Opinion ID: 47
Heading Depth: 1
Heading Rank: 4

Heading: Relevant Considerations for Evaluating Availability

Text: In addition to challenging the date of inquiry used by the District Court, TJS objects to the legal standards employed by the District Court to evaluate the adequacy of potential alternative sites. Specifically, TJS contends that the District Court applied legally erroneous standards in deciding whether sites identified by the Town of Smithtown were available, and that the Court improperly prohibited testimony by TJS's expert witness intended to address the question of availability. We will not review particular evidentiary rulings that were made by the District Court in the course of a trial whose result we are vacating. We also express no opinion as to the ultimate merits of this case and the question of whether adequate alternative locations for adult businesses exist in Smithtown. This question turns on a fact-specific inquiry that the District Court will undertake on remand. We do, however, deem it appropriate to address TJS's more general challenge to the standards employed by the District Court to determine whether certain sites are available. This issue has already been briefed by both parties and argued to this Court, and it is almost certain to recur in this case. Our review of the District Court's legal conclusions is de novo. See Am. Booksellers Found. v. Dean, 342 F.3d 96, 100 (2d Cir.2003); see also David Vincent, 200 F.3d at 1333 (explaining that while a district court's calculation of the number of sites available for adult business under a zoning law is a factual finding reviewed for clear error, a court's methodology in making that calculation is a question of law). The Supreme Court has not precisely delineated the relevant factors for determining whether potential relocation sites are reasonably available, but it has identified certain factors as categorically irrelevant. In Renton, the Court concluded that the 520 acres that the city left open for use by adult theater sites constituted reasonable alternative avenues of communication. 475 U.S. at 53, 106 S.Ct. 925. Those 520 acres consisted of ample, accessible real estate, including acreage in all stages of development from raw land to developed, industrial, warehouse, office, and shopping space that is criss-crossed by freeways, highways, and roads. Id. (alterations and internal quotation marks omitted). Reversing the Court of Appeals, the Supreme Court rejected the argument that much of this land was not truly available because sites were already occupied by existing businesses, not currently for sale or lease or otherwise not commercially viable. Id. at 53-54, 106 S.Ct. 925 (internal quotation marks omitted). In doing so, the Court made it clear that whether the acquisition and use of land might be unprofitable or commercially impracticable was not relevant to its concept of availability. See id. at 54, 106 S.Ct. 925 ([W]e have never suggested that the First Amendment compels the Government to ensure that adult theaters, or any other kinds of speech-related businesses for that matter, will be able to obtain sites at bargain prices.). Following Renton, federal courts have based the availability inquiry on whether proposed sites are physically and legally available, and whether they are part of an actual commercial real estate market in the municipality. See Hickerson, 146 F.3d at 106-07 (quoting Stringfellow's, 671 N.Y.S.2d 406, 694 N.E.2d at 417). Several factual considerations underlie the question of whether sites are part of an actual real estate market. One factor is the the pragmatic likelihood of [sites] ever actually becoming available, id. at 106, 671 N.Y.S.2d 406, 694 N.E.2d 407, to a generic commercial enterprise. Though Renton does not require relocation sites to be actuallyas opposed to potentiallyavailable, the requirement of potentiality connotes genuine possibility. Topanga, 989 F.2d at 1531. Other significant factors relating to sites' physical characteristics include their accessibility to the general public, the surrounding infrastructure, ... and ... whether the sites are suitable for some generic commercial enterprise. Hickerson, 146 F.3d at 106 (internal quotations omitted). Sites that meet these criteria can qualify as available, even if they are in industrial or manufacturing zones. See Tollis, Inc. v. County of San Diego, 505 F.3d 935, 941 (9th Cir.2007). Additionally, the need for a site to be developed before an adult entertainment business can relocate does not render the site unsuitable. See David Vincent, 200 F.3d at 1334. This does not mean that any site that is legally available under a municipality's zoning laws is necessarily suitable simply because the possibility of development or alteration theoretically exists. Where the physical features of a site or the manner in which it has been developed are totally incompatible with any average commercial business, Topanga, 989 F.2d at 1532, or the site lacks the basic infrastructure that is a precondition to private development, it should not be considered part of the relevant real estate market for purposes of determining availability. See Woodall v. City of El Paso, 49 F.3d 1120, 1124 (5th Cir.1995) ([I]n determining whether there are sufficient sites available, the finder of fact may exclude land under the ocean, airstrips of international airports, sports stadiums, areas not readily accessible to the public, areas developed in a manner unsuitable for any generic commercial business, areas lacking in proper infrastructure, and so on.). On the other hand, it is clear under Renton that whether or not sites fit the specific needs of adult businessesor any other precise type of commercial enterpriseis constitutionally irrelevant. See Renton, 475 U.S. at 54, 106 S.Ct. 925; Topanga, 989 F.2d at 1531 ([W]hen a relocation site suits some generic commercial enterprise, although not every particular enterprise, it ... may be said to be part of the real estate market.). If sites are part of the commercial market generally, they are available even if they are not commercially viable for adult business specifically. See Isbell, 258 F.3d at 1113. TJS does not object to this formulation for determining availability, but rather argues that the category some generic commercial enterprise includes only classes of businesses similar in physical characteristics to an adult entertainment business, such as CVS Pharmacy, Wendy's and Blockbuster Video. Appellant's Br. at 16-17. Therefore, TJS contends, a fact-finder must exclude from consideration any site that is best suited for a big box enterprise, such as sites that are part of a large or expensive tract of land or sites zoned for industrial or warehouse usage as well as for general commercial enterprises. For example, TJS argued to the District Court that a six and three-tenths acre site (Site 17) occupied by an automobile dealership was not available because it was too large ... too expensive... and not pragmatic for TJS. TJS, 2008 WL 2079044, at . TJS advanced similar objections to other sites. [8] The District Court rejected TJS's argument, reasoning that a site is not unsuitable simply because it is better suited for some other commercial or industrial use. See id. at  & n. 1. The District Court therefore considered these sites available for the purpose of assessing adequacy. We find that the District Court articulated and applied the correct standard for availability. TJS's objections to the physical size of sites and to the nature of the businesses currently operating at certain sites ultimately reduce to complaints about economic impact and commercial viability. Even if we granted that certain identified sites were better suited to large businesses, like automobile dealerships, than they were to small retail stores, it would not follow that these sites would not be part of a general commercial real estate market. It would mean only, and quite unremarkably, that there are sites that would be more profitable locations for some commercial businesses than for others. As we have explained, the possibility that sites will be unprofitable or commercially unviable for adult businesses like TJSor even for nonadult businesses that are similar in sizeis not relevant to the availability inquiry. The ideal lot [for a particular type of business] is often not to be found. David Vincent, 200 F.3d at 1334. An adult entertainment establishment must compete for commercial real estate like any other market participant. And, like for other market participants, the physical size or nature of the business may affect the availability of commercially viable sites or the willingness of property owners to sell or lease to them. There are, in short, inevitable impediments to a business's relocation. But obstacles such as the possibility of making due with less space than one desired, or having to purchase a larger lot than one needs, do not render property unavailable for the purpose of constitutional analysis. Id. at 1335. Alternative sites need only be available, not attractive. Essentially, TJS attempts to avoid the logic of Renton and the prohibition against consideration of economic impact, Topanga, 989 F.2d at 1529, by asking us to subdivide the real estate market. TJS does not dispute that sites that are not viable for adult entertainment businesses may still be available. Rather, as outlined above, it argues that the test for whether a site is part of an actual market depends on whether the site is suitable for businesses that share similar characteristics to adult entertainment businesses. We find no support for such an approach, and we decline to adopt it. Indeed, courts have repeatedly insisted that sites are part of an actual real estate market if they are potentially suitable for commercial enterprises generally, not for a particular subset of commercial enterprises. See, e.g., Z.J. Gifts D-4, L.L. C. v. City of Littleton, 311 F.3d 1220, 1240 (10th Cir.2002) (refusing to exclude categorically warehouses and other large-scale manufacturing uses from the availability calculation because, under Renton, industrial, warehouse, office, and shopping space[s] were included in the list of divers[e] properties available for adult businesses) (emphasis omitted), rev'd on other grounds, 541 U.S. 774, 124 S.Ct. 2219, 159 L.Ed.2d 84 (2004); Isbell, 258 F.3d at 1113 (rejecting argument by adult business that parcels occupied by car dealerships or plumbing supply outlets were not part of the relevant business real estate market because the parcels were not economically suitable, and indicating that `it is not relevant whether a ... site will result in lost profits, higher overhead costs, or even prove to be commercially infeasible for an adult business' (quoting Topanga, 989 F.2d at 1531)). That some sites are simply bigger than TJS desires and more expensive than it wishes does not render them unsuitable for some generic purpose or remove them from the general real estate market. We are unconvinced by TJS's admonition that adult entertainment businesses will cease to exist if local governments are allowed to recognize large lot sizes as available alternatives for relocation. See App. Br. at 16. Even leaving aside the legal irrelevance of commercial viability concerns under Renton, TJS's contention that smaller commercial enterprises cannot possibly locate on larger lots is speculative. TJS ignores, for instance, the District Court's findings that certain large sites could be subdivided, and that current property owners could sublet portions of their property to smaller businesses. See TJS, 2008 WL 2079044, at  15, 17-18; see also MJ Entm't Enters., Inc. v. City of Mount Vernon, N.Y., 328 F.Supp.2d 480, 484 (S.D.N.Y.2004) (recognizing that sites that are currently in use are available despite the fact that the sites would have to be acquired or leased, and even subdivided). Of course, it is possible that other businesses may not wish to locate next to an adult entertainment business like TJS or to sublease to one. But the First Amendment is not concerned with restraints that are not imposed by the government itself.... It is of no import under Renton that the real estate market may be tight ... or that property owners may be reluctant to sell to an adult venue. David Vincent, 200 F.3d at 1335. In endorsing the District Court's legal standards for the evaluation of availability, we do not ourselves now find that particular sites are or are not available. Because the District Court did not measure adequacy at the time the ordinance was challenged, we decline to speculate as to whether sites potentially available at that time provided sufficient alternatives. On remand, the District Court will determine whether there are currently adequate alternatives for relocation in Smithtown. See supra page 20 n. 2, 9. We hold only that TJS's challenge to the District Court's legal standard for determining availabilityand more specifically its challenge to the District Court's definition of generic commercial enterpriselacks merit.