The Board of Standards and Appeals had denied the application based on its finding that the signage was an art installation rather than an “advertising sign,” as defined in the Zoning Resolution. Local Law 31 of 2005 amends the regulations governing the usage of outdoor advertising signs by requiring companies engaged in outdoor advertising to submit to the Department of Buildings an exhaustive list of all of the companies’ “signs, sign structures and sign locations” which are located within 900 feet and within view of an arterial highway. Pursuant to Local Law 31, a Sign Registration Application was submitted to the Department of Buildings on April 4, 2011 to register an advertising sign-structure on the south wall of a six-story parking garage located at 111 Varick Street in Lower Manhattan, which is 57 feet from the Holland Tunnel—a designated arterial highway under the Zoning Resolution. The Department of Buildings rejected the application on March 12, 2012 by pointing to evidence indicating that the sign’s size and orientation had been changed, which are actions in violation of the Zoning Resolution. On January 15, 2013, the Board of Standards and Appeals agreed with the Buildings’ determination that the sign structure’s status as an “advertising sign,” as defined by Zoning Resolution § 12-10, was discontinued when Terry Fugate-Wilcox leased the sign structure from 1979 to 1989 to display his art installation titled the “Holland Tunnel Wall,” and the Board affirmed the denial of the application.

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The Department of Buildings failed to appeal both relevant ALJ decisions. In 2006, the owner of 882 Sixth Avenue entered into a licensing agreement with Troystar Inc., a registered outdoor advertising company. The agreement allowed Troystar to install a sign on the facade of the owner’s building. Two years later, the Department of Buildings issued the owner eight NOVs, one for failing to register as an “outdoor advertising company” and seven for failing to comply with various advertising sign regulations. The owner challenged the NOVs before an ALJ, who issued two separate decisions that addressed four violations each. In the first decision, dated July 6, 2009, the ALJ found that the owner was not an outdoor advertising company. In the second decision, dated July 10, 2009, the ALJ sustained all four NOVs and ordered the owner to pay $800 per violation.

Buildings appealed the second decision to the Environmental Control Board, arguing that the owner was acting as an OAC and that, as such, the Board should impose the statutory penalty of $10,000 per NOV. The Board agreed with Buildings, reversed the ALJ, and imposed a $40,000 penalty on the owner.

On appeal, Justice Eileen A. Rakower granted the owner’s article 78 petition, finding the Board’s decision arbitrary and capricious. The Board should not have revisited the issue of whether the owner was an OAC; the first ALJ decision, which decided that the owner was not an OAC, was never appealed by Buildings. And because the time to appeal that first decision had passed, the decision was final and binding on the Board.

Rosen v. City of New York, 2011 N.Y. Slip Op. 31683U (N.Y. Cty. Sup. Ct. June 21, 2011) (Rakower, J.) (Attorneys: Phillip L. Billet, for owner; Michael A. Cardozo, for NYC).