Greenberg Traurig’s Nick Hockens testifying on behalf of the applicant before the BSA on March 8, 2016. Image credit: BSA
The transferring property was granted a variance 35 years ago, but the value of the development rights has since sky-rocketed. On March 8, 2016, the Board of Standards and Appeals unanimously voted to grant Charlton Cooperative Corporation’s request for a variance to transfer unused development rights from the applicant’s property, located at 112 Charlton Street, to an adjacent property, located at 108 Charlton Street, in Manhattan’s Special Hudson Square District. Because the site from which the unused development rights would be transferred had previously received a variance, the development rights cannot be transferred without Board approval.
The applicant’s property holds a six-story, mix-used building in a district zoned for residential use. On June 10, 1980, the district was at that time zoned for manufacturing use, and the Board granted a variance to convert five of the six floors of the building from manufacturing use to residential use, excluding the ground floor from such conversion. Thirty-five years later, the applicant requested permission from the Board to transfer the unused development rights for use on an adjacent property in the construction for a new, as-of-right residential development.
The applicant argued that transferring the unused development rights in this situation is appropriate. According to the applicant, transferring the unused development rights in this instance would not undermine the integrity of the Board’s findings in granting the original variance, because the original variance had been granted to allow for residential use, and the unused development rights would be transferred for residential use on a different physical property. Further, the applicant argued that the initial variance had been granted 35 years ago, when the unused development rights were worth much less—so much less, in fact, that at the time the original variance had been granted, the financial worth of the development rights were so low that no valuation price had been included with the original variance. The change in worth of the unused development rights was out of the applicant’s control and could not have been foreseen by the applicant at the time the original variance had been granted.
The Board voted unanimously to grant the applicant’s request to transfer the unused development rights from his property to an adjacent property for residential use. According to the Board, the facts of the case prove that neither the adjacent property owner nor the Board could have foreseen the usage of the applicant’s property at the time the initial variance had been granted 35 years ago. Further, the Board found that since the applicant’s property and the adjacent property are under separate ownership, the applicant could not have predicted or controlled the development activities on the adjacent site to his advantage. Further, the Board acknowledged that 35 years have passed since the applicant’s property received the initial variance, which obviates the fact that the applicant could not have foreseen the value of the development rights on his property increasing in the distant future.
BSA: 112 Charlton Street (1092-79-BZ) (Mar. 8, 2016) (Greenberg Traurig, LLP, for Charlton Cooperative Corp., owner).
By: Jessica Soultanian-Braunstein (Jessica is the CityLaw Fellow and a New York Law School graduate, Class of 2015)