Town board’s counsel explains town’s obligations and developer’s rights to board of ed members


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August 13, 2010
by Christine Yeres

Toward the end of Tuesday’s joint town and school board work session, Clinton Smith of Wormser Kiley, counsel to the New Castle town board, explained to members of both boards and an audience of 100 residents the ways in which the town board is constrained in deciding what to grant the developer of Chappaqua Crossing. Following is the conversation among Smith and members of both boards.

Clinton Smith: The town board has to view this application through several legal prisms, some having to do with land use.  The town is not necessarily free to make any decision it may choose.  The town might face restrictions [in what it can choose] if growth can be accommodated.  The town board has to meet certain requirements in evaluating the application for growth. 

Without getting into the details of all of that, because a lot still remains to be seen through that prism. I want to emphasize that although I understand the school board’s position—the economics of it—the town has the same economic issue.  The [decision on whether to tax condos as fee simple] applies to taxes for both town and school boards.  But the town board has to make certain of its decisions based on a number of legal factors and analyses, and it’s not all a blank slate.

Board of Ed member Jeffrey Mester: I have not followed this as closely as I possibly could, but I’m trying to find out: What does the town get [from this project] besides the 6.5 acres?

Town Supervisor Barbara Gerrard: Given the fact that the developer is already in a second certiorari to reduce their taxes, it’s a matter of stabilizing our assessables.  We’re responsible for the fiscal security of the entire town and to see the commercial base eroding the way it has….  One of the things the town board is insisting on is that we got the developer to increase the amount of commercial square footage, we got them to go up over 135,000 square feet [from 520,000 s.f. to 642,000 s.f.], because we think that’s a very good thing for the town.

But remember the traffic issues: You’re all concerned about traffic.  All the traffic experts will tell you that commercial square footage is about 1.5 to 2 times the number of trips that are that generated by residential property.  So if we say “all commercial” and make the whole property commercial with no children on the property, that creates huge issues of transportation and traffic.  We wish we did have more options.  We do know informally that the developer continues to say he is still interested in marketing it to empty nesters.  The way they have the square footage—master bedroom on the main floor, two bedrooms—means they’re looking for that demographic.

It was the town board that insisted that the project be evaluated non-age-restricted, because during those public hearings residents brought up the possibility of non-enforcement [of age-restriction].  We thought those were very good suggestions.  We thought that was the better way to evaluate the project.  And if we’re fortunate enough that the developer markets it [to an empty-nester demographic] – other than the affordable units – that would have a much lower impact [on the schools].  And remember: we got it down from 348 units.  We threw that out.  And now the sizes of the apartments are smaller as well.

Board of Ed member Gregg Bresner: The town’s budget is $36 million.  The entire taxes from Reader’s Digest to the town is $190,000 – about .6 percent of the town’s budget.  And that applies to the school district as well.  Isn’t it a more reasonable solution to cut expenses and make this problem go away once and for all?

Clinton Smith: That goes back to Jeff’s question, “What does the town get from it?”  And you have to realize that the town is not a party to the transaction. The town is the approving agency.  And one of those prisms [through which the board is obliged to look at the developer’s application] is the Fifth Amendment, which says that a person has the right to do what he will with his property, subject to reasonable regulation. That means that when you want to put a deck on your house you have to get planning board approval, but nonetheless that [approval] can’t be arbitrarily withheld.  If the town is to say “No, go away,” there must be a rational, legally supportable basis in fact—and in law—for doing that.

Town board member Robin Stout: That’s the lawyer answer, and that’s fine.  But my point is that once upon a time not very long ago, Reader’s Digest produced a lot more money and therefore we, the taxpayers, and the school district, had less of a burden because there was more paid by Reader’s Digest.  One of our problems today is – you’re right—the commercial tax base has whittled to almost nothing.  So at this point it’s not much good for anybody.  One of the things the community has to decide is if we’re willing to afford a black hole up there, which means that the town expenses and school district expenses will be taken care of mostly by the residents. 

Or will we be able to put that property to some productive use up there so that we can all get revenue?  And yes, Jeff, as you said, we need to look at it and know whether it will be net revenue. But my concern is that change is coming and Reader’s Digest is leaving and we have to figure out whether we can get net revenue—and good net revenue—so that the tax burden on the average household is reduced.

Board of Ed member Jeffrey Mester: Speaking for myself, not the school board, if our revenues are a million dollars from this, it’s cheaper to lose that million dollars than to lose the three or four million dollars in [educating additional] students. It may be the lesser of two evils.

Town board member Robin Stout:  Well, we have to do the projections and figure out whether there are net revenues; if there aren’t net revenues, then it’s not worth doing.

Clinton Smith:  I would say, though, that from the town board’s point of view [and in view of its obligations as the approving agency], “worth doing” is not necessarily the be-all and end-all of the equation for the town’s approval action.

From Tuesday’s Joint Work Session, a general discussion of the developer’s rights and the town board’s obligations as lead agency:

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For NCNOW’s complete coverage of Chappaqua Crossing, dating from 2007, click HERE.


Comments(23):
We encourage civil, civic discourse. All comments are reviewed before publication to assure that this standard is met.

The statement by the Town’s attorney that under the Fifth Amendment the developer has the right to do what it wants with its property subject to reasonable regulation misses the point.  The reasonable regulation here is the Town’s zoning ordinances subject to which the developer bought the property.  Fifth Amendment due process means the right to a procedural mechanism to be heard—not the substantive right to do what you want regardless of the prevailing law.  Under the laws of this State, the Town has the right to enforce its zoning laws.  Otherwise they are meaningless and each property owner can do what he or she wants with his property.  My experience over 40 years as a litigator tells me that if you went into the developer’s records, it planned even before it purchased the property to seek a change in zoning to build a massive residential development for its own benefit regardless of the effect on the Town.

By litigation attorney on 08/13/2010 at 7:31 am

Does this mean that it doesn’t matter if Chappaqua Crossing costs the town more than it contributes?  Aren’t economic impacts environmental impacts also, according to NYS’s environmental review act?  I understand about 5th amendment rights, but is Smith saying that there’s some right here to run the town or school district into the red? I’m interested in seeing the actual numbers.

By OK, so what now? on 08/13/2010 at 7:31 am

Is this to say that Stout is wrong?  If there is NO tax benefit to the town at all, that doesn’t matter when deciding to approve or not?  And why is Mr. Stout so concerned about a “black hole”? Isn’t he in real estate? Doesn’t he know how the market works?  Why, how would it become a “black hole” economically?

By What's it mean? on 08/13/2010 at 7:47 am

When projections indicated that we had to build another middle school, at a tremendous cost to every resident, we built a new school.  The projections indicated student growth over the next 10 years warranted the second middle school.  Interesting that less than seven years after Seven Bridges was built, we are now having under enrollment and the real projection for the future is that both middle schools will have considerable under enrollment within the next two years.  Could we have gotten it any more wrong?

Can’t we as a town determine our own destiny?  The Chappaqua Crossing property is zoned the way it is and leave it that way.  I don’t know one person in town who wants to see residential anything built at that site.  We need to learn from the past and keep things as they are.  Projections, as seen with the building of an additional middle school, aren’t always accurate.  It’s already cost each of us so much already.  If we, as tax payers, don’t feel that the town board reflects our views, then it is up to us to vote for people who do.

By It's Ground Hog Day All Over Again on 08/13/2010 at 8:31 am

I strongly suggest that the town does not approve any variance from the existing zoning restrictions at Chappaqua Crossing.  I agree with Ground Hog Day that I have not spoken to a single person in town that believes allowing any housing to be constructed on the property is a good idea.  Opening the property to a multitude of commercial tenants seems like a short term fix that doesn’t address the developers problem - they aren’t willing to price the facility to an anchor tenant at a market price.

I can live with a black hole, and $0 tax revenue from Chappaqua Crossing, for as much time as it takes until:

1) Summit Greenfield eventually sells the property and takes a loss on their mistimed investment.  Let’s face it, they gambled and lost.  We all have suffered the same problem at some time in our lives when no one was there to bail us out.  I feel no obligation whatsoever to help out a developer that made poor assumptions when acquiring the property (including, possibly, an assumption that the town would roll over and give zoning variances).  A transfer of ownership will, hopefully, give a new owner an affordable cost basis from which to begin anew with the property, or,

2) The economy improves (which surely it will in the coming years) and SG are able to sell to recoup their investment, or attract an anchor tenant at a market rate that provides them with a return, or, it is sold to a competent commercial real estate manager that can market the unique character and layout of the complex in a way consistent with the way the town would like to see it utilized.

Living in a Black Hole

By Fine with a Black Hole on 08/13/2010 at 9:50 am

REPRINTED FROM ABOVE - ‘Clinton Smith:  I would say, though, that from the town board’s point of view [and in view of its obligations as the approving agency], “worth doing” is not necessarily the be-all and end-all of the equation for the town’s approval action.’

What specific variables [other than “worth doing” which seems clear in context] does town board counsel Clinton Smith have in mind?  The town board should enumerate to the voters all variables it is required to consider when approving a zoning change.

By Need transparency on 08/13/2010 at 10:56 am

I went to the town meeting Tuesday night and—was it me?—Clinton Smith seemed less like a legal advisor for OUR town and more like one for the developer. He seemed contentious to the school board and anything but neutral about the issues. Also as the litigation attorney in the commentary so aptly pointed out, he misconstrued the 5th Amendment in this case. I have heard informally that Mr. Smith has told the town board that if they vote against residential development, Summit Greenfield will sue. He may be right but this doesn’t seem like a justification for caving in. Also, I get the impression he has quite biased opinions in the matter that are totally contrary to the will of the people.

By agree with comments on 08/13/2010 at 11:18 am

This is the MOST I’ve understood EVER of the ways in which the board (through its counsel) is thinking!  Extremely interesting.  This explains a great deal.  But still: I can’t believe that we are obliged to grant the developer approval for a plan that devastates the town.  No way can that be right. Mr. Smith may be litigation-shy, but residents are not!

By Well, finally! on 08/13/2010 at 12:01 pm

message to By Well:  Who exactly is going to pay for this litigation that you are referring to?  The last thing anyone needs in life is attorney bills. 

This is a mess.

By not ok on 08/13/2010 at 1:56 pm

I attended the joint board meeting on August 10 and was astonished to find that the town board members that I voted for were reminiscent of the victims in a school yard when approached by a bully.  For that is what has happened in Chappaqua.  A corporate bully has come to town.  Members of the town board find themselves dependent on the advice of the town’s attorney whose legal arguments are as suspect as his loyalty to the town and to Chappaqua’s taxpayers.

Instead of a schoolyard bully demanding small change, here is a corporate bully demanding from the town board, millions in restitution for a failed investment.  A fearful supervisor and board are being advised by an attorney who justifies his deferential response to the bully with the threat that SG will sue the town.  Will they also sue Dunkin Donuts, sue the Bank of America, sue the Clintons for living in the town, or sue anyone who walks into the town’s Gazebo?

Bowing to legal threats has no place in a town of professionals, who, in the normal course of their work, blow off threats of being sued as a piece of lint flecked from their suit jacket.  Wake up town board members!  The town residents will back you all the way, monetarily and otherwise, and you will become heroes if you only show some guts and just rule, “No zoning changes,” to end finally this sorry spectacle.

By Show Us Some Spine on 08/13/2010 at 2:14 pm

While I am not a litigation attorney, I am familiar with the law and landmark cases, etc. The developer purchased this property with “reckless abandon” and total disregard for the principles and morals that we as town people moved here to live and raise our children. Others have called them bullies, and I totally agree. I do not like bullies and furthermore, go out of my way to support those who are victims of them. We want peace, we want quiet, we want uncrowded schools, we want clean air and water. How can the developer guarantee that? He can only cry I want what I want with the money that I can spend, I can buy anything. Well, this is not Manhattan, so take your money and refigure what you can do to best serve your property in a mutually amicable way to your existing and future tenants, the town residents, and if your children lived here and went to school here, what would be in the best interest of them!!!

By One piece of the backbone needed on 08/13/2010 at 5:04 pm

I thought Clinton Smith was council for the developer, starting when he offered that residents who couldn’t hear were free to leave.  He seemed more interested in throwing up roadblocks than helping the Town Board do what is right for the town.  I can’t believe that the better legal argument says the Town Board cannot refuse zoning CHANGES given all of the serious objections that have been raised.

What would be the basis of the developer’s suit?  I realize that they can pursue legal action even if their case is weak but surely the Town Board would not approve rezoning because of a threat of legal action.

I do not think we should count the latest proposal (199 units) a victory over the initial plan (348 units).  Do we really think the developer started with their ultimate goal?  The base case should be the way the property is currently zoned, not some ridiculous opening bid.  Until the owner of the property comes up with a proposal that looks better than development with the existing zoning, we should say NO. And Clinton Smith should figure out how to make that happen.

By Stop the Insanity on 08/13/2010 at 5:22 pm

Whatever the outcome of the Reader’s Digest development debate, it has served a valuable purpose insofar as it has revealed the disappointing tendency of our local officials, when under stress, to try to shield their deliberations from public scrutiny. 

First they chose not to televise this critical joint school/town board public meeting.  Then they insulted the 100 or so people (taxpayers/voters) who took the trouble to attend the meeting by holding it in a room with almost no spectator seating, and telling the overflow crowd that they were not entitled to hear the meeting, even though a suitably larger room 20 feet away stood vacant.  Had it not been for vocal residents, the vast majority would actually have been excluded, at the express direction of Ms. Gerrard and Mr. Smith. I wonder if they would have excluded the developer’s representatives (who were already in the room, seated).

Lesson learned.  We need new government.

By What we learned on 08/13/2010 at 7:21 pm

Why did Clinton Smith, the Town’s attorney, adopt a threatening tone and demand the name of the man who stood up and suggested a compromise at the Aug. 10 meeting?

The resident could have aptly responded, “My name is ______ and, yes, I do still have relatives living in Germany!  Or to update Mr. Smith’s arrogant behavior: “Are you adding me to your list, Sen. Joe McCarthy?”

What a disgraceful attempt at intimidation.

We have more questions than answers about the Town’s attorney.  Such as, who is he working for?

Why do all of his arguments sound as if he is representing Summit Greenfield? 

What is his game?

Lawyers in this town are laughing at his 5th amendment argument which is so poor that it is embarrassing.  Did he forget there are top litigators and experts in all areas of law in this
town?

CHANGE THE LAWYER!

By CHANGE THE LAWYER! on 08/13/2010 at 8:16 pm

I am incredulous that this has continued on for so long.  If it is correct that the current zoning would not permit residential development at Chappaqua Crossing, then it is time to JUST SAY NO! 

Are any of our local lawyers versed in whether and under what circumstances a recall petition can be filed?  Maybe it’s time to vote the bums out!

And I am not convinced by the assertion that commercial use generates more traffic.  Sadly, no citation of the source of that pearl of wisdom was offered.  The Town survived the traffic at the peak of Reader’s Digest’s reign ... surely it will still survive if and when a suitable commercial tenant is found.  Of course, there is no reason I have heard for holding to the “large tenant” only zoning restriction.  Why not allow smaller commercial tenants? 

Town Board ... LISTEN to your constituents!  JUST SAY NO!!!

By JUST SAY NO! on 08/13/2010 at 8:47 pm

Dear Ms. Gerrard:

New Castle can’t afford to depend upon the kindness of the developer, who has “informally,” as you say, signaled to you that he intends to market the majority of the units to “empty nesters,” even though the project will now admittedly be non-age-restricted. Your responsibility to the town shouldn’t permit you to count on that. 

Not only do we have no idea what direction the market will take the developer when it comes time to sell any residential units—we have no idea what direction the market (and his own economic circumstances) will take the developer the minute he procures a residential zoning change. 

And to Mr. Stout: Our giving the developer the zoning he wants will in no way ensure against the “black hole” you fear.  Once he has residential zoning he will have less motivation to fill the commercial.  And if we’re worried about too much traffic from all-commercial?  As another reader has pointed out, the town has parking ratio regulations that it must enforce.  Control traffic from the parking-regulations end.

By The kindess of strangers on 08/14/2010 at 5:55 am

I also attended the meeting and stayed on for the regularly scheduled Town Board meeting.  There were some interesting comments and discussions at this meeting. I tried to find the repeat on TV and on the NCCTV site and could not. Does anyone know why this is so?

What I saw and heard at both of the meetings was most dismaying. Thank goodness for NCNOW’s coverage.

By Bob on 08/14/2010 at 10:08 am

It’s absolutely ridiculous how a developer’s hands (and money) is tied up by this town board and residents.  I’d like to make a suggestion to the developer - cut your losses now (it’s only going to cost you more money, time & frustration) and donate the land to the Upper Westchester Muslim Society.  The existing building and its parking facilities would be a great starting point for them.

By great idea on 08/14/2010 at 10:58 am

To great idea:  Are you kidding?  Cannot be sure.  How about a museum dedicated to idiots and morons.

By not okay on 08/14/2010 at 3:35 pm

It may be time for the school board or even members of the public to engage separate counsel—not for litigation, which is always a last resort—but rather to follow up and test the suggestions made by the town’s lawyer Mr. Smith that the town may not be free to reject out of hand the developer’s proposal to rezone for multifamily residential. 

What is the legal standard for reviewing/rejecting such a proposal, and who has the burden of proof?  These are fundamental issues that require elucidation.  So far, that has not been provided by the town board or its counsel, except to the extent of Mr. Smith’s suggestions at the last meeting.

To use a school metaphor, its’ not good enough to see the town board’s final answer sheet.  We want the board to show us its work!  How did they arrive at their answers? It’s not a matter of distrust of the board, but rather of assuring that the reasoning and level of certainty behind any legal view are fully understood by the public.  Besides, everyone knows that for every two lawyers there are often three opinions.

If the town board won’t provide a clear view of what it feels is the legal lay of the land, other interested boards and the public will have to engage expert counsel of its own.

By Legal transparency on 08/15/2010 at 9:00 pm

“Legal Transparency” has an excellent point.

Is there an attorney in town who would volunteer a legal opinion on this point?

By We Need to Know on 08/17/2010 at 2:14 pm

To It’s Ground Hog Day ....you have your facts absolutely wrong!!! Projections never indicated that increased student enrollment indicated we needed a new middle school several years ago. Quite the contrary. We knew we had a population bubble that would crowd our schools for a period of only a few years. Long term projections presented during the “should we build a new middle school debate” absolutely indicated that this bubble was temporary and that student enrollment would in fact decline- which is exactly what it did do and is doing now. Our options to address this temporary enrollment bubble included expanded and renovating existing facilities and some minor redistricting to move and balance population. I attended most of those meetings and can tell you as a matter of fact that the CCSD school board back then had almost immediately dismissed expanding elementary and Bell schools. They committed early to building a new middle school and much of the discussion was about where to build it and how to redistrict. To be clear, projections back then indicated student enrollment would be temporarily high and eventually moderate and then fall. The school board continually promoted the theme that if we are to maintain our reputation for excellence in education we must build a new school. Of course most of us know that we could have mainatined our excellnce in education had we expanded Bell and a few elementary schools and not have this underutilized and costly (higher taxes) Middle School.

By Not so Fast on 08/18/2010 at 9:11 am

I remain amazed that the Town is wasting time, resources and any good will that might be left in the minds of its residents negotiating with the developer to help make an ill timed and ill conceived real estate gamble profitable. I would love to know what our legal obligation is to Greenfield as it relates to continuing to review these proposals.  Clearly in years when tax revenues are down, the Town’s money could (and should) be spent on things that benefit the residents, not a stranger trying to exploit our Board.

The thought that the additional tax revenue might cover the burden being imposed on the schools and the tax payers would be laughable if it wasn’t such a blatant disregard for our best interests.  The developer was well aware of the zoning restrictions on the property when he bought it.  Unless off the record promises were made to the developer regarding proposed changes to the zoning that might be available post-closing (which, by the way, would be completely unenforceable), Greenfield decided to take a gamble.  I have clients that take gambles on real estate deals all the time….some are successful and some end up in bankruptcy.  Why should Greenfield’s gamble be protected and funded me and my neighbors. Who protects my gambles? Make no mistake about it, any change in the zoning at the Reader’s Digest is bascially handing Greenfield a bag of money stolen from our pockets.

By RE Lawyer on 08/18/2010 at 12:56 pm


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