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Penn Cent. Transp. Co. v. New York City

Citation: 7 ELR 20579
No. No. 273, 366 N.E.2d 1271/10 ERC 1389/397 N.Y.S.2d 914, (N.Y., 06/23/1977) Aff'd

Affirming a lower court decision, 6 ELR 20251, the New York Court of Appeals upholds the landmark preservation status of New York City's Grand Central Terminal and declares that the scheme that would transfer development rights over the terminal to nearby properties is not a taking of private property without due process of law. Appellants planned to construct an office building over the terminal and sought to enjoin enforcement of the city's landmark preservation designation of the terminal as a taking. Noting that the case does not involve zoning, historic district preservation, or an eminent domain taking, the court finds that landmark preservation discriminates against single parcels of property because of their social significance, but owners of commercial property are entitled to a continued reasonable return. The court holds that there is no constitutional imperative that a reasonable economic return for the use of private property embrace governmental and societal investment in the property. The terminal derives much of its return and value from its location, connection with a heavily-subsidized railroad, and access to public transportation routes. Also, income from appellants' nearby property that benefits from its proximity to the terminal may be imputed to obtain a reasonable return on the terminal. Furthermore, the development rights over the terminal may be transferred to appellants' nearby properties. No taking occurs if these substitute rights provide reasonable compensation. Only a regulation that eliminates all reasonable return constitutes a deprivation of property without due process.

Counsel for Appellants
John E. F. Wood, Jon M. Friedman, Peter H. Jacoby
Dewey, Ballantine, Bushby, Palmer & Wood
140 Broadway, New York NY 10005
(212) 344-8000

John M. Johnson, Edna R. Sussman
White & Case
14 Wall St., New York NY 10005
(212) 732-1040

Counsel for Respondent
W. Bernard Richland, Corporation Counsel; Leonard Koerner, L. Kevin Sheridan, Stanley Buchsbaum
Municipal Building, New York NY 10013
(212) 566-3929