Waiver Not a Consent to Further Expansion of Zoning Lots

20210485_NCS blog image2_934x490The ground lessee of tax Block 248 Lot 76 in New York County and its mortgagee, the Plaintiffs, objected to the expansion of a zoning lot which included tax lots 15 and 76.  The Plaintiffs had each executed a Waiver of Declaration of Zoning Lot when those tax lots 15 and 76 were combined into a single zoning lot. The Plaintiffs asserted that the Waivers did not allow for the further expansion of the zoning lot to include tax lot 70; they sought a ruling that the Waivers did not allow further expansion of the zoning lot and injunctive relief.

A Recital in the Zoning Lot and Development Agreement (“ZLDA”) for the combination of tax lots 15 and 76 into a single zoning lot stated that the zoning lot “may be expanded” and the Waiver referenced the ZLDA. However, the ZLDA was not signed by either of the Plaintiffs and the Waiver itself did not address whether the zoning lot could be further expanded. The Supreme Court, New York County, granted the Plaintiffs’ motion for summary judgment, enjoining construction without the consent of the Plaintiffs, as parties-in-interest, to the expansion of the zoning lot to include tax lot 70. According to the Court,

“[a]s a matter of law, the Declarations of Waiver…did not waive their right to object to future mergers with other lots. The Declarations of Waiver are unambiguous and only apply to the merger of Lots 15 and 76…Defendants’ reliance on Recital B [in the ZLDA that the zoning lot “may be expanded”] to create an expansion of the Waivers is misplaced. The Recitals are descriptive and non-binding [citations omitted].”

The Court noted the following text from the Appellate Division, First Department’s decision in Grand Manor Health Related Facility, Inc. v. Hamilton Equities, Inc., 65 AD3d 445 (2009):

“Although a statement in a ‘whereas’ clause may be useful in interpreting an ambiguous operative clause in a contract, it cannot create any right beyond those arising from the operative terms of the document.”

Little Cherry, LLC v. Cherry Street Owner LLC, 2021 NY Slip Op 31225, decided April 9, 2021, is posted at https://www.nycourts.gov/reporter/pdfs/2021/2021_31225.pdf.


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