Overview
In a complaint filed yesterday, the owners of Grand Central terminal accuse New York City of changing the zoning rules to effectively give away their' "air rights" and other "transferrable development rights" (TDRs), so that a private developer, SL Green, could build a new office tower. The plaintiffs claim that this was a classic "taking" under the Constitution, requiring that they be compensated by over $1 billion:
[U]nder prior zoning, in order to build its 1400 foot office tower, SL Green would have been required both to make improvements to the local transit and pedestrian network and to acquire Grand Central Terminal TDRs. With the new zoning, SL Green now can construct its office tower solely by making the infrastructure improvements, thus eliminating the need to acquire any Grand Central Terminal TDRs. The rezoning effected the same change for the other sites in the Vanderbilt Corridor. As a result, [plaintiff's] TDRs are now effectively unsellable and therefore worthless. Thus, the City’s “zoning” took from Midtown the entire value of the Grand Central TDRs and transferred over $475 million of that value to SL Green, for no purpose other than to reduce SL Green’s costs and increase its profits in constructing an office tower that it was going to build anyway. In doing so, the City took away from Grand Central’s owner the very value of the TDRs . . . ., with the sole purpose and outcome of benefitting a private real estate developer. This is a classic violation of the Public Use clause of the Fifth Amendment to the Constitution -- taking the property of a private citizen for the benefit of another private citizen without any public purpose.The New York Times story on the suit is here. The case has not been assigned to a judge yet. [UPDATE: The case was assigned to Judge Gardephe.]
