One shoe drops: Judge dismisses Summit Greenfield’s state suit against the town

October 5, 2012
by Christine Yeres

In a decision filed with the County Clerk on Monday, October 1, 2012, State Supreme Court Judge George Loehr dismissed Summit Greenfield’s lawsuit challenging the New Castle Town Board’s review of the developer’s application to construct 199 units of housing (20 of them affordable) on the former Reader’s Digest property.  The developer of Chappaqua Crossing filed the state suit (and another in federal court) two months before the Town Board completed its review and approved construction of 111 units of housing (20 of them affordable). The federal case is pending.

The state suit alleged that the town’s failure to act on its application had deprived Summit Greenfield of all economically viable use of the commercial portion of its property and sought compensation, even suggesting that the town be required to purchase the property from Summit Greenfield.

The decision reads, in part, “it is clear that [Summit Greenfield] has not been deprived of all economically beneficial uses of the Property.  From the date [Summit Greenfield] acquired the Property to the date it commenced this action, it was free to lease the commercial portion of the Property and to develop the residential portion of the Property if only for single family homes: on its face, something of no insignificant value.  Viewing the full bundle of [Summit Greenfield’s] rights, it was never permanently deprived of all economically beneficial use of the Property.”

In his decision, Judge Loehr pointed out that to state such a claim, Summit Greenfield must “allege facts to the effect that” the Town’s “regulatory conduct, after the final exhaustion of administrative remedies, has deprived [Summit Greenfield] of the ability to obtain a reasonable return—viewed in the light of investment-backed expectations—from the Property as a whole based on any legal use of the Property.”

“When [Summit Greenfield] acquired the Property,” Judge Loehr continued, “it knew how the Property was zoned and therefore the uses to which it could be legally put.  [Summit Greenfield] does not challenge the zoning; [it] challenges [the Town’s] conduct in refusing to approve its proposed development of the Property within the existing zoning and/or in refusing to change the zoning and/or to approve variances.  While [the Town’s] conduct in refusing to approve what [Summit Greenfield] had requested presumably reduced its value, it did not destroy its value as a whole.  A diminution in value, even if significant, which does not leave the Property worthless, and which resulted from hoped for administrative approvals or changes in the law fails to state a claim under Penn Central and the Fifth Amendment or as a violation of a substantive due process under the Fourteenth Amendment.”

Also on October 1, Summit Greenfield issued the following statement through spokesperson Geoff Thompson of Thompson and Bender: “We have reviewed the ruling and respectfully disagree with the judge’s decision. We are reviewing our options.”

Background: A timeline

2004 Summit Greenfield purchased the property with zoning for BRO (Business, Research, Office) and some single family homes

April 2005 Summit Greenfield asks for zoning change to allow up to four additional office tenants (one to occupy at least 200,000 SF, the other three limited to 171,000 SF combined total)—besides tenant Reader’s Digest.

June 2005 Town Board approves change to have four additional tenants.

January 2006 Summit Greenfield proposes construction of 348 condos, reduction of existing office square footage

December 2006 Town Board rejects the application

July 2007 Summit Greenfield proposes 278 units of housing (56 of them affordable)

August 2007 Town begins NYS environmental review

December 2009 Reader’s Digest, in bankruptcy proceeding, announces it will break its 20-year lease.

March 2010 Summit Greenfield files its first FEIS (final environmental impact statement); Summit Greenfield asks for a variance to lift the four-additional tenant limit.

July 2010 Summit Greenfield proposes plan for 199 units of housing (20 of them affordable); SG submits a second FEIS

In response to October 2010 comments from Town Board, SG submits third FEIS

November 2010 Town declares FEIS incomplete because it does not adequately ensure “the potential viability of the commercial use of the property,” “a range of housing types” including AFFH (affirmatively furthering fair housing, as per the HUD settlement with the County), and consistency with “Town zoning, community character, [and] the Town Development Plan”

December 2010 Reader’s Digest leaves the campus.

February 2011 Summit Greenfield files state and federal lawsuits against the town.

April 2011 Town Board votes to remove limit on number of office tenants and to allow 111 units of housing (20 of them affordable).

March 2011 Summit Greenfield amends its Complaint alleging that the Town’s approval process had been “a sham,” that “its delay was done in bad faith,” and that the project the town approved “was not economically viable, thereby depriving [Summit Greenfield] of all economically viable use of the Property.”

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

As a community we are really abusing both the owner of Chappaqua Crossing and ourselves? I have said from day one, that we need to make Mr. Charney a private partner with the Municipality of New Castle. We need to embrace him, and embrace his ambition to have a successful money making venture in New Castle. To do otherwise hurts us all. How much money does New Castle need to raise over the next 10 years to keep residential taxes either frozen or to decrease them by THREE percent each year over the next 10 years; how does Chapp Crossing help this GOAL? Where in New Castle can we either expand or improve the commercial base before we create new areas of commercial? How can we promote the goals of Mr. Charney while serving the interest of our children? How about 3 brand new Schools up at Chappaqua Crossing – Bell, Graflin, Roaring Brk. Turn Bell, Graflin, Roaring Brk into condo projects as developed by CC. If the town board was asked how much money does the Municipality need to collect from the commercial base would they know? How would they back up their numbers? Do we need to generate $2.0m more per year, $3.0m, $10.0m, or $23,887,011.67 more in annual commerical revenue. What is needed, and how quickly can building permits be received. What RED CARPET is being laid out at town hall and for who, where, and why, and based on WHAT? Can we get these answers before December 31, 2025 ? Would it be too much to ask to have such answers by December of this year? Do we already know our numbers or are we just begining to think about it now?

By What’s up Doc on 10/05/2012 at 8:11 am

A welcome and entirely correct judgment by the court. 

As for the comment by “What’s up Doc”, this type of thinking is precisely backwards. 

The day that our town government adopts this sort of thinking will be the day that the character of our town starts to decline.  The primary goal should not be to encourage commercial tax growth, it should be to protect and improve the quality of life of the residents.  Commercial tax revenue is of course desirable and welcome, but it’s never been cheap to live here, and if the desire to develop the commercial tax base conflicts with the primary goal of protecting and enhancing our quality of life, then I’ll vote against development, even if it means high taxes.

No one likes high residential taxes, but let’s be honest..  we all knew what to expect when we moved here.

By Just Sayin’ on 10/06/2012 at 7:46 am

Don’t be afraid of being able to find a solution that works for the owner of Chappaqua Crossing and the community. High taxes are high taxes, but no one needs to embrace abusive taxes just to keep the entire Municipality being one big Country Club. Paying $83,000 in property taxes for 5800 sqft on just over an acre of land is too much! Instead of embracing gridlock, lawsuits, and failure on everyones side, including your opinion, embrace finding a solution; unless you are in a profession that does not like solutions because it reduces your income!

By Don’t be afraid on 10/07/2012 at 10:08 am

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We encourage civil, civic discourse. In other words, be pithy and polite. All comments will be reviewed before publication to assure that this standard is met.