Macmillan, Inc. v. CF Lex Associates, 56 N.Y.2d 386 (1982)

For purposes of zoning lot mergers under the New York City Zoning Resolution, the term ‘tract of land’ refers solely to the surface land, excluding buildings and improvements thereon; therefore, a space tenant, even with a substantial interest in a building, is not necessarily a ‘party in interest’ requiring consent for a zoning lot merger.

Summary

Macmillan, Inc., a major tenant in the Macmillan Building, sued to prevent a zoning lot merger and air rights transfer without its consent. Campeau Corporation, the building owner, sought to merge the zoning lot with an adjacent development lot to allow for a larger building on the development lot. Macmillan argued it was a ‘party in interest’ under the zoning resolution, requiring its consent. The New York Court of Appeals held that ‘tract of land’ refers only to the surface land, not the building, and therefore Macmillan was not a ‘party in interest’ whose consent was required. This decision facilitates zoning lot mergers by clarifying that consent is not required from every tenant in a building.

Facts

Macmillan occupied nearly all of the usable space in the Macmillan Building under a long-term lease. Campeau Corporation purchased the Macmillan Building and sought to execute a declaration of zoning lot restrictions with CF Lex Corp., which owned an adjacent development lot. The purpose of this was to merge the zoning lots and transfer air rights from the Macmillan Building to the development lot, allowing CF Lex Corp. to construct a larger building on its lot. CF Lex Corp. purchased the air rights from Campeau for $5,060,000. Macmillan contended that it was a “party in interest” under the zoning resolution and that its consent was required for the zoning lot merger and air rights transfer.

Procedural History

Macmillan filed suit seeking a declaratory judgment that the air rights transfer required its consent. The Supreme Court dismissed the complaint. The Appellate Division reversed, reinstated the complaint, and temporarily enjoined construction. The defendants appealed to the New York Court of Appeals, which granted leave to appeal.

Issue(s)

Whether, under the New York City Zoning Resolution, the term “tract of land” includes buildings erected on the land, thereby making a space tenant with a substantial interest in the building a “party in interest” whose consent is required for a zoning lot merger.

Holding

No, because the term “tract of land” refers only to the underlying surface land and does not include buildings or improvements. Therefore, Macmillan, as a space tenant, is not a “party in interest” whose consent is required for the zoning lot merger.

Court’s Reasoning

The court reasoned that the phrase “tract of land” is not defined in the zoning resolution, so it looked to the plain meaning of the words. The court noted that “tract” refers to a region or stretch of land, and “land” refers to the solid surface of the earth. The court also observed that the drafters of the resolution did not use the phrase “land and improvements,” which would have explicitly included buildings. The court emphasized the practical implications of including buildings in the definition of “tract of land,” arguing that requiring the consent of every space tenant with a recorded interest would “so encumber the procedure for zoning lot merger as to make it of questionable practical utility.” This would be inconsistent with the zoning resolution’s purpose of promoting desirable land use and strengthening the city’s economic base. The court also highlighted that air rights are historically associated with land ownership, citing the maxim “cujus est solum, ejus est usque ad coelum et ad inferos” (to whomsoever the soil belongs, he owns also to the sky and to the depths). The court stated, “Air rights are incident to the ownership of the surface property — the right of one who owns land to utilize the space above it.”