IN RE: Richard D. DE PAOLO et al.

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Supreme Court, Appellate Division, Third Department, New York.

IN RE: Richard D. DE PAOLO et al., Appellants, v. TOWN OF ITHACA et al., Respondents.

Decided: July 29, 1999

Before:  PETERS, J.P., SPAIN, CARPINELLO and GRAFFEO, JJ. Lewis B. Oliver Jr., Albany, for appellants. Barney, Grossman, Dubow & Marcus (William J. Troy III of counsel), Ithaca, for Town of Ithaca and others, respondents. Shirley K. Egan, Cornell University, Ithaca, for Cornell University and another, respondents. Bond, Schoeneck & King LLP (John D. Allen of counsel), Syracuse, for Ithaca City School District, respondent.

Appeal from a judgment of the Supreme Court (Philip R. Rumsey, J.), entered January 25, 1999 in Tompkins County, which, in a combined proceeding pursuant to CPLR article 78 and action for declaratory judgment, granted respondents' motions to dismiss the petition/complaint for, inter alia, failure to state a cause of action.

This appeal stems from petitioners' unsuccessful challenge to a series of actions by respondents in connection with respondent Cornell University's plan to implement a new cooling system for its campus buildings, referred to as “Cornell Lake Source Cooling Project” (hereinafter CLSCP).   The CLSCP involved the construction of a heat exchange facility (hereinafter HEF) adjacent to Cayuga Lake, in which cool water pumped from the bottom of the lake would be used to chill water circulating within a closed loop pipeline and then be returned to the lake at a warmer temperature.   In addition to environmental review under the State Environmental Quality Review Act (ECL art 8) (hereinafter SEQRA), the CLSCP also entailed Cornell's acquisition of an easement from respondent Ithaca City School District (hereinafter the District) for the purpose of running underground pipes between the HEF and its campus, rezoning of the land on which the HEF was to be constructed, and the issuance of various approvals and permits by respondent Town of Ithaca.

Petitioners commenced this combined CPLR article 78 proceeding and declaratory judgment action seeking to annul respondent Town Board of the Town of Ithaca's amendment of the Town's zoning ordinance and respondent Planning Board of the Town of Ithaca's grant of site plan and subdivision approvals, as well as the District's conveyance of an easement to Cornell.   Supreme Court granted respondents' motions to dismiss the petition/complaint for, inter alia, failure to state a cause of action, and this appeal ensued.

 As a preliminary matter, although Supreme Court predicated its dismissal of petitioners' third and fourth causes of action, in part, on its determination that they lacked standing to challenge the Planning Board's site plan and subdivision approvals, we find that respondents waived any objection to petitioners' standing by failing to raise this issue in their preanswer motion to dismiss (see, Matter of Prudco Realty Corp. v. Palermo, 60 N.Y.2d 656, 657, 467 N.Y.S.2d 830, 455 N.E.2d 483;  Strokes Elec. & Plumbing v. Dye, 240 A.D.2d 919, 920, 659 N.Y.S.2d 129;  Gilman v. Abagnale, 235 A.D.2d 989, 990, 653 N.Y.S.2d 176).   Nonetheless, these causes of action 1 were properly dismissed.   Simply stated, the record does not support petitioners' claim that the Town Board acted beyond the powers granted to it under Town Law § 274-a (6) and § 277(4) by conditioning its approval of the nonresidential site plan and subdivision upon its receipt of Cornell's agreement to provide public access to Cayuga Lake. Notably, although the Planning Board's preliminary site plan and subdivision approvals were conditioned upon public access to the lake, the final approvals deleted any such condition.

We likewise reject petitioners' assertion that the Town Board engaged in illegal “contract zoning” by amending its zoning ordinance to accommodate the CLSCP in exchange for Cornell's granting the Town a 99-year license to use certain property as a public park, thereby allowing continued public access to Cayuga Lake.   Here again, the record fails to support petitioners' claim, and in fact refutes it.   Nothing in its agreement with Cornell committed the Town to a specific course of action with respect to the zoning amendment and, indeed, the Town expressly rejected language which could have arguably been so interpreted.   While Cornell's grant of the license to the Town was conditioned upon its receipt of all approvals required for the project, including rezoning, no provision in the agreement obligated the Town to issue such approvals or approve Cornell's rezoning application.   Consequently, we see no parallel between these circumstances and the situations presented in either Citizens to Save Minnewaska v. New Paltz Cent. School Dist., 95 A.D.2d 532, 468 N.Y.S.2d 920, lvs. dismissed 61 N.Y.2d 605, 473 N.Y.S.2d 1026, 462 N.E.2d 156, 61 N.Y.2d 853, 473 N.Y.S.2d 975, 462 N.E.2d 152 or City of New York v. 17 Vista Assocs., 84 N.Y.2d 299, 618 N.Y.S.2d 249, 642 N.E.2d 606 as the Town neither “legislated pursuant to the terms of a contract” (Citizens to Save Minnewaska v. New Paltz Cent. School Dist., supra, at 534, 468 N.Y.S.2d 920) nor agreed “in exchange for a predetermined [consideration] * * * [to provide] an expedited and favorable determination” (City of New York v. 17 Vista Assocs., supra, at 306, 618 N.Y.S.2d 249, 642 N.E.2d 606).

Moreover, the record discloses that the Town Board's concern over public access to Cayuga Lake antedated inception of the CLSCP.   In its 1993 Comprehensive Plan, the Town designated the lakefront parcel, ultimately the subject of the licensing agreement, as having an “anticipated land use” for recreation.   We find no impropriety in the Town's engaging in concurrent discussions with Cornell to further its longstanding objective of ensuring public use and enjoyment of the lakefront and, therefore, find no basis to conclude that the zoning amendment was the result of impermissible government action.

 Petitioners alternatively argue that the zoning amendment must be annulled because the Town Board's vote was tainted by the participation of four Board members with prohibited and undisclosed conflicts of interests.   We disagree.   Although one Board member and the spouse of another were employees of Cornell, these affiliations presented no conflict of interest under General Municipal Law § 801 since neither individual's employment duties involved the preparation, procurement or performance of any part of the CLSCP, nor was their remuneration directly affected by the project (see, General Municipal Law § 802[1][b] ).  Furthermore, neither of the two remaining Board members in question had any impermissible interest in Cornell's application for a zoning change;  one was a graduate student whose tuition and stipend were paid by a foundation unrelated to Cornell and whose studies did not involve participation in the CLSCP, and the other was married to a Cornell retiree whose pension benefits were similarly outside its control.   And while violation of a specific section of the General Municipal Law is not critical to a finding of an improper conflict of interest (see, Matter of Zagoreos v. Conklin, 109 A.D.2d 281, 287, 491 N.Y.S.2d 358), we are satisfied that none of these four Board members had any direct or indirect interest, pecuniary or otherwise, in the CLSCP such that their vote could reasonably be interpreted as potentially benefitting themselves.   Given the absence of any actual conflict of interest, or the significant appearance thereof, Cornell's acknowledged failure to comply with the disclosure provisions of General Municipal Law § 809 is not a defect requiring invalidation of the Town Board vote.

 Finally, petitioners claim that the District's grant of an easement to Cornell ran afoul of the voter approval requirements of Education Law § 2511(1) and § 2512(1).   Again, we disagree.   While Education Law § 2511(1) requires voter approval for the sale of any real estate belonging to a school district, no such approval is required “to exchange real estate belonging to the district for the purpose of improving or changing schoolhouse sites” (Education Law § 1709[11] ).   Here, the District's Board of Education granted an easement to Cornell in exchange for access to its proposed cooling system and various improvements to the District's infrastructure.   We reject petitioners' narrow construction of the term “exchange” as encompassing only the acquisition of other real property in return for a conveyance thereof.   An exchange is “a reciprocal transfer of property for other property of value” (91 N.Y. Jur 2d, Real Property Sales and Exchanges, § 3, at 20).   The District's receipt of enhancements and improvements to its property in return for its conveyance of an underground easement to Cornell constituted an “ exchange” authorized by Education Law § 1709(11).

 Nor does the 1996 amendment to Education Law § 2512(1), requiring prior voter approval of repairs or improvements to school buildings or sites, apply to the District's action.   Explicitly excluded from the reach of the amendment are projects for which the SEQRA review process was initiated before the amendment's September 1, 1996 effective date (see, L.1996, ch. 171, § 23).   Here, the SEQRA process was initiated in March 1996 and completed the following month, and a bond resolution supplementing the 1992 resolution was passed in May 1996.2

ORDERED that the judgment is affirmed, without costs.


1.   We deem that petitioners have abandoned any challenge to the dismissal of their fourth cause of action as they failed to raise it in their brief (see, First Natl. Bank of Amenia v. Mountain Food Enters., 159 A.D.2d 900, 901, 553 N.Y.S.2d 233).

2.   Although the SEQRA process for the CLSCP was not completed until January 1998, that date is of no relevance in ascertaining the applicability of amended Education Law § 2512(1).



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