Opinion
INDEX NO. 154847/2019
09-16-2020
BICAL DEVELOPMENT INC. Plaintiff, v. NEW YORK CITY DEPARTMENT OF Defendant.
NYSCEF DOC. NO. 23 PRESENT: HON. MELISSA ANNE CRANE Justice MOTION DATE 05/20/2019 MOTION SEQ. NO. 001
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 001) 3, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 were read on this motion to/for ARTICLE 78 (BODY OR OFFICER). Upon the foregoing documents, it is
In the verified petition before the court, petitioner Bical Development Incorporated (Bical) seeks an order that 1) compels respondents New York City Department of Finance and the City of New York (collectively, DOF) to grant Bical the tax abatement it sought, 2) annuls DOF's decision that denied the requested abatement, and 3) awards costs and attorney's fees to Bical. DOF cross-moves to dismiss the petition. For the reasons below, the court grants the cross motion and dismisses the petition.
Bical owns improved real property located at 2859 Flatbush Avenue in Brooklyn. It leases this property to Bical Auto Mall, Inc., an affiliated entity that operates as a car dealership and service center. Around July 22, 2013, Bical filed a preliminary application for an abatement of real property taxes (ICAP benefits). In a letter dated July 23, 2013, DOF acknowledged receipt of the application. As is pertinent here, the letter stated, "IMPORTANT: The final application must be filed within one (1) year after the building permit is received. . . .This is a hard one (1) year deadline with no exceptions" (NYSCEF Doc. No. 1 [Complaint Exhibit A]).
Bical filed the building permits before construction began. However, Bical claims that the building permits it filed in connection with the property required several modifications, and the final permits did not issue until around December 29, 2017. Bical filed its final application for ICAP benefits with DOF on April 6, 2018. The final application states that Bical received the building permit on "December 29, 2017 (final)" and that construction commenced in January 2016 (id. [Exhibit B]). In response to the final application, DOF sent a denial letter dated January 15, 2019 (id. [Exhibit C]). The letter indicated that DOF denied the application because, contrary to the statement in Bical's final application, Bical received its construction permit on July 25, 2016. Therefore, Bical made its April 6, 2018 filing more than one year after the issuance of the permit. On January 30, 2019, Bical's counsel wrote to DOF, challenging the determination, requesting a meeting to discuss the ruling, and notifying DOF of Bical's intent to commence this proceeding.
Bical filed its petition on May 10, 2019. It cites both the State's Real Property Tax Law (RPTL) §§ 489-aaaaaa - 489 kkkkk (ICAP) and its local counterpart, Administrative Code §§ 11-247 - 11-555. It notes that, although an ICAP applicant must file its final application within one year of the issuance of the construction permit, the statute provides that "[i]f the final application is not filed within such one year period, abatement benefits shall not be granted until such application is filed, and the department may delay the granting of such benefits, at the department's discretion, to investigate the reason for the late filing" (RPTL § 489-cccccc [5] [a] [ii]). It contends that the Administrative Code is silent on this subject, and that it cannot limit an applicant's rights under the State's law (citing, inter alia, Matter of Arash Real Estate & Mgt. Co. v New York City Dept. of Consumer Affairs, 148 AD3d 1137, 1140 [2d Dept 2017]; see New York State Assn. for Affordable Hous. v Council of the City of N.Y., 141 AD3d 208, 214-215 [1st Dept 2016]). Bical contends that, as a result, DOF improperly denied Bical's application.
In opposition, DOF recounts the legislative history of the provision on which Bical relies. It notes that the initial ICAP legislation established a strict filing requirement for the timing of the final application, and the Administrative Code followed the State legislation's guideline. Further, DOF states that Governor Andrew Cuomo signed the enabling legislation on which Bical relies, New York Senate Bill 6751 (2017 NY SB 6751), on October 23, 2017, over four years after Bical filed its initial application. The amendment afforded applicants "an updated final application procedure granting discretion to [DOF] to accept applications after the one[-]year period-and, conclusively, to ensure that the abatement program operates as intended" (id.). The memorandum further noted that the bill would apply to projects "filing after enactment" (id.). In addition, DOF quotes section two of the bill, that expressly states the act "shall take effect immediately and shall apply to projects that file preliminary applications on or after such date" (2017 NY SB 6751). As such, the law's application was not retroactive. DOF stresses that the Department of Buildings issued the initial construction permit on July 25, 2016 (NYSCEF Doc. No. 8 [Aff in Support of Cross Motion] [Exhibit 5]). DOF states that, because of this, it had no power to grant Bical's untimely application. DOF argues that for this reason as well, there is no basis for mandamus. DOF stresses the extraordinary nature of mandamus relief in the context of an Article 78 proceeding. This relief exists only where the entity in question violated a clear legal duty. Here, on the other hand, DOF had a clear legal duty under the statute to deny Bical's application. For this reason, DOF argues, its action was rational.
In reply, Bical reiterates its position that the issuance of the final building permit on December 29, 2017 is determinative. Therefore, Bical contends, its final application was timely. Further, Bical argues New York Senate Bill 6751 does not contain the one year deadline. In addition, Bical points out that it filed the final application after the bill's enactment. Bical reiterates its position that DOF's duty is not a discretionary one, suggesting that the 2017 bill allows DOF to delay its approval of the application but does not allow it to deny the application. Bical contends that dismissal is not proper because Bical's statement in the petition, that the final application was timely, must be accepted as true for the purposes of CPLR § 3211.
Under CPLR § 7803, a court sets aside an agency determination only if "the 'determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion'" (Matter of Save America's Clocks, Inc. v City of New York, 33 NY3d 198, 207 [2019] [quoting CPLR § 7803 (3)]). As stated, Bical's primary argument is that DOF violated RPTL § 489-ccccc (5) (a) (ii) when it rejected Bical's final application as untimely. Specifically, Bical contends that the law as amended directs DOF to grant abatement benefits even if an applicant files its final application more than one year after the issuance of the construction permit. There is no merit to this position. The enabling legislation, the Sponsor's Memorandum, and the law itself plainly state the amendment only applies to situations in which the preliminary application was filed after October 23, 2017, the effective date of the order. Bical's preliminary application was filed around July 22, 2013. Therefore, the amendment does not apply to Bical's tax abatement application (see SNL Capital Partners, LLC v City of New York, 68 Misc 3d 597, 602 [Sup Ct, NY County 2020] [SNL Capital] [evaluating plaintiff's request to enjoin enforcement of a 2020 amendment to RPTL § 489-ccccc that excluded self-storage units from program]). Not only is the prospective application of the amendment clear from the statutory language, but it is appropriate where, as here, a "loss of ICAP benefits relates to the propriety of prospective relief rather than impairing rights that [Bical] actually possessed" (SNL Capital, 68 Misc 3d at 601 [internal quotation marks omitted]).
Bical's arguments to the contrary are unpersuasive. Among other things, Bical contends that because it filed its final application after the amendment's enactment, DOF should have applied the law as amended. Again, the law clearly references the filing date of the preliminary rather than the final application, and thus is inapplicable to the matter at hand. For the same reasons, the court rejects Bical's application for mandamus relief, which is only available "where the public official has failed to perform a duty enjoined by law" (New York Civ. Liberties Union v State of New York, 4 NY3d 175, 184 [2005]; accord Matter of Yohay v City of New York, 181 AD3d 408, 409 [1st Dept 2020]). Bical's argument that the initial deadline was not strict is belied by the record of the statute and its enforcement.
Bical also apparently argues that DOF's denial of the application was arbitrary because it considered the original date of the construction permit's issuance, July 15, 2019, as the date that Bical received its building permit. Instead, according to Bical, DOF should have considered December 29, 2017, the date that the modifications to the building permit were finally approved, to determine whether the final application was timely. However, courts find an action arbitrary and capricious only if it lacks a sound basis and ignores the facts (see Matter of Christakis v New York City Tr. Auth., 181 AD3d 471, 474 [1st Dept 2020]). As DOF notes, the statute at issue references the filing of the permit as the critical date and does not refer to the final operable permit. It cites Matter of 96 Wythe Acquisition, LLC v Jiha (165 AD3d 1100, 1102 [2d Dept 2018]), in which the Second Department stated that according to "the plain language of [the pertinent New York City rule, Administrative Code of City of NY § 11-270 (c) (1) (b)], it is the time that the original or earliest building permit is issued that dictates the deadline for filing the final application for ICAP benefits." Further, the Sponsor's Memorandum supports DOF's position as to the operable date. In particular, the memorandum explains that under the original - and applicable - statute - DOF had "no ability . . . to grant an abatement if an applicant file[d] the final application after one year if something holds up the construction process" (Sponsor's Memorandum, 2017 SB 6751 [Spons. Memo., 2017 SB 6751]). The memorandum acknowledges that the then-existing rule prevented DOF from exercising its discretion "to accept applications after the one-year period ended" and to operate the abatement program as it was intended (id.). Unfortunately, although the denial of the abatement was contrary to the statute's original intent, the amendment that corrects this problem does not apply to Bical or any other businesses that filed their initial applications before the law's effective date.
The court also rejects Bical's position that because DOF's motion is one for CPLR § 3211 relief, DOF and the court must accept the petition's allegation that Bical's final application was timely. Bical misconstrues the parameters of a CPLR § 3211 analysis. The court does not accept Bical's contention where, as here, documents, including the legislative history, contradict it. The court has considered Bical's other positions and finds them unpersuasive. Finally, because the amendment to the Real Property Tax Law does not apply here, the court does not reach the issue of whether, if it were to consider the application, DOF properly exercised its discretion.
Accordingly, it is is
ORDERED That the petition is denied, the cross-motion is granted and the petition dismissed.
The clerk is directed to enter judgement dismissing this action. 9/16/2020
DATE
/s/ _________
MELISSA ANNE CRANE, J.S.C.