UPDATED: Construction Shutdown: Preserving Land Use Approvals

Eugene Travers. Image Credit: Eugene Travers/Kramer Levin

Governor Andrew Cuomo’s executive orders issued in response to the COVID-19 public health emergency halted non-essential construction throughout the City of New York. Many of the halted construction projects enjoyed land use approvals granted by City agencies, and the Governor’s orders did not toll the expiration dates of these approvals. (Update:) Subsequent to the construction shutdown, Mayor Bill de Blasio on April 29, 2020 issued an emergency executive order tolling the expiration dates of certain City land use approvals “for the duration of the [COVID-19] emergency.”  It remains to be seen if legislation will be adopted to provide a more permanent solution to address the time lost during the construction shutdown and the eventual remobilization period.  The New York State Senate passed a bill on May 27, 2020 that would allow the City to extend certain land use approvals issued before March 7, 2020 for up to 120 days beyond their stated expiration dates.*

Even with these measures, with limited exceptions, the approvals will expire after a period of time unless proactive measures are taken.  Developers and lenders should confirm the status of existing approvals, note their expiration dates (subject to any tolling), and apply for renewals as necessary.

This article describes the requirements to preserve the rights granted by some common land use approvals, and summarizes the expiration dates and renewal procedures for such approvals.

Approvals by the City Planning Commission

The City Planning Commission grants “authorizations” and “special permits” under various provisions of the Zoning Resolution.  Examples of these approvals include transfers of development rights from landmark properties, height and setback waivers, floor area bonuses for subway station improvements and through-block arcades, long-term care facilities in residential districts, and large retail uses and self-service storage facilities in certain manufacturing districts.

For most developments, the Zoning Resolution provides that “substantial construction” must be completed within four years from the effective date of the approval to preserve the rights granted under the approval.  If substantial construction is not completed, the approval will automatically lapse and the rights granted pursuant to the approval will terminate.

Renewals may be granted for up to two additional three-year periods where the City Planning Commission finds that the facts upon which the approval was granted have not substantially changed.  An application for renewal must be made prior to the date that the approval expires, otherwise a new application must be filed subject to whatever review process and findings were required for the original approval.

The Department of Buildings is responsible for determining if substantial construction has been achieved.  For the construction of a new building, Buildings has, in the past, interpreted substantial construction to mean the completion of excavation and the installation of all footings and foundation walls in accordance with a validly issued building permit for the entire building, with no cessation of work.  In the case of an alteration, substantial construction has been understood to mean work sufficient to justify the issuance of a certificate of occupancy covering all of the work.

Approvals by the Board of Standards and Appeals

The Board of Standards and Appeals grants “variances” to modify the use and/or bulk regulations applying to a site if certain findings are made.  The Board also grants special permits under certain provisions of the Zoning Resolution.  Examples of these special permits include waivers to allow integration of community facility buildings with existing buildings, schools in manufacturing districts, and health clubs and spas.

Unless the Board’s resolution approving a special permit or variance specifies otherwise, “substantial construction” must be complete within four years of the approval date to avoid lapse of the approval.  As with the City Planning Commission, the Department of Buildings is responsible for determining if substantial construction has been achieved.  The Board’s rules allow for reinstatement of expired approvals in most cases, subject to required procedures and findings and payment of additional fees.

Approvals by the Landmarks Preservation Commission

The Landmarks Preservation Commission grants approvals known as “certificates of appropriateness” for major work on landmarked properties.  The Commission also issues two types of staff-level approvals for other work on landmarked properties.

A certificate of appropriateness is valid for six years from the date that Landmarks votes to approve the application, or eight years if an applicant is also applying to the Planning Commission or the Board of Standards and Appeals for an approval.  Staff-level approvals are valid for four years from the date of their issuance.

Approvals by the Landmarks Commission may be renewed twice: once by the staff of the Commission, subject to certain conditions depending upon type of permit (e.g., issuance of a valid building permit for the work, and no open landmark violations), and once at the discretion of the Chair of the Commission based on “extraordinary circumstances.”  The term of a staff renewal is two years from the expiration date for staff-level approvals, and three years from the expiration date for a certificate of appropriateness.  The term of a renewal by the Commission Chair is for “a stated period of time,” but is typically no more than two or three years, depending upon the type of permit.

An application for renewal must be made prior to the expiration of the permit. An expired permit may be reinstated at the discretion of the Chair of the Commission if the request is made no later than 90 days after the expiration of the permit.

The Landmarks Preservation Commission rules require that approved work must be “substantially completed” prior to the expiration of the permit.  The staff of the Landmarks Preservation Commission determines if the construction has been substantially completed, unlike approvals by the Planning Commission and Board of Standards and Appeals where the Department of Buildings makes the determination.

Change of Plans

Any construction pursuant to the approvals discussed above must substantially comply with the drawings filed as part of the application and approved by the relevant agency.  If design changes require modifications of those drawings, it may be possible that a new approval is required from the issuing agency.  The nature of the new approval will depend upon the scope and extent of the changes, and could range from a staff-level confirmation of substantial compliance, to a modification of the existing approval, or to the requirement for an entirely new application process.

*Update Note (5/28/2020): The original version of this article omitted reference to the Mayor’s April 29, 2020 emergency executive order. The article has also been updated to reference the bill that was adopted by the New York State Senate after the article was published.

By: Eugene C. Travers (Eugene Travers is an Associate at Kramer Levin Naftalis & Frankel LLP. He is a New York Law School graduate, Class of 2010, and a former CityLaw fellow.)



Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.