BSA’s decision to deny developer’s request to complete construction was irrational since it had previously granted similar requests. Menachem Realty Inc. submitted professionally certified plans to Buildings for a sixstory residential condominium at 1623 Avenue P in Midwood, Brooklyn. Buildings issued a building permit based on the plans, and Menachem began excavation and foundation work. Before the foundation was completed, Buildings performed an audit of the plans, raised eight objections, and issued a letter stating that the permit would be revoked unless Menachem cured all eight objections. Menachem cured six of Buildings’ objections before the City Council approved a rezoning that changed the property’s zoning district from R6 to R4-1, but failed to resolve two objections. Under the new zoning regulation, Menachem could no longer build the condominium as-of-right. And since Menachem failed to complete the foundation work before the rezoning, the permit lapsed and Buildings issued a stop work order. Shortly thereafter, Buildings revoked the permit because Menachem failed to cure the remaining two objections.
Menachem filed an application with BSA, claiming that it had acquired a right to complete construction given that excavation had been completed and substantial progress had been made on the foundation prior to the zoning change. Before BSA heard the matter, Buildings reinstated the permit since Menachem had cured the two outstanding objections, but later claimed it did so in error. BSA denied the application, ruling that Menachem could not complete construction because the excavation and foundation work had not been performed under a valid permit. BSA determined that the permit was invalid since Menachem failed to cure all outstanding objections prior to Council’s approval of the rezoning. Menachem filed an article 78 petition challenging BSA’s determination.
Justice David Schmidt granted the petition, annulled BSA’s decision, and ordered BSA to renew the permit and award Menachem a six-month extension to complete construction. Schmidt ruled that BSA’s determination was arbitrary and capricious since BSA had treated similarly situated parties in a nonuniform manner. BSA appealed Schmidt’s decision, but the Second Department upheld it, finding that BSA acted irrationally because it failed to distinguish its decision from prior determinations where permits were held to be valid on essentially the same facts.
Menachem Realty Inc. v. Meenakshi Srinivasan, Index No. 9054/07 (2nd Dept. March 17, 2009).