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KAYE, CHIEF JUDGE:
The New York City zoning laws prohibit continuation
of a nonconforming use if, during a two-year period, "the active operation
of substantially all the non-conforming uses * * * is
discontinued" (New York City Zoning Resolution 52-61). This
case presents a novel question of statutory construction: what is
the appropriate legal standard to determine whether a nonconforming use
has been discontinued under the Zoning Resolution? Contrary to the
trial court and Appellate Division, we conclude that substantial--rather
than complete--discontinuation of the active, nonconforming activity
forfeits the nonconforming use, and that the good faith of the owner is
irrelevant to that determination. Here, the Board of Standards
and Appeals (BSA) on the facts found minimal warehouse activity following
the complete stoppage of operations for 20 months, which failed to preserve
nonconforming use status, and it revoked the building permit allowing petitioner
to maintain a nonconforming use on the premises. Because the BSA
determination was supported by substantial evidence, we reverse the trial
court and Appellate Division decisions reinstating the building permit.
1. Facts
At issue here is a portion of a 16-story building
located at the northeast corner of Third Avenue and East 80th Street in
Manhattan. Built in 1926, the entire premises were situated in a
retail zoning district and, in compliance with the certificate of occupancy
and applicable zoning regulation, served as a storage and warehouse facility.
When Morgan Manhattan Storage and Warehouse Company purchased the building
in 1956, it continued to use the structure exclusively as a warehouse.
The 1961 New York City Zoning Resolution changed the neighborhood from
a retail zoning district to residential districts overlaid with strips
of commercial districts on the avenue (rather than street) blocks.
As a result, that portion of the building on Third Avenue presently remains
in a commercial (C1-9) zoning district. The portion fronting on 80th
Street, however, is now in a residential (R8B) zone. Because warehouse
use is no longer permitted as of right in either the commercially or
the residentially zoned areas (see, Zoning Resolution Article II; 32-00,
32-25), use of the building as a warehouse could continue under the Zoning
Resolution only as a nonconforming use (see, Zoning Resolution 12-10,
52-11). Morgan continued to use the building as a warehouse until
August 1989, when it contracted to sell the premises to a real estate
developer. At that time, Morgan emptied the building and for the
next 20 months ceased all warehouse operations. The sale fell through,
and in April 1991 Morgan transferred a limited amount of goods stored in
its other warehouses to the 80th Street facility and assigned a property
manager there, in an effort to resume nonconforming warehouse use and thereby
maintain the value of its property. In June
1992, Chase Manhattan Bank acquired the premises from Morgan by way of
deed in lieu of foreclosure. In response to a request by Chase for advice
as to whether nonconforming warehouse use was permissible, the New York
City Department of Buildings (DOB) issued an informal opinion that the
nonconforming use at the premises had been re-established in April 1991
and could lawfully continue.
Petitioner Toys "R" Us purchased the basement,
first and second floors of the building from a subsidiary of Chase in March
1994. Three months later, petitioner filed an application with DOB
to convert the purchased premises into a retail toy store. DOB approved
the application and in September 1994 issued a building permit authorizing
the conversion. The 38,000 square foot premises
occupy both commercially and residentially zoned space. A toy store
is permitted as of right in the commercially zoned portion of the premises
on Third Avenue but not in the residentially zoned section fronting on
80th Street, which includes the building's loading docks (see, Zoning Resolution
Article II; 32-00, 32-15). The instant dispute arises out of the
DOB authorization to develop and operate this latter segment of the property
situated in the residential zoning district as a retail toy store--a nonconforming
use.
Respondent-intervenor "Neighbors-R-Us," a
coalition of neighborhood and block associations, objected to the building
permit and sought its revocation. In October 1994, DOB denied the
request. Respondent-intervenor then challenged the issuance of the
building permit by way of an administrative appeal to the BSA. It
urged that the nonconforming warehouse use had been discontinued during
the two-year period from August 1989 to July 1991 and, therefore, the Zoning
Resolution only allowed the property to be developed in furtherance of
a permitted use. The BSA held public hearings during a five-month
period concerning the nature and extent of warehouse operations during
the period between April and July 1991 and conducted a site inspection
of the building and the surrounding area. After reviewing hundreds
of pages of documents and hearing testimony from all sides, the BSA, "based
on the totality of the evidence presented," found the warehouse activity
between April and July 1991 minimal. Concluding that the Zoning Resolution
did not require complete cessation of the nonconforming use as a precondition
to termination, the BSA determined that the insignificant level of warehouse
activity during that period failed to perpetuate the nonconforming warehouse
use. Deeming Morgan's clear intent to resume warehouse operations
insufficient to preserve the nonconforming use, the BSA revoked petitioner's
building permit.
Petitioner commenced an article 78 proceeding
seeking to reinstate the permit. Supreme Court held that the storage
of some goods in the warehouse during April to July 1991, coupled with
the absence of any bad faith or fraud by Morgan, sufficiently continued
the nonconforming use. It thus granted the petition and annulled
the BSA determination, allowing petitioner to maintain a nonconforming
retail use in the residentially zoned space. The Appellate Division
affirmed, one Justice dissenting. Like the trial court, the Appellate Division
applied a good faith standard and concluded that the concededly minimal
storage activity from April to July 1991 sufficed to preserve nonconforming
use status under the Zoning Resolution. The Appellate Division granted
leave to appeal to this Court, and we now reverse.
2. Analysis
A use of property that is no longer authorized
due to rezoning, but lawfully existed prior to the enactment of the existing
zoning ordinance, is a nonconforming use (see, Young,
Anderson's American Law of Zoning 6.01, at 481-482 [4th ed]; see
also, Zoning Resolution 12-10). Nonconforming uses are necessarily
inconsistent with the land-use pattern established by an existing zoning
scheme.
Due to constitutional and fairness concerns
regarding the undue financial hardship that immediate elimination of nonconforming
uses would cause to property owners, however,
courts and municipal legislators have adopted a "grudging tolerance"
of such uses (Pelham v Board of Trustees, 77 NY2d 66, 71). The law
nevertheless generally views nonconforming uses as detrimental to a zoning
scheme, and the overriding public policy of zoning in New York State and
elsewhere is aimed at their reasonable restriction and eventual elimination
(Syracuse Aggregate v Weise, 51 NY2d 278, 284; Matter of Harbison v City
of Buffalo, 4 NY2d 553, 559-560; see, Young, Anderson's American Law of
Zoning 6.06, 6.69, at 500, 695).
This policy disfavoring nonconforming uses
was expressly incorporated into New York City's 1961 Zoning Resolution.
The purposes of the Zoning Resolution were to encourage "the development
of desirable residential, commercial, and manufacturing areas with appropriate
groupings of compatible and related uses and thus to promote and to protect
public health, safety, and general welfare" (Zoning Resolution 51-00).
Nonconforming uses, while generally allowed to continue (see, Zoning Resolution
52-11), were considered antagonistic to those goals and thus "subject
to certain limitations" (Zoning Resolution 51-00). As explained
in the Statement of Legislative Intent, "[t]he regulations governing non-conforming
uses * * * are therefore adopted in order to provide a gradual remedy for
existing undesirable conditions resulting from such incompatible non-conforming
uses, which are detrimental to the achievement of such purposes" (id.).
One such restriction placed on the perpetuation
of nonconforming uses is contained in Zoning Resolution 52-61, which
provides for the elimination of any nonconforming use that
is discontinued for two years. Under 52-61: "If, for
a continuous period of two years, * * * the active
operation of substantially all the non-conforming uses in any building
or other structure is discontinued, such land or building or other structure
shall thereafter be used only for a conforming use. Intent to resume
active operations shall not affect the foregoing" (emphasis omitted).
Whether petitioner can use the residential
portion of the premises at issue here for nonconforming toy store use depends
on whether its predecessor, Morgan, discontinued its nonconforming warehouse
operations for two years within the meaning of 52-61. This Court has
never considered the proper legal standard for determining when a nonconforming
use is abandoned under this zoning ordinance. In revoking petitioner's
building permit, the BSA construed 52-61 as requiring substantial discontinuation,
rather than complete cessation, of the nonconforming use by the property
owner for two consecutive years, irrespective of any intent to preserve
nonconforming use status. The BSA, comprised of five experts in land
use and planning, is the ultimate administrative authority charged with
enforcing the Zoning Resolution (see, New York City Charter 659, 666).
Consequently, in questions relating to its expertise, the BSA's interpretation
of the statute's terms must be "given great weight and judicial deference,
so long as the interpretation is neither irrational, unreasonable nor inconsistent
with the governing statute" (Matter of Trump-Equitable Fifth Ave Co v Gliedman,
62 NY2d 539, 545; see, Appelbaum v Deutsch, 66 NY2d 975, 977). Its
determination, moreover, must be sustained if it has a rational basis
and is supported by substantial evidence (see, Appelbaum v Deutsch, 66
NY2d at 977, supra; Matter of Fuhst v Foley, 45 NY2d 441, 444). Where,
however, the question is one of pure legal interpretation of statutory
terms, deference to the BSA is not required (see, Matter of Teachers Insurance
and Annuity Assoc v City of New York, 82 NY2d 35, 41-42).
Here, we must resolve two questions.
First, we must determine the appropriate legal standard for abandonment
under Zoning Resolution 52-61--a pure legal question that does not
mandate deference to the BSA. We must then decide whether the
BSA's conclusion that Morgan abandoned nonconforming warehouse use was
supported by substantial evidence.
(a) The Legal Standard Under Zoning Resolution
52-61
Petitioner argues that the relevant inquiry
under Zoning Resolution 52-61 is whether nonconforming operations have
completely ceased, and that any nonconforming use--however minimal--precludes
a finding of abandonment. The trial court and Appellate Division
majority agreed, concluding that Morgan's use of the premises for some
actual warehouse activity sufficed to preserve the nonconforming use.
According to petitioner, New York courts have
uniformly required proof that the entire nonconforming use was discontinued
as a precondition to termination. Petitioner points to Matter of
Marzella v Munroe (69 NY2d 967) in support of this contention. In Marzella,
the property owner used a parcel of land that had been rezoned to permit
only one two-family structure to house four families in two dwellings.
When one house remained vacant for 15 years, so that three families rather
than four resided on the property, the local zoning board concluded that
nonconforming use of the property for four families had been abandoned.
This Court disagreed, finding insufficient evidence to establish that the
entire nonconforming use had been abandoned (id., at 968).
In doing so, we explained that "[a]bandonment
does not occur unless there has been a complete cessation of the nonconforming
use" (id., at 968). Notably, however, the local zoning ordinance
in Marzella broadly prohibited resumption of any "nonconforming use which
has been abandoned" (see, Village of Dobbs Ferry Code 300-81B).
The term "abandoned" was not qualified in any way; the statute therefore
gave no indication that anything less than complete discontinuation of
the nonconforming use would suffice to surrender it.
Similarly, in Town of Islip v PBS Marina (133
AD2d 81), also relied upon by petitioner, the relevant zoning ordinance
contained absolute terms, providing that "discontinuance of any
non[-]conforming use for a period of one year or more terminates such
non-conforming use." The Appellate Division thus concluded that "'discontinuance
connotes a complete cessation * * * so that a minimal nonconforming function,
of itself, would not constitute an abandonment'" (id. [quoting Baml Realty
v State of New York, 35 AD2d 857]). Indeed, in each of the cases
cited by petitioner adopting the complete cessation standard, the statutes
spoke exclusively in terms of discontinuance, failing to qualify that requirement
in any way (see, e.g., Baml Realty v State of New York, 35 AD2d at 857,
supra; City of Binghamton v Gartell, 275 App Div 457, 459).
Unlike the statutes in these prior cases,
however, Zoning Resolution 52-61 explicitly equates abandonment with
something less than discontinuation of the entire nonconforming use. Section
52-61 specifically terminates any further nonconforming use when "the active
operation of substantially all the nonconforming uses * * * is discontinued"
for a continuous
two-year period (emphasis added). To construe this statute as
requiring the property owner to discontinue all nonconforming operations--as
the courts below did--simply ignores the plain language of the ordinance
requiring that the owner merely cease "substantially" all of the nonconforming
use.1 Allowing the slightest nonconforming function to preserve the
nonconforming use, moreover, would eliminate the specific language requiring
"active" operations to avoid termination.
The carefully chosen words of 52-61 thus
impose a standard of substantial rather than complete cessation.2
The language of the statute also contradicts the conclusion of both the
trial court and Appellate Division that 52-61 implicitly contains a good
faith standard, allowing nonconforming activity to continue upon a showing
that a property owner, in the absence of bad faith or fraud, intended to
resume nonconforming use. Generally, abandonment of a nonconforming
use requires both an intent to relinquish and some overt act or failure
to act, indicating that the owner neither claims nor retains any interest
in the subject matter of the abandonment (see, Young, Anderson's American
Law of Zoning 6.65, at 678). In New York, however, the inclusion
of a lapse period in the zoning provision removes the requirement of intent
to abandon--discontinuance of nonconforming activity for the specified
period constitutes an abandonment regardless of intent (see, Matter of
Prudco Realty Corp v Palermo, 60 NY2d 656, 657-658).
Zoning Resolution 52-61 provides a specific
lapse period--two years--thereby rendering the owner's intent irrelevant
to abandonment. Indeed, 52-61 goes even one step further, expressly
stating that "[i]ntent to resume active operations shall not affect" the
determination whether a nonconforming use has been discontinued.
Notwithstanding the unique language of this particular zoning provision,
petitioner urges that 52-61 must be interpreted in its favor as the landowner.
To be sure, zoning restrictions, being in derogation of common law property
rights, should be strictly construed and any ambiguity resolved in favor
of the property owner (see, Matter of Allen v Adami, 39 NY2d 275, 277).
Zoning Resolution 52-61, however, is not ambiguous--its clear language
prohibits additional nonconforming activity when "substantially all" of
the "active" nonconforming operations are
discontinued, and deems the owner's intent irrelevant. Furthermore,
public policy specifically supports termination of nonconforming uses,
and the Zoning Resolution itself seeks to
achieve "a gradual remedy" for "incompatible" nonconforming uses (Zoning
Resolution 51-00). As we have stated in a related context:
"It has been
said in New York that a zoning ordinance must be 'strictly construed' in
favor of the property owner * * *. By way of counterpoint, however,
it has been said, with equal conviction, that the courts do not hesitate
to give effect to restrictions on nonconforming uses * * *. It is
because these restrictions flow from a strong policy favoring the eventual
elimination of nonconforming uses" (Matter of Off Shore Restaurant Corporation
v Linden, 30 NY2d 160, 164).
Thus, the interpretation of 52-61 adopted
by the BSA and Appellate Division dissenter--requiring only substantial,
rather than complete, discontinuation to terminate a nonconforming use,
regardless of the owner's good faith--gives effect to all of the ordinance's
terms (see, Bliss v Bliss, 66 NY2d 382, 388-389 [courts must, where possible,
give meaning and effect to every word of a statute]) and also comports
with the policy underlying the Zoning Ordinance.
The Appellate Division's concern that anything
less than complete cessation under 52-61 will lead to arbitrary results
warrants comment. Section 52-61 imposes an objective, not
subjective, standard: substantial discontinuation of active,
nonconforming operations. Stated otherwise, 52-61 terminates a
nonconforming use when only minimal nonconforming activity continues.
Whether this standard has been satisfied will, of course, turn on the peculiar
facts of each case. All zoning cases are by their nature fact specific,
and as a leading
authority recognizes, the right to a nonconforming use must necessarily
be decided "on a case-by-case basis" (Young, Anderson's American Law of
Zoning 6.23, at 553). Certainly,
the DOB and BSA, comprised of qualified experts, are capable of making
these determinations.
(b) Application
of the Legal Standard to the Facts
It is undisputed that Morgan's warehouse use
from 1961 to August 1989 was permitted as a nonconforming use, and that
Morgan completely ceased all nonconforming warehouse operations for 20
months between August 1989 and April 1991. The only question before
the courts below and this Court is whether Morgan's warehouse activity
during the four-month period from April to July 1991 sufficed to preserve
nonconforming use status under Zoning Resolution 52-61. If not,
petitioner is prohibited from operating a nonconforming retail toy store
in the residentially zoned portion of the subject premises. Either
way, of course, petitioner's store may be developed in that segment of
the property situated in a commercial zoning district, where a toy store
is permitted as of right.
The BSA's determination that Morgan substantially
discontinued nonconforming warehouse use of the property for 24 months
must be confirmed if it has a rational basis and is
supported by substantial evidence (Matter of Cowan v Kern, 41 NY2d
591, 598). And where substantial evidence exists, a reviewing court
may not substitute its judgment for that of the
BSA--even if the court might have decided the matter differently (Matter
of Cowan v Kern, 41 NY2d at 599, supra; Matter of Collins v Dodd, 38 NY2d
269, 270). In reaching its conclusion, moreover, the BSA had de novo
review power and was not bound by the findings of the DOB (see, Zoning
Resolution 72-11).
The BSA's review of warehouse logs for the
contested four-month period revealed only eight customer accounts, compared
to the 1500 accounts previously maintained by the company. It further
revealed that approximately 19 crates were shipped to the warehouse at
that time, which would have occupied only one-tenth of one percent of the
entire volume of the building. This extremely low level of activity
was corroborated by testimony of the following: an Enviropact employee
who, after examining every lobby floor and 75% of the storage lockers,
saw only 12 to 15 crates and a few cardboard files; a Chase loan officer
who walked through the building and observed about 20 large storage crates;
various neighborhood residents who noticed that the building was vacant
and unused; and a local real estate agent who found the warehouse to be
completely empty, unheated, unlit and infested with pigeons. Based
on this evidence, the BSA rejected the testimony of Morgan's president,
Jeffrey Morgan, that five percent of the building was used to maintain
40 to 50 customer
accounts from April to July 1991.
The BSA's conclusion, however, was premised
on more than the drastic reduction in the volume of storage activity.
The BSA specifically noted the absence of any standard evidence for the
critical four-month period typically available to document a legitimate
business operation, such as insurance records, tax documents, advertisements,
liability coverage, customer records, employee records, certain directory
listings, telephone records or sales receipts. Jeffrey Morgan even
acknowledged that the company failed to renew the requisite Department
of Consumer Affairs license after it expired in April 1991.
The BSA thus properly considered objective
factors regarding the nature and degree of nonconforming warehouse use,
and its determination that Morgan's level of warehouse operations from
April to July 1991 was too insignificant to preserve nonconforming use
status under 52-61 was supported by substantial evidence. That
conflicting inferences may have been drawn from this evidence is of no
moment. "[T]he duty of weighing the evidence and making the choice
rests solely upon the [administrative agency]. The courts may not
weigh the evidence or reject the choice made by [such agency] where the
evidence is conflicting and room for choice exists" (Matter of Stork Rest
v Boland, 282 NY 256, 267).
Finally, petitioner's contention that the
BSA departed from its own precedent is unavailing. In 4702/4712 Clarendon
Road, Brooklyn (March 23, 1993), the question was also whether
nonconforming commercial operations were abandoned under Zoning Resolution
52-61. After reviewing various business records attesting to the
continuous commercial use of the property, the BSA determined that the
active operation of substantially all the nonconforming use at the premises
had not been discontinued for two years. In reaching the opposite
conclusion here, the BSA noted the failure to produce similar business
documents. Clarendon, therefore, is not inconsistent with the instant case.
Accordingly, the order of the Appellate Division
should be reversed, with costs, and the petition dismissed.
F O O T N O T E S
1. Tellingly, the drafters of 52-61 rejected a proposed termination
provision that omitted the qualifying language "substantially all."
In a Zoning Resolution submitted to the City Planning Commission pursuant
to a contract with the City of New York, a special planning staff of architects
suggested the following regarding termination of nonconforming
uses:
"If a non-conforming use discontinues active or continuous operations for a continuous period of one year, the building or other structure or tract of land where such non-conforming use previously existed shall thereafter be occupied and used only for a conforming use. Intent to resume active operations shall not affect the foregoing" (Voorhees, Walker, Smith and Smith, Zoning New York City, 51-31 [August 1958] [emphasis added]).
2. Petitioner alternatively urges that, because 52-61 refers to discontinuation of "substantially all the nonconforming uses"--emphasizing the plural "uses"--discontinuation should be measured by whether a majority of the number of nonconforming uses is maintained, regardless of the level of activity devoted to each use. Petitioner, however, overlooks the basic rule of statutory construction that "[w]ords in the singular number include the plural, and in the plural number include the singular" (General Construction Law 35).
* * * * * * * * * * * * * * * * *
Order reversed, with costs, and petition dismissed. Opinion by Chief Judge Kaye. Judges Simons, Titone, Bellacosa, Smith, Levine and Ciparick concur.
Decided December 20, 1996