Appellate Division reverses lower court in a three-two opinion. GAC Catering Inc. purchased a one-family home on the corner of Otis Avenue and Hylan Boulevard in Staten Island, across the street from its catering business. GAC demolished the house, and applied to BSA for a variance from residential zoning in order to construct a two-story commercial building to be used as a photography studio in conjunction with GAC’s catering hall. In support of its application, GAC claimed that commercial uses predominated the neighborhood, and that its broker was unable to sell or lease the property as a residence because of the heavy traffic on Hylan Boulevard. GAC also submitted an economic feasibility study indicating that development in strict conformity with the current residential zoning would not yield a reasonable rate of return.
BSA granted the variance, and Edward J. Vomero, a next door neighbor, filed an Article 78 petition seeking to annul BSA’s determination. Vomero argued that the hardship was self-created since GAC was aware of the residential zoning prior to purchasing the lot. Vomero submitted proof that a buyer had offered to buy the property for $415,000, and also claimed that because the property was bought for $275,500 and its market value had recently been appraised at $384,000, it was possible for GAC to receive a reasonable rate of return.
A lower court ruled that GAC’s hardship was self-created based on its prior knowledge of the lot’s zoning. 3 CityLand 126 (Sept. 15, 2006). The court found that nothing in the record supported BSA’s determination that GAC’s lot was unique in comparison to the similarly sized, residentially developed adjacent lots, and that while the neighborhood’s mix of commercial and residential uses may indicate the unreasonableness of the current zoning, it did not prove the uniqueness of GAC’s lot. The court annulled the variance, ruling that BSA’s determination was not supported by substantial evidence. The City appealed.
In a three-two decision, the Second Department reversed the lower court, ruling that BSA’s determination had a rational basis and was not arbitrary or capricious. The appellate division ruled that there was nothing in the record to conclude that GAC’s property was substantially different from other similarly situated properties in the area that had unique physical conditions which made conforming uses impractical.
The panel also ruled that BSA’s reliance on GAC’s economic study was appropriate despite the presence of some non-conclusive evidence offered by Vomero. The court further ruled that knowledge of the lot’s zoning prior to purchase did not, by itself, constitute a self-created hardship.
Vomero v. City of New York, 2008 N.Y. Slip Op. 7251, (2nd Dep’t Sept. 30, 2008) (Attorneys: Samuel L. Scollar, for Vomero; Michael A. Cardozo, Edward F.X. Hart, Tahirih M. Sadrieh, for NYC).