Court Opinion

ID: 5875965
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:59:26.069101+00
Date Added: 2024-06-11T08:44:51.334376
License: Public Domain

OPINION OF THE COURT
Bloom, J.
The controversy before us involves a claim, by Kenvic and 875 Third Associates (collectively Kenvic), on the one hand, and plaintiff on the other, to the same air rights. We are, in the main, in accord with the conclusions reached by Special Term. In one respect only do we differ. We are of the opinion that the motion of the city to dismiss should have been granted.
Kenvic is the fee owner of 13 contiguous tax lots fronting on the easterly side of Third Avenue between 52nd and 53rd Streets. It and its associates have owned the property since at least 1976. Plaintiff is the ground lessor of the corner tax lot at 53rd Street under a lease which commenced in 1959 and which, together with an extension, expires in 1993.
In 1980, application was filed by Kenvic for merger of the 13 tax lots into a single zoning lot, in accordance with the provisions of the Zoning Resolution. The application wended its way through the various necessary city agencies as required by the Uniform Land Use Review Procedure Act. Ultimately, it was given final approval by the Board of Estimate. During this period negotiations were conducted with the city for the erection of an office building, pursuant to which Kenvic agreed to provide for a connecting tunnel between the proposed building and the IND subway station located at 53rd Street and-Third Avenue. It also agreed that when the ground lease now held by plaintiff expired, the building would be demolished and a new building would be erected which, at least in part, would be devoted to some public purpose.
The plans submitted by Kenvic provided for the erection of a 29-story building on the zoning lot created by the merger of the 13 tax lots owned by it in fee. These plans were approved by the city authorities. Under the Zoning Resolution, the allowable gross area of a building is computed on the basis of the square footage of the zoning lot augmented by a multiple fixed by the Resolution for the zoning area. In the instant case, this basis for *491computation would have allowed for the erection of a 29-story office building on the area held in fee by Kenvic, i.e., the zoning lot. The plans approved called for such a building which was in fact erected. Had the 13 tax lots not been united into a single zoning lot, the maximum gross area of the proposed building would have been less. The cost of the building was some $87 million, financed by a temporary loan from Chase Manhattan Bank, N. A., and a permanent mortgage from John Hancock Mutual Life Insurance Company. The additional gross area for the building which was erected by Kenvic is accounted for by the air rights allocable to the lot under ground lease to plaintiff.
Initially, plaintiff sought a declaration that the merger of the tax lots into a single zoning lot was contrary to law and null, void, and of no effect whatsoever. It has now abandoned the claim for such declaratory relief and seeks damages only for the alleged usurpation by Kenvic of plaintiffs’ alleged air rights. Special Term held that it was not entitled to such damages and granted summary judgment to Kenvic and its associate respondents. We agree. Since the damage claim has no application to the city, the city’s motion to dismiss should also have been granted by Special Term.
Under Zoning Resolution § 12-10 as it existed from 1961 to 1977, a zoning lot was defined as either:
“(a) A lot of record existing on the effective date of this resolution or any applicable subsequent amendment thereto, or
“(b) A tract of land, either unsubdivided or consisting of two or more contiguous lots of record, located within a single block, which on the effective date of this resolution or any applicable subsequent amendment thereto, was in single ownership, or
“(c) A tract of land, located within a single block, which at the time of filing for a building permit (or, if no building permit is required, at the time of filing for a certificate of occupancy), is designated by its owner or developer as a tract all of which is to be used, developed, or built upon as a unit under single ownership.” (Emphasis in original.)
The section further provided that a zoning lot need not coincide with a lot as shown upon the official tax map. It also provided that “ownership of a zoning lot shall be deemed to include a lease of not less than 50 years duration, with an option to renew such lease so as to provide a total lease of not less than 75 years duration.”
Thus, the Zoning Resolution as enacted in 1961 was susceptible of the interpretation that air rights were possessed both by *492the fee owner and the ground lessor. However, when the ground lease was for a total period of less than 75 years’ duration the ground lessor could not transfer his air rights. Given these circumstances, it was inevitable that a clash would arise between the owner and the ground lessor over air rights. Such a clash did occur in Newport Assoc, v Solow (30 NY2d 263, cert denied 410 US 931). In that case the roles of the parties were reversed. The plaintiff was the fee owner. The defendant was a long-term ground lessor of property immediately adjacent to the property of the fee owner. The ground lessor also owned the fee to contiguous property. He decided to build on the property owned by him. In computing the maximum gross area of the proposed building he added the air rights of the property held by him as ground lessor. In resolving the clash, the Court of Appeals held that so long as no one had exercised the air rights, each was free to exercise them and to build to the maximum height allowed by law. Once, however, one of the contending parties utilized the air rights over the leased property, the other contending party was shorn of all such rights. In short, the laurel wreath went to the one first to exercise the right (see, concurring opn of Breitel, J., 30 NY2d, at pp 268-269).
In 1977 the Zoning Resolution was amended to eliminate the condition that a ground lessor was required to have an interest in the property of at least 75 years’ duration in order to support the alienation of air rights. However, to avoid the possibility of vexing constitutional questions, the framers of the amendment “grandfathered” the rights of the parties. Inasmuch as both plaintiff and Kenvic held their interest in their respective properties prior to the amendment, they are both bound by the law as it then existed. Accordingly, Solow (supra) is applicable. Indeed, the case before us is stronger than Solow, for here the ground lease is for a period of less than 75 years. Hence, although plaintiff could use those rights during the period of its lease, it never had the power to transfer them.
Moreover, the 1977 amendment to Zoning Resolution § 12-10 defined zoning a lot as either: “(b) A tract of land, either unsubdivided or consisting of two or more contiguous lots of record, located within a single block, which, on the effective date of this resolution or any applicable subsequent amendment thereto, was in single ownership”. Inasmuch as all 13 tax lots were at the time in single ownership, Kenvic was entitled to have all 13 tax lots designated a single zoning lot. Hence, the square footage of the zoning lot determined the allowable gross area of the building erected and there was no encroachment on plaintiff’s air rights, either under the Zoning Resolution as it *493existed in 1961 or the amendment of 1977 (cf. Matter of Friends of Shawangunks v Knowlton, 64 NY2d 387).
Finally, we note that the city fits into the picture only insofar as it may be called on to issue building permits for the land under ground lease, permitting the erection of structures by the ground lessor to a height to which it claims to be entitled to build. Initially, the ground lessor contended that building to such height was economically feasible and presented architectural plans indicating its intention to do so. At a conference called by Special Term that position was abandoned. In lieu thereof plaintiff urged its right to tear down the two walk-up tenements now on the lot and to erect a replacement building to the same height. When Special Term noted that nothing prevented the ground lessor from so doing, it abandoned that contention and retreated to a claim solely for damages. Such a claim, even if viable against Kenvic, and we have indicated that it is not, has no place against the city. By consequence, the city’s motion to dismiss the complaint should have been granted.
Accordingly, the resettled order and judgment (one paper) of the Supreme Court, New York County (Martin Evans, J.), entered May 3, 1984, which granted the motion of defendants Kenvic Associates and 875 Third Associates, and the cross motions of Chase Manhattan Bank, N. A., John Hancock Mutual Life Insurance Company and Debevoise & Plimpton, all for summary judgment; denied the motion of defendant the City of New York to dismiss the complaint as against it and denied plaintiffs’ cross motion for partial summary judgment, should be modified, on the law, to the extent of granting the motion of the city to dismiss and, except as so modified, affirmed, without costs. The appeal from the order of the Supreme Court, New York County (Martin Evans, J.), entered March 1, 1984, should be dismissed as subsumed.