A State Supreme Court Judge dimissed Chappaqua Crossing developer Summit/Greenfield's state lawsuit against the Town of New Castle, which involved how the town board handling the review of its residential rezoning application for the property.
In his decision, dated Sept. 26, Judge Gerald E. Loeher disagreed with Summit/Greenfield's assertion that the town had, through how it handled its review process and in approving fewer housing units than requested, deprived the developer of economic use of the property, which the plaitiff argued amounted to a de facto taking of the site. That argument formed the crux of the developer's case. Additionally, Loeher argued that the town had not taken away all economic uses, pointing to the fact that Summit/Greenfield always had site's commercial zone and, in its initial years of ownership, an earlier zone for the property that permitted development of some single-family homes.
In the state case, Summit/Greenfield sought damages and to have the town purchase its property.
The decision is a blow to Summit/Greenfield, which filed the lawsuit in February 2011, less than two months before the Town Board voted to rezone the site for residential usage, but only granted 111 out of 199 proposed condos and townhouses on the former Reader's Digest headquaters site. Summit/Greenfield amended its complaint several weeks later, arguing that only approving 111 units hurts the economic viability of the project.
"While Defendent's conduct in refusing to approve what Plaintiff had requested presumably reduced its value, it did not destroy its value as a whole," Loeher wrote in his 9-page decision about the board approving just 111 units.
The filed filed a motion to dimiss the case in February 2012, and Summit/Greenfield amended the complaint around the same time. In his writing, Loeher denied Summit/Greenfield's support for amending the suit and dimissed the amended complaint.
"We are pleased, though not surprised, by the well reasoned decision of Judge Loehr in favor of the Town of New Castle," replied John Walsh, an attorney for New Castle who defends in its civil lawsuits. "We have always believed that the claims asserted by the developer were meritless."
Walsh also weighed in a overdue consulting fees that the developer owes to the town, which stem from the environmental review of its residential rezoning application.
"The Town's claims for past due consultant fees are still outstanding and the Town expects to pursue them vigorously," he said.
Former Supervisor Barbara Gerrard, who presided over Summit/Greenfield's housing proposal and voted in favor of rezoning for the 111 units, praised the decision, saying it was "no surprise."
"They had no case," she said of Summit/Greenfield.
Current Supervisor Susan Carpenter could not be reached for comment.
Under state law, Summit/Greenfield can choose to appeal the case. A notice for doing so must be filed within 30 days of when the lower-level judge's order is served.
On Monday afternoon, Summit/Greenfield released a rebuttal statement, which keeps open the possibility of an appeal.
"We have reviewed the ruling and respectfully disagree with the judge’s decision," the statement reads. "We are reviewing our options."
Meanwhile, Summit/Greenfield still has a pending federal lawsuit against the town over the review. That case is in the discovery phase and in it, the developer not only makes a similar economic case as the state suit but argues that the town is hostile towards affordable housing. Summit/Greenfield's application included 20 affordable housing units, which the town approved, although, as noted, the developer maintains that getting a lower number of approved housing undermines the economic viability of its proposal.
The recent dismissal is the second of its kind in the ongoing litigation. In its federal suit, the developer originally included current and former town board members who presided over the rezoning vote. However, in late July a federal judge removed them from the listing, arguing that their inclusion in the case was redundant.
Chappaqua Crossing has played out like a soap opera ever since Summit/Greenfield bought the site from Reader's Digest in 2004. The developer had been proposing a mixed commercial/residential project under several iterations since the mid 2000s. An initial version, proposed in 2006 and rejected by the town board, called for more than 348 units, while a new proposal submitted in 2007 called for 278. The 2007 proposal, through the town board's decision to do an environmental review, eventually morphed into the 199 iteration. The proposals prior to the developer's last one included age restrictions.
The developer's desire to build multi-family housing on the site attracted heated opposition, as public meetings were packed with angry opponents. Arguments against the rezoning ranged from fear of more traffic, to concern that the units would bring in a large (and costly) number of new kids to the Chappaqua school district, and erosion of town's potential commercial tax base, given that the multi-family zone requested would have partially come at the expense of the site's existing office zone.
Summit/Greenfield also saw an erosion of fortunes for its commercial aspect. Reader's Digest, which under the deal because the site's chief tenant, filed for bankruptcy in 2009 and vacated the property in December 2010. Much of the 700,000 square feet of office space sits vacant, although there are notable tenants, such as WeeZee and Northern Westchester Hospital.
The developer got some positive news with the April 2011 decision from the Town Board, as it voted to lift a square footage cap on the number of commercial tenants it can have. Summit/Greenfield is still seeking to fill its empty space.
Although Chappaqua Crossing became a dormat topic after the rezoning votes, it has become a hot item again in town. The Town Board is seeking to rezone the commercial portion of the site so that it can legal to build a large supermarket (it must be between 50,000 to 60,000 square feet) with ancillary retail. The proposal is in reaction to two things: The 2011 departure of D'Agostino, which left Chappaqua without a major grocery store, and in bulking up the commercial tax base. Summit/Greenfield is receptive to the idea, and at a Sept. 24 public hearing informed the board that it will submit a new plan that takes into account the proposed rezoning. Residents have blasted the rezoning proposal; their concerns have ranged from the possibility of more traffic, to the idea of the site becoming a third business district in town that would unfairly compete with existing merchants.
Also pending is a request from Summit/Greenfield to extend the residential rezoning. When the board approved it in 2011, it set a 1-year expiration date, in the event that the developer did not get site plan approval from the Planning Board, with two, 6-month extensions allowed. Summit/Greenfield was granted its first 6-month extension, which expires on Oct. 11. It is requesting its second one, which would be valid until April 11, 2013, two years after the rezoning was granted.
A copy of the judge's decision is attached to this story as a PDF file.