Bella Vista Apartment Co. v. Bennett, 89 N.Y.2d 465 (1996)
When a property has received a commercial use variance, its surplus development rights cannot be transferred to an adjacent property for residential use without further review and approval by the Board of Standards and Appeals (BSA).
Summary
Bella Vista, a real estate developer, sought to build a 14-story apartment building but lacked the necessary floor area ratio (FAR). It purchased development rights from an adjacent lot that had a commercial use variance to build a movie theater. The New York City Building Department rejected Bella Vista’s application to combine these rights, and the BSA confirmed this decision. The New York Court of Appeals reversed the lower courts, holding that the development rights associated with a property benefitting from a commercial use variance cannot be transferred to another property without BSA approval. This prevents undermining the original basis for granting the variance.
Facts
Bella Vista owned Lot 186, zoned for residential use, but lacked the required FAR to build a 14-story apartment building. The adjacent Lot 185 had been granted a commercial use variance to operate a movie theater. Bella Vista purchased 120,000 square feet of development rights, including 30,000 square feet of air rights, from the owner of Lot 185 to meet the FAR requirements. Bella Vista sought a building permit based on this combination of development rights, without seeking separate BSA approval.
Procedural History
The New York City Building Department rejected Bella Vista’s building permit application. The BSA affirmed the Building Department’s decision. Bella Vista filed an Article 78 petition challenging the BSA’s determination. The Supreme Court granted the petition, directing the issuance of the permit. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal and reversed the Appellate Division, dismissing the petition.
Issue(s)
Whether the excess residential use development rights of a property that benefits from a commercial use variance can be transferred to and combined with an adjacent property for an as-of-right use by the latter, without discrete BSA approval.
Holding
No, because allowing such a transfer without BSA approval would undermine the findings required for the original variance and potentially circumvent proper land use regulation.
Court’s Reasoning
The Court of Appeals reasoned that the BSA must make specific findings before granting a variance, including unique physical conditions, inability to realize a reasonable return under existing uses, and that the variance will not alter the neighborhood’s character or harm the public welfare. Allowing the transfer of development rights from Lot 185, which had a variance based on these findings, to Lot 186 without further BSA review would undermine the original basis for the variance. As the Court noted, “if a landowner retains the bonus option to sell surplus development rights as they existed before the use variance is acquired, the variance might not have been the ‘minimum variance necessary to afford relief,’ and the lack of any ‘reasonable possibility’ of a ‘reasonable return’ is retrospectively placed in considerable doubt.” The court distinguished Matter of Clearview Gardens Pool Club v Foley, emphasizing that Clearview involved a simple reversion to a conforming use, not a complex combination of rights that could circumvent zoning regulations. The court emphasized the importance of the BSA retaining review power to preserve coherent land use determinations and adherence to the zoning plan. The Court concluded that the BSA and Building Department’s determinations were rational and within their justifiable range of discretion. Allowing such combinations of rights could enable variance holders to manipulate and augment the benefits of their variances, contradicting the principles of zoning and land use planning. The Court stated, “The precedent should not be expanded to allow landowners to garner commercial use by variance and then, by resourceful fusions, leverage assertedly residual residential development rights, without discrete BSA approval. The inherent contradictions and dangers to effective land use planning regulation and application dictate otherwise.”