Not your average game of patty-cake! Earlier this week, New York’s First Department, Appellate Division issued its decision related to 200 Amsterdam,1 overturning the lower court’s decision which would have required 200 Amsterdam to remove several floors of its building in order to comply with zoning. The lower court determined that the NYC Zoning Resolution did not permit a developer to utilize a portion of a tax lot to merge with a neighboring zoning lot.

Known as the “gerrymandered zoning lot,” the developer of 200 Amsterdam included portions of neighboring tax lots in its zoning lot in order to transfer air rights from those portions of tax lots to be utilized in 200 Amsterdam’s 55-story development. The inclusion of partial tax lots in a zoning lot is not expressly discussed in the NYC Zoning Resolution, but was permitted by a 1978 Department of Buildings memo. While challenges to 200 Amsterdam started in 2017, the developer moved forward with the construction of its development under lawfully issued building permits.

After losing at the lower court almost a year ago, the developer argued in its appeal that the case was moot because the building was substantially complete. The Appellate Court unanimously overturned the lower court’s decision, in part, saying that because the challengers did not seek injunctive relief at every opportunity, they essentially allowed the developer to continue to construct their building. In fact, the developer spent an additional $50 million during the time of the challenge to substantially complete the building. The Court found that the developer’s “work [] could not be readily undone without undue hardship” – citing from Matter of Weeks Woodland Assn., Inc. v. Dormitory Auth. Of the State of N.Y., 95 AD3d at 747, where the Court held that the challengers’ case was moot when the developer had substantially completed its building with a legally issued building permit, despite an incorrect interpretation of the Zoning Resolution.

Unlike Weeks Woodlands, the Court in 200 Amsterdam found that the developer and the City correctly applied the zoning regulations and that the developer was permitted to include portions of a tax lot in its zoning lot. Yet, as the Court underscored, there is no chance of this situation repeating for developers in the future since the Department of Buildings issued an updated memo prohibiting the practice of allowing portions of tax lots to be included in neighboring zoning lots.

An appeal to the highest court in New York, the Court of Appeals, is not as-of-right where the Appellate Division issued a unanimous decision. The challengers must seek leave to appeal, which is unlikely to be granted.