Develop Don't Destroy v. Urban Development Corp.
874 N.Y.S.2d 414, 59 A.D.3d 312 (2009)
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Rule of Law:
A court must defer to a state development agency's finding of "blight" for an urban renewal project as long as the finding is not corrupt, irrational, or baseless. This deference applies even if the designated area includes unblighted parcels or is experiencing some market-rate development, as the concept of blight is to be interpreted liberally.
Facts:
- Forest City Ratner Companies (FCRC) proposed a 22-acre mixed-use development in Brooklyn called "Atlantic Yards," which included a professional basketball arena, residential towers, and commercial space.
- The project's footprint covered a previously designated blighted area (the Atlantic Terminal Urban Renewal Area or ATURA) as well as three adjacent city blocks that were not part of ATURA (the non-ATURA area).
- Prior to the project's announcement, the non-ATURA area was experiencing some private redevelopment and gentrification.
- The Empire State Development Corporation (ESDC), a state agency, sponsored the project and commissioned a blight study.
- FCRC acquired many properties within the non-ATURA area and allowed them to remain vacant or fallow.
- Based on its commissioned study, the ESDC formally found the non-ATURA area to be "substandard and insanitary" (i.e., blighted).
- This "blight" finding allowed the project to proceed as a "land use improvement project," which exempted it from local zoning laws and enabled the use of eminent domain.
- The ESDC also designated the proposed arena as a "civic project" to further justify its involvement.
Procedural Posture:
- Petitioners initiated a hybrid CPLR article 78 proceeding and action for declaratory judgment in the Supreme Court, New York County (a state trial-level court).
- The action sought to annul administrative findings by the Empire State Development Corporation (ESDC) and the Public Authorities Control Board (PACB) concerning the Atlantic Yards project.
- The Supreme Court, New York County, dismissed the action in its entirety.
- Petitioners, as appellants, appealed the dismissal to the Supreme Court, Appellate Division, First Department (an intermediate appellate court).
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Issue:
Does a state agency's determination that an area is "blighted" and qualifies for redevelopment as a "land use improvement project" under the Urban Development Corporation Act lack a rational basis when portions of the area are not substandard and have seen recent private investment?
Opinions:
Majority - Per Curiam (Panel: Gonzalez, J.P., Sweeny and DeGrasse, JJ.)
No. A state agency's determination that an area is blighted does not lack a rational basis under these circumstances. Courts must afford extraordinary deference to the public purpose findings of the legislature and its agencies, particularly regarding blight determinations. Following the standard set in Kaskel v. Impellitteri, a court cannot intervene unless the agency's finding was made corruptly, irrationally, or baselessly. The concept of "blight" is a malleable and elastic term that is to be interpreted liberally and can encompass conditions like underutilization or obsolescence, not just physical decay. The fact that an area contains some unblighted properties does not invalidate an area-wide blight finding, as urban renewal projects are not required to proceed on a piecemeal, lot-by-lot basis. The petitioners are merely opposing their judgment to that of public officials on a matter legislatively committed to those officials. The court also rejected petitioners' environmental challenges under SEQRA, finding the ESDC took the required "hard look" at environmental concerns and that its decisions regarding build years, terrorism risk, and project alternatives were reasonable.
Concurring - Catterson, J.
No. While compelled by longstanding precedent to accept the majority's conclusion, I reject its core reasoning. The Urban Development Corporation Act (UDCA) is being used as a tool of a private developer to destroy a neighborhood deemed "underutilized." A perfunctory "blight study" performed years after a project's conception should not serve as the rational basis for a blight determination, especially when the project's announcement itself likely caused the area's stagnation by halting other private development. The record contains only the barest minimum of evidence to support the agency's finding of blight. Although I deplore the destruction of the neighborhood in this manner, I cannot conclude as a matter of law that the ESDC's finding was entirely without evidence, and am therefore legally constrained to concur.
Analysis:
This decision solidifies the principle of extreme judicial deference to administrative agency findings of "blight" in New York. By reaffirming the highly lenient Kaskel standard, the court makes it exceedingly difficult for opponents to challenge urban renewal projects on the grounds that an area is not truly blighted. The case demonstrates that the legal definition of blight is broad and flexible enough to encompass areas with significant private investment and unblighted properties, thereby empowering state agencies like the ESDC to facilitate large-scale private developments over local opposition. This precedent significantly strengthens the hand of state development authorities and private developers in eminent domain and land use matters.
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