Owner must file four months from Council’s action; challenge cannot be raised as a defense. In September 2003, DEP started the process to condemn a 12,500- square-foot lot at 142 Grand Street in Manhattan as part of the City’s construction of the Third Water Tunnel. The largest capital project in the City’s history, the Third Water Tunnel construction will enable the City to close and repair the City’s two functioning water tunnels for the first time since they commenced operations in 1917 and 1936. Construction commenced in the 1970s and 13 miles of the planned 60-mile water tunnel are operational.

The City’s proposed condemnation was to enable construction at 142 Grand Street of a 512- foot deep shaft connecting the Third Water Tunnel to the City’s water mains and a large chamber, three feet below the surface, to regulate water pressure. The City estimated a 30-month construction period, after which, the lot could return to its original condition with the City retaining access to maintain the water pressure chamber.

The Planning Commission approved DEP’s application to condemn 142 Grand Street in April 2004. The City Council, which had 20 days after the Commission’s vote to request review, waived. In November 2004, DEP started the second step in the condemnation and filed in court to take title from the owner, Grand Lafayette Properties LLC, which operated a 95-space parking lot on the site. In its response, the owner argued that the City did not need the entire lot. The lower court ruled that the City proved its need for the entire lot and, on appeal, the First Department agreed. 2 CityLand 109 (Aug. 15, 2005).

On April 4, 2006, the Court of Appeals denied the owner’s appeal, ruling that it failed to challenge the condemnation correctly. When the City’s ULURP process is used to satisfy the hearing requirement for a condemnation, an owner’s only method to challenge the taking is to file an article 78 action. The owner should have filed an action within four months from the expiration of the Council’s 20-day right to review. It erred by raising it as a defense to the City’s court filing for the transfer of title. The lower courts, the Court of Appeals ruled, should not have considered the owner’s claim that the taking was excessive.

In re City of New York (Third Water Tunnel, Shaft 30B), 2006 NY Slip Op 02453 (April 4, 2006) (Jack M. Weiss, for Grand Lafayette; Michael A. Cardozo, Paul T. Rephen, for City).