Twin Lakes Development Corp. v. Town of Monroe, 1 N.Y.3d 100 (2003)

A municipality can impose fixed per-lot fees on developers for recreational purposes in lieu of parkland dedication, provided there’s an essential nexus between the fee and the development’s impact, and the fee is roughly proportional to the recreational needs generated by the development.

Summary

Twin Lakes Development Corp. challenged the Town of Monroe’s requirement that developers pay fixed per-lot fees for recreational purposes and consulting costs. Twin Lakes argued that these fees constituted an unconstitutional taking and violated due process. The New York Court of Appeals held that the fixed recreation fee was constitutional because it met the “essential nexus” and “rough proportionality” tests established in *Dolan v. City of Tigard*. The court also found no due process violation in the consulting fee requirement because the Town Code provided sufficient mechanisms for ensuring the fees were reasonable, and Twin Lakes had not availed itself of these mechanisms. The court affirmed the dismissal of Twin Lakes’ complaint.

Facts

Twin Lakes Development Corp. sought approval to subdivide a 28-acre parcel into 22 residential lots in the Town of Monroe. As required by Town Code, Twin Lakes deposited funds into an escrow account for consulting costs. The Planning Board granted conditional final approval, mandating per-lot payments in lieu of parkland dedication and reimbursement for consulting fees. The “in lieu of” payments were set at $1,500 per lot, as per Town Code.

Procedural History

Twin Lakes paid $33,000 in “in lieu of parkland” fees and $22,000 in consulting costs, allegedly “under protest.” Instead of challenging the Planning Board’s determination directly, Twin Lakes filed a declaratory judgment action to invalidate the fee provisions on constitutional grounds. The Supreme Court granted the Town’s motion for summary judgment, dismissing the complaint. The Appellate Division affirmed. Twin Lakes appealed to the New York Court of Appeals.

Issue(s)

1. Whether the Town’s $1,500 per-lot recreation fee constitutes an unconstitutional taking because the fee is not based on an “individuated assessment” of the recreational needs generated by its subdivision plan.
2. Whether the Town Code violates procedural due process because applicants cannot challenge the amount of the recreation fee as excessive in relation to a particular subdivision plan.
3. Whether the requirement to pay consulting fees without an express audit component violates due process.

Holding

1. No, because the Town made explicit findings connecting the need for recreational facilities to the subdivision’s impact and the fee is roughly proportional to that impact.
2. No, because the recreation fee requirement is generally applicable, was adopted after a public hearing, and the Town revisits the fee schedule annually, allowing property owners to voice objections.
3. No, because the Town Code limits fees to those that are “reasonable,” the Town interprets fees as subject to audit provisions, and the Town has processes in place to ensure fees are not excessive.

Court’s Reasoning

The court applied the “essential nexus” and “rough proportionality” tests from *Dolan v. City of Tigard* to the recreation fee. The court found an essential nexus because the Town made explicit findings that the demand for recreational facilities exceeded existing resources and that subdivision development exacerbated the problem. The statute also mandated that fees be used strictly for recreational purposes. The court stated, “Taken together, these factors clearly establish the essential nexus between the stated purpose of the condition and the fee.”

Regarding rough proportionality, the court held that Twin Lakes failed to prove that the $1,500 per-lot fee was disproportionate to the development’s impact. The court distinguished *Garden Homes Woodlands Co. v. Town of Dover*, noting that the per-lot fee was neither a special assessment nor a tax but a generally applicable land-use regulation. The court highlighted *Jenad, Inc. v. Village of Scarsdale*, stating that the fee “was merely a kind of zoning, like set-back and side-yard regulations, minimum size of lots, etc., and akin also to other reasonable requirements for necessary sewers, water mains, lights, sidewalks, etc.”

As for the consulting fees, the court noted that the Town Code limited fees to those that were “reasonable” and that the Town interpreted the fees as subject to audit provisions. Because Twin Lakes did not allege the fees were unreasonable or request an audit, the court found no due process violation. The court emphasized, “Under these circumstances, plaintiff has failed to establish a due process violation.”