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Article 78 and Appeals Briefs, Documents, and Commentary |
Motion For Leave to Appeal Filed With NY Court of AppealsPetitioners Kettaneh and Lepow have filed a motion for leave to appeal with the New York Court of Appeals returnable on December 19, 2011. Permission is required to appeal if there are no dissents in the Appellate Division. Landmark West filed a separate motion, also returnable December 19, 2011. February 21, 2011 Update Responsive briefs in the Appellate Division appeal were filed by the City and the Congregation on January 14, 2011. The reply brief of the Petitioners Kettaneh and Lepow are due March 11, 2011, with the appeal scheduled to be argued for the April Term. The appeal is scheduled for the February 2011 Term. May 11, 2010On April 9, 2010, Justice Lobis summarily denied the motions to reargue and the intervene - in a four page decision, which could not have been much shorter. Although the Court claimed to have discussed the issues raised, we are still poring over the Court's initial decisions trying to find a discussion of the issue of a bifurcated financial analysis or the issue of the BSA jurisdiction to base a variance based upon a landmarking hardship. The Court said that the remedy was to perfect the appeal - and that will be accomplished soon. January 25, 2010 - StatusBoth Kettaneh and Landmark West have filed notices of appeal from the decisions of Justice Lobis. Landmark West then filed a motion for reargument in October, 2009. In the reargument motion, Landmark West falsely claimed that certain issues were not covered in the Court's Kettaneh Decision, because Landmark West claimed inaccurately that Kettaneh had not raised them. Remember that the Landmark West decision incorporated the Kettaneh Decision by reference. Landmark West made this inaccurate claim possibly as an expediency in order to boost its chances on its motion for reargument. This put Kettaneh in the unhappy position of having to move to intervene to protect itself from the false maneuvering of Landmark West - Landmark West then opposed Kettaneh's motion to intervene! The Ωotions have been fully briefed - links may be found on the Article 78 Court Filings Page. August 4, 2009 - Court Dismisses Landmark West Article 78 ProceedingAs expected, Justice Lobis of New York Supreme Court dismissed the Landmark West Article 78 proceeding in a 6 page decision which addressed only the claim relating that the BSA lacked jurisdiction because of deficiencies in the DOB action being appealed to the BSA. The Court incorporated by reference its July 19, 2009 33 page decision in the Kettaneh case asserting incorrectly that the arguments made by Landmark West were addressed in the Kettaneh decision - they were not. Indeed, arguments made by Landmark West (and Kettaneh) as to the improper bifurcated feasibility analysis and the lack of jurisdiction of the BSA to use landmarking as a basis for variances were not addressed in the Kettaneh decision. The Court also materially misstated the facts on the last page of the decision: the assertion that the project had evolved from a 14 story project to an 8 story plus penthouse project over time. This is completely incorrect as to the application before the BSA which concerned the 105 foot 9 floor project as to which the Landmarks Preservation Commission issued a certificate of appropriateness in 2006. The only change made in the plans was the rear courtyard unblocking the rear lot line windows submitted to the BSA at the end of the proceeding. The Court was confused by the fact that during the Landmarks proceeding, the height of the building was modified. Absolutely no modifications were made to the plans that in any way related to the eight objection issued by the DOB in March 2007 and removed in August 2007 without explanation. The Court states "Revisions to Proposals may be required to address the DOB's objections." That is true. What is not true is that revisions were made in this matter - not exactly a subtle distinction. The distinction was made to the Court and ignored by the Court. July 25, 2009 - Why Did the Court Ignore the Fact That The Congregation Would Earn A Reasonable Return from It All Residential Building?[The following is not intended to be a comprehensive analysis of the decision - it does, however, illustrate the vulnerability of the decision to an appeal.] It is always frustrating when a court mischaracterized a position so that it may ignore other points. This is what the Court did in its July 10, 2009 decision. This is a common ploy and the Court adopted the mischaracterizations of the BSA as to positions of the opponents and Petitioners. By suggesting at the conclusion of the opinion that the Court might have ruled differently if it were conducting a de novo review, the Court appeared to imply that it had addressed the positions of the Petitioners in the remainder of the decision.It had not. We believe that if the appellate court accepts the view that the reasonable return analysis must be performed as to the entire site, then the variances must be annulled. But, the Court adroitly avoided addressing this argument, even though pointedly raised by the Petitioners. See Ex. N-1. This exhibit was shown to the Court at the March 31, 2009 hearing. In order to uphold the variances, the Court needed a way to ignore the Petitioners' attack upon the feasibility studies submitted by the Congregation. A typical way to ignore inconvenient positions is for a court to mischaracterized the inconvenient positions by addressing secondary points, while claiming that the secondary points were the primary arguments, and then dismissively not addressing the primary arguments. Both the BSA and the Court asserted that the Petitioners' primary argument was that the BSA should have used a return on equity analysis. But, the Petitioners' had argued explicitly that even a return on investment showed a reasonable return could be earned. [On the other hand, unfortunately, the Landmark West petition did seem to stress the return on equity point.] The Petitioners were explicit that the BSA had mischaracterized the positions. ¶ 167 of the Petition states: "both the Scheme A and Scheme C conforming as-of-right buildings would earn a reasonable return for the owner whether using return on investment or return on equity." ¶204 of the Petition states in criticizing the BSA decisions: "The Decision discussion of return on equity is not only not candid, but suggests, falsely, that this was the only issue raised by opponents as to the reasonable return/feasibility reports." At the hearing, Petitioners counsel said that its most important point, saved until last, was that the return on investment of an all residential building earned a reasonable return. What then did the court state at p.22: "Finally, petitioners' biggest complaint was that the Congregation's expert did not utilize the return on equity analysis in determining the Project's rate of return." This was utterly false, but, allowed the court to deal with the return on equity issue at length, and then ignore Petitioners' primary points. The Court needed a way not to address the Petitioners' conclusive demonstration that the Congregation would earn a reasonable rate of return from the "not-really" all residential as-of-right building presented in December 21, 2007. The Court did note (although the BSA decision did not) correctly that the Freeman Frazier had stated that a 6.55% return was a satisfactory return. p. 21. " Freeman/Frazier notes that this is at the low end of the range that typical investors would consider for an investment opportunity." But, the Court left out the next sentence in Freeman Frazier's report (R-140) as quoted by Petitioners in ¶ 50 of Petitioners' reply : 5.00 Conclusion 7.4 0.7. So, the Court left out the part of Freeman/Frazier's statement that the return of 6.55% was "acceptable." This was deliberate, given the emphasis by the Petitioners as to this point. On page 8-9, earlier in its Decision, the Court described correctly Freeman Frazier having submitted an analysis of an all residential building on December 21, 2007 and that the proposal "provided an annualized return on total investment in the amount of 3.63%." [The Court also discussed this same filing more obliquely on page 21.] The Court then describes further submissions, but circumvented the fact that this analysis was not one of the proposal revised later. But, Petitioners made clear in ¶26 and in an entire section of its petition ¶¶66-76 that the all residential plan Scheme C was not updated after December, 2007. It was so clearly evident that the Scheme C was not updated properly, that the BSA in its Article 78 answer recalculated the analysis as is should have been done in the BSA proceeding and arrived at a rate of return of 6.7%. Petitioners pointed this out in its reply at ¶¶43-51. Clearly, this admission by the City should have ended the issue of validity of the condominium variances - and Petitioners' counsel at the hearing was crystal clear that this was its most important argument and was dispositive of the case. So, what did the Court do? First, as noted before, it ignored Freeman/Frazier's admission that 6.55% was "acceptable." Then, the Court did not even mention the BSA's admission at ¶292 as to 6.7%, and covered this up by using the ploy that the Court was completely addressing the Petitioners' most important point, and dismissively not discussing the other points. We believe this will be easy to demonstrate on an appeal. The Court similarly completely failed to discuss at all the primary objection that Petitioners asserted as to the site value used in the bifurcated two floor condominiums as-of-right analysis. The Court observed that Petitioners' had objected to the exaggeration of the site value - but, did not discuss the issue at all. The Court noted that a the November 27, 2008 meeting, "The BSA asked the Congregation to consider only the value of the residential portion of the site in calculating the reasonable return, and eliminate the community facility from the site value. p. 8. What the Court failed to note is that Freeman Frazier never revised the site value in this matter at all. Petitioner's demonstrated this with Exhibit N-3 filed with it Reply, and displayed to the Court at the hearing of March 31, 2009 on a large poster board, which showed that the site value used on October 25, 2007 was $17,050,000 and was $12,347,000 by the final site value used in May, 2008. Because the community house with one double and 3 regular floors, it was 5/7 of the as-of-right building. One would have expected that the site value was reduced by that proportion. But, it was never done. Petitioners' attacked this site value in numerous other ways - the Court noted the objection in general to the site value, but did not discuss the objections at all. The Court also completely ignored the Petitioners' legal argument that a bifurcated analysis was the improper standard. The Court's only reference to this argument was at p.21 where the Court stated: "Petitioners assert that although the BSA required the analysis to be performed, the BSA never explicitly addressed how the reasonable return analysis should be conducted, since there is no language in the statute as to how to consider a mixed-use profit and non-profit structure." This is quite odd: the Court said that the statute was silent - but, then ignored all of the applicable case law on the issue, as if it did not exist, and did not even attempt to engage in a rational policy analysis. Finally, on the issue of the feasibility study, one fact stressed repeatedly by the Petitioners that the Court (and the BSA) failed mention was the $12,347,000 payment being made to the Congregation as the acquisition price and the fact that the BSA completely ignored the return on investment inherent in such payment. Nor did the Court bother to discuss the extensive New York case law requiring that the cost to the owner of acquiring the site be considered in a reasonable return analysis. This was also required by the formal written BSA guidelines. The BSA just failed to consider the issue - to cover for the BSA, the Court noted that the cost of acquiring the three lots was listed in the deeds: but, this actually makes the BSA failure look more negligent, since the deed refer to nominal payments of one and ten dollars - so, that would make the returns o $12,347,000 on a 21 dollar investment astronomical. This note is not exhaustive as to the errors, even as to reasonable return, but, is being provided to suggest the possibilities of an appeal. July 10, 2009 - Court Rules For BSAWe were notified late on July 15, 2009 the Court's decision of July 10 ruling in support of the BSA and the Congregation Shearith Israel. Although disappointed, we note that the Court said that if a de novo review were to be held, she may have ruled for the Petitioners. We also believe that sufficient errors of law were made by the Court to form a basis for an appeal. Most alarming was the cursory discussion of unique physical condition, failure to discuss the absence of authority for the BSA to use landmarking as a physical conditions, the failure to discuss the need for a reasonable return analysis to be base upon the entire sight, conflating and confusing the various as of right studies, not addressing the computation of rate of return for the all residential building as provided by the BSA in its answer, failure to explain why it was not arbitrary to block the windows of the front apartments, and even more. Puzzling was the Court's use of the term "return on profit". July 8, 2009 - Court Denies Motion of Further ReplyThe Court denied Kettaneh's motion to file a further reply. The motion had been filed so that Kettaneh could respond to new assertions and misrepresentation made in the papers filed by the BSA and the Congregation when answering the LW petition. Kettaneh had intended to file a memorandum substantially in the form of the attached draft further reply. The Court claims that it will not consider the filings in the Landmark West proceeding - yet, on March 31, 2009 the Court held a combined hearing. We hope that the Court can ignore what the Congregation alleged in its response to Landmark West. June 19, 2009 - Landmark West RepliesLandmark West replied to the Answers of the BSA and the Congregation on June 19, 2009. The LW reply was disappointing in that the distorted factual assertions made by the BSA and Congregation in their May 26, 2009 answers were ignored. In fact, the LW reply includes no citation to the Record in support of its positions. Rather, LW in a footnote decided to rely on the fact-detailed responses of the Kettaneh Petitioners. Much of the LW reply was devoted to the argument that LW had standing and to a technical jurisdictional argument. LW avoidance of references to the record ordinarily would result in the court ignoring their arguments. The LW Memorandum of Law briefs issues and cites material not raised in its Petition, but rather included in the Kettaneh filings. Thus, nothing material is added by the LW filings. The Kettaneh Petitioners do not concur with all of the positions taken by LW. For example, LW argues that the BSA's bifurcated analysis was improper, but does not state what would be a proper analysis. The Kettaneh Petitioners argue that the bifurcated analysis was flawed, one reason being that the BSA allowed landmarking issues to intrude on the valuation process. The Kettaneh Petitioners then argue that the required all-residential analysis, also flawed to the benefit of the Congregation, still showed that the Congregation would receive a reasonable return, and for that reason, the Court should simply annul the BSA determination without the need for further BSA proceedings. LW was ambiguous and seemed to suggest other types of feasibility analysis. Because the Congregation and the City added to their asserted facts and arguments, without response by LW, the Kettaneh Petitioners asked the court for the right to file another brief setting the record clear. Basically, the Kettaneh Petitioners view the LW filings to be a net negative. June 19, 2009 Landmark West Reply Memorandum of Law. May 26, 2009 - Responses to Landmark West Petition Filed.The City and the Congregation have filed their answers to the amended petition of Landmark West. Both respondents essentially copied their prior answering papers to the Kettaneh Petition. In addition, the Congregation's Memorandum of Law rewrote many sections and in essence filed a sur-reply to the Kettaneh reply papers, after the Court at the March 31, 2009 hearing had denied the Congregation's request to file such a sur-reply. LW Amended Petition of May 9, 2009 (removing two petitioners from action). Congregation Memo of Law of May 26, 2009 in answer to LW. Congregation Answer of May 26, 2009 to LW Petition. City Memo of Law of May 21, 2009 in answer to LW. City Answer of May 26, 2009 to LW Petition. May 4, 2009 - Report on StatusJustice Lobis of the New York State Supreme Court held a joint hearing on the Kettaneh Article 78 proceeding and the Landmark West secondary action on March 31, 2009. See Transcript. Alan Sugarman argued the merits of the Article 78 proceeding on behalf of the Kettaneh Petitioners and presented a number of poster sized exhibits. Sugarman conclusively showed, among other things, that an as-of-right all residential building would earn a reasonable return, and accordingly the Congregation's condominium variances did not meet the requirements of finding (b) of New York City Zoning Resolution 72-21. Sugarman explained that the BSA had improperly used the landmark status of the Congregation site and buildings in making the (b) finding as well as in making the (a) finding, arguing that the BSA had no jurisdiction to provide relief from hardships allegedly created by the landmark laws. Sugarman also communicated to the Court the fact that 90% of the variances related to the condominium part of the project, that access and circulation was an irrelevant issue, and that the BSA had shown its bias in failing to consider as to the community house variances that the caretaker's apartment could be accommodated on the fifth floor of a proposed building - without requiring a variance for the fourth floor. These issues and factual assertions are not included in the Landmark West pleadings. The Kettaneh Petition would be ready for decision, except for the procedural situation created by the Landmark West case. Landmark West chose to start its case as a regular action with complaint. Over half of the hearing was devoted to Landmark West attempting to justify to the Court that it was proper to commence its case as a regular action. Ultimately, the Court concluded that Landmark West was in error, and in a decision of April 21, 2009, and ordered that the Landmark West case be converted to an Article 78 proceeding, giving the Respondents 10 days to respond - but, only after Landmark West gives the Respondents notice. On April 24, 2009, Landmark West served the decision and order on the Respondents and their response would then be due ten days later; but, because Landmark West served by mail, the response papers will be due May 11, rather than May 4. This case is destined to continue as a number of procedural issues are raised relating to the conversion of a complaint to a petition and the ability of the respondents to respond to what what a complaint. This will prolong the case - which is problematic since there is no stay in place to stop the Congregation from proceeding with construction. The Court at the hearing did inquire as to what the Landmark West complaint added which was not included in the Kettaneh Petition. Counsel for Landmark West and the City struggled to provide an answer. The fact is, on important points with a chance of success, all points are covered in the Kettaneh Petition. The Landmark West petition alleges that the BSA unconstitutionally provided religious deference to the Congregation; the Kettaneh Petition position is that whatever the motives of the BSA, the five findings of the zoning resolution were not met, and there is no need to move to the motives of the BSA. Additionally, Landmark West argued that the BSA improperly assumed jurisdiction on the original application because of defects by the DOB: the Kettaneh Petitioners did not want to argue this point whatever its technical legal merits, for they expected the BSA to claim (as it did) that the August 2007 amended DOB filing cured the original defect. The Landmark West complaint also made general conclusory assertions made Kettaneh Petition, but the Kettaneh Petition provided detailed citations to the record but the Landmark West complaint did not. As to these assertions, the Landmark West complaint relied upon weaker facts than those cited in the Kettaneh Petition. In addition, the Landmark West complaint makes no argument on the issue of the windows in 18 West 70th (except for one phrase) and no reference to shadows created by the BSA's ignoring the important contextual zoning laws. Whatever occurs, it is clear that that there will be delay and that delay could have undesirable consequences due to lack of a stay. It is also likely that there will be further misdirection, confusion, and conflation of the facts of the case unless Landmark West carefully scrutinizes its statements of facts - but, even then, the Respondents will have the opportunity to dissemble and distort once again. May 4, 2009We are pleased now to post more of the filings in the Article 78 proceeding, since there is no longer a litigation strategy benefit in not posting these documents. In the right column are links to the various documents filed by the primary petitioners, Kettaneh and Lepow, against the BSA. In all the Kettaneh Petitioners filed over 600 pages in support of their Petition including a 79 page Petition, a 248 page Reply, and two Memoranda of Law totaling over 172 pages and citing 75 judicial precedents. The Kettaneh Petitioners also prepared over 50 pages of special graphical exhibits and presented some of these at the March 31, 2009 hearing. Documents have also been posted in the the secondary case by Landmark West and other petitioners. Landmark West has filed on the substance a 27 page Complaint - Landmark West has yet file any exhibits or to file a substantive memorandum of law. February 26, 2009The court hearing in the Article 78 Appeal Proceeding by Peter Nizam Kettaneh and Howard Lepow against the BSA has now been scheduled to be heard on Tuesday, March 31, 2008, 10:30 AM before the Honorable JOAN B. LOBIS,: 60 Centre Street, Room 345, New York, New York 10007. The hearing is open to the public in theory, although, this Judge usually hold hearings in chambers. At the same hearing, Landmark West will have the opportunity to argue, in its separate case, the two motions to dismiss filed against the Landmark West plaintiffs. Among other things, the Kettaneh Petition and the Landmark West Complaint both argue that it was a violation of the law for the BSA to consider the landmarking of the zoning site and a building on the zoning site as a factor in making the hardship (a) finding under Z,R. 72-21. Relief from any such hardship, opponents argue is a matter for the Landmarks Preservation Commission and the City Planning Commission. The Kettaneh petition is being argued on the merits-in the City answer to the Kettaneh petition, the City reaffirmed that it had in fact used landmarking as a factor in making the (a) finding. Check back for further analysis. September 29, 2008On September 29, 2008, an Article 78 appeal was filed against the BSA and Congregation Shearith Israel by West 70th residents and property owners in the New York State Supreme Court. The petitioners are Peter Nizam Kettaneh and Howard Lepow and are represented by Alan D. Sugarman. The comprehensive 69 page petition was accompanied by a 98 page memorandum of law and a 13 volume, 4200 page compilation of documents filed in the BSA proceeding. The return date for the hearing is October 31, 2009, but it is expected that the City and the Congregation will seek and appeal. The petition attacks the BSA for having issued a disingenuous decision which conceals the true facts and reasoning behind its decision. In reality, the BSA ignored requirements that each of the variances satisfy the five findings of Section 72-21 of the New York City Zoning Resolution in a way that eviscerates the variance requirements. The BSA further ignored the legislative determination in the 1984 mid-block zoning that the light and air and scale of the mid-blocks were deserving of protection, deciding that the individual impact of the tall building without setbacks were too small so as to represent an impact on the public welfare in conflict with the (c) finding of Section 72-21. This troubling conclusion basically removes the protections of mid-block zoning when coupled with the BSA's findings that it would ignore the physical condition requirements of finding (a) and would not require probative proof that the owner of a property must show that a reasonable return could not be earned as required by finding (c). There were two sets of variances approved - three variances related to expansion space sought for the schools operated by the Congregation and its tenants on floors 2,3, and 4. These three variances added only 1500 square feet of space to a conforming building, and were justified by this so-called programmatic need. The other set of variances - four in number - related to the upper floors of the proposed building and permitted the construction of an additional 12, 500 square feet of condominium space. Thus, the upper floor variance accounted for 90% of the space allowed by the BSA and had nothing at all to do with the religious ownership of the site, of so BSA claimed, and were justified because the Congregation could not earn a profit on the development site because of the hardship resulting from the landmarking laws and the zoning laws (if you are a zoning lawyer, note the circularity here).
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