New Castle is seeking to get Chappaqua Crossing owner Summit/Greenfield's state lawsuit against the town tossed out.

The motion to dismiss was filed on Feb. 2 for the White Plains state supreme court building. In it, the town's lawyers, John Walsh and Paul Svensson, argue that Summit/Greenfield, owner of the 114-acre former Reader's Digest site, was not deprived by the town of being able to economically develop the property as the developer claims.

In its state lawsuit, first field in February 2011 and then amended, Summit/Greenfield claims that the town, through its action during the review of its proposed residential rezoning and request to lift a cap on the number of permitted commercial tenants, conducted a "sham" process. The town's behavior, the developer argues, made for a de facto "taking" of the property. A taking, in legal terms, means that a government has deprived the property owner of being able to get economic value from its asset.

The developer is seeking monetary compensation from the town and for New Castle to take outright possession of the property.

In its motion, the town argues that Summit/Greenfield has already had the right to develop its property and get economic value from it due to the existing zoning status. Such zoning includes: Permitting commercial development and the town board's April 2011 vote allowing multifamily unit residential zoning for 111 out of 199 of Summit/Greenfield's proposed condos and townhouses. There was residential zoning prior to that, which permitted 1-acre, single-family housing.

The town's counsel also argues that Summit/Greenfield, which bought the property from Reader's Digest in 2004 before leasing it back to the media company, consented to a June 2005 town board vote to change commercial rezoning from only permitting one tenant to allowing four. Summit/Greenfield has felt that the cap was restrictive and the town ultimately agreed to scrap it last April when it approved a preliminary development plan for the whole site. That plan also included the town board's multifamily residential rezoning vote.

Summit/Greenfield contends that the approved zoning plan from the town is not economical because having only 111 units, as opposed to 199, can't cover costs for repositioning the commercial space for use from more tenants.

The town, seizing on the developer's argument that the rezoning vote was not sufficient, points to a quote from its attorney that states the zoning changes “akin to closing a barn door after all the livestock has escaped.”

Its tongue in cheek retort: "Applying the correct legal standard, even if the farm animals that routinely reside inside a barn have escaped, the owner still has the barn, the property on which it sits, all other resources on or under the land, and any animals that reside on the property."

Meanwhile, Summit/Greenfield has been continuing to rent out its commercial property - there is 700,000 square feet in total - most recently securing ACCESS Nursing Services and WeeZee, which are related groups centering around a new children's play space that will be constructed.

Overall, the developer is dealing with a tougher real estate climate, and the town notes in its motion that it is not at fault for Summit/Greenfields difficulty in filling space, a problematic venture since Reader's Digest moved out in December 2010. If the town were to be blamed for Summit/Greenfield's difficulty in getting tenants, the motion argues, it would merely be a diminution of the property's value and not a taking. The town also states that it has not stopped Summit/Greenfield from leasing or marketing the property.

Additionally, New Castle's counsel argues that Summit/Greenfield has not shown any market value for the site in its suit, whether a fair market value or any possible price coming from an alleged taking. The town's counsel, however, states the Summit/Greenfield has given a value of $30 million in its ongoing tax assessment challenge lawsuits against New Castle. Those challenges span from 2008-11 and seek reductions in the property's value. The town also argues that Summit/Greenfield has given revenue numbers in the past for the site, in its tax challenges.

"Plaintiff averred that the subject property returned net revenue of $772,434.77 in 2007, $2,089,751.32 in 2008 and $1,520,756.15 in 2009," the motion reads.

Geoff Thompson, a spokesman for Summit/Greenfield, declined to comment about the motion. John Walsh, New Castle's attorney, explained that motions can be filed, including a response from the developer and a town response that their arguement, until May 14.

The motion has no impact on Summit/Greenfield's related federal lawsuit against the town, former Supervisor Barbara Gerrard, former Councilman Michael Wolfensohn and current Councilman Robin Stout.

That suit alleges a violation of due process linked to how the rezoning application was reviewed. It also claims the town violated the Fair Housing Act and that it has obstructed the building of affordable housing. Summit/Greenfield proposed 20 units for the site that would count towards Westchester County's housing settlement with the federal government and the Anti-Discrimination Center, which the town approved as being among the 111 units. Choosing to go with its legal actions, Summit/Greenfield has declined to pursue residential development under the rezoning.

Currently, the town and Summit/Greenfield are in the legal discovery process for the federal suit. Both sides are still waiting on a judge's ruling on the town's motion to dismiss that case against Gerrard, Wolfensohn and Stout as defendants. It is anticipated that the town's counsel will file a motion to dismiss the federal suit against the town as a defendant once discovery is done, Walsh explained.

A copy of the town's motion to dismiss the state lawsuit is attached.