Red Hook Chamber of Commerce sued BSA and City but failed to name owner. In 2003, BSA granted a use variance to 160 Imlay Real Estate LLC to convert a vacant six-story industrial building into 150 luxury condominiums. The Red Hook-Gowanus Chamber of Commerce then filed an Article 78 suit to annul the variance, but failed to include Imlay as a party within the allotted time.

The Supreme Court allowed the case to move forward without Imlay. 3 CityLand 97 (July 15, 2006). The court then ruled in favor of the Chamber, vacated the variance, and returned the matter to BSA to determine whether Imlay could earn a reasonable rate of return for the building under an M2-1 zoning designation. BSA appealed.

The Second Department reversed the lower court, ruling that Imlay stood to lose millions of dollars if the variance was annulled and that its interests would not be adequately protected unless it was a party to the Article 78. The court also stated that the lower court could not annul BSA’s variance after finding that it was based on a rational basis.

In re Red Hook/Gowanus Chamber of Commerce v. BSA, 2008 N.Y. Slip Op. 2600 (2d Dept. Mar. 18, 2008) (Michael S. Hiller, for Chamber; Michael A. Cardozo, Pamela Seider Dolgow, for BSA).