Herald Sq. S. Civic Assn. v Consolidated Edison Co. of NY, Inc.

[*1] Herald Sq. S. Civic Assn. v Consolidated Edison Co. of NY, Inc. 2003 NY Slip Op 51755(U) Decided on March 24, 2003 Supreme Court, New York County Soto, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 24, 2003
Supreme Court, New York County

Herald Square South Civic Association; LAURA BENNETT-SHELTON; SUNG K. MIN; and WILLIAM KALUSH, Plaintiffs,

against

Consolidated Edison Company of New York, Inc., NEW YORK CITY DEPARTMENT OF BUILDINGS, and PATRICIA A. LANCASTER, AIA, acting in her capacity as COMMISSIONER OF THE NEW YORK CITY DEPARTMENT OF BUILDINGS, Defendants.



101667/03

Faviola A. Soto, J.

Before the court are competing interests with respect to the construction of an electrical substation. The parties have ably presented their positions in their papers and at oral argument. After careful consideration of the arguments and mindful of this court's role, the court issues the following decision and order.

Plaintiffs Herald Square South Civic Association, Laura Bennett-Shelton, Sung K. Min, and William Kalush move for a preliminary injunction. They seek to enjoin any further construction and other development activities in connection with the proposal to build an electric substation (the "Substation") at 15 West 30th Street, 25 West 30th Street, 24 West 31st Street, and 26 West 31st Street (the "Site" ) until defendant Consolidated Edison Company of New York, Inc. ("Con Ed") has complied what plaintiffs argue are the applicable requirements of the City Environmental Quality Review (CEQR) and the State Environmental Quality Review Act (SEQRA), and implementing regulations.

Plaintiffs also seek to enjoin the issuance of any further approvals or permits until Con Ed complies with what plaintiffs argue are other applicable laws, rules and regulations: a noise variance from the New York City Board of Standards and Appeals (BSA) ( pursuant to § 42-214 of the New York City Zoning Resolution (ZR)), and restrictive covenants.

Additionally, plaintiffs seek to annul and vacate any approvals issued by defendants Department of Buildings of the City of New York and Patricia A. Lancaster, AIA, acting in her capacity as Commissioner of the New York City Department of Buildings (collectively, the "DOB") for the demolition and/or construction of the Substation.

The thrust of plaintiffs' claim is that this court must intervene to prevent irreparable injury to the neighborhood and its residents. It argues that Con Ed wrongfully attempted to circumvent the normal public review process, in violation of CEQR and SEQRA, and that Con Ed seeks to avoid any meaningful public input and review of its proposal to build the Substation. [*2]

Con Ed opposes. Con Ed argues that plaintiffs have failed to show their entitlement to the extraordinary remedy of a preliminary injunction: plaintiffs cannot show a likelihood of success on the merits, irreparable injury, or that a balance of equities lies in plaintiffs' favor. Con Ed argues that as the Site is in a M1 Zoning District, it need not apply for a special permit or variance, and as it complied with the applicable performance standards, it may now proceed as of right to build the Substation.

The DOB also opposes, arguing that there is no basis for the issuance of a preliminary injunction against it, and cross-moves, pursuant to CPLR 3212, for summary judgment for failure to state a cause of action. The DOB argues that SEQRA does not apply to its issuance of the demolition and building permits. Further, the DOB argues that once it determines that a project complies with the Zoning Resolution ("ZR") and other applicable laws, it may not exercise discretion in it approval or denial of a permit, and can not proceed into the inquiry urged by plaintiffs.

The Temporary Restraining Order

Previously, this court granted in part and denied in part plaintiffs' application for a temporary restraining order: the court restrained Con Ed from commencing construction of the Substation, but permitted it to continue with the scheduled demolition. The demolition is nearing or has been completion.

The Complaint

The underlying complaint for a preliminary and permanent injunction contains four causes of action. The first three are against Con Ed, alleging violation of the CEQR and SEQRA, violation of restrictive covenants, and failure to obtain a noise variance. The fourth cause of action, against the DOB, seeks to annul the demolition permit issued to Con Ed and to enjoin DOB's issuance of a building permit.

The Prior Proposed Site

Con Ed initially sought to locate a substation on property it owns at the corner of West 24th Street and the Avenue of the Americas (24th Street Site). Because the 24th Street Site is zoned as a commercial district (C6-4X), Con Ed had to apply to the BSA for a special permit or variance in order to build a substation of the size it sought to build. On June 4, 2002, the BSA denied Con Ed's application as to both the special permit and the variance. Con Ed brought an Article 78 action, and Justice Wilkins granted its petition in part, to the extent of annulling that portion of the BSA resolution that denied Con Ed's application for a variance, and remanding the case to the BSA so that it could evaluate the evidence adduced at the hearing using the correct legal standard. Matter of Consolidated Edison Co. Of New York, Inc. v Board of Standards and Appeals of the City of New York, Sup Ct, NY County, Jan. 6, 2003, Wilkins, J., Index No. 114964/02.

After the BSA denied its application to construct a substation at the 24th Street Site, Con Ed turned to the Site as a desirable location for a new substation. Since it did not own the property at the Site, Con Ed began to take the steps that would be necessary to acquire the property through condemnation. It also began negotiations with the owners of the property at the Site, and Con Ed was ultimately able to purchase the property through a private commercial transaction, without the use of condemnation.

Con Ed states that, in order to reserve the right to condemn certain restrictive covenants, [*3]if necessary, it issued the determinations and findings required under Eminent Domain Procedure Law § 204, and it concluded that the Substation would not result in a significant adverse impact to the environment, such that a negative declaration of significance would have been appropriate under SEQRA, if that statute had applied.

The New Site and the Substation

The Herald Square South community, located from 26th Street to 34th Street, and from Madison Avenue to Seventh Avenue, is zoned as a manufacturing area. The Substation will be approximately 45,000 square feet, four stories tall, and consist of approximately 150 feet of frontage on West 30th Street and approximately 200 feet of frontage on West 31st Street.

Plaintiffs argue that the area is now characterized by viable small-scale enterprises, restaurants, office buildings, hotels and residential uses. They argue therefore that if the Substation is placed at the Site, it would have no relation to the surrounding historic commercial, residential or office context of the area, and would be the only building on these blocks with such an industrial character.

Plaintiffs further raise deeply-felt concerns regarding the effects of the Substation on the health and welfare of the residents. They point to troubling studies and writings which support or suggest the deleterious effects of the electric and magnetic fields ("EMF's") emissions, the potential impact on the value and marketability of the properties, the socio-economic effect on the neighborhood, the increased noise, the possibility of an explosion or a fire, and the heightened possibility of a terrorist attack.

Accordingly, plaintiffs argue that Con Ed must conduct a meaningful and open public review process, including full consideration of definitive and viable mitigation measures, as well as additional discretionary approvals, thereby triggering a full environmental review under the CEQR or SEQRA, before Con Ed can proceed any further with construction,

As to the equities, they argue that Con Ed and not plaintiffs should bear the cost of locating a different location for its transmission feeders, that Con Ed will not lose money if it cannot build the Substation at the Site, that Con Ed is obligated to find another site, and that Con Ed failed to establish its need for the Substation.

Con Ed argues that the court's inquiry begins and ends with its compliance with the applicable regulations and its resulting right to build the Substation. They argue that plaintiffs are incorrect, and that CEQR and SEQRA are not applicable here. Moreover, as the area is zoned M1, it has complied with the applicable performance standards are set forth in ZR §§ 42-21 to 42-28, inclusive, which set limits on noise, vibration, smoke, dust, odor and other effects that may result from the operation of a facility. Therefore, it need not apply for a special permit or variance. Con Ed also challenges plaintiffs' reliance on the cited studies and writings, submits other studies that they argue are more authoritative, and points to the need for the Substation.

Applicable Regulations

The issues before the court must be addressed within the applicable regulatory framework.

SEQRA

Plaintiffs argue that SEQRA is applicable here.

SEQRA is set forth at Environmental Conservation Law (ECL) §§ 8-0101, et seq, with its regulatory framework set forth at 6 NYCRR 617: [*4] The basic purpose of SEQR is to incorporate the consideration of environmental factors into the existing planning, review and decision making processes of state, regional and local government agencies at the earliest possible time. To accomplish this goal, SEQR requires that all agencies determine whether the actions they directly undertake, fund or approve may have a significant impact on the environment, and, if it is determined that the action may have a significant adverse impact, prepare or request an environmental impact statement.

6 NYCRR § 617.1 (c).

An "agency" is defined as a "state or local agency." ECL 8-0105 (3); 6 NYCRR § 617.2 (c). A state agency is "any state department, agency, board, public benefit corporation, public authority or commission" (ECL 8-0105 [1]; 6 NYCRR § 617.2 [ah]); while a local agency is defined as "any local agency, board, district, commission or governing body, including any city, county and other political subdivision of the state." ECL 8-0105 (2); see also 6 NYCRR § 617.2 (v).

An "action" under SEQRA includes "projects or physical activities, such as construction or other activities that may affect the environment by changing the use, appearance or condition of any natural resource or structure, that: (i) are directly undertaken by an agency; or (ii) involve funding by an agency; or (iii) require one or more new or modified approvals from an agency or agencies." 6 NYCRR § 617.2 (b)(1). Actions, however, do not include "official acts of a ministerial nature, involving no exercise of discretion." ECL 8-0105 (5) (ii).

Applicability

Plaintiffs argue that the legislative delegation of eminent domain authority to Con Ed, in Section 11 of the Transportation Corporations Law ("TCL"), must also assign all associated responsibilities of the sovereign when that power is exercised, including abiding by SEQRA's substantive and procedural mandates. Plaintiffs further argue that Con Ed will need a certificate of public necessity from the Public Service Commission ("PSC") to condemn the property, thereby triggering SEQRA review.

Con Ed maintains that, because it is not an "agency" within the meaning of SEQRA, neither its decision to locate the Substation at the Site, nor the possibility that it may initiate a condemnation proceeding, is subject to SEQRA. Con Ed argues that SEQRA, by its very terms, applies only to actions of a "state or local agency" and not to all conduct that may be deemed "state action."

This court agrees that, because Con Ed is not an "agency," as defined by SEQRA, its actions, including its possible use of the power of condemnation, do not trigger SEQRA. Matter of Brady v Genesee and Wyoming R.R. Co., 225 AD2d 1024 (4th Dept 1996). This court further agrees with Con Ed's argument that, should it choose to condemn the property and the restrictive covenants, a certification of necessity is not required by the PSC, because it would exercise its power pursuant to TCL 11 (3-a), which does not require a certificate from the PSC, as opposed to TCL 11 (3-b), which does require such a certificate.

Zoning

Plaintiffs argue that additional zoning restrictions are applicable here.

The ZR includes a Zoning Map that divides New York City into three basic types of zoning districts: residential, commercial and manufacturing, each of which is further subdivided [*5]into more specific zoning districts. The Site is located in an area zoned M1-6. ZR § 41-11 designates M1 districts as "Light Manufacturing Districts (High Performance)" which are "designed for a wide range of manufacturing and related uses which can conform to a high level of performance standards. Manufacturing establishments of this type, within completely enclosed buildings, provide a buffer between Residence (or Commercial) Districts and other industrial uses which involve more objectionable influences."

The ZR classifies and combines the uses of buildings or other structures and of tracts of land into Use Groups. Electric utility substations are within Use Group 17, which consists "primarily of manufacturing uses which: (1) can conform to high performance standards by controlling objectionable influences; and (2) in so doing, can limit their impact on adjacent residential areas; and (3) normally generate a great deal of traffic, both pedestrian and freight." ZR § 42-14 (emphasis in original).

Use Group 18, by contrast, consists primarily of industrial uses which: (1) either involve considerable danger of fire, explosion or other hazards to public health or safety, or cannot be designed without appreciable expense to conform to high performance standards with respect to the emission of objectionable influences; and (2) normally generate a great deal of traffic, both pedestrian and freight. ZR § 42-15 (emphasis in original).

Noise Variance

Plaintiffs argue that, pursuant to § 42-214 of the ZR, Con Ed must apply for a noise variance from the BSA. In a document Con Ed issued in October 2002, it erroneously indicated that the M1-6 district in which the Site is located adjoins a residential district. ZR § 42-214 states that "Whenever a Manufacturing District adjoins a Residence District, at any point at the district boundary or within the Residence District, the maximum permitted decibel levels in all octave bands shall be reduced by six decibels from the maximum levels set forth in the table in Section 42-213 (Maximum permitted decibel levels)." (Emphasis in original).

In fact, according to the Zoning Map, all of the districts adjoining the district where the Site is located are commercial districts, as indicated by the "C" prefix. Thus, ZR § 42-214 does not apply to the Substation. Defendants assert that the data submitted by Con Ed, including noise data, indicates that the Substation will meet the applicable performance standards for an M1 District.

Therefore, Con Ed need not apply to the BSA for a discretionary noise variance.

Effect of Restrictive Covenants

Two restrictive covenants relate to property at the Site. The first covenant, created in 1846, requires an eight-foot setback from the West 30th Street line. Although Con Ed argues that this covenant is no longer enforceable, it states that the issue is moot because the construction plans for the Substation comply with the setback requirement.

The other covenant, which was created through an 1846 deed granted to Con Edison's predecessor in title, precludes the use of any part of the property for "any slaughter house, smith shop, forge, furnace, steam engine, brass foundry, nail or other iron factory or any manufactory of gun powder, glue, varnish, vitriol, ink or turpentine or for the tanning, dressing or preparing skins, hides or leather or any brewery, distillery or any other noxious or dangerous trade or [*6]business."

Con Ed argues that plaintiffs do not qualify as third party beneficiaries and therefore have no rights to enforce the restrictive covenants. Con Ed further argues that plaintiffs have not substantiated their conclusory assertion that the "noxious use" covenant was part of a plan or general scheme of development, and, therefore, plaintiffs may not seek to enforce it. Moreover,

the conditions have changed substantially since the covenants were created, and plaintiffs, therefore, have not shown that the court should enforce the covenants.

This court finds that the Substation would not violate the covenant, as it is not "any other noxious or dangerous trade or business." Electric utility substations are listed in Use Group 17. All but one of the businesses and trades listed in the restrictive covenant are found in Use Group 18 of the ZR, which, as stated above, are uses which "either involve considerable danger of fire, explosion or other hazards to public health or safety, or cannot be designed without appreciable expense to conform to high performance standards with respect to the emission of objectionable influences." ZR § 42-15 (1).

The City, through the ZR, has made a determination that an electric utility substation is not of the same general class as the uses prohibited by the restrictive covenant. See Fishman v. Town of Islip, 20 Misc 2d 180, 181 (NY Sup 1959), aff'd 10 AD2d 984 (2d Dept. 1960) (stating "[i]n order to interpret the intent of the original covenantors as to what other uses of the land were to be prohibited in futuro we must resort to ordinary rules of construction. Such a guide is the well-known doctrine of ejusdem generis which serves to make words of general import following an enumeration of specific things applicable only to things of the same general class"); see also Smith v. Scoville, 205 App.Div.112 (1st Dept 1923).

Furthermore, "[r]estrictive covenants must be construed strictly against those seeking to enforce them, and when the language used is reasonably capable of two constructions, the one that limits rather than the one that extends the restriction should be adopted." Premium Point Park Assn. v Polar Bar, Inc., 282 App.Div. 735 (2d Dept 1953), affd 306 NY 507 (1954).

Accordingly, Con Ed is not constrained by the restrictive covenants.

Lack of Success on the Merits

Accordingly, plaintiffs have failed to show that there is a likelihood of success on the merits in their claims against Con-Ed. They have failed to show that under the circumstances herein, they can succeed in having the court adopt their analysis, and have failed to show that Con Ed is not entitled to proceed, as of right, to build the Substation. In the absence of this showing, the motion is denied, and the court does not reach plaintiffs' arguments regarding the equities and irreparable injury.

DOB's Opposition and The Cross-Motion:

DOB opposes and cross- moves for summary judgment. It argues that SEQRA does not apply to its issuance of ministerial permits, such as demolition and building permits. See Incorporated Vil. of Atlantic Beach v Gavalas, 81 NY2d 322 (1993). DOB states that once it determines that the project complies with the ZR and other applicable laws, it may not exercise discretion in its approval or denial of the permit, and can not proceed with further inquiry into the nature of the proposal or its impact on surrounding areas. Thus, the DOB argues, there is no basis to enjoin the DOB from issuing a construction permit, and plaintiffs, as a matter of law, will fail in their SEQRA claims against the DOB. [*7]

DOB further argues that the issuance of building permits is specifically listed as a Type II action in the SEQRA regulations, and it is therefore exempt from SEQRA review. 6 NYCRR § 617.5 (c) (19). See Citizens for the Preservation of Windsor Terrace v Smith, 122 AD2d 827, 828 (2d Dept 1986).

Plaintiffs have failed to defeat DOB's showing of entitlement to judgment as a matter of law. The issuance of building permits is exempt from SEQRA review, and, accordingly, there is no agency action that would trigger SEQRA for construction of the Substation at the Site. The Substation is an as-of-right development that does not require discretionary approvals from any state or local agency, and, therefore, it is not subject to SEQRA.

Summary Judgment As to Con Ed

Pursuant to CPLR 3212 (b), the court, without the need for a cross-motion, may grant summary judgment to any party other than the moving party if it shall it shall appear that the party other than the moving party is entitled to a summary judgment. The applicability of summary judgment was discussed at oral argument.

Here, although Con Ed did not cross-move for summary judgment, the court has searched the record and grants it such relief. There are no genuine disputed issues of fact, and, as a matter of law, plaintiffs are not entitled to the relief sought in any of the three causes of action brought against Con Ed.

Accordingly, it is

ORDERED that all stays are lifted; it is further

ORDERED that plaintiffs' motion for a preliminary injunction is denied; and it is further

ORDERED that the cross motion for summary judgment is granted, and the complaint is dismissed as against defendants Department of Buildings of the City of New York and Patricia A. Lancaster, AIA acting in her capacity as Commissioner of the Department of Buildings of the City of New York, and the Clerk is directed to enter judgment in favor of said defendants; and it is further

ORDERED that the court grants summary judgment to defendant Consolidated Edison Company of New York, Inc., and the complaint is dismissed as against said defendant, and the Clerk is directed to enter judgment in favor of said defendant; and it is further

ORDERED that defendants shall serve a copy of this decision and order upon the County Clerk and the Trial Support Office within thirty days of entry.

Dated: New York, New York

March 24, 2003

________________________

FAVIOLA A. SOTO, J.S.C.

Copies faxed and mailed