort Orange's application utilizing only Section 4 of the Demolition Ordinance, or instead Sections 375-40(H)(1) and (2), the actions of the Board render the argument moot. In its January 21, 2010 decision, the Planning Board, although rej ecting the applicability of aforementioned

2 Respondent Fort Orange notes that the Planning Board does not issue demolition permits, but rather authorizes the Building Commissioner to do so. While this argument is technically correct, it appears largely to be a semantic one. Both the Building Commissioner and the Planning Board are named parties in the instant action, and represented in this matter by Corporation Counsel. In the interest of judicial economy and deciding the matter on its merits, the Court will consider petitioners first cause of action as referring to the Planning Board's authorization of the Building Commissioner to issue said demolition permit.

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Sections 1 and 2 of the Demolition Ordinance to Fort Orange's "pending" application, specifically considered the eleven factors set forth in those sections, and relied upon its evaluation of said factors as the basis for its determination, pursuant to Section 4, as to the architectural, archeological or historical importance of the subject premises.' Indeed, an exhaustive review of the administrative record at issue reveals that the Planning Board thoroughly considered extensive information relevant to each of the "Review Criterion" identified in Section (H)(l) and (2), and only after such consideration did it authorized the Building Commissioner to issue the demolition permit. While petitioners may disagree with the conclusions reached by the Planning Board after its consideration of said factors and the information relevant thereto, any assertion that the Planning Board's actions were arbitrary and capricious due to a failure to consider these factors is simply unfounded. Accordingly, petitioners first cause of action must be rejected.

B. Challenge to the SEORA Determination

In their second cause of action, petitioners argue that "[t]he decision of the [Planning Board in granting the demolition permit] is arbitrary and capricious and in violation of law because the Planning Board granted demolition approval without conducting a full environmental impact statement as required by SEQRA." Respondents deny the necessity for a full EIS, and assert that the respondent Planing Board's actions in issuing a negative declaration were in complete compliance with SEQRA.4

The parties agree that the project as proposed by Respondent Fort Orange was appropriately classified as a "Type I" action pursuant to SEQRA, which "carries with it the presumption that it is likely to have a significant adverse impact on the environment and may

3 As argued by respondents, even if applicable in the case at bar, Section H (2) of the Demolition Ordinance is written so as to make its use permissive, not mandatory, thereby precluding a claim that the Planning Board's failure to apply it was arbitrary and capricious.

4 Respondent Planning Board also argues that petitioners' challenge under SEQRA is time barred. The Court rejects this defense for the reasons stated in Acting Supreme Court Justice Richard M. Platkin's Decision and Order, issued on February 10,2010, and as discussed in Matter of Eadie v. Town Bd. Of Town ofN. Greenbush, 7 NY3d 306,316-18 (2006).

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require an EIS." 6 NYCRR 617.4(a)(I)(emphasis added). Despite this presumption, it is well settled that "an EIS is not aper se requirement for a Type I action." Dunk v. City of Watertown, 11 AD3d 1024, 1025 (4th Dept. 2004); Matter of Forman v. Trustees of State Univ. ofN.Y., 303 AD2d 1019, 1020-21 (4th Dept. 2003). Indeed, while "the threshold triggering an EIS is relatively low, a 'negative declaration [which obviates the need for an EIS] is properly issued when the agenc[y] ha[s] made a thorough investigation of the problems involved and reasonably exercised [its] discretion"'. MatterofSpitzerv. Farrell, 100 NY2d 186,190 (2003), quoting Chinese Staff & Workers Assn .. V. City of New York, 68 NY2d 359,364 (1986). Thus, a court's review of a negative declaration is limited to "whether the agency identified the relevant areas of environmental concern, took a 'hard look' at them, and made a reasoned elaboration' of the basis for its determination." Matter of Eadie v. Town Bd. Of Town ofN. Greenbush, 7 NY3d 306, 316-18 (2006), quoting Matter .of Jackson v. New York state Urban Dev. Corp., 67 NY2d 400, 417 (1986); Mirabile v. City of Saratoga Springs, 67 AD3d 1178, 1180-81 (3rd Dept. 2009). When the responsible agency has fulfilled its obligations in that regard, "it is not the [court's] role ... to second-guess [the agency's] determination and/or substitute [its own] judgment for the conclusion it has reached;" Matter of Anderson v. Lenz, 27 AD3d 942,943-44 (3rd Dept. 2006).

Here, respondent Planning Board, acing as the lead agency under SEQRAs, classified the proposed project as a "Type I" action pursuant toSEQRA, and adopted the full EAF submitted by respondent Fort Orange. That EAF included reasoned assessments of the impact of the project on aesthetic, historical and archeological resources, as well as a recognition ofthe project's location in relation to a historic district and the prior history of the subject premises." In making its determinations, respondent Planning Board's "hard look" included consideration of "expert reports from a nationally recognized historic preservation architectural firm concluding that the current state of the [subject premises] lacks any archeological, architectural or historic

5 The Planning Board was designated as the lead agency with the consent of all other involved agencies.

6 The Planning Board specifically noted, on numerous occasions, that the subject premises were "adjacent to a historic district", and located within a "proposed", but yet-to-be designated historic district.

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importance, that its demolition was not significant, and that the proposed streetscape was an acceptable and appropriate replacement." It is worthy of note that respondent Planning Board revisited its negative declaration four times between October 2008 and May 20107, during which the Planning Board considered both altered project plans as well as new environmental and historical information provided by petitioners and other members of the public .. Regardless, the Planning Board determined each time that there was no substantive change in the potential environmental impact of the project that would require the a full EIS under SEQRA.8 Therefore, after a thorough review of respondent Planning Board's negative declarations and the process by which these determinations were made, the Court is constrained to reject petitioners second cause of action.

C. Challenge to the Conduct of the May 27h Planning Board Meeting

In their third cause of action, petitioners argue that the respondent Planning Board's May 27,2010 decision, which changed the timing ofHRC's review of the proposed new streetscape from "prior to demolition" to "prior to the commencement of construction", was arbitrary and capricious because: (a) proper notice was not given; (b) the public was not given an opportunity to be heard; (c) it was made after the Planning Board improperly went into executive session; and (d) was not taken as a result of any reasoned reconsideration." Respondents demur, asserting that the complained-of action left HRC's authority unaltered, and satisfied the applicable notice and hearing requirements.

As a threshold matter, a review of the administrative record and respondent affidavits reveals that petitioners' claim that the Planning Board improperly conducted an executive session

7 The Planning Board also conducted public hearings on December 30, 2009, during which it received public comment, prior to the January 21, 2010 determination.

8 A review of the administrative record in the instant action leads the Court to conclude that even if a full EIS had been conducted here, the ultimate outcome would not be materially different.

9 Petitioners do not, and could not, argue that HRC had any authority to review respondent Fort Orange's application for a demolition permit, as the subject premises are located outside an historic district.

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during the May 2? meeting is factually unfounded. While the Planning Board's Chairman suggested the Board go in to executive session during that meeting, Counsel to the Board advised against such a session, and there is no evidence that such a session ever occurred.

Likewise, petitioners' allegations that the May 2? meeting violated the applicable notice and meeting requirements also finds little support in the record or the law. The published agenda for the May 2? meeting noted only one item - "The case of The Fort Orange Club c/o Whiteman, Osterman and Hanna LLP to consider additional information received by the Planning Board as Lead Agency pursuant to SEQRA, and possible action regarding conditional approval." Amended Verified Petition, Exhibit N (emphasis added). Representatives from petitioner HAP were present and were heard at said meeting, which was conducted, in part, to address and assess additional information provided by HAP as to the historical significance of the subject premises. Regardless, petitioners fail to cite any authority for their requested relief, and have failed to show "good cause" for this Court to declare as void the Planning Board's actions on that date. See, Town of Moriah v. Cole-Layer-Trumble Co., 200 AD2d 879,881 (3fd Dept. 1994); Concerned Citizens to Review the Jefferson Valley Mall, 83 AD2d 612, 613-14 (2nd Dept. 1981). In light of the foregoing, the Court must likewise reject petitioners third cause of action.

Based on all of the foregoing, it is hereby

ORDERED AND ADJUDGED, that the petition is dismissed and the relief requested therein is in all respects denied, petitioners' application for a preliminary injunction is hereby denied as moot" and the temporary restraining order in this matter is hereby vacated.

This shall constitute the Decision, Order and Judgment of the Court. The original Decision, Order and Judgment is being returned to the counsel for respondent Fort Orange who is

10 Because the Court has consolidated its determination on the preliminary injunction with its decision on the underlying Article 78 action, and has rejected petitioners' arguments as lacking sufficient merit, the application for a preliminary junction is moot.

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directed to enter this Decision, Order and Judgment without notice and to serve all counsel of record with a copy of this Decision, Order and Judgment with notice of entry. The Court will transmit a copy of the Decision, Order and Judgment and the papers considered to the County Clerk. The signing of the Decision, Order and Judgment shall not constitute entry or filing under CPLR Rule·2220. Counsel is not relieved from the applicable provisions of that rule respecting filing, entry and notice of entry.

ENTER.

Roger D. McDonough Acting Supreme Court Justice

Dated: Albany, New York October 8, 2010

k. I . r-J

Papers Considered II:

1. Order to Show Cause and Temporary Restraining Order, executed on May 27, 2010;

2. Verified Petition, dated May 27,2010, with annexed exhibits and Memorandum of Law;

3. Affirmation of George F. Carpinello, Esq., dated May 27,2010;

4. Correspondence from Counsel for City Respondents, dated June 4, 2010;

5. Affidavit of Robert L. Sweeney, Esq., sworn to June 4,2010, with annexed binder of exhibits;

6. Affidavit of Robert L. Sweeney, Esq., swoin to June 4, 2010, with annexed affidavit of

William Krackeler;

7. Affidavit of William Krackeler, sworn to June 4,2010, with annexed exhibits;

8. Amended Verified Petition, dated June 4, 2010, with annexed exhibits;

9. Supplemental Affidavit of Robert L. Sweeney, Esq., sworn to June 7, 2010, with annexed exhibits;

10. Reply Affirmation of George F. Carpinello, Esq., and Reply Memorandum of Law, dated

June 7, 2010;

11. Affirmation of Jeffrey V. Jamison, Esq., dated June 7,2010;

12. Administrative Record on Appeal, Volumes I, II, and III, dated June 16,2010;

13. Respondent Planning Board's Verified Answer to Amended Petition, dated June 18, 2010;

11 Letters and annexed exhibits dated after June 23,2010 or later were submitted without permission of the Court

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14. Respondent Planning Board's Brief in Opposition to the Petition, dated June 18,2010;

15. Respondent Fort Orange Club's Verified Answer to Amended Petition, dated June 18,

2010;

16. Affidavit of Robert L. Sweeney, Esq., sworn to June 18,2010

17. Respondent Fort Orange Club's Memorandum of Law, dated June 18,2010;

18. Petitioners' Reply Memorandum of Law, dated June 23, 2010;

19. Affidavit of William J. Rusch, sworn to June 23, 2010;

20. Reply Affirmation of George F. Carpinello, Esq., dated June 23, 2010, with annexed exhibits;

21. Minutes, June 8, 2010 Oral Argument.

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