Per-Lot Recreation Fee

Town Law § 277 (4) permits a town planning board, where it has made necessary preliminary findings, to require that developers of residential subdivisions include in their plans land for parks or other recreational purposes. “The section represents a legislative reaction to the threatened loss of open land available for park and recreational purposes resulting from the process of development in suburban areas and the continuing demands of the growing populations in such areas for additional park and recreational facilities” ( Matter of Bayswater Realty & Capital Corp. v Planning Bd. of the Town of Lewisboro, , 76 NY2d 460, 468 [1990] [discussing earlier version of statute]). Specifically, the statute conditions a town's power to mandate a parkland set-aside on

“a finding [by the planning board] that a proper case exists for requiring that a park or parks be suitably located for playgrounds or other recreational purposes within the town. Such findings shall include an evaluation of the present and anticipated future needs for park and recreational facilities in the town based on projected future population growth to which the particular subdivision plat will contribute”

(Town Law § 277 [4][b]).

The statute also provides that a planning board may require a monetary payment in an amount to be established by the town board if the planning board determines that, although the subdivision is a “proper case” for requiring park dedication, “a suitable park or parks of adequate size to meet the requirement cannot be properly located on such subdivision plat” ( id. at [c]). The town must deposit any monies paid “in lieu of” a parkland set-aside into a trust fund for use exclusively for recreational purposes ( see id.).

As previously noted, the Monroe Town Code currently sets the “in lieu of” fee at $1,500 per lot for subdivisions consisting of five or more lots ( see Town Code §26B-2 [A][7][b]). The Town's graduated fee schedule was fixed by a 2000 amendment to the Code that increased the fees based, in part, on the “rapid growth” in the Town's population over the previous 15 years (Local Law No. 3 [2000] of Town of Monroe § 1). The Town Board justified the fee increase by explaining that “existing facilities for active recreation are severely limited and are inadequate to accommodate the needs of its residents,” and that the Board's efforts to address increased demand for recreational facilities resulting from the population growth were “hampered by the constraints of the unavailability of suitable lands and upward-spiraling land costs” ( id.). The additional fee income would enable the Town to “plan for the recreational needs of the residents in these new subdivisions and site plans and ameliorate the additional strain these new residents place on the already limited park and recreational facilities of the Town” ( id.).

Plaintiff argues that the $1,500 per-lot recreation fee constitutes an unconstitutional taking because the amount of the fee is not based on an “individuated assessment” of the recreational needs generated by its subdivision plan and thus is not roughly proportional to those needs. Plaintiff further contends that the Code violates procedural due process because applicants cannot challenge the amount of the fee as excessive in relation to a particular subdivision plan. Plaintiff therefore challenges the Town's authority to impose a fixed, per-lot recreation fee on developers in lieu of requiring developers to set aside dedicated parkland.

The Takings Clause of the Fifth Amendment of the United States Constitution -- applicable to states through the Fourteenth Amendment -- provides, “[n]or shall private property be taken for public use, without just compensation” ( see Dolan v City of Tigard, 512 US 374, 383-384 [1994]). We have observed that the “[e]lementary and strong constitutional principles protect[ing] private property rights * * * evolved to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole” ( Manocherian v Lenox Hill Hosp., , 84 NY2d 385, 391 [1994], cert denied 514 US 1109 [1995] [quoting Penn Cent. Transp. Co. v New York City, 438 US 104, 123]).

The United States Supreme Court has developed a standard for evaluating takings claims arising in the “context of exactions -- land-use decisions conditioning approval of development on the dedication of property to public use” ( City of Monterey v Del Monte Dunes at Monterey, Ltd., 526 US 687, 702 [1999]). A reviewing court must assess whether an “essential nexus” exists between the “legitimate state interest” advanced as the justification for the restriction and the condition imposed on the property owner ( see Dolan, 512 US at 386 [citing Nollan v California Coastal Commn., 483 US 825, 837 (1987)]; Bonnie Briar Syndicate v Town of Mamaroneck, , 94 NY2d 96, 105-106 [1999], cert denied 529 US 1094 [2000]). Where such a nexus is present, the “degree of the exactions demanded” must have “the required relationship to the projected impact of [the applicant's] proposed development” ( Dolan, 512 US at 388).

In Dolan, the Supreme Court analyzed whether a municipality made sufficient findings to support its decision to condition the applicant's expansion permit on a dedication of property for flood control and recreational purposes. After considering the various standards adopted by states, the Court determined that a “rough proportionality” test would “best encapsulate[] what we hold to be the requirement of the Fifth Amendment” ( id. at 391).[1] Thus, although “[n]o precise mathematical calculation is required,” the dedication must be “related both in nature and extent to the impact of the proposed development” ( id.).

Here, plaintiff failed to demonstrate that the Town's $1,500 per-lot fee constitutes a taking. When enacting the current fees, the Town made explicit findings that the demand for recreational facilities exceeded existing resources and that continued subdivision development, paired with the “upward- spiraling land costs,” would exacerbate the problem. Additionally, the statute authorizing the Town to impose recreation fees mandates that fees collected in lieu of parkland set-asides be deposited into a trust fund to be used strictly for recreational purposes ( see Town Law § 277 [4][c]). Taken together, these factors clearly establish the essential nexus between the stated purpose of the condition and the fee ( cf. Nollan, 483 US at 837).

With respect to plaintiff's application, the Town concluded:

“based on the present and anticipated future need for park and recreational opportunities in the town, and to which the future population of this subdivision will contribute, that parklands should be created as a condition of approval of this subdivision. However, because the lot area and ownership patterns do not suit it to the development of a park suitable to meet the requirements of the site, pursuant to Section 277 of Town Law, the Planning Board requires that the applicant deliver payment in lieu of parkland dedication * * *.”

These findings satisfy the requirements of Town Law § 277 (4)(c) and reflect the individualized consideration of the project's impact contemplated by Dolan. Plaintiff identifies no proof in the record to support a contrary conclusion that the $1,500 per- lot fee is not roughly proportional to the impact its development would have on the recreational needs of the Town. Moreover, we are unpersuaded that Dolan precludes municipalities from establishing fixed fees to ensure that adequate recreational facilities can be provided. In light of plaintiff's heavy burden to rebut the presumption of constitutionality of this law ( see e.g. de St. Aubin v Flacke, , 68 NY2d 66, 76 [1986]; Lighthouse Shores, Inc. v Town of Islip, , 41 NY2d 7, 11 [1976]), plaintiff's unsubstantiated claims are insufficient to establish that the fee constitutes a taking.

Plaintiff further cites our holding in Garden Homes Woodlands Co. v Town of Dover (95 2 516 [2000]) to support the argument that its due process rights were violated by the imposition of the per-lot recreation fees without a hearing to review the reasonableness of the fee amount. In Garden Homes, two municipalities undertook a joint street improvement project and imposed a series of special assessments on property owners within the improvement district to pay for the project. The plaintiff property owner did not receive notice of the proposed assessment and, therefore, did not object to the assessment. When the plaintiff learned that it faced a $44,800 special assessment, it brought an action that included a challenge to the adequacy of the notice-by-publication method used by one of the municipalities. We held that the municipality's compliance with the notice-by-publication provision of Town Law § 239, which governs the filing of assessment rolls, was insufficient to protect the property owner's right to contest the special assessment before it was imposed ( id. at 519-520).

Relying on Jenad, Inc. v Village of Scarsdale (18 2 78 [1966]) -- involving another recreation fee -- plaintiff reasons that, because an “in lieu of” exaction is not a “general tax,” such an exaction is the equivalent of the special assessment in Garden Homes. Jenad does not support plaintiff's position. In Jenad, which has been partially abrogated by Dolan ( see 512 US at 389 [declining to adopt Jenad's standard for measuring the sufficiency of the nexus]), we went further than holding that the “in lieu of” fee was not a “general tax” to conclude:

“[t]his is not a tax at all but a reasonable form of village planning for the general community good. * * * This 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. If the developers did not provide for parks and playgrounds in their own tracts, the municipality would have to do it since it would now be required for the benefit of all the inhabitants”

>(18 NY2d at 84).

Similarly, the per-lot fee at issue here is neither a special assessment nor a tax. The requirement that developers pay the recreation fee is generally applicable to any Town property owner seeking to divide its property. Furthermore, unlike the property owner in Garden Homes, plaintiff can make no claim that it lacked notice of the “in lieu of” fee -- a generally applicable land-use law adopted after a public hearing and appearing in the Monroe Town Code. Not only was the law adopted through a public legislative process but also the Town revisits the fee schedule on a yearly basis, at which time concerned property owners can voice objections. Additionally, the Town's recreation fees were not imposed against an unsuspecting property owner who could be divested of title for failing to pay, but upon a knowing property owner who willingly subjected itself to the fees by instigating the subdivision application process. For all of these reasons, Garden Homes is inapposite.

Consulting Fees

The power of the Town to charge “some amount” associated with the consideration of a land-use application is not disputed in this case ( see Suffolk County Bldrs. Assn. v County of Suffolk, , 46 NY2d 613, 619 [1979]). This Court has repeatedly observed that this power is limited by the requirement “that the fees charged be reasonably necessary to the accomplishment of the regulatory program” ( id. [citing Jewish Reconstructionist Synagogue of North Shore v Incorporated Vil. of Roslyn Harbor, , 40 NY2d 158, 163 [1976]). Plaintiff argues that its due process rights were violated by the requirement that it pay the consulting fees incurred in conjunction with its application, asserting that no opportunity existed to challenge the reasonableness of those fees.

Section 26B-2 (A)(11)(a) of the Monroe Town Code requires an applicant to deposit an escrow with the Town Clerk “to cover the costs being incurred by the town for all consultant services, including but not limited to engineering, planning and legal as well as clerical costs incurred in the processing and reviewing of such application.” The Code further provides that “[t]he Planning Board, in conjunction with the applicant, shall compute the amount of the escrow to be posted with the town. Such amount shall be reasonably related to the costs attendant to the town's review of the application” ( id. at [i][1]). Thus, under the challenged provisions, the applicant is required only to reimburse the Town for fees actually expended.

Plaintiff accurately observes that the consulting fee provisions do not include an express audit component providing an applicant with the opportunity to review the fee assessment but cites no authority for the proposition that such a mechanism must be contained within the fee provisions themselves as opposed to elsewhere in the statutory or regulatory scheme. The Code, however, expressly limits the fees that can be exacted to those that are “reasonable” ( see Town Code § 26B-2 [A][11][a][i][1]) and the Town interprets the fees as subject to the audit provisions of Town Law §§ 118 and 119. In addition, uncontradicted proof in the record establishes that (1) the Town pays the same rate for consulting services as it charges applicants; (2) the Planning Board audits vouchers submitted by consultants in the first instance and rejects any excessive or unnecessary charges; and, (3) applicants may inspect consultants' invoices upon request.

Here, plaintiff apparently paid the fees “under protest” but the record contains no indication of the nature of that protest and plaintiff did not request an audit of the fees. Indeed, although plaintiff complains that it has been deprived of an opportunity to contest the consulting fees, it has not alleged that the fees were, in fact, unreasonable. Under these circumstances, plaintiff has failed to establish a due process violation.

Accordingly, the order of the Appellate Division should be affirmed, with costs.