Court Opinion

ID: 5800855
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:27:42.462184+00
Date Added: 2024-06-11T08:42:34.401973
License: Public Domain

Lupiano, J. (dissenting).
The historical, aesthetic and cultural significance of Grand Central Terminal is not disputed. Similarly, the contribution of the terminal to the uniqueness of New York City is not subject to polemics. Thus, the designation of Grand Central Terminal as a landmark under the Landmarks Law of New York City is easily countenanced. However, the sole issue to be decided on this appeal is, as aptly phrased by Justice Murphy: "whether plaintiffs have satisfactorily established that the law, as applied to them in this case, imposes such a burden as to constitute a compensable taking”. Such issue narrows down to the impact of the Landmarks Preservation Law on the particular parcel.
Plaintiff Penn Central Transportation Company ("Penn Central”) has a 300-year lease for the terminal. Plaintiff The New York and Harlem Railroad Company is 95% owned by the trustees of Penn Central and is the owner of the fee. The 51st Street Realty Corporation is also a subsidiary of the Penn Central. Subsequent to the designation of the terminal as a landmark, agreements were entered into between Penn Central and UGP Properties^ Inc. ("UGP”) under date of January 22, 1968, whereby UGP was to erect an office building, in keeping with applicable zoning laws, in and above that part of the terminal space now occupied by the waiting room and shops along 42nd Street. UGP engaged the renowned firm of Marcel Breuer & Associates to prepare architectural designs. That firm, winner of many awards for architectural distinction (e.g., awards for the Whitney Museum and the Housing and Urban Development Headquarters Building in Washington, D. C.), designed a high-quality building in compliance with the zoning laws which would not alter the Main Con*276course or any other part of the terminal actually used in railroad operations, would provide ample access for pedestrians and, most significantly, would preserve the facade of the terminal building (Breuer Plan I). In providing for office building space rising above the present terminal frontage on 42nd Street and set back some 30 feet from the facade of the present building, this plan constituted a present-day application of a principle which had been embodied in the original plans for the present terminal building. The original plans called for an office building to be erected over the present facade in essentially the same location as is proposed in Breuer Plan I. The difference is that, in keeping with current building capabilities and practices, the Breuer I design calls for a considerably taller building of more modern design. The removal of certain shops and advertising signs on 42nd Street and the creation of a pedestrian arcade, as envisioned by this plan, was recognized by the Landmarks Commission as considerably enhancing, "if sensitively handled * * * the exterior of Grand Central Terminal by providing a quieter and more dignified base to support the monumental columns that rise from the ramp level. Since the suggested changes in the street level entrances would unquestionably improve pedestrian access to the Terminal and to the subway, these proposals might well be acceptable as a means of perpetuating the use of the Landmark and of protecting its main exterior architectural features”. However, Breuer Plan I was twice rejected by the commission on applications for a certificate of no exterior effect (Administrative Code of City of New York, § 207-5.0) and for a certificate of appropriateness (Administrative Code, § 207-6.0) respectively. The commission in response to the "applicant’s claim that the Pan Am Building has already destroyed the silhouette of the south facade and that the proposed tower, with its granite facing, would either provide a better background or that one more tower could not do further damage” opined that the "great mass of the Breuer I tower right on top of the Terminal facade * * * would reduce the Landmark itself to the status of a curiosity”. An alternative design which came to be known as Breuer II Revised was also submitted. The major difference between the two plans is that Breuer II Revised does not preserve the south facade of the terminal building. A certificate of appropriateness was similarly denied for Breuer II Revised.
At this point, after denial of a certificate of no exterior *277effect and a certificate of appropriateness, owners of landmarks generally would have had available an important administrative remedy: an application for relief (including ultimately the lifting of the landmark restrictions) on the ground of economic hardship. Such relief is denied with respect to the terminal and its site, however, because this part of the law is so drawn as to exclude from its applicability property having partial real estate tax exemption under section 489-ff of the Real Property Tax Law, relating to commuter railroad real property (Administrative Code, § 207-8.0, subd a, par [2]). Property exempt under section 489-ff is one of the few types as to which the Landmarks Law withholds relief and the terminal is the only 489-ff property which has been designated a landmark.
As a consequence, plaintiffs commenced the instant action for declaratory judgment which resulted in a judgment of the Supreme Court, New York County (Saypol, J.), declaring that the Landmarks Law of the City of New York and the actions taken pursuant thereto by the Landmarks Preservation Commission as applied to Grand Central Terminal and its site: (a) constitute a taking of private property for public use without compensation; and (b) deny to plaintiffs due process of law and the equal protection of the laws. Trial Term in its memorandum decision quoted at length from the supplemental report of former Associate Judge John Van Voorhis of our Court of Appeals, serving as Special Master in the reorganization proceedings involving The New York, New Haven and Hartford Railroad Company in the United States District Court for the District of Connecticut. The following excerpt from that report is particularly relevant: "There is, of course, a precedent for this structure in the Pan-American Building located about 200 feet to the north. Whether the opposition to its construction will succeed is not presently known, but it would seem to me, that the probabilities are in its favor. The Grand Central Station is not proposed to be removed, [citation] It is doubtful that the City could insist upon its being maintained at Penn Central’s expense as a memorial to the golden age of railroading. The building, as it is, is expensive to maintain, and even under the broad scope of the police power in modern times it is doubtful that it can be so constricted without there being a taking without payment of just compensation as required by the state and federal constitutions. This is particularly true in view of the similarity and close proximity to the *278Pan-Am Building which, it might be argued, could constitute discrimination denying the equal protection of the law.” Also of particular relevance are the following findings of fact enunciated by Trail Term: "9. The Terminal is deteriorating at a substantial rate. The condition of the Terminal was such that repairs and maintenance work costing approximately $1,278,135 were necessary in June 1972 * * * 25. The Terminal site is a valuable location for an office building. It is in the heart of a commercial area occupied mainly by high-rise commercial structures such as office buildings and hotels * * * 31. If construction of Breuer I had commenced in 1968, the City could have received substantially increased property taxes from commencement of construction. ” (Emphasis supplied.) After further finding that the proposed venture would have been successful and that substantial sums would have accrued to the respective plaintiffs, Trial Term found: "36. For the years 1967 to 1971, the cost to Penn Central of operating the Terminal building itself, exclusive of purely railroad operations, exceeded the revenues received from concessionaires and tenants in the Terminal. 37. The net deficit to Penn Central from operating the Terminal was $1,165,470 in 1969 and $1,902,467 in 1971. 38. As of June 1, 1972, the Metropolitan Transportation Authority leased the Terminal and, together with the Connecticut Transportation Authority, receives all revenues from tenants and concessionaires in it (with the exception of any rent Penn Central would receive under its lease with UGP) and has assumed all costs of operating the Terminal. Penn Central is obligated to pay these agencies $4,500,000 a year for the next five years and $2,000,-000 thereafter. The Metropolitan Transportation Authority received partial reimbursement for these costs from the City.” In light of the agreement which Penn Central found necessary to make with the MTA and CTA and of the maintenance and operating expenses of the terminal far exceeding actual revenues therefrom, it is averred that the denial of the opportunity to profit from the proposed development leaves Penn Central in a position where it cannot make any return on the terminal. Put another way, it is plaintiffs’ contention that the application of the Landmarks Law to this parcel in the manner described above, effectively deprives them of the reasonable beneficial use of their property and thus amounts to a taking. It is aptly observed in Lutheran Church in Amer. v City of New York (35 NY2d 121, 131) that "[t]he landmark *279preservation problem has received considerable comment the net effect of which is general agreement that attempts to designate individual landmarks in high economic development areas is fraught with trouble (see, especially, Costonis, The Chicago Plan: Incentive Zoning And The Preservation of Urban Landmarks, 85 Harv. L. Rev. 574; Wolf, The Landmark Problem in New York, 22 Intramural L. Rev. of N. Y. U. 99).” Although title and use remain in the record owner, Lutheran Church (supra) recognized that in a particular case the Landmarks Law may operate to so severely restrict free use as to be confiscatory. Essentially this is the manner in which Trial Term viewed the problem presented by the instant action.
The majority cite specific instances in which plaintiffs are alleged to have erred in attempting to carry the burden of proving a net operating deficit. First, it is asserted that the "Statement of Revenues and Costs” for the years 1969 and 1971 improperly attribute a considerable amount of railroad operating expenses to their real estate operations. Certain substantial cost items for 1971, such as "maintenance, repairs and service plant operation”, "cleaning”, "policing”, "materials and supplies”, and "utilities”, are criticized for being presented as related to the entire terminal operation rather than segregated as between the railroad and real estate portions thereof. Patently, the tenants and concessionaires who provide the gross revenues of the terminal are there because the terminal is an active railroad station and provides a nexus with public transportation via subway and bus, thus insuring the daily passage of thousands of people. Pragmatically, these tenants and concessionaires can be attracted and retained if the building is operated as a railroad station and is maintained, cleaned, repaired and policed in all its parts. There is, therefore, a basis for claiming that the expense of operating and maintaining the building is a proper expense in ascertaining the profitability or unprofitability of its operation. The insubstantial nature of the criticisms of the "Statement of Revenues and Costs” is evident because excluding all items the defendants, the City of New York and the Landmarks Preservation Commission, claim should be excluded only reduces the deficit from $1,902,467 to $1,089,672. That alone serves to establish the economic burden borne by the terminal. Further, though difficult to apportion, it may not be gainsaid that the value of the "real estate” aspect of the terminal is dependent upon the maintenance of the terminal *280as an area which will be visited for purposes other than transportation.
It is next claimed that plaintiffs’ failure to impute a rental value to the vast space in the terminal devoted to railroad purposes is an error vitiating plaintiffs’ analysis of the property’s capacity to yield a reasonable return. As to this contention, the plain answer is that the defendants’ reliance on Matter of Seagram & Sons v Tax Comm. of City of N. Y. (14 NY2d 314) is misplaced. This case dealt not with income from a building, but with the determination of its appraisal value on the capitalization-of-rents method. Obviously, under those circumstances, rent had to be imputed to owner-occupied space in order to have something to capitalize for that portion of the building. That, of course, is not the case here which is concerned with whether the owner is making any return from his use of his property. Indeed, the Landmarks Law itself in defining "reasonable return” states that for such purposes "[n]et annual return shall be the amount by which the earned income yielded by the improvement parcel during a test year exceeds the operating expenses of such parcel during such year” (Administrative Code, § 207-1.0, subd v, par [3], cl [a]; emphasis supplied). As a matter of economic analysis, the argument treats the terminal as if someone had made a gift of it to Penn Central, The fact is that Penn Central paid its own money for the terminal and to the extent it has been "saved” money for terminal rental, it has lost the interest it would have made if it had never built the terminal or had sold it. These figures of rent and interest on the value of the property are economic equivalents (see La Porte v State of New York, 6 NY2d 1, 7, app dsmd 361 US 116; Albany Country Club v State of New York, 37 Misc 2d 134, 144, mod on other grounds 19 AD2d 199, affd 13 NY2d 1085). Further, it has been held that the imputation of rent does not. create income from property as the term is defined by the Internal Revenue Code (Harper v Granger, 99 F Supp 216). In passing, note is taken of plaintiffs’ point that it is ironic to have the argument made in this case that the present terminal should be assigned an enormous rental value because of the rental values for comparable space in mid-Manhattan. Rental values are high in that area in the context of the owners’ freedom within the zoning laws to develop their property in profitable ways. At issue here is the application of the Landmarks Law in such manner as to deprive the terminal of such value. It may well be *281argued that no one would pay substantial rentals for a lease of the terminal when told that the only use to which he can put it is. an unprofitable railroading use. In this sense the value which defendants would have the court attribute to the property is precisely the value that they have taken away from it.
Next, it is maintained that plaintiffs have failed to satisfactorily show an inability to increase the terminal’s commercial income by transferring vacant or under-utilized space to revenue-producing use. In this context it appears that Penn Central has been assiduous in attempting to increase its terminal income. Indeed, the commercialization of the terminal had reached such a point that one of the things discussed in the proceedings before the Landmarks Commission was the desirability of eliminating some of the concessions which have disfigured the building. The simple assertion that there is room for development of additional office space, stores or recreational facilities is highly speculative. As to existing leases, there is nothing to suggest that they were not negotiated at arm’s length. As to additional development, it is worthy of note that a proposed bowling alley in place of the waiting room failed of approval by the Public Service Commission. Also, a proposed mall failed of accomplishment because of its impingement upon trackage.
Defendants next assert that the claimed hardship based on deferred maintenance expenses, attributable to the Landmarks Law provision (Administrative Code, § 207-10.0) requiring Penn Central to maintain the landmark is spurious. This assertion is seemingly premised on the argument that the Landmarks Law mandates no more than that required by ordinary prudent management for the preservation of the investment. Maintenance is a prerogative of management. To transform that prerogative into a duty is to clearly lessen Penn Central’s estate. It is as though a lien is asserted against the property in the amount necessary to maintain the terminal and it mandates expenditures whether or not justified by the operating statement. Otherwise stated, ownership entitles one to destroy as well as to preserve. Subject to the law of nuisance, inter alia, the vehicle of destruction may be neglect. To require maintenance or improvements may be an idea whose time has come, but it may not be required solely of landmarks, and not in the context of additional burdens or restrictions upon the parcel which on a pragmatic economic *282and financial basis cannot be complied with. Though not here in issue, notice may be taken of the fact that criminal penalties attach to the failure to maintain a landmark.
It is further asserted by defendants that the agreements with the MTA and the CTA referred to above, were improperly found by Trial Term to impose a loss in that Penn Central must pay additional sums to those agencies. Review of the historical background of those agreements impels the conclusion that defendants’ contention is without merit. Approximately two years prior to any agreement with the MTA, Penn Central acquired all the assets of the New Haven Railroad, specifically including all the New Haven’s interest in the off-terminal (Park Avenue) properties. For this interest Penn Central was charged more than $28,000,000. At the same time, Penn Central became responsible for all the operations and operating deficits of the New Haven. Therefore, when Penn Central and the MTA negotiated their agreements, the New Haven was in essence a mere corporate shell. There were no assets of the New Haven to which the MTA could "succeed” and the MTA in fact acquired nothing from the New Haven. Defendants, though acknowledging that all revenue inures to the benefit of the MTA and that all costs are borne by the MTA, aver that the $2,000,000 credit against expenses incurred is in reality a sum due the MTA as the successor in interest to the New Haven. During the time when the New Haven still held an interest in the off-terminal properties and their revenues, these revenues had been applied towards offsetting the operating deficits of the terminal and, if any excess remained, the New Haven asserted a claim to a share of the excess. It was thought equitable for Penn Central to contribute towards the operating deficits of the terminal an amount roughly equivalent to the part of the off-terminal revenues which had formerly been applied towards New Haven’s share of the terminal expenses. Penn Central’s acquisition of the part of the off-terminal revenues which was "not excess” was accompanied by its assumption of the very expenses (formerly the obligations of the New Haven) against which the nonexcess revenues had been applied. No benefit was derived from the simultaneous acquisition of a debit and a credit in equal amounts. Thus, the credit of $2,000,000 provided by Penn Central to the MTA did not come out of the assets of the New Haven to which the MTA had succeeded and the agreements between Penn Central and the MTA *283delineate that this credit is to come out of Penn Central’s own ássets and is specifically applied towards operating expenses of the terminal.
The other credit of $2.5 million per year for five years required to be provided by Penn Central in connection with the operation for MTA’s account of the Harlem-Hudson Division is not related to the terminal. The operating agreements were not entered into for the benefit of Penn Central, but for the purpose of maintaining commuter service. While Penn Central may have been able to meet operating deficits, it may also have been able to discontinue commuter service. The $2.5 million credit was the price it paid for withdrawal from commuter service. Viewed in this context, the credit is chargeable not to the operation of the terminal, but to the Penn Central itself. However, this does not alter the fact that the several agreements leave Penn Central with no possible source of return from the terminal, save development rights.
The majority view the plaintiffs as having failed to satisfactorily show that unused development rights over the terminal could not have been profitably transferred to one or more nearby sites (see New York City Zoning Resolution, § 74-79 et seq.). The transfer resolutions authorize the City Planning Commission to grant special permits, if certain conditions are met, allowing the transfer of development rights from a landmark site to adjacent sites. As originally enacted, they neither provided compensation nor significantly mitigated plaintiffs’ harm. Defendants acknowledged that development rights are not ipso facto equated with compensation when the zoning resolution was amended in 1969 to expand the number of sites that could receive transfers of development rights from the terminal site. Moreover, as defendants themselves note, the process of transfer is fraught with obstacles. The City Planning Commission and the Board of Estimate must approve. Neighbors may resort to the courts to protest the erection in their vicinity of a structure which does not comport with the zoning resolution. For these and numerous other reasons it is difficult to assign a monetary value to the transfer rights. However, not content with merely asserting the general value of transfer rights, defendants detail the economic benefit to be derived from a transfer to the Biltmore Hotel site. This, of course, requires the demolition of the Biltmore Hotel, a viable profit-making entity and ignores the fact that the vast square footage could not be transferred to *284any adjacent site, unless the Biltmore site was to be occupied by a 103-story structure. In the context of this discussion, it ill-behooves defendants to in effect control the deployment of the Penn Central’s financial resources and usurp its management prerogative. In light of the substantial costs that may attend the transfer of development rights because the landmark owner must submit a program for continuing maintenance of the landmark as part of his application for the special permit, the value of the development rights are less attractive.
It is, therefore, concluded on the record herein that plaintiffs have sustained their burden of demonstrating that the terminal site, as restricted, is incapable of producing a reasonable economic return. Concededly the operation of the terminal represents an economic hardship. Conjecture that Penn Central could have "done better” may not operate as a talisman in the resolution of this matter. It is only required that Penn Central do the best it can. The possible transfer of development rights cannot be viewed under the circumstances herein as offsetting the restrictions placed on the terminal site. The benefits to both the city and the citizenry to be derived from the designation of the terminal as a landmark are self-evident. Yet in the manner of its application as delineated above, lies the inequity of this particular case. The terminal is to be preserved in its pristine state for the benefit of all and the bill for this is presented solely to Penn Central. Assuming the terminal is and represents all that defendants claim (an assumption easily indulged in), the relevant considerations and circumstances may well warrant resort to the power of eminent domain as an appropriate solution. If for cogent reasons resort to such power is not feasible, defendants may have to forego this particular objective. In this connection, it should be noted that Breuer I appears to be more suited to a compromise of the rival interests of defendants and of plaintiffs. Further, if the power of eminent domain is deemed here inappropriate, society is left with an inchoate right. .
At this point the following lengthy excerpt from the Court of Appeals opinion in Forster v Scott (136 NY 577, 583-585 [1893]) is most apt:
"The constitutional guarantees against the appropriation of. private property for public use, except upon just compensation, as well as that against depriving the owner of its enjoy*285ment and possession without due process of law, have been the subject of much judicial discussion in the manifold aspects in which the questions have been presented in the numerous cases * * * The validity of a law is to be determined by its purpose and its reasonable and practical effect and operation, though enacted under the guise of some general power, which the legislature may lawfully exercise, but which may be and frequently is used in such a manner as to encroach, by design or otherwise, upon the positive restraints of the Constitution. What the legislature cannot do directly, it cannot do indirectly, as the Constitution guards as effectively against insidious approaches as an open and direct attack. Whenever a law deprives the owner of the beneficial use and free enjoyment of his property, or imposes restraints upon such use and enjoyment, that materially affect its value, without legal process or compensation, it deprives him of his property within the meaning of the Constitution. All that is beneficial in property arises from its use and the fruits of that use, and whatever deprives a person of them deprives him of all that is desirable or valuable in the title and possession. It is not necessary, in order to render a statute obnoxious to the restraints of the Constitution, that it must in terms or in effect authorize an actual physical taking of the property or the thing itself, so long as it affects its free use and enjoyment, or the power of disposition at the will of the owner. Though the police and other powers of government may sometimes incidentally affect property rights, according to established usages and recognized principles familiar to courts, yet even these powers are not without limitations, as they can be exercised only to promote the public good, and are always subject to judicial scrutiny. [Citations omitted.]
"As the plaintiff in the case at bar was virtually deprived of the right to build upon his lot by the statute in question, and as this circumstance obviously impaired its value and interfered with his power of disposition, it was to that extent void as to him, and created no encumbrance upon it.”
Manifestly, the competing meritorious interests of the city and the Landmarks Preservation Commission in seeking to preserve the historical, aesthetic and cultural heritage represented by Grand Central Terminal and the interest of Penn Central as owner in the free use of its property unburdened by restrictions imposed by the former under circumstances and in such manner as to be confiscatory in nature, must be *286reconciled. It is submitted that given the present economic conditions prevalent in New York City and, indeed in the United States, given the financial situation of Penn Central with due regard for the reasonable efforts on the part of management to obtain an adequate return on the property at issue, and given the grandeur of the terminal, somewhat faded in the physical sense but fully vital from an historical and cultural perspective, Breuer I represented a patently good faith effort to do homage to the terminal within the ambit of its landmark designation, and at the same time to recognize the prerogative of private ownership and the economic necessities of this commercial parcel.
In the amicus curiae brief submitted on behalf of the Committee to Save Grand Central Station, et al., it is stated that "[regulation for the purpose of the preservation of * * * [landmarks] has been upheld in all states where the matter has been tested in court”, citing in support of this proposition the following: City of New Orleans v Levy (223 La 14); Opinion of the Justices to the Senate (333 Mass 773); Opinion of the Justices to the Senate (333 Mass 783); City of Santa Fe v Gamble-Skogmo (73 NM 410); Town of Deering ex rel. Bittenbender v Tibbetts (105 NH 481); Rebman v City of Springfield (111 Ill App 2d 430); Bohannan v City of San Diego (30 Cal App 3d 416). A reading of these cases indicates that, with one exception, each case was concerned with the preservation of a district, not an individual parcel. This is so analogous to zoning that the statutory scheme is oft referred to as zoning. The one exception was a prohibition against the erection of any building within Va mile of the town common unless the plans were approved (Town of Deering ex rel. Bittenbender v Tibbetts, supra). Again, hardly the sort of taking here present. We refer again to the Court of Appeals decision in Lutheran Church in Amer. v City of New York (35 NY2d 121, supra), wherein it was observed in the able opinion, per Gabrielli, J. that zoning regulation is different than, and not to be equated with, landmarks preservation. Nevertheless, the court proceeded to demonstrate that even zoning is void if confiscatory. Further, it is confiscatory if it may fairly be stated that the regulation serves to add property remaining in private hands to the government’s resources. Citing Forster v Scott (136 NY 577, supra), the court also noted that a statute which affects the free use and enjoyment of property or the power of disposition at the will of the owner is "obnoxious to the *287restraints of the Constitution” (Lutheran Church in Amer. v City of New York, supra, p 130). "What has occurred here, however, where the commission is attempting to force plaintiff to retain its property as is, without any sort of relief or adequate compensation, is nothing short of a naked taking” (Lutheran Church in Amer. v City of New York, supra, p 132; emphasis supplied). It thus appears that Mr. Justice Saypol correctly analyzed the opinion of the Court of Appeals and that severe criticism of the Justice in this respect by defendants is unwarranted. Of particular note is the fact that in Lutheran Church, the landowner wished to demolish the mansion which had been designated a landmark and to accomplish this purpose it was necessary to have the "landmark designation” itself removed. It was "uncontested that the existing building [was] totally inadequate for [the landowner’s] legitimate needs and must be replaced if [the landowner] is to be able freely and economically to use the premises especially as it appears that adjoining structures have been integrated with [the landowner’s] operation” (Lutheran Church in Amer. v City of New York, supra, p 132). However, the declaratory judgment action initiated by plaintiffs herein has its inception not in a desire to demolish the landmark, but rather to alter it; that is, to use it in a manner which will insure a reasonable economic return while preserving the landmark in a feasible and consonant manner. To phrase it another way: plaintiffs desire to build an office tower over the landmark and not to remove the landmark and replace it with such office tower. Consequently, the declaratory relief afforded by the Supreme Court must be viewed as not removing the "landmark designation” from the terminal, but rather perceived as holding that the manner of applying such designation as above delineated, constitutes a taking of plaintiffs’ private property for public use without just compensation. It is beyond cavil that if defendants, especially the Landmarks Preservation Commission, acted favorably in respect of any of the plaintiffs’ applications seeking to construct the tower, the instant action would not have been maintained. By virtue of the fact that plaintiffs retained an outstanding architect firm and even submitted Breuer I which retains the famed south facade of the terminal, their good faith in coming to terms with the landmark designation has been exhibited. The presence of the Pan Am Building and the fact that the original plans for the present terminal envisioned an office tower over such terminal militate in persuasive fashion against the de*288fendants’ intransigent position. In this context, such rigid application of the Landmarks Law designation may well be self-defeating. Self-defeating not only because it calls into question the propriety of such law, but also because the individuals who designed, built, indeed underwrote the great structures now deemed worthy of designation as landmark, undoubtedly did so for a variety of reasons, among which was their intention to profit therefrom. Is it not reasonable to assume that if the result of structural distinctiveness is to be a lessening of the entrepreneurial estate, there may well be no structures to designate as landmarks in the years to come?
Defendants claim that Trial Term erred in declaring that the Landmarks Law as applied to plaintiffs denies them the equal protection of the laws. It will be recalled that Penn Central is precluded from seeking relief available to others because of its receipt of a partial real estate tax exemption. The statutory scheme, without explanation therefor, treats differently three classes of landmark owners. Penn Central is relegated to that category which cannot obtain relief from the Landmarks Law. Moreover, as demonstrated by plaintiffs, there is neither a common thread nor a common sense segregation of classes of property. It is this feature which denies to plaintiffs the equal protection of the laws. The power of classification cannot be arbitrarily exercised. The distinctions made must have some reasonable basis (Rosenthal v New York, 226 US 260; cf. Matter of Brown v Board of Trustees of Town of Hamptonburg, School Dist. No. 4, 303 NY 484).
The remaining contentions raised by defendants have been considered and found to be without merit. Accordingly, the order and judgment of the Supreme Court, New York County (Saypol, J.), entered respectively on January 21, 1975 and February 4, 1975 declaring that the Landmarks Law of New York City and the actions taken pursuant thereto by the Landmarks Preservation Commission as heretofore applied to Grand Central Terminal and its site: (a) constitute a taking of private property for public use without compensation; and (b) deny to plaintiffs due process of law and the equal protection of the laws, should be affirmed, with costs and disbursements.
Stevens, P. J., and Kupferman, J., concur with Murphy, J.; Markewich and Lupiano, JJ., dissent in an opinion by Lupiano, J.
Order and judgment, Supreme Court, New York County, *289entered on January 21, 1975 and February 4, 1975, and all findings of fact and declarations of law inconsistent with the opinion of this court, reversed, on the law and the facts, said order, judgment and findings vacated, and judgment directed to be entered declaring that plaintiffs have failed to establish that the New York City Landmarks Preservation Law is unconstitutional as applied to them. Appellants shall recover of respondents $60 costs and disbursements of these appeals.
Settle order on notice providing, inter alia, for new findings of fact consistent with the opinion of this court.