The New York Supreme Court Appellate Division’s opinion in HBC Victor LLC v. Town of Victor, No. 23-01347 (Mar. 22, 2024) marks the second time the issue of whether the Town can seize HBC’s property by eminent domain.

The first time out the court shot down the taking, concluding that it lacked a valid public use because the Town did not have a present plan for the property and the resolution of taking did not specify the present purpose other than “redevelopment.” And that isn’t enough.

As you know, that doesn’t mean the end of the line when it comes to eminent domain. As we often used to counsel clients when we did this stuff, beating back a taking on public use grounds just educates the condemnor about the shortcomings. Unlike other civil litigation, there’s no res judicata (sorry kids, that’s what we still call it) in eminent domain, and a condemnor committed to the cause can keep trying and trying until it gets it right. Here’s an example of that.

After being rebuffed, the Town gave it another go. Instead of just saying it was taking the property for “redevelopment” and not identifying a future use, the second time around it said it was taking the property for redevelopment and turn over to tenants who claim they will make better use than the present owner:

Inasmuch as one of the Town’s stated public purposes is to facilitate an economic redevelopment project that would permit the vacant and underutilized property to be turned into space appropriate for lease to an international department store and a grocer, both of which have expressed interest in becoming tenants, we conclude that the Town met its burden of establishing a legitimate public purpose for the condemnation (see Penney Prop. Sub Holdings LLC, 220 AD3d at 1171).

Slip op. at 2. That was good enough for the court because it met the very low standards applicable to public use challenges: “any” use which might contribute to the public health, safety, or welfare. Id. 

True, that wasn’t what the Town said when it first tried to take the property, but the owner’s prior successful challenge made it realize the error of its ways:

Although the Town initially stated at the public hearing that it had not yet determined what it would do with that portion of the property, the Town subsequently narrowed its public use in its determination and findings to a “community and recreation center space to provide for and enhance the Town’s public services” as part of creating a “vibrant, sought-after retail, community and recreation destination” on the property.

Slip op. at 3.

For good measure, the Town threw in its intent to “use a portion of the building for an 11,000-square-foot community and recreation space[.]” Id. That is “a viable public purpose[.]” Id.

The court also made short work of the owner’s claim that the private-to-private transfer made the taking suspect. This is New York, and in New York “it is well settled” that the taking from A to transfer the property to B is just fine, as long as the transfer is part of a redevelopment plan. Finally, the court rejected the owner’s claim that there was no plan. Recall that in Kelo, the U.S. Supreme Court “Euclid-ized” public use by concluding that the private redistribution of property by eminent domain was ok as long as it was part of an “integrated development plan”

It is further argued that without a bright-line rule nothing would stop a city from transferring citizen A’s property to citizen B for the sole reason that citizen B will put the property to a more productive use and thus pay more taxes. Such a one-to-one transfer of property, executed outside the confines of an integrated development plan, is not presented in this case. While such an unusual exercise of government power would certainly raise a suspicion that a private purpose was afoot, the hypothetical cases posited by petitioners can be confronted if and when they arise. They do not warrant the crafting of an artificial restriction on the concept of public use.

The Town’s plan here was its comprehensive plan (you know, the zoning thing). As you land users know, most of these municipal general plans (hat tip Professor Haar) contain generalized statements of long-term goals for land use within the jurisdiction. Pie-in-the-sky sometimes, other times very parcel specific. Which causes us to ask: are any proposed uses incompatible with a general plan?

HBC Victor LLC v. Town of Victor, No. 23-01347 (N.Y. App. Div. Mar. 22, 2024)