Midan Restaurant, Inc. v. Board of Estimate, 67 N.Y.2d 800 (1986)
The Board of Estimate has broad authority to review the character and fitness of applicants seeking a revocable consent franchise, including considerations beyond land use impact.
Summary
This case addresses the scope of review the New York City Board of Estimate can exercise when considering an application to renew a revocable consent to operate a sidewalk cafe. The Court of Appeals held that the Board’s review extends beyond land use impact to include the character and fitness of the applicant. The Board acted rationally in denying the application based on evidence suggesting the applicant’s principal had a criminal conviction and was attempting to force tenants out of nearby apartments. This decision clarifies that the Board’s oversight is broader than that of community or borough boards.
Facts
Midan Restaurant, Inc. applied to the New York City Board of Estimate for renewal of its revocable consent to operate an enclosed sidewalk cafe. Thomas Lydon signed a sidewalk cafe occupancy contract as “V.P.” for Midan Restaurant, Inc., and two checks on behalf of the restaurant. Information was presented to the Board indicating that Thomas Lydon, a de facto corporate principal of Midan Restaurant, Inc., had been convicted of assaulting a tenant. Testimony at a public hearing suggested Lydon was attempting to force tenants out of apartments in buildings adjoining the restaurant.
Procedural History
The Board of Estimate denied Midan Restaurant’s application to renew its revocable consent. Special Term reversed the Board’s determination, holding that the denial was arbitrary and capricious. The Appellate Division affirmed the Special Term’s decision. The New York Court of Appeals reversed the Appellate Division’s order and reinstated the Board of Estimate’s determination.
Issue(s)
Whether the Board of Estimate, in reviewing an application for renewal of a revocable consent to operate a sidewalk cafe, is limited to considering only land use impact or whether its scope of review can include the character and fitness of the applicant.
Holding
No, because the New York City Charter provisions grant the Board of Estimate a broader scope of review that includes the authority to review the character and fitness of applicants seeking a revocable consent franchise.
Court’s Reasoning
The Court of Appeals reasoned that the New York City Charter distinguishes between the scope of review for community or borough boards and that for the Board of Estimate. Section 366-a(b) of the City Charter proscribes community and borough boards from considering issues other than land use impact. However, sections 67(4) and 197-c(f) grant the Board of Estimate a broader scope of review, allowing it to consider the character and fitness of applicants. The court found that the Board had a rational basis for denying the application, citing evidence that Thomas Lydon was a de facto corporate principal, his prior conviction for assault, and testimony indicating attempts to force tenants out of nearby apartments. The Court stated, “The Board was entitled to conclude, on the basis of the information before it, that Thomas Lydon was at least a de facto corporate principal of Midan Restaurant, Inc.” and that “This conviction, together with public hearing testimony pointing to the conclusion that Lydon was seeking to force tenants out of apartments, some of which were located in buildings adjoining the restaurant, provided the Board with a rational basis for denying the application to renew the revocable consent to operate the enclosed sidewalk cafe.”