Ruling from the bench following oral argument, Judge Eileen A. Rakower upheld the State Environmental Quality Review Act (“SEQRA”) analysis and municipal approvals for the project.  The Court rejected claims that the City Council and City Planning Commission had been misled about the developer’s plans and upheld their decision not to compel disclosure about project financing, citing longstanding SEQRA precedent that such disclosure is not required absent “compelling evidence of a sham transaction or that financial sponsors are unwilling or unable to fulfill their obligations.”

The “New Domino” project, which is anticipated to break ground in 2012, will convert a vacant, formerly industrial site along the East River into an integrated development containing open space, community facilities, and commercial and residential properties, including a substantial affordable housing component.  It would provide waterfront access on site for the first time in over a century, while preserving many of the former refinery’s historic structures, including the iconic “Domino Sugar” sign.

For more information about the recent decision, contact David Paget or Jennifer Coghlan.

The Draft Report contains nine findings concerning the projected impacts of sea level rise and 14 policy recommendations for state legislators and executive agencies to prepare for and protect against those risks.  This post focuses on the recommendations related to the State Environmental Quality Review Act (“SEQRA”), the New York law requiring state and local governments to consider the potential significant adverse environmental impacts of their actions.

The SEQRA recommendations primarily relate to actions undertaken within newly-proposed “coastal risk management zones,” which would require an amendment to SEQRA or its implementing regulations.  The Task Force suggests that such zones should be established and include those areas that FEMA has already identified as “coastal high hazard areas” or “areas of moderate wave action” on Flood Insurance Rate Maps (Draft Report, at 54).

SEQRA regulations currently categorize actions as Type I (those that presumptively have significant adverse impacts and are more likely to require preparation of a full Environmental Impact Statement), Type II (those determined not to have significant adverse impact or otherwise precluded from SEQRA review) and Unlisted.  Under one proposal, the Task Force recommends that all Unlisted Actions undertaken within a coastal risk management zone be added to the Type I list (Draft Report at 61).  Alternatively, the Draft Report suggests amending the criteria for environmental significance in the SEQRA regulations to expressly incorporate sea-level rise related impacts (Draft Report at 61; 6 NYCRR 617.7(c)).

Neither of these recommendations, however, addresses the technical issues of how the environmental significance of sea level rise on a proposed project should be measured.  Moreover, the classification of all actions occurring within a coastal risk management zone as Type 1 may be inconsistent with existing SEQRA guidance which anticipates that the significance of sea level rise and other global warming impacts on a project would be assessed “on a case-by-case basis” — with no bright line test imposed based on project location.[1] This recommendation could also sweep in minor discretionary actions, such as wetland permits for single lots, that are not the type or scale of government action typically considered Type I.

Finally, the Task Force makes a commonsense recommendation that DEC’s short and long Environmental Assessment Forms (“EAF”) – used to determine the potential significance of an action’s environmental impacts – be revised to “require[e] an evaluation of risks to and from the project based on the risk of sea level rise and coastal hazards … and other related effects of sea level rise” (Draft Report at 61).  The long EAF currently asks, “Is [the proposed] project or any portion of project located in a 100 year flood plain,” though sea level rise is projected to expand the areas of New York traditionally considered at risk of serious flooding.

For additional information on the consideration of climate-related impacts under SEQRA or the National Environmental Policy Act (“NEPA”), contact Steven Russo.

[1] DEC, Assessing Energy Use and Greenhouse Gas Emissions in Environmental Impact Statements, July 15, 2009, at 4, 5.

One of the most significant components of the agenda is an overall vision of promoting and talking about environmental protection in the context of economic development in the State.  It emphasizes that “environmental protection can benefit our economy—creating green jobs while reducing pollution …”[1] The environmental agenda, like other parts of Cuomo’s published agenda for reforming New York State,  proposes review and reform of the state’s environmental bureaucracy to maximize environmental protection and coordination among agencies, and create cost savings.  The Governor-elect would task the state’s Spending and Government Efficiency Commission with this review of existing agencies and procedures.[2]

The document also suggests that Governor-elect Cuomo will be as much about the carrot as the stick when it comes to promoting conservation.  He proposes a “Cleaner Greener Communities Competitive Grant Program” to help create incentives for sustainable communities, encourage smart growth, and reduce sprawl.  The grants would support innovative comprehensive regional plans which incorporate sustainability, transportation, emissions and efficiency issues into the planning framework.[3] Where the funds for such a grant program will come from is not spelled out.

Cuomo’s environmental agenda supports the continuation of New York’s Brownfield Cleanup Program (“BCP”), including the tax credits component, while streamlining the BCP process to ensure its effective use on those sites that need it most.[4] The document does not address the State’s participation in the Federal Superfund program, from which current Governor David Paterson has proposed to withdraw.

On Marcellus Shale, the Cuomo agenda takes a middle road, stating that “New York State must ensure that, if and when the Shale’s natural gas is obtained, it does not come at the expense of human health or have adverse environmental impacts.”[5] Potential impacts to watersheds are given special mention, suggesting that drilling in the New York City watershed and other watersheds will be given enhanced scrutiny.  On another energy-related issue, Cuomo restates a longstanding position that Indian Point nuclear plant be shut down.[6]

Cuomo also proposes a review of the State Environmental Quality Review Act (“SEQRA”) process to expand SEQRA considerations to include environmental justice, and strengthen the current Environmental Justice Policy “so it gives more robust assurance that adequate consideration is given to environmental justice.”[7]

While budget and political realities will no doubt impact Cuomo’s implementation of his agenda, the Governor-elect’s proposed agenda nonetheless provides a window into his environmental policy preferences in advance of his taking office on January 1st.   This preview suggests a potential that the new administration will take a broader view of environmental protection that goes beyond regulation to promoting smart growth and sustainable development as part of an overall statewide focus on economic development.

• Download a copy of the agenda here (pdf)

[2] Id. at 7.

[3] Id. at 91-92.

[4] Id. at 94.

[5] Id. at 96.

[6] Id. at 95.

[7] Id. at 97-98.

The final regulations, available on DEC’s website, do not differ substantively from the draft regulations issued on August 4, 2010. Revised versions of the Regulatory Impact Statement, Regulatory Flexibility Analysis, and Rural Area Flexibility Analysis associated with the new regulations, as well as DEC’s assessment of public comments received, are available in the November 3, 2010 issue of the New York State Register.

For more information about New York’s Endangered Species Act, contact Steven Russo or Jessica Steinberg.

As explained in Act itself:

It is the purpose of this article to augment the state’s environmental policy by declaring a fiscally prudent state policy of maximizing the social, economic and environmental benefits from public infrastructure development through minimizing unnecessary costs of sprawl development including environmental degradation, disinvestment in urban and suburban communities and loss of open space induced by sprawl facilitated by the funding or development of new or expanded transportation, sewer and waste water treatment, water, education, housing and other publicly supported infrastructure inconsistent with smart growth public infrastructure criteria.

ECL § 6-0105.

“State infrastructure agency” is defined to include a variety of state agencies and authorities, including the Departments of Environmental Conservation, Transportation, Education, Health, and State, the New York State Environmental Facilities Corporation, the New York State Housing Finance Agency, the Housing Trust Fund Corporation, the Dormitory Authority, the Thruway Authority, the Port Authority of New York and New Jersey, the Empire State Development Corporation, the New York State Urban Development Corporation, and “all other New York authorities”.  ECL § 6-0103(2)

These agencies must ensure that any public infrastructure they “approve, undertake, support or finance” is, to the extent practicable, consistent with specified criteria, which include, inter alia;

• to advance projects located in municipal centers;
• to foster mixed land uses and compact  development, downtown revitalization, brownfield redevelopment, the enhancement of  beauty in  public spaces,  the diversity and affordability of housing in proximity to places of employment, recreation and commercial development  and  the  integration of all income and age groups; and
• to promote sustainability by strengthening existing and creating new communities which  reduce greenhouse gas emissions and do not compromise the needs of future generations,

ECL §§ 6-0107(1), (2)(b), (2)(e), (2)(j).  The CEO of a state infrastructure agency must attest to the proposed project’s conformance to the relevance criteria in a smart growth impact statement.  ECL § 6-0107(3).  If the project does not meet the relevant criteria or “compliance is considered to be impracticable”, the agency shall prepare a statement of justification of such noncompliance.  Id.  Although not addressed in the legislation, it appears that such statements could be incorporated into an environmental impact statement (“EIS”) prepared under the New York State Environmental Quality Review Act (“SEQRA”).  For projects for which no EIS is required, however, the agency will need to prepare a separate statement to satisfy the requirements of the Smart Growth Act.

If promulgated as proposed, the State ESA regulations will be significantly changed.  Several sections have been added, including how DEC will list endangered and threatened species and species of special concern; requirements for recovery and restoration plans; requests for determination whether a specific action is subject to Part 182; and penalties and enforcement for violations.  The most significant changes are the new sections regarding “incidental take permits.”  The draft regulations define “incidental take” as “any taking of a species listed as endangered or threatened in Part 182.5 and otherwise prohibited by section 11-0535 of the [ECL] that is incidental to, and not the intended purpose of, an otherwise lawful activity.”  Proposed 6 N.Y.C.R.R. § 182.2(k).  “Take” or “taking” would be defined as “pursuing, shooting, hunting, killing, capturing, trapping, snaring and netting of any species listed as endangered or threatened in this Part, and all lesser acts such as disturbing, harrying or worrying.”  Id. § 182.2(y).  This proposed definition is similar to the definition of “take” under the federal ESA, where it is defined as “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.”  16 U.S.C. § 1532(19).

The proposed regulations state that “any activity that is likely to result in the take or a taking of any species listed as endangered or threatened in this Part as determined by the [DEC] . . .” must be done pursuant to an incidental take permit.  Proposed 6 N.Y.C.R..R § 182.11.  The permit application will have to include a mitigation plan and implementation agreement, an analysis of whether being issued the permit would jeopardize the continued existence of the species’ population, a description of ways to modify the project to minimize or completely avoid a take of the species, and a certification statement, in addition to describing the proposed project and its potential impacts to the listed species.

Significantly, the applicant will have to demonstrate that measures taken pursuant to the mitigation plan will result in “a net conservation benefit to the listed species,” which is defined as:

[A] successful enhancement of the species’ overall population or contribution to the recovery of the species within New York.   To be classified as a net conservation benefit, the enhancement or contribution must benefit the affected species listed as endangered or threatened in this Part or its habitat to a greater degree than if the applicant’s proposed activity were not undertaken.

Id. § 182.2(o).  Based on recently issued State ESA Permits, a net conservation benefit most likely may be demonstrated by measures to set aside critical habitat or create new habitat for the listed species, depending on the species affected.  Applicants also must include a monitoring plan and a description and guarantee of how the plan will be funded.  For example, the applicant may post a performance bond that will cover habitat monitoring costs.

An applicant’s permit application will also have to identify involved persons, the timeline for implementing the plan (which will become the permit term), specify the source of funding, and be signed by all involved persons.  DEC will issue an incidental take permit if it determines that any taking will be incidental to, and not the purpose of, the proposed activity, and there will be a net conservation benefit to the species.  The Department will base its decision “upon the best scientific and other information that is reasonably available to [DEC].”  Id. § 182.12.

These new regulations, as evidenced by the recently issued ESA permits, will add a regulatory hurdle to projects proposed in areas where there may be a take of a listed endangered or threatened species.  Developers previously addressed a project’s potential impacts to such  species during the State Environmental Quality Review Act (“SEQRA”) process.  Now, they will have to go through two processes – a SEQRA review process and a separate ESA permitting process.  This independent permitting jurisdiction means that DEC now will be a SEQRA “involved agency.”  This means DEC will have formal commenting authority, and may even claim “lead agency” status in certain matters, potentially displacing local town or village boards, and driving the entire SEQRA review process.  Regardless, unless the project’s mitigation measures result in a net conservation benefit to the listed species, as opposed to just minimizing any potential adverse impacts under SEQRA, DEC will not have legal authority to issue a State ESA Permit.

As we stated previously, when planning a project, developers should try to ensure that any potential impacts to listed species are considered and avoided in a manner consistent with DEC’s regulations.

Update (August 4, 2010):

Today, DEC published its proposed ESA regulations.  DEC will accept comments from August 4 – September 20, 2010.  Comments may be submitted via email to: Proposed Rulemaking Part 182 – Endangered and Threatened Species of Fish and Wildlife; Species of Special Concern or by mail to:

Dan Rosenblatt

New York State Department of Environmental Conservation

628 Broadway

Albany, New York 12233-4750

For additional information on submitting comments:

• Proposed ESA Regulation
• How to Comment on Fish, Wildlife, and Marine Resources Proposed Regulations
• Regulatory Impact Statement

In December 2008, ESDC determined to use its condemnation power to acquire 17 acres of privately-owned property, including petitioners’, in connection with Columbia’s expansion plan.  ESDC found that the project qualified under the Urban Development Corporation Act as both a “land use improvement project” (because the project would eliminate blighted conditions) and as a “civic project” (because the project would provide educational facilities).  The $6.28 billion project, which is being exclusively underwritten by Columbia, a private non-profit institution, will comprise 6.6 million gross square feet in 16 new buildings, 2 acres of open space, and other structures.  Petitioners contested ESDC’s designation of the project area as “blighted,” and challenged the integrity of the two neighborhood studies commissioned by ESDC that supported its blight finding, arguing that the studies were biased and demonstrated bad faith on the agency’s part.  Petitioners also argued that the “civic project” designation was impermissible because Columbia is a private, not a public, entity.

In Thursday’s Kaur decision, the Court of Appeals reaffirmed that the judiciary has a limited role in reviewing the actions of ESDC, a quasi-legislative entity.  Citing Goldstein, the Court noted that ESDC was authorized by the state legislature, and that a court “may only substitute its own judgment for that of the legislative body authorizing the project when such judgment is irrational or baseless.”  The Court rejected petitioners’ arguments that ESDC acted in bad faith and with pretext, finding no evidence to support such allegations.  The Court instead held that ESDC’s determination was made rationally and in good faith, and that the separate neighborhood conditions studies on which ESDC relied were creditable and not biased.  The Court then cited blight evidence dating back to the 1960s to reject petitioners’ argument that Columbia created blight by neglecting the project-area properties that it acquired starting in the early 2000s.  The Court also held that the UDC Act’s definition of a “substandard or insanitary” (i.e., blighted) area was not unconstitutionally vague.

The Court of Appeals made new law in New York by holding that “civic projects” under the UDC Act are not limited to public institutions, and may in fact include projects proposed by private educational institutions.  After noting that the Columbia project “unquestionably [] promote[s] education and academic research while providing public benefits to the local community,” the Court rejected the First Department’s determination that the statutory language is limited to public entities.  In a concurring opinion, Judge Smith stated that because the Court upheld ESDC’s blight determination, the civic project doctrine need not have been reached, and that it was subject to constitutional constraints that the Court failed to address.

Finally, the Court rejected petitioners’ claims that ESDC violated their procedural due process rights by closing the administrative record and proceeding with the condemnation despite ongoing disputes as to whether ESDC was required to turn over additional documents to petitioners.  The Court stated that a violation of the Freedom of Information Law (“FOIL”) only rises to a due process violation where petitioners can demonstrate that they were deprived of a meaningful opportunity to be heard, or demonstrating that materiality of the records sought through FOIL.  The Court found that ESDC did not withhold documents that formed part of the administrative record, and that petitioners had unfettered access to thousands of pages of documents, including those at the core of ESDC’s action.  Noting that the legislature intended for expedient condemnation proceedings that did not allow for any discovery, the Court held that petitioners failed to meet their burden.

According to the New York Times, petitioners plan to seek review of the decision by the United States Supreme Court.

SPR serves as environmental counsel for the Empire State Development Corporation, and Mark Chertok and Dan Chorost served as co-counsel to ESDC’s eminent domain counsel in the Kaur case.  David Paget and Dan Chorost served as co-counsel for ESDC in the Goldstein case.   A copy of ESDC’s appellate brief is available here (pdf), and reply brief here (pdf).

The DEC recently issued four licenses, or New York State Endangered Species Act permits (“ESA Permits”) under Article 11 of the Environmental Conservation Law (“ECL”), a number which is notable for far exceeding past issuances.  The permits were issued for the construction of a wind power plant, a retail facility, a road project, and a residential development.  These ESA Permits authorize the “taking” of endangered and/or threatened species, which includes the killing, capturing, disturbing and worrying the species, or modification of its habitat.  ECL § 11-0535; see also State v. Sour Mt. Realty, Inc., 714 N.Y.S.2d 78 (2d Dept. 2000); State v. White Oak Co., 787 N.Y.S.2d 333 (2d Dept. 2004).

To receive the ESA Permit, the applicants had to demonstrate a net conservation benefit to the identified species once all mitigation measures and permit conditions are complete.  Although DEC determines necessary mitigation measures on a case-by-case basis depending upon the type of species involved, DEC required similar mitigation conditions for each of the ESA Permits.  Conditions included permanently protecting land by transferring title or a conservation easement, and securing a performance bond before commencing any activities on site to cover the estimated costs of habitat restoration and mitigation.  Setting aside crucial habitat or new habitat that did not exist may become a standard permit requirement.

Under Governor Pataki, the DEC did not exercise its endangered species authority pursuant to Article 11.  Instead, endangered and threatened species issues were dealt with pursuant to the State Environmental Quality Review Act (“SEQRA”).  Under the new administration, and Commissioner Pete Grannis, DEC has notably begun to exercise its Article 11 authority.  Therefore, projects that might “take” a listed species and cannot be modified to avoid the taking entirely will have to obtain an ESA Permit.

Although developers have always had to consider the impacts of a proposed project on listed species under SEQRA, if the mitigation measures minimized the adverse impacts, then the requirements of SEQRA were usually satisfied and the review ended, even if the project resulted in alteration or destruction of the species’ habitat.  Now, it appears that even when the project satisfies SEQRA requirements, if the project’s impacts alter or destroy listed species’ habitat or “take” a listed species, the developer must apply for an ESA Permit. To receive the permit, the developer must demonstrate a “net conservation benefit” from the proposed mitigation measures, which may include setting aside crucial habitat or creating new habitat for the listed species.  Therefore, when planning a project, the developer should try to ensure that impacts to listed species and their habitat are considered and avoided entirely.  Otherwise, the developer will need an ESA Permit.

DEC has sent draft regulations to the Governor’s office for approval, a required step before releasing them for public comment.  The draft regulations are expected in the near future.  The content of the draft regulations are unknown, but based on the ESA Permits issued, they may likely require mitigation measures like permanent protection and monitoring of habitat, and securing a performance bond to ensure that the mitigation measures are implemented.

DEC’s Article 11 enforcement authority was made clear in the recent ESA Permits and DEC’s recent letter (pdf) denying Entergy’s application for a Water Quality Certificate pursuant to Section 401 of the Clean Water Act for Indian Point Units 2 and 3 (“Indian Point”) in Buchanan, New York.    Sampling data from 1975-1990 determined that Indian Point’s operations harmed (i.e., resulted in a “taking” of) shortnose sturgeon, a New York listed endangered species, and Atlantic sturgeon, a federally protected species, by impinging the sturgeon on and entraining them in the cooling water intake structures.  Although recent sampling data was not available, DEC determined that based on prior studies and Indian Point’s unauthorized “take” of the listed species, the relicensing of Indian Point “would continue to cause mortality to the sturgeon species” and therefore was not in compliance with Article 11.

In a letter dated December 30, 2009, EPA expresses several concerns with the DSGEIS.  EPA notes that the original GEIS that the DSGEIS supplements was issued in 1992 and expresses concerns that existing conditions may have significantly changed since that time.  In addition, EPA asserts that the analysis and discussion of cumulative and indirect impacts in the DSGEIS should be significantly expanded.  EPA encourages both the New York State Public Service Commission, which has regulatory authority over the pipelines that would transport the natural gas, and the New York State Department of Health, which has primary enforcement responsibility under the Safe Drinking Water Act, to take a more active role in the SEQRA process.

EPA joins with the DEP in expressing serious concerns over potential adverse impacts to the New York City water supply, and notes that water sources serving upstate communities deserve similar protection.  Accordingly, EPA suggests that EPA, DEC and DEP work together to “develop an enhanced oversight approach” that would allow for the coordination of applicable regulatory programs to better protect drinking water supplies that could be impacted by natural gas drilling.  EPA also encourages DEC to release information regarding the chemical composition of hydrofracturing solutions, which to date has been closely guarded by industry under claims that such composition represents a trade secret not subject to public disclosure.  Access a complete copy of EPA’s comment letter here (pdf).

• View all prior posts on Marcellus Shale issues

SPR’s comment letter identified multiple deficiencies in the DSGEIS related to potential impacts of concern to units of local government, including traffic, noise, visual, community character and land use impacts.  SPR’s comment letter also encouraged DEC to adopt regulations that would provide units of local government with meaningful advisory input to NYSDEC during well permitting.  Access a complete copy of SPR’s comment letter—which is attached to NRDC’s comment letter—here (pdf).

• See all posts related to Marcellus Shale and hydrofracking issues