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

Citation: 8 ELR 20528
No. No. 77-444, 438 U.S. 104/11 ERC 1801/(U.S., 06/26/1978) Aff'd

The Supreme Court affirms a New York Court of Appeals ruling, 7 ELR 20579, that the restrictions imposed under New York City's Landmarks Preservation Law on Penn Central's right to construct an office building above Grand Central terminal do not constitute a taking of private property. Justice Brennan, writing for a 6-3 majority, notes that whether a taking has occurred is essentially an ad hoc factual inquiry in each case. Factors of particular significance in this inquiry are the economic impact of the regulation on the claimant and the character of the governmental action. The restrictions imposed under the Landmarks Law do not prevent Penn Central from continuing to obtain a "reasonable return" on its investment through its current uses of the terminal. Moreover, the city's action in making the development rights in the air space above the terminal transferable to other parcels in the vicinity mitigates whatever financial burden the restriction on construction over the terminal itself may have imposed on Penn Central. The Court rejects the contention that historic or landmark preservation laws are inherently arbitrary, noting that actions taken under the law in this case were pursuant to a comprehensive plan and that judicial review of such actions was available. Penn Central's contention that it is solely or disproportionately burdened by the landmark restrictions is likewise erroneous in view of the large number of additional landmarks that have been designated by the city and the basic zoning principle that legislation to promote the general welfare may permissibly burden some properties more than others. Nor do the restrictions constitute an appropriation of the air space above the terminal for a strictly governmental purpose.

In dissent, Justice Rehnquist argues that a taking has occurred because Penn Central, by being prohibited from making an otherwise lawful use of its property, has been required to bear the entire cost of preserving the terminal as a public landmark. The case should, in his view, be remanded for a determination of whether the transferable development rights given Penn Central are the full equivalent of the property taken.

Counsel for Appellant
Daniel M. Gribbon, John R. Bolton
Covington & Burling
888 16th St. NW, Washington DC 20006
(202) 452-6118

Counsel for Appellees
W. Bernard Richland, Corp. Counsel; Stanley Buchsbaum, L. Keven Sheridan, Leonard Koerner
Municipal Bldg., New York NY 10007
(212) 566-3322

Counsel for Amici Curiae National Trust for Historic Preservation, et al.
David Bonderman, Robert A. Garrett
Arnold & Porter
1229 19th St. NW, Washington DC 20036
(202) 872-6700

Frank B. Gilbert, Stephen N. Dennis, Gregory E. Andrews
National Trust for Historic Preservation
740 Jackson Place NW, Washington DC 20006
(202) 638-5200

Counsel for Amicus Curiae State of New York
Louis J. Lefkowitz, Attorney General; Samuel A. Hirshowitz, First Ass't Attorney General; Philip Weinburg, Ass't Attorney General
2 World Trade Center, New York NY 10047
(212) 488-7561