IN RE: AAG MANAGEMENT (2024)

Order and judgment (one paper), Supreme Court, New York County (Lucy Billings, J.), entered September 19, 2023, which, to the extent appealed from as limited by the briefs, denied the petition to annul the July 21, 2022 decision of respondent New York State Urban Development Corporation d/b/a Empire State Development (ESD) to approve a modified general project plan (GPP) as arbitrary and capricious and seeking an order declaring that ESD's approval violated the Urban Development Corporation Act (UDCA), and dismissed this hybrid proceeding brought pursuant to CPLR articles 30 and 78, and bringing up for review two orders, same court and Justice, entered September 6, 2023, which denied petitioners’ motions to supplement the record, unanimously affirmed, without costs.

Supreme Court properly denied the motions to supplement the record, as all but one proffered exhibit post-date ESD's determination (see Matter of Featherstone v. Franco, 95 N.Y.2d 550, 554, 720 N.Y.S.2d 93, 742 N.E.2d 607 [2000] [“judicial review of administrative determinations is confined to the facts and record adduced before the agency”] [internal quotation marks and brackets omitted]).  As to the remaining exhibit, Supreme Court denied its inclusion based on petitioners’ concession that it was “merely a preliminary proposal, of no effect, and that petitioners do not rely on it for the court to grant their petition[ ].”  Petitioners proffer no argument on appeal for its inclusion in the record.

ESD's approval of the GPP was not arbitrary and capricious or affected by an error of law, in finding that the GPP qualified as both a land use improvement project and a civic project (CPLR 7803[3];  Matter of Pell v. Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 N.Y.2d 222, 231, 356 N.Y.S.2d 833, 313 N.E.2d 321 [1974];  see McKinney's Uncons Laws of N.Y. § 6260[c]-[d]).  Concerning land use improvement, the terms “substandard and insanitary conditions, or blight ․ are to be understood liberally so as not to unduly constrict the governmental prerogative to take measures directed at improving the urban environment” (Matter of Develop Don't Destroy [Brooklyn] v. Urban Dev. Corp., 59 A.D.3d 312, 321, 874 N.Y.S.2d 414 [1st Dept. 2009] [internal quotation marks omitted], lv denied 13 N.Y.3d 713, 2009 WL 4250872 [2009]).  Indeed, “[m]any factors and interrelationships of factors may be significant” to the finding, as blight “is something more than deteriorated structures” and “involves improper land use” (see generally Yonkers Community Dev. Agency v. Morris, 37 N.Y.2d 478, 483, 373 N.Y.S.2d 112, 335 N.E.2d 327 [1978] [internal quotation marks omitted]).  ESD's public purpose findings are “entitled to extraordinary judicial deference ․ in reviewing blight findings made by the ESD[ ] pursuant to Unconsolidated Laws § 6260(c)” (Matter of Develop Don't Destroy [Brooklyn], 59 A.D.3d at 322, 874 N.Y.S.2d 414;  see also Yonkers Community Dev. Agency, 37 N.Y.2d at 484, 373 N.Y.S.2d 112, 335 N.E.2d 327).

Here, the GPP and accompanying detailed neighborhood conditions study analyzing each site and lot “spelled out” the facts supporting the determination (see Yonkers Community Dev. Agency, 37 N.Y.2d at 484, 373 N.Y.S.2d 112, 335 N.E.2d 327).  This included poorly located subway entrances, narrow sidewalks, inadequate plazas and streetscapes, a derelict passage between Penn Station and the Herald Square subway station, inconsistent zoning, underutilization of lots, and outmoded building stock, among other things.  It is enough that ESD presented facts showing “the site was outmoded, underbuilt and insufficiently utilized” (Matter of Don't Destroy [Brooklyn], 59 A.D.3d at 325, 874 N.Y.S.2d 414;  see also Jo & Wo Realty Corp. v. City of New York, 157 A.D.2d 205, 218, 555 N.Y.S.2d 271 [1st Dept. 1990], affd on other grounds 76 N.Y.2d 962, 563 N.Y.S.2d 727, 565 N.E.2d 476 [1990]).  Contrary to petitioners’ contention, Supreme Court did not simply “rubber stamp” ESD's findings (see Yonkers Community Dev. Agency, 37 N.Y.2d at 485, 373 N.Y.S.2d 112, 335 N.E.2d 327).

As to the civic project finding, we reject petitioners’ contention that ESD failed to find “that adequate provision has been, or will be, made for the payment of the cost of acquisition, construction, operation, maintenance and upkeep of the project” (Uncons Laws § 6260[d][3]).  The GPP specified that prior to the commencement of any development contemplated thereunder, ESD must enter into contracts with developers setting forth all material terms of the transaction including funding mechanisms, hold public hearings on notice allowing for public consideration of each contract, hold a vote by the ESD directors regarding the approval of each contract, apply to the Public Authorities Control Board (PACB) seeking approval of funding, and receive PACB approval based on a finding at that time that “there are commitments of funds sufficient to finance the acquisition and construction of such project” (Public Authorities Law § 51[3]).  This process ensures that the requisite funding will be available when needed.  Contrary to petitioners’ contention, the plain language of the UDCA does not require ESD to produce cost and revenue estimates at the time of GPP adoption (see Matter of Tompkins County Support Collection Unit v. Chamberlin, 99 N.Y.2d 328, 335, 756 N.Y.S.2d 115, 786 N.E.2d 14 [2003]).  As ESD is responsible for the administration of the UDCA, which tasks ESD with determining whether a project qualifies as a civic project, we uphold its rational interpretation here (see Matter of Johnson v. Joy, 48 N.Y.2d 689, 691, 422 N.Y.S.2d 56, 397 N.E.2d 746 [1979];  Matter of Barklee Realty Co. v. New York State Div. of Hous. & Community Renewal, 159 A.D.2d 416, 416, 553 N.Y.S.2d 112 [1st Dept. 1990], lv denied 76 N.Y.2d 709, 563 N.Y.S.2d 61, 564 N.E.2d 671 [1990]).

We have considered petitioners’ remaining arguments and find them unavailing.