Court upholds BSA ruling denying vested rights

Bronx developer claimed non-compliance with zoning law was minimal and should not impede vesting of rights. Developer GRA V LLC applied for an excavation and foundation permit from the Department of Buildings for construction of a 63- unit apartment building in a neighborhood of one- and two-family buildings within the Bronx’s Van Cortlandt Village. Despite an Administrative Code requirement that permit applications be accompanied by a lot diagram survey prepared by a licensed surveyor, the developer only included a Sanborn map signed and stamped by its architect. Buildings accepted the Sanborn map in lieu of the survey, relying on the architect’s seal, and issued the foundation permit to the developer.

Aware that the City was in the process of downzoning the neighborhood to restrict development to one- or two-family buildings, the developer moved quickly with construction, completing excavation and 85 percent of the foundation by the day the City Council approved the rezoning. After Buildings issued a stop-work order, the developer filed a request to continue work, arguing that it had acquired a vested right to continue. While Buildings did not initially oppose the developer’s request, a survey submitted by neighbors showed the developer’s Sanborn map was inaccurate. The developer submitted its own survey, confirming that the Sanborn map inaccurately marked the adjacent building’s footprint, failing to show it was set back 1.9 feet from the street line. As a result, the developer’s proposed structure, bound by the “narrow streets” zoning requirement not to build any closer to the street line than the nearest adjacent building, pierced the setback area at three small points. Following the submission, Buildings denied the request.

The developer appealed to BSA. Buildings opposed, arguing that since the proposed structure pierced the setback area, the permit was invalid, and that a valid permit is necessary to establish vested rights. The developer countered that the non-compliance was minimal, and that because it had not yet built the above-ground structure, the building could still be modified to comply with the setback requirement.

BSA denied the request, concluding that the above-ground building plans could not be separated from the foundation. As a result, the foundation permit was invalid because it was accompanied by an inaccurate boundary survey, and the proposed structure would violate the setback requirement based on the inaccuracy. 2 CityLand 120 (Sept. 15, 2005). The developer then filed an Article 78 petition, which a lower court denied.

On appeal, the First Department upheld BSA’s determination, ruling that BSA was entitled to deference and had a rational basis for finding that the permit was invalid. The court agreed that the proposed above-ground structure must be considered together with the foundation permit for both validity and vesting purposes. The court emphasized that the developer was aware of the proposed zoning changes and took the risk by relying on a Sanborn map instead of an accurate survey. The court reaffirmed that a claim for common law vested rights cannot be supported in reliance on an invalid permit, even where Buildings erroneously issued the permit due to its own failure to initially notice that the application failed to comply with Code provisions.

GRA V LLC v. Srinivasan, 2008 N.Y. Slip Op. 06432, (1st Dep’t July 29, 2008) (Attorneys: Sheldon Lobel, P.C., for GRA; Michael A. Cardozo, Victoria Scalzo, Stephen J. McGrath, Virginia Waters, for BSA).

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