State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: December 10, 2015 520543 

________________________________

In the Matter of NRG ENERGY,

INC.,

Appellant,

v MEMORANDUM AND ORDER

EMPIRE ZONE DESIGNATION BOARD

et al.,

Respondents.

________________________________

Calendar Date: October 19, 2015

Before: McCarthy, J.P., Rose, Devine and Clark, JJ.

__________

Nixon Peabody, LLP, Albany (Jena R. Rotheim of counsel),

for appellant.

Eric T. Schneiderman, Attorney General, Albany (Owen Demuth

of counsel), for respondents.

__________

McCarthy, J.P.

Appeal from a judgment of the Supreme Court (Teresi, J.),

entered April 4, 2014 in Albany County, which, among other

things, dismissed petitioner's application, in a combined

proceeding pursuant to CPLR article 78 and action for declaratory

judgment, to, among other things, review a determination of

respondent Empire Zone Designation Board revoking petitioner's

certification as an empire zone business enterprise.

Petitioner is a company located within an empire zone and

was certified as a qualified empire zone enterprise in August

2002. In June 2009, petitioner received notice from respondent

Department of Economic Development (hereinafter DED) that it
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reviewed petitioner's business annual reports (hereinafter BARs)

for the years 2002-2007 and that, as a result of its findings,

petitioner's certification was being revoked for its failure to

satisfy the 1:1 benefit-cost test retroactively effective as of

January 1, 2008 (see General Municipal Law § 959 [a] [v] [6]). 

After conducting a public meeting on the matter in July 2013,

respondent Empire Zone Designation Board (hereinafter the Board)

upheld DED's revocation of petitioner's certification. 

Petitioner then commenced this combined CPLR article 78

proceeding and action for declaratory judgment seeking, among

other things, to annul the Board's determination. Supreme Court

found, among other things, that petitioner was entitled to a

declaration that revocation of its empire zone certification

cannot be made retroactive to the 2008 tax year, but rejected

petitioner's remaining contentions. Petitioner now appeals, and

we affirm.

Initially, petitioner concedes that the benefits that it,

on its own, generated are insufficient to satisfy the 1:1

benefit-cost test. However, petitioner argues that DED erred in

failing to also consider the benefits generated by an affiliate,

NRG Northeast Affiliate Services, Inc. (hereinafter NAS) in

conducting the benefit-cost analysis pursuant to General

Municipal Law § 959 (a) (v) (6). As is relevant here, this Court

has repeatedly held that "DED [is] only required to review and

consider the wages and investments made by the business

enterprise as set forth in its BARs" (Matter of Lyell Mt. Read

Bus. Ctr. LLC v Empire Zone Designation Bd., 129 AD3d 137, 143

[2015]; see 5 NYCRR 11.9 [c] [2]; Matter of Hague Corp. v Empire

Zone Designation Bd., 96 AD3d 1144, 1146 [2012], affd sub nom.

James Sq. Assoc. LP v Mullen, 21 NY3d 233 [2013]). Petitioner

only included its own wages and investments in its BARs and did

not include the wages and investments of NAS. Because DED was

not required to consider any wages and investments that

petitioner had not set forth in its BARs, the Board's

determination to uphold the decertification has a rational basis

(see Matter of Hague Corp. v Empire Zone Designation Bd., 96 AD3d
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at 1146).1

Further, we reject petitioner's related argument that 5

NYCRR 11.9 (c) (2), which limits DED's analysis to those benefits

provided for in a business enterprise's BARs, is contrary to

statute (see General Municipal Law § 957 [k]). We perceive no

statutory language or related legislative intent that DED be

required to independently investigate whether an entity has

created more benefits than it had reported (see generally James

Sq. Assoc. LP v Mullen, 21 NY3d at 250-251). Petitioner's

remaining contentions are either without merit or academic. 

Rose, Devine and Clark, JJ., concur.

ORDERED that the judgment is affirmed, without costs.

ENTER:

Robert D. Mayberger

Clerk of the Court

1 Therefore, we do not address the hypothetical question of

whether the Board could have properly excluded benefits provided

by NAS had petitioner accounted for such benefits in its BARs.