New York City Council v New York Hous. Auth

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New York City Council v New York Hous. Auth 2013 NY Slip Op 33035(U) December 2, 2013 Supreme Court, New York County Docket Number: 101386/13 Judge: Cynthia S. Kern Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. SCANNED ON 12/5/2013 [* 1] ¢ SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: Part 55 ----------------------------------------------------------------------x In the Matter of the Application of NEW YORK CITY COUNCIL, BARUCH HOUSES TENANTS' ASSOCIATION, ROBERTO NAPOLEON, DOUGLASS HOUSES TENANTS' ASSOCIATION and JANE WISDOM, Jndex No. 101386/13 bECISION/ORDER Petitioners, For a Judgment Pursuant to Article 78 of the Civil Practice Law & Rules F~ LE 0 1 f -against- NEW YORK CITY HOUSING AUTHORITY and JOHN B. RHEA, as Chairman of the Board of the New York City Housing Authority, D: ~c o4 2013 cou~~YORK Respondents. ---------------------------------------------------------------------x HON. CYNTHIA S. KERN, J.S.C. I I -,Rl<'S 0FACe i j I Recitation, as required by CPLR 2219(a), of the papers considered i the review of this motion for: ~~~~~~~~~~~~~~~~~~ Papers +umbered I Notice of Petition and Affidavits Annexed .................................. . Affirmation in Opposition to Petition.......................................... . Replying Affidavits ..................................................................... . Exhibits ..................................................................................... . I 1 2 3 5 Petitioners New York City Council, Baruch Houses Tenants' Association, Roberto Napoleon, Douglass Houses Tenants' Association and Jane Wisdom (collectively hereinafter referred to as "petitioners") commenced the instant proceeding purst iant to Article 78 of the Civil Practice Law and Rules ("CPLR") seeking to challenge a land lease itnitiative proposed by respondents New York City Housing Authority and John B. Rhea (he reinafter referred to as ' ! [* 2] ¢ f l "NYCHA" or "respondents"). For the reasons set forth below, the etition is denied. The relevant facts are as follows. In 2011, NYCHA unveil~d "Plan NYCHA: A l Roadmap for Preservation," a five-year strategic plan which identi~ed new and sustainable ' sources of revenue, including development rights at NYCHA Cam~uses that NYCHA could use l to generate a significant source of capital funding to raise money fof its capital budget. Early in i 2013, NYCHA publicly unveiled its proposed plan to lease land frof existing public housing projects to private developers (the "Land Lease Initiative"). Purs t to the Land Lease Initiative, fourteen parcels of land from eight NYCHA developmen s located in Manhattan would be leased for 99 years to private developers for the purposes ofbuil ing high-rise residential buildings. Pursuant to the Land Lease Initiative, eighty percent of e units in the new high rises are to be leased out at market rates and twenty percent of the units e to be reserved for low- income individuals. NYCHA alleges that it chose the fourteen sites primarily for "their potential to generate significant revenue" for developers, and in tum, for NY I HA and its buildings. ' Specifically, it alleges that "[t]he income generated through land le,es would be dedicated to building improvements at the eight developments, initially, and othef public housing properties I citywide." : J After unveiling the Land Lease Initiative, NYCHA released document entitled "Landi Lease Initiative - Pre-RFP Discussion Document" (the "Pre-RFP"), hich provided significant information about the Land Lease Initiative to potential developers s ch as the identification of the various sites, the amount of square footage that is available unde certain zoning rules and NYCHA'sviews on the applicable approval process. Subsequent to eleasing the Pre-RFP, i NYCHA held a series of meetings with residents and resident associ4tions of the affected NYCHA developments. NYCHA alleges that it released detailed in~rmation about the i 2 [* 3] development sites, including responses to questions and concerns d created a two-step process whereby NYCHA would first issue a Request for Expressions of In erest ("RFEI''), to be followed by the issuance of a Request for Proposals ("RFP"). Purs ant to the process, only developers who responded to the RFEI would be permitted to respo d to the RFP but a developer could be conditionally designated after a response to the RFEI alon . This means that a developer could be selected subject to the successful completion of 11 legal pre-development requirements such as local and Department of Housing and Urban evelopment ("HUD") reviews and approvals, as a result of an "exceptionally responsive d visionary" proposal in response to the RFEI. However, the RFEI makes clear that "NYC may only incur a legal obligation identified in the RFEI with regard to the Parcels describe in it after NYCHA enters into a binding written agreement and such written agreement is app oved by the Board." On August 16, 2013, NYCHA issued its Request for Expres ions of Interest ("RFEI") which "invites developers to submit proposals for the design, cons ction and operation" of the residential developments called for by the Land Lease initiative and informs prospective developers that an "internal selection committee" ofNYCHA staff ·n review the submissions. Upon review, the NYCHA members may recommend to NYCHA's board that "a Developer be selected for a particular Development Parcel." Once NYCHA's ho d approves the recommendation, it will issue a Conditional Designation Letter to developer and the "selected Applicant must begin pre-development work within thirty (30) days of the date of the conditional Designation Letter." Petitioners then commenced the instant Articl 78 petition in October 2013 seeking to challenge the Land Lease Initiative. It is well-settled that an Article 78 proceeding may only be b ought to challenge a final agency determination or action. See CPLR § 7801. A court lacks s bject matter jurisdiction to 3 [* 4] issue an opinion in the absence of a genuine legal dispute and thus oes not have discretion to entertain an unripe claim. See Combustion Eng'g, Inc. v. Travelers Jndem. Co., 75 A.D.2d 777 (1 51 Dept 1980). In order for an agency action to be deemed "final," two criteria must be satisfied: (I) ''the action must 'impose an obligation, deny a right o fix some legal relationship as a consummation of the administrative process ... [meaning] a pra atic evaluation [must be made] of whether the' decision maker has arrived at a definitive po ition on the issue that inflicts an actual, concrete injury"; and (2) "there must be a finding that the apparent hann inflicted by the action 'may not be prevented or significantly ameliorated by her administrative action or by steps available to the complaining party."' Gordon v. Rush, 100 .Y.2d 236, 242 (2003), citing Matter ofEssex County v. Zagata, 91N.Y.2d447, 453 (1998. "If further agency proceedings might render the disputed issue moot or academic, then the agency position cannot be considered 'definitive' or the injury 'actual' or 'concrete."' Matt r ofEssex County, 91 N.Y.2d at 454. In the instant action, that portion of the petition seeking to c allenge the Land Lease Initiative as arbitrary and capricious must be denied as unripe as the EI was not a final agency action. As an initial matter, the issuance of the RFEI was not a final agency action because it did not inflict an actual, concrete injury upon petitioners. Petitioners ha e not demonstrated that they have yet been affected by the issuance of the RFEI as there has been o direct or immediate impact from the issuance of the RFEI and thus, there can be no h . See Matter of Town of Riverheadv. Central Pine Barrens Joint Planning & Policy Commn., 71A.D.3d679, 681 (2d Dept 2010), citing Church ofSt. Paul & St. Andrew v. Barwick, 67 (1986)(finding no concrete injury as "[t]here has been no direct or i ediate impact from any administrative action. 'Indeed, as yet, there can be no such harm for ere has been no 4 [* 5] interference."') The "mere participation in an ongoing administrati e process is not, in and of itself, an actual concrete injury." Matter o/Town of Riverhead, 71 .D.3d at 681. Additionally, the issuance of the RFEI was not a final agency action because any which may be inflicted upon petitioners in the future may be prevented or significantly am liorated by further administrative action. As an initial matter, respondents have yet to eceive expressions of interest from developers. If respondents do receive expressions of i terest, they may decide not to go forward with the developers that have expressed interest whic would render the instant petition moot. Moreover, respondents have affirmed that any dete ination to go forward with a certain developer would be subject to approval by NYCHA's board, which would constitute final agency action. It would be at that point that a petition challenging e Land Lease Initiative would be ripe for review pursuant to Article 78. Petitioners' reliance on Price v. County of Westchester, 255 .D.2d 217 (3d Dept 1996) for the proposition that the issuance of the RFEI was a final agency ction is misplaced. In Price, petitioners, the owners of land abutting the Westchester airport, co enced an Article 78 proceeding in 1994 alleging respondents failed to comply with. the S te Environmental Quality Review Act ("SEQRA") in connection with a project being construe ed at the airport. Respondents asserted that the petition was untimely as they made th ·r final determination for the purposes of compliance with SEQRA in 1987. In addressing petitio ers' assertion that the determination was not final because it "contains several contingencie ," the court explained: We agree with respondents that the contingencies do ot affect the finality of the [determination], which clearly commits he County to a definite course offuture action with regard to each fthe projects identified in the updated master plan. Id. at 220 (emphasis added). However, in the instant action, the issu ce of the RFEI was not a 5 [* 6] final agency action as it does not clearly commit respondents to a finite course of future action as NYCHA's members may decide not to approve any of the <level pers's expressions of interest or they may not get expressions of interest from developers. Furth r, NYCHA' s board may not even approve the developer that NYCHA's members choose, in w ich case the Land Lease Initiative might not go forward at all. Petitioners' reliance on Sierra Club, Inc. v. Power Auth. of e State ofNew York, 203 A.D.2d 15 {1 51 Dept 1994) is also misplaced. In Sierra Club, petiti ners brought an Article 78 proceeding in May 1990 seeking to challenge the proposed constru ti on of hydroelectric dams in Quebec. A letter of intent to go forward with the project had been ·gned by the contracting parties in December 1988 and the specifics of such agreement, whi h was later executed, were approved by respondents' trustees in June 1989. In determining tha the action was untimely, the court held that respondents' approval of the specifics of the agreem nt in June 1989 constituted a final agency determination as "[i]t was then that the Power Authori 's commitment under the terms of the agreement became 'formulated and proposed' and the a ministrative process... conferred finality." Id at 16. The court noted that "[e]ven f the subsequent formal contract had modified the terms of the approval, this fact would not, per se, render the initial approval less final." Id Unlike in Sierra, in the instant action, no p rtion of the Land Lease Initiative has yet been approved by NYCHA's board. NYCHA has ot chosen a developer and has not submitted any such choice or plans to its board for approval. Thus, it is clear that the issuance of the RFEI was not agency action that "conferred finality." That portion of the petition challenging respondents' failure t submit the Land Lease Initiative to the Uniform Land Use Review Procedure ("ULURP") required by Public Housing Law ("PHL") § 150 is also denied as unripe. Pursuant to PHL § 150 1), "[t]he prior approval of 6 [* 7] .. the local legislative body and of the planning commission, if any,... all be requisite to the final adoption or approval by an authority or municipality of a plan or pr ·ect. ..." City Charter § 197c(a) (8) specifies that ULURP applies to "[h]ousing and urban rene al plans and projects pursuant to city, state and federal housing laws." It is undisputed th t respondents have not yet submitted to ULURP any portion of its Land Lease Initiative for rev ew. However, petitioners may only challenge respondents' failure to do so once there is a "fin l adoption or approval" "of a plan or project." While the parties dispute whether ULURP appro al is required for the Land Lease Initiative as a whole, the parties do not dispute that at a mini um "it is required for actions requiring zoning changes from the city." With regard to these zonin changes, respondents affirm that "[i]nasmuch as NYCHA now intends to include retail st es in several of its developments, it will, in fact, seek ULURP approval of the zoning c anges necessary to effectuate that before it finally adopts or approves its Land Lease Ini iative." As it is clear that NYCHA's board has not yet approved the Land Lease Initiative, an challenge to respondents' failure to submit the Initiative, in whole or in part, to ULURP, is pre ature as they may still do so. Finally, that portion of the petition seeking an Order rescindi g the RFEI on the basis that the Land Lease Initiative was not sufficiently described in NYCHA' 2013 Annual Plan in violation of 42 USC§ 1437c-l(d)(8) (the "Housing Act") and 24 C "implementing regulations") is also denied. USC§ 1437c-l(d)(8) § 903.7(h) (the d 24 CFR § 903.7(h) requires that NYCHA contain certain information in its annual plan, such as "a description of any housing for which [NYCHA] will apply for demolition or dispositio "along with a "timetable for the demolition or disposition." As an initial matter, respondents ave demonstrated that its 2013 Annual Plan complies with Federal Requirements. In its 2013 7 ual Plan submitted to [* 8] .. HUD on October 18, 2012, NYCHA described a new initiative to ring hundreds of millions of dollars in revenue to NYCHA to help maintain and preserve public housing in New York City. The 2013 Annual Plan stated that the new initiative would create p rmanently affordable housing units, not displace any residents, and bring millions of dollars to th housing authority that would go towards providing safe, secure and well-maintained housing for YCHA residents at the sites throughout the City. The 2013 Annual Plan also informed HUD th t NYCHA would offer its sites for the development of market rate and affordable housing an , in some cases, ground floor commercial and retail establishments. Finally, the 2013 Annual Pl states that "(a]fter NYCHA has engaged residents, elected officials, and other community leade s, [NYCHA] will finalize a list of new sites and, early in 2013, release a Request for Proposals eeking development on these sites." Pursuant to the 2013 Annual Plan, there followed a year of ngagement of residents, elected officials and other community leaders, which culminated in e 2014 Annual Plan, dated October 18, 2013, which lists the eight developments and fourteen arcels ofland that NYCHA proposes to lease and provides further specifics about the Land Le e Initiative. Petitioners' assertion that NYCHA was not sufficiently specific about the Land ease Initiative in the 2013 Annual Plan is unavailing. At the time NYCHA submitted the 201 Annual Plan to HUD in October 2012, NYCHA has affirmed that it did not know the details of the sites it would propose to lease to private developers nor did it know any further details abo t the Initiative as a whole. Indeed, NYCHA has affirmed that "by the time the 2014 Annual Pl was drafted, more details about the initiative were known, and more were provided." However, even if the Land Lease Initiative was not sufficien ly described in NYCHA's 2013 Annual Plan, petitioners' request to rescind the RFEI on that b sis is denied as petitioners have no private right of action to enforce the 2013 Annual Plan. N CHA publishes its annual 8 [* 9] ¢ ¢ plan pursuant to the Housing Act, which provides that a "public ho sing agency shall submit to the Secretary an annual public housing agency plan under this subs ction for each fiscal year for which the public housing agency receives assistance ... " 42 U.S.C. 1437c-l(b)(l); see also 24 C.F.R. 903.4 & 903.7. HUD has established a process by which it views, approves or disapproves a Public Housing Authority's Annual Plan. With respe t to the investigation and enforcement of these provisions, 42 U.S.C. § 1437c-l(l)(2) provide that "the [HUD] Secretary shall...provide an appropriate response to any complaint concerning noncompliance by a public housing agency with the applicable public housing agency plan." 4 U.S.C. § 1437c-1(1)(2). The Housing Act's implementing regulations provide that ifHUD's Secretary determines that a public housing agency is not in compliance with the annual plan, "it shall take such actions as the Secretary determines to be appropriate to ensure such compliance." 24 C.F.R. § 903.25. It is well settled that "the fact that a federal statute has been violated and some person harmed does not automatically give rise to a private cause of action in favor of th t person." Cannon v. Univ. ofChicago, 441U.S.677,688 (1979). "The question whether a sta te creates a cause of action, either expressly or by implication, is basically a matter of statutory c nstruction." Transamerica Mortg. Advisors, Inc. v. Lewis, 444 U.S. 11, 15 (1979). Courts have routinely found that no private right of action exists under the Housing Act. See Renaissan Equity Holdings LLC v. Donovan, 2013 WL 2237547 at*5 (E.D.N.Y. May 21, 2013)( "[t]her is no private right of action under the Housing Act. ... "); see also Thomas v. Butzen, 2005 WL 23 7676 (N.D. Ill. 2005)(finding that "section 1437c-1...does not suggest Congressiona intent to confer enforceable rights on plaintiffs. The section says nothing about a private right o action, and its focus is on public housing agencies' responsibility to report to HUD, not on thei responsibilities to their tenants."); see also Shell v. HUD, 2009 WL 4298757 at *2 (11th Cir. 9 ec. 2, 2009)(affirming the [* 10] ¢ ¢ district court's holding "that neither 24 C.F.R. 903.25 nor 42 U.S. . § 1437c-l provide a private right of action"); see also Copeland v. United States, 622 F.Supp. 1347 (S.D. Fla. 2008)(observing that under 42 U.S.C. §1437c-l, whether a housing authority violates its annual plan is a question for HUD to determine in its discretion). In the instant action, this court agrees with the well-settled l w that petitioners do not have a private right of action to challenge NYCHA's alleged failur to sufficiently describe the Land Lease Initiative in its 2013 Annual Plan. The Housing Act do snot address enforcement of an annual plan and, by its plain terms, does not create individual rig ts. Although the broad purpose of the Housing Act may be directed at ensuring adequate, h bitable housing for lowincome families, the focus of §1437c-1 is on regulating the contents ofNYCHA's annual and five-year plan submissions and thus focuses on the regulated entity ather than on the individuals protected. Therefore, that portion of the petition must be denied. Petitioners' reliance on Renaissance Equity Holdings LLC v. Donovan, 2013 WL 2237547 (E.D.N.Y. May 21, 2013) for the proposition that the Hous ng Act may be challenged pursuant to Article 78 is also without merit. In Renaissance, the pla ntiffs, landlords of a building which participates in the section 8 housing program, comm need an action against HUD asserting violations of the Housing Act and its implementing regulat ons. The court dismissed the complaint on the ground that the Housing Act does not provide a private right of action which would enable plaintiffs to maintain such a lawsuit. In a footn te, the court went on to state that "Plaintiffs are not left without remedy. They may file an.Article 78 proceeding against NYCHA in state court...and may ... assert breach of contract claims a inst NYCHA for violations oftheir... contracts." Id at *6. However, that remedy does not apply to petitioners in the instant action as the Renaissance plaintiffs' right to commence an Article 7 proceeding against 10 [* 11] NYCHA was based solely on the fact that they maintained a housi contract with NYCHA. In this case, as petitioners cannot demonstrate any contractual relatio hip with NYCHA whatsoever, they may not challenge the 2013 Annual Plan pursuant to Article 78. Accordingly, that portion of the petition which seeks to resc nd the RFEI due to noncompliance with the Housing Act and its implementing regulati ns is denied with prejudice and the remaining portions of the petition are denied without prejud ce as they are not yet ripe for review. This constitutes the decision and order of the court. J.S.C. F ¢teo DEC 04 207J CO~EWYORK CLERK'S OFFQ: .... 11 [* 12] . " \'..,..,; .:; ¢'"(; -·; ¢ ..;.~>~ ' '~ :~: -, ·.~ ~ ..t.#·v .;

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