SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 11 In the Matter of the Application

of CHELSEA BUSINESS & PROPERTY OWNERS' ASSOCIATION, LLC, d/b/a CHELSEA FLATIRON COALITION, Petitioner, For an Order Pursuant to Article 78 of the Civil Practice Law and Rules - against THE CITY OF NEW YORK; BOARD OF STANDARDS AND APPEALS OF THE CITY OF NEW YORK; SETH DIAMOND, Commissioner for the Department of Homeless Services of the City of New York ("DHS"); GEORGE NASHAK, Deputy Commissioner for Adult Services for DHS; ROBERT D. LIMANDRI, Commissioner for the Department of Buildings of the City of New York ("DOB"); FATMA AMER, P.E., First Deputy Commissioner for DOB; JAMES P. COLGATE, R.A., Assistant Commissioner to Technical Affairs and Code Development for DOB; BOWERY RESIDENTS' COMMITTEE, INC.; 127 WEST 25th LLC; and DANIEL SHAVOLIAN, Respondents. AMENDED VERIFIED PETITION Index No. 113194/10 (Justice Madden)

Petitioner, Chelsea Business & Property Owners' Association, LLC, d/b/a Chelsea Flatiron Coalition ("CFC"), for its amended verified petition, pursuant to Article 78 of the Civil Practice Law and Rules ("CPLR"), against respondents, The City of New York, the Board of Standards and Appeals of the City of New York ("BSA"), Seth Diamond, Commissioner for the Department of Homeless Services of the City of New York ("DHS"), George Nashak, Deputy Commissioner for Adult Services for DHS, Robert D. LiMandri, Commissioner for the Department of Buildings of the City of New York ("DOB"), Fatma Amer, P.E., First Deputy Commissioner for DOB, James P. Colgate, R.A., Assistant Commissioner to Technical Affairs and Code Development for DOB (collectively, the "City"), Bowery Residents' Committee, Inc., ("BRC"), 127 West 25th LLC ("127 LLC") and Daniel Shavolian (collectively with the City, "Respondents"), alleges as follows: PRELIMINARY STATEMENT 1. This proceeding is brought pursuant to Article 78 of the Civil Practice Law and

Rules ("CPLR") to challenge BSA Resolution 189-10-A, dated April 5, 2011 and issued April 6, 2011 ("Resolution"), which affirmed DOB's approval of plans and issuance of permits for the construction of a 100,000 square foot, 328-bed, in-patient and out-patient drug, alcohol and mental health care facility and homeless shelter for the mentally ill at 127 West 25th Street in New York, New York ("Proposed Facility"). Approximately 80 percent of the Proposed Facility's annual budget, equaling tens of millions of dollars in taxpayer funds, will be provided by the City. 2. BSA Resolution stands in violation of the Zoning Resolution of the City of New

York ("ZR"), the Administrative Code of the City of New York ("Admin Code") and both relevant case law and BSA precedent. Accordingly, the Court should find that BSA Resolution

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was affected by an error of law, was arbitrary and capricious and an abuse of discretion, see CPLR 7804(3), and order that the approvals and permits for the Proposed Facility be revoked. 3. Additionally, this proceeding is brought to compel the City to perform obligations

enjoined upon it by law, see CPLR 7804(1), including compliance with (i) the Admin Code, e.g., 21-312's homeless shelter size limitation, (ii) the New York City Charter ("Charter") procurement rules, e.g., contract registration, and (iii) the Uniform Land Use Review Procedures ("ULURP"). 4. Further, petitioners seek a preliminary injunction to stay the occupancy of the

Proposed Facility, currently expected to open on or about May 20, 2011, pending the outcome of this proceeding, and unless and until respondents are in full compliance with all applicable laws, regulations and rules. Finally, petitioners seek a permanent injunction to enjoin occupancy and operation of the facility in contravention of the law. 5. BRC, the developer and future operator of the Proposed Facility, has, with City

approval and assistance, attempted to circumvent provisions of the applicable City and State law that preclude and/or interfere with the project. Additionally, BRC has provided contradictory information and made inaccurate representations to various government entities -- including BSA -- in order to obtain government approvals. Even after being made aware of the misinformation, the various government entities have granted BRC approvals to proceed with the construction and occupancy of the Proposed Facility in contravention of law. 6. Based upon these misrepresentations, BRC and DOB have improperly designated

the Proposed Facility a "hotel" in order to site the Proposed Facility in a location where it would otherwise be prohibited.

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BSA sanctioned these designations, ignoring the wealth of evidence and

precedent indicating that the Proposed Facility is in fact a type of "community facility," known as a "non-profit institution with sleeping accommodations," because such a community facility is not permitted where the Proposed Facility is located. 8. BSA approval perverts the clear and common meaning of the term "hotel,"

contravenes the ZR and ignores the City and State statutes and regulations governing the operation of the Proposed Facility, which define the Proposed Facility as a residential, health care center. Additionally, BSA ignored substantial evidence indicating that the duration of residency at the Proposed Facility will far exceed the limits imposed to qualify as a "transient hotel" under the ZR, instead relying on BRC's alleged, unsupported and contradictory statements. 9. Next, neither DOB, DHS nor BSA have enforced, or are willing to enforce, the

statutory provision of the Admin Code that limits homeless shelters to 200 beds. See Admin Code 21-312. All three agencies are aware of the regulation, and both DOB and BSA disclaimed responsibility for the statute's enforcement, instead deferring to DHS's unsupported representations and illogical explanations as to why the 328-bed Proposed Facility does not violate the 200-bed limitation. Yet, it is unavoidable that the Proposed Facility falls within the statute's purpose, based upon applicable regulations and definitions as well as detailed legislative history. Thus, the City should be compelled to enforce the statute, as it is written and intended, against the Proposed Facility. 10. Further, the City has refused to conduct a ULURP review prior to occupancy of

the Proposed Facility. However, the terms of the DHS contract with BRC for homeless services as well as BRC's lease for the Proposed Facility, the City's use -- and conditions placed upon the BRC's use -- of millions of dollars in capital funds to pay for the Proposed Facility's furniture

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and equipment, and the City's use of taxpayer funds for BRC's debt service associated with the Proposed Facility's renovation costs, illustrate the City's authority and control of the Proposed Facility operations. Thus the Proposed Facility is a City facility subject to ULURP prior to occupancy of the Proposed Facility. See Charter 197-c(a). 11. Additionally, the Proposed Facility should have undergone a ULURP review

because, had the City properly applied its zoning laws, the Proposed Facility would have been prohibited from the subject district absent a special permit and/or a variance. Special permits under the New York City Planning Commission's ("CPC") jurisdiction must proceed through ULURP review. 12. Moreover, since the Proposed Facility is a City project that was budgeted for in

accordance with the City's housing plan to meet the City's legal obligation to provide housing for the homeless, its development necessitates a ULURP review. Accordingly, this Court should compel respondents to submit the Proposed Facility to the ULURP process before any public funds are provided to BRC and before the Proposed Facility begins operation. 13. Finally, while it is clear that DHS has approved the funding and other

requirements for the Proposed Facility, the contract between DHS and BRC remains unregistered with the Comptroller of the City of New York ("Comptroller"), and thus, ineffective. DHS is required, pursuant to the Charter, to register all contracts with the Comptroller. See Charter 328(a). However, DHS and BRC are proceeding as though a valid contract is in place and all public funds apparently promised by DHS will be forthcoming. DHS has represented to the Court that this contract will be registered prior to commencement of occupancy, but DHS and BRC have acknowledged that contracts for other programs that will operate within the Proposed Facility, including the 96-bed Reception Center shelter, are still being negotiated and have not

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been sent to the Comptroller for registration. Therefore, DHS should be compelled to comply with the Charter requirements for registration before any public funds are provided to BRC and before the Proposed Facility begins operation. 14. In sum, respondents have attempted to circumvent provisions of applicable laws

and regulations in order to facilitate the development of the Proposed Facility. Additionally, City respondents have ignored misrepresentations made by BRC and have granted approvals in violation of law. Accordingly, BSA's determination was affected by an error of law, was arbitrary and capricious and was an abuse of discretion, and, therefore, DOB's approvals and issued permits should be revoked, and respondents should be compelled to comply with applicable provisions of law prior to occupancy of the Proposed Facility. Further, this Court should enjoin any occupancy of the Proposed Facility pending the outcome of this proceeding and until compliance with all applicable laws is demonstrated. THE PARTIES 15. Petitioner, CFC, is a Delaware limited liability company with its principal place

of business in New York, New York. that was formed on June 1, 2010 by a group of citizens who reside or work and own property in the Chelsea and Flatiron neighborhoods of New York, New York and who are concerned with Respondents' disregard of the zoning and other laws governing siting of the Proposed Facility. CFC has dozens of members who own property and/or reside adjacent to, across the street from, within 400 feet of, in close proximity to and within several blocks of the Proposed Facility. CFC has thousands of additional members, ranging from young families to retirees, from new renters to decades-long home owners, who live in the Chelsea and Flatiron neighborhoods.

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Respondent The City of New York, is a municipal corporation organized and

existing under the laws of the State of New York ("State"). 17. Upon information and belief, at all times hereinafter mentioned: a. Respondent Board of Standards and Appeals of the City of New York is a

board established pursuant to chapter 27 of the Charter, the purpose of which is to hear and decide appeals from DOB determinations, and whose decisions are reviewable under Charter 669(d). b. Respondent Seth Diamond is the Commissioner of DHS and Respondent

George Nashak is the Deputy Commissioner for Adult Services for DHS. Their responsibilities include, but are not limited to, ensuring compliance with applicable State and City laws concerning, among other things, adult homeless shelters, including contracts related thereto and operations and financing thereof. c. Respondent Robert D. LiMandri is Commissioner of DOB, Respondent

Fatma Amer, P.E., is the First Deputy Commissioner for DOB and Respondent James P. Colgate, R.A., is the Assistant Commissioner to Technical Affairs and Code Development for DOB. Their responsibilities include, but are not limited to, ensuring construction in the City is compliant with relevant laws, including the zoning laws, and issuing certificates of occupancy pursuant to the applicable laws. 18. Respondent BRC is a tax exempt non-profit organization incorporated under the

laws of the State with its principal place of business at 324 Lafayette Street, New York, New York. BRC is a $48 million a year business that provides social services to predominately mentally ill and substance addicted homeless men and women in and around New York, New

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York. It received roughly $15.1 million in contract payments from DHS in 2010 in addition to millions of dollars in DHS contributions.1 19. Respondent 127 West 25th LLC ("127 LLC") is a Delaware limited liability

company with its principal place of business at 501 Fifth Avenue, New York, New York that holds an ownership interest in the property located at 127-131 West 25th Street, New York, New York. 20. Respondent Daniel Shavolian is a citizen of the State and purportedly the sole,

managing member of 127 LLC. JURISDICTION AND VENUE 21. Jurisdiction is had and venue is proper because this action arises out of activities

engaged in and real property located in the State and County of New York, as well as an appeal, pursuant to Charter 669(d), from a determination of BSA. 22. Plaintiff has standing to bring this proceeding as an organization formed to

represent the legal interests of affected area business and property owners and residents. CFC and its members will be directly and adversely affected by Respondents' derogation of the law as well as the irrevocable change to the character of the community that will result from occupancy of the Proposed Facility. More specifically, CFC and its members will be harmed by the denial of their rights to community involvement, as provided by law, in addition to increased population density, traffic congestion, noise, and demand for fire, police and medical emergency services, as well as secondary displacement of neighborhood residents and businesses and reduced property and business values that will result from operation of the Proposed Facility.

Respondents BRC, 127 West 25th LLC and Daniel Shavolian are parties to this special proceeding only as nominal, but necessary parties.

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STATEMENT OF FACTS I. The Property and Property Owner(s) 23. The location for the Proposed Facility is a single tax lot sited at Block 801, Lot

21, 127-131 West 25th Street, New York, New York 10001 ("Property"). See Work Permit for Job No. 120288054 and Schedule A Proposed Certificate of Occupancy & Use, dated August 13, 2010, attached as Exhibit 1.2 24. 127 LLC purchased the Property in early 2008 for approximately $32.7 million,

and financed the purchase with a mortgage, in the principal amount of $26.2 million, which became due and payable on January 1, 2010, and is currently in default.3 See Decision & Order, 127 West 25th LLC v. N.Y. 18 LLC et al., Index No. 101755/2009, at 3, 4 (Sup. Ct. N.Y. Cty. July 9, 2010) ("Decision & Order"), attached as Exhibit 2. 25. Despite the unstable financial and legal status of 127 LLC and the Property, on or

about February 18, 2010, BRC and Shavolian, on behalf of 127 LLC, entered into a 33-year lease for the Property in order to convert and use the Property to house the Proposed Facility. See

Unless otherwise noted, all exhibits cited herein refer to and accompany the Affirmation of Daniel S. Connolly, Esq. in Support of the Amended Verified Petition, dated May 6, 2011. Shavolian and 127 LLC have been unable to negotiate an extension or refinancing of the mortgage due to encumbrances placed upon the Property, which are the subject of prolific litigation in the New York State courts as well as the Bankruptcy Court for the Central District of California. See Ex. 2; see also Amended Complaint, 127 West 25th LLC v. NY 18, LLC, et al., Index No. 101755/2009, dated Feb. 19, 2009, attached as Exhibit 3; Verified Complaint, 127 West 25th LLC & 241 Fifth Avenue Hotel, LLC v. Nader & Sons LLC & Nader Hakakian, Index No. 601010/2010, dated April 19, 2010, attached as Exhibit 4; Verified Complaint, 127 West 25th v. NY 18 LLC, Index No. 650498/2010 (Sup. Ct. N.Y. Cty.), attached as Exhibit 5; Notice of Motion and Motion of United States Trustee for the Appointment of a Chapter 11 Trustee or, in the Alternative, for Appointment of an Examiner, In re Ezri Namvar, Docket No. 08-BK-32349BR (C.D. Cal. 2008), attached as Exhibit 6. These actions center on allegations of fraud, and according to one New York State court decision, "[t]he submitted evidence does raise inferences of Shavolian's culpability" in an alleged fraudulent loan scheme, and stated that "the specter of foul play is palpable." See Ex. 2 at 11, 12.
3

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Agreement of Ground Lease, Att. 8 to OASAS Chemical Dependence Certification Application for the Chemical Dependency Crisis Center, dated June 22, 2010, at 2.2, attached as Exhibit 7. 26. Construction to convert the 12-story, 100,000 square foot factory ("Building")

into an "Integrated Service Center" to house and treat mentally-ill and substance-addicted homeless began in late 2010 and is slated to finish on or around May 20, 2011. See BRC Development of Integrated Service Center, Background Information for Meeting with Social Services Committee, Community Board 4, Manhattan, dated April 1, 2010, at 3, attached as Exhibit 8; see also Letter from Randy Mastro, Esq. to Hon. Joan A. Madden, dated April 18, 2011, attached as Exhibit 9. II. The Proposed Facility 27. BRC has announced that it will create a "12-story, 100,000 square foot, integrated

service center" to house BRC's medically-monitored, in-patient detoxification unit, drug, alcohol and mental health counseling and shelter programs, case management services, a food service program supporting the other programs, and BRC's executive offices. BRC 2009 Annual Report at 1, attached as Exhibit 10. 28. More specifically, BRC has stated that the following programs will be located in

the Proposed Facility: (i) the Chemical Dependency Crisis Center, a 24-hour, 32-bed, medicallymonitored in-patient drug and alcohol detoxification facility; (ii) the Reception Center, a 96-bed shelter for homeless men and women suffering from severe and persistent mental illness; (iii) a 200-bed shelter for homeless adult males suffering from mental illness and alcohol and substance addiction; (iv) the Fred Cooper Substance Abuse Services Center, an ambulatory, nonresidential, medically-supervised out-patient facility for the treatment of drug and alcohol abuse problems in homeless and marginally housed men and women; (v) the Continuing Day

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Treatment program, an ambulatory, non-residential, medically-supervised out-patient facility for the treatment of mental illness in homeless men and women, many of whom also suffer from alcohol or substance abuse addictions; (vi) the Food Service Program, a kitchen and cafeteria that will supply meals to the in-patient program residents and out-patient program clients; (vii) Home-Based Case Management, a one-on-one service coordination program offered to seriously and persistently mentally ill individuals in unstable living situations; and (viii) the Metropolitan Apartment Program, a case management program providing personal finance and skill training to the roughly 87 formerly homeless residents living in BRC-sponsored apartments. See id. at 24; see also BRC Program Descriptions, attached as Exhibit 11; Excerpts of the BRC Web Site at www.brc.org/programs.php, attached as Exhibit 12. 29. Finally, the Proposed Facility will include dining facilities, rooftop space for all

residents and daytime program attendees as well as the relocation of BRC's executive offices. See Ex. 10 at 14-17; Ex. 8 at 3. A. 30. Chemical Dependency Crisis Center BRC's Chemical Dependency Crisis Center ("CDCC"), which will be located on

the third floor of the Proposed Facility, is an "inpatient unit" offering 24-hour, "medically monitored withdrawal services" to homeless men and women with alcohol or substance abuse addiction. Answers to Questions Raised by the Public to BRC at June 14, 2010 Manhattan Community Board 4 Public Forum at 4, No. 15, at 6, No. 24, attached as Exhibit 13; Ex. 7.4 The program offers "highly developed integrated medical and psychiatric services," including "24-

In order to relocate the CDCC, BRC must obtain permission and a new operating certificate from OASAS. Accordingly, BRC submitted its application, along with blueprints of the Proposed Facility, to OASAS on June 22, 2010. The status of this application it unknown.

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hour nursing coverage," Ex. 11at 2, through its "on-site medical and psychiatric staff supplementing credentialed addiction counselors," Ex. 10 at 16. 31. The CDCC space will consist of "26 male beds, 6 female beds, one male

bathroom and one female bathroom adjacent to each dormitory, office space, a reception area, an exam room, lounge areas, a nurses' station overlooking all sleeping areas, and storage areas." Ex. 7, Att. 10; see also id., Att. 8, Ex. N at FL-3 (blueprints of CDCC showing exam room and nurses' station). 32. Significantly, patients "remain [within the CDCC space] at all times" and "follow

a highly structured schedule that includes three meals, individual and group motivational counseling, didactic health and substance abuse education, therapeutic activities, and self-help programs." Ex. 13 at No. 24; see also Ex. 11 at 2. According to BRC, "CDCC's highly developed integrated medical and psychiatric services go far beyond what is available in most detox programs of this model." Ex. 11 at 2. 33. CDCC provides this high level of medical care through a staff that includes a

program director, psychiatric nurse practitioners, licensed practical nurses, registered nurses and substance abuse counselors, as well as support staff. Ex. 7, Part IV - Resource Allocation at 9; see id. at Att. 23. In addition, licensed physicians, including at least one full-time psychiatrist, will be on staff. See Responses to "Follow-Up Questions to BRC" From Community Board 4, dated July 20, 2010, at 3, No. 7, attached as Exhibit 14. 34. The CDCC's medically-licensed staff are responsible for, among other things,

"psychiatric evaluation and treatment [and] medication management," as well as "diagnosing, treating, evaluating and managing acute and chronic illness and disease; obtaining medical

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histories and conducting physical examinations; [and] prescribing drugs for acute and chronic illness." Ex. 7 at Att. 23. Accordingly, medication will be dispensed to CDCC patients. 35. The CDCC is licensed by the New York State Office of Alcoholism and

Substance Abuse Services ("OASAS") and subject to OASAS regulations. See Mental Hygiene Law 19.40; see also 14 NYCRR 816 et seq. Pursuant to these regulations, admission to an in-patient chemical dependency rehabilitation program requires an extensive medical evaluation that is performed by a health professional and a chemical dependence diagnosis. 14 NYCRR 816.5(g); see id. 816.9. The evaluation includes, among other things, a medical examination and necessary laboratory tests. See id. 816.5(d), (g)(5). Additionally, the medical staff are responsible for the creation and implementation of a treatment plan designed to help the patient reach sobriety before discharge from the facility and medical monitoring of the patient's progress throughout their stay at the facility. See id. 816.5(k). 36. The CDCC receives funding from federal and City sources, including the New

York City Department of Health and Mental Hygiene ("DOH"), the United States' Department of Health and Human Services' Bureau of Primary Health Care and the United States' Department of Housing and Urban Development. See Ex. 11 at 2; Ex. 8 at 2; Ex. 7, Part IV - Resource Allocation at 1. In addition, DOH will provide $395,025 for "purchase or lease" of the Proposed Facility. Ex. 7, Part II - Site Info. at 1. 37. B. 38. In 2009, CDCC treated approximately 1,319 individuals. See Ex. 7 at 3. Reception Center BRC's Reception Center, which will be located to the fourth and fifth floors of the

Proposed Facility, is a 96-bed residence for homeless men and women who are mentally ill with a history of alcohol and substance abuse. The program will be operated under a contract with,

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and funded by DHS, and licensed by the New York State Office of Temporary and Disability Assistance ("OTDA"), a division of the State's Department of Family Assistance.5 See Ex. 10 at 14-17; see also Ex. 8 at 2; Letter from Christopher Gene King, Esq. to Hon. Joan A. Madden, dated April 15, 2011, attached as Exhibit 17, at 2 (correcting record to state that Reception Center is funded by DHS pursuant to a contract between BRC and DHS). 39. "The [Reception Center] is the only clinically based, transitional residence offered

in the city for homeless individuals who have been diagnosed with one or more severe and persistent mental illnesses," and "[m]any of these individuals also have a history of substance abuse, and some are medically fragile." Ex. 11 at 4. 40. "The goals of the Reception Center are to provide psychiatric and medical

stabilization along with therapeutic and case management services with the aim of placing its clients in appropriate supportive housing within nine months." Id.; see also Ex. 13 at 6, No. 24. Reception Center residents receive medical and psychiatric treatment and counseling from

On March 1, 2010, OTDA issued violations to BRC for operating the Reception Center, at its current 324 Lafayette Street address, without a valid certificate of occupancy and without OTDA certification, as required by law. More specifically, OTDA concluded that without DOB approval of the legal capacity for the third and fourth floors, which BRC had renovated in 2002 to include dormitory sleeping accommodations, BRC was in violation of 18 NYCRR 491.1(d) and 491.3(g). See OTDA Report of Inspection, dated March 1, 2010, at 2 & 3, attached as Exhibit 15. BRC has been cited each year since 2002 for the same violation without consequence, and DOB has taken no action against BRC for using the Reception Center without a valid certificate of occupancy. See id. at 2. Additionally, the inspection report found numerous other operating violations, including lack of proper operating policies, fire code problems, sanitation issues and failure to cooperate in the mandated annual OTDA inspection process. See id. at 3, 4-6. BRC's history of operating violations is not limited to the Reception Center location. For example, as recently as June 4, 2010, OTDA cited not only BRC, but also DHS for operating the BRC Palace Safe Haven Shelter without seeking OTDA certification in violation of 18 NYCRR 485.1(d). See OTDA Report of Inspection, dated June 4, 2010, at 2, attached as Exhibit 16.

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"social workers, case managers, and health and mental health professionals (all on-site)." Ex. 10 at 14-17 (parenthetical in original). 41. In addition, during the day, Reception Center residents must enroll in day

treatment programs, either on- or off-site. See Ex. 13 at 6, No. 24. Additionally, residents "will be engaged by clinical staff to help them secure entitlements and/or employment, develop daily living skills, prepare for housing interviews, or arrange housing appointments" and will attend "[n]umerous workshops" including, among other things, "art therapy, budgeting, health and nutrition, men's groups, [and] women's groups." Id. After Reception Center residents transition to supportive housing within, on average, nine months, the Reception Center provides "[f]ollowup care for at least one year . . . to assist graduates in maintaining housing and continuing to successfully reintegrate into society." Ex. 11 at 4. 42. Similar to the blueprints for the CDCC, the fourth and fifth floor blueprints for the

Reception Center provide for nurses' stations overlooking the dormitory-style beds as well as exam rooms, in addition to bathrooms, offices, lounges and a reception area. See Ex. 7, Att. 8, Ex. N at FL-4 & FL-5. C. 43. 200-Bed Residence for Mentally Ill Homeless Adult Men The sixth to ninth floors of the Proposed Facility will house a 200-bed residence

program for homeless men suffering from mental illness ("Shelter").6 Additionally, Shelter residents will receive assistance in "furthering their education, pursuing employment, and maintaining their health and sobriety." Ex. 10 at 16-17; see Ex. 13; Ex. 8 at 3.

BRC, in its application to OASAS for State certification of the SASC and CDCC programs, stated that the 200-bed residence was a relocation and expansion of BRC's existing Boulevard Residence program. See Ex.7, Att. 8, Ex. N at FL-6 FL-9. This conflicts with BRC's statements that the 200-bed shelter is a new program.

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44.

The program will be licensed and funded by DHS and operated pursuant to a

contract with DHS. See Ex. 8 at 3. The Shelter, which will be "modeled on the success of [BRC's] numerous other homeless shelters," Ex. 10 at 16-17, will "provide[] a complete range of mental health stabilization, medication management, case management and medical services," Ex. 14 at 2. 45. Although the "immediate goal of the [Shelter] is to provide emergency shelter for

mentally ill men," residents are expected to reside in the Shelter for "at least three to four months." BRC Proposal to New York City Department of Homeless Services, dated February 8, 2010, at D, pp. 1, 3, attached as Exhibit 18. As residents of the Proposed Facility, the homeless "[will] focus on finding their own housing, while also addressing other needs, such as furthering their education, pursuing employment, and maintaining their health and sobriety." Ex. 10 at 1617. The Shelter, both itself and through the mix of programs available at the Proposed Facility, will provide "housing placement services, case management services, mental health treatment, substance abuse treatment, and vocational services designed to support residents in achieving full recovery and community reintegration goals." Ex. 13 at 6, No. 24. 46. The Shelter will achieve these goals with a dedicated staff of nine certified

nursing assistants, 1 full-time and 1 part-time psychiatric nurse practitioner, two clinical supervisors, ten independent living specialists, two intake specialists and four retention specialists. See New York City Department of Homeless Services FY 11 Annual Review Budget Summary Form, dated April 22, 2010, at 2, attached as Exhibit 19; see also Ex. 18 at D, p. 3. In addition, as with the Reception Center, residents must enroll in day treatment programs, either on- or off-site. See Ex. 13 at 6, No. 24 & 7, No. 26. Further, Shelter residents "will be engaged

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by clinical staff to help them secure entitlements and/or employment, develop daily living skills, prepare for housing interviews, or arrange housing appointments." Id. at 6, No. 24. 47. Consistent with the blueprints for the SASC, CDCC and Reception Center floors,

the four Shelter floors have nurses' stations overlooking the dormitory-style beds in addition to bathrooms, offices, lounges and reception areas. See Ex. 7, Att. 8, Ex. N at FL-6 - FL-9. Moreover, floors seven and nine contain exam rooms as well as additional nursing stations. See id. at FL-7 & FL-9. D. 48. Fred Cooper Substance Abuse Service Center BRC's Fred Cooper Substance Abuse Service Center ("SASC"), which will be

located on the tenth floor of the Proposed Facility, is a daytime, non-residential, "medically supervised outpatient service" for the treatment of alcohol and substance abuse problems in homeless and marginally housed men and women, and focuses on the treatment of "severely dysfunctional chronic alcoholics and other substance abusers with poor treatment histories." Ex. 11 at 6; see also OASAS Chemical Dependence Certification for the Fred Cooper Substance Abuse Services Center, dated June 22, 2010, App. Summ. at 2, attached as Exhibit 20.7 Unlike typical outpatient substance abuse programs, the SASC focuses exclusively on serving the homeless, "including those who are dually diagnosed" with more than one form of mental illness. Id. at 3. Accordingly, SASC patients have a significantly higher level of dysfunction and incidence of co-occurring mental illness than those in similar out-patient substance abuse programs. See id. at 3 & n.1.

In order to relocate the SASC, BRC must obtain permission and a new operating certificate from OASAS. Accordingly, BRC submitted its application, along with blueprints of the Proposed Facility, to OASAS on June 22, 2010. The status of the application is unknown.

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49.

Patients enrolled in the SASC program receive physical and mental evaluations,

treatment and counseling from licensed physicians, nurses and substance abuse counselors. See id., Part IV - Resource Allocation at 2 & Att. 23. 50. Like the CDCC, the SASC is licensed by OASAS and, accordingly, the physical

and psychiatric medical care that SASC offers must comply with OASAS regulations. See Mental Hygiene Law 19.40; 14 NYCRR 822 et seq. 51. The SASC receives funding from, among other sources, Medicaid and DOH. See

Ex. 20, Part IV - Resource Allocation at 1; see also id., Part II - Site Info. at 1; see also id., App. Summ. at 3. In addition, DOH will provide BRC with $197,512 for "purchase or lease" of the Proposed Facility. Id. at 4. E. 52. Continuing Day Treatment BRC's Continuing Day Treatment ("CDT") program, which will share a portion of

the tenth floor with the SASC, is a daytime, non-residential program that provides medicallysupervised outpatient services such as "on-site psychiatric treatment and medication management, case management, assistance with entitlements and housing, and rehabilitation services" to treat mental illness, specifically for homeless men and women, many of whom also suffer from alcohol or substance abuse addictions. Ex. 11 at 6. 53. In addition to the medical treatment services, CDT patients "receive two meals,

engage in individual and group counseling, and attend three hour-long therapeutic groups on topics such as medication management, independent living, and health education." Ex. 13 at 6, No. 24. These services are paid for through, among other means, Medicaid. See Ex. 11 at 6; see also Ex. 8 at 2.

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54.

The CDT is licensed by the New York State Office of Mental Health ("OMH")

and therefore must adhere to mandated State regulations for the operation of its facility. See Mental Hygiene Law 7.09(b), 31.04(a); 14 NYCRR 501.1 et seq., 587.1 et seq.; see also Letter from James B. McQuide, OMH Director of Bureau of Inspection & Certification, to BRC Executive Director Lawrence Muzzy Rosenblatt, dated February 12, 2008, attached as Exhibit 21. F. 55. Home-Based Case Management and Metropolitan Apartment Program BRC also plans to relocate two of its case management programs to the eleventh

floor of the Proposed Facility. See Ex. 8 at 3. The first, the Home-Based Case Management ("HBCM") program, provides "comprehensive case management services to individuals diagnosed with a serious and persistent mental illness, many with a history of homelessness and/or substance abuse," who reside independently in transitional housing or other residential situations. Ex. 11 at 8. As indicated, the case management services provide planning, coordination, monitoring, and evaluation of medical services to the enrolled patients. Id. 56. Consistent with its medical focus, the HBCM program receives funding from

Medicaid, DOH and the New York City Human Resources Administration's Adult Protective Services division. See id.; see also Ex. 13 at 3, No. 10. 57. The additional relocated case management program, the Metropolitan Apartment

Program ("MAP"), "is a transitional housing program targeting formerly homeless clients who are either mentally ill or dually diagnosed as mentally ill and chemically addicted." Ex. 11 at 5; see Ex. 8 at 3. 58. The program, funded by OMH and Medicaid, provides case management, money

management, skills training and other services. See id.

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G. 59.

Food Service Program The first and second floors of the Proposed Facility will house a commercial

kitchen and cafeteria to supply breakfast, lunch and dinner to the in-patient, out-patient and shelter residents of the Proposed Facility. See Ex. 10 at 14-17, 24; see also Ex. 13 at 5-6, No. 23; id. at 6, No. 24; Ex. 7, Part II - Site Info. at 2. H. 60. Executive Offices BRC plans to relocate its executive offices to the twelfth floor. See Ex. 10 at 16-

17. These offices include BRC's "finance, human resources, property management, fundraising, research, and quality assurance, as well as BRC's executive leadership." Id. III. Integrated and Interdependent Nature of the Proposed Facility 61. The foundation of BRC's plan, as clearly set forth in BRC's promotional

materials, interviews with the media and State certification applications, is to create a "vertical campus, centrally located on West 25th Street" that will provide "greater efficiency and greater effectiveness" by combining and centralizing BRC's transitional housing and in- and out-patient treatment facilities along with its case management and administrative support offices "under one roof" and "all working in coordination." Ex. 10 at 1, 14-17. 62. Similarly, DHS has emphasized the Proposed Facility's integrated nature, stating,

"The BRC shelter is necessary in order to meet the Homeless Services mandate of right to shelter each night. [The Proposed Facility] model project will provide necessary services in an integrated model to assist single adults in their efforts to return to the community as quickly as possible." Winnie McCroy, DOB Says No Zoning Problems with 328-Bed 25th St. Facility, Chelsea Now, August 25, 2010 (quoting DHS spokeswoman), attached as Exhibit 22.

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63.

In fact, just last month, DHS Commissioner Seth Diamond announced to the press

that "this is the kind of project that advocates for the homeless have been asking for, one that integrates a variety of services and provides good programs for the people living in the shelter to get counseling and job training . . . ." Letter from Daniel S. Connolly, Esq. to BSA, dated March 15, 2011, Exhibit I, attached as Exhibit 23 (emphasis added). DHS Commissioner Nashak reaffirmed this understanding of the facility a week later in a letter to New York City Council Speaker Christine Quinn where he proclaimed: "The 25th Street facility will house medical and rehabilitative services and is precisely the progressive service model for which City Council members and representatives for the homeless have long called." Letter from Daniel S. Connolly, Esq. to BSA, dated March 25, 2011, attaching Letter from DHS Commissioner Seth Diamond to Council Speaker Christine C. Quinn, dated March 22, 2011, attached as Exhibit 24. 64. Indeed, integration of BRC's programs through relocation to a centralized facility

had been a long-held dream of BRC, see BRC Capital Funding Request Form For Not-For-Profit Organizations, Funding Requested for City FY 2011, Att. II.17 at 2-3, 11, attached as Exhibit 25, and one that BRC had been actively working toward achieving at 127 West 25th Street for over a year and a half, see Anton Troianovski, Homeless Shelter Divides Chelsea, The Wall Street Journal, dated May 19, 2010 (noting year-and-a-half lease negotiation), attached as Exhibit 26. As BRC proudly stated in response to questions posed by the public during a Community Board 4 public forum, the Proposed Facility provides residents "a multitude of services," from mental health and substance abuse treatment to vocational training, that will ultimately provide stability and "develop the clients' daily living skills." Ex. 13 at 7, No. 26. In order to achieve that goal, "[m]ost of their waking hours, clients on site are engaged in specific program activities." Id. at 5, No. 25.

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65.

BRC's intention to centralize and coordinate its programs to provide this

comprehensive treatment to its patients and residents is also apparent from the fact that, in order to obtain OASAS approval for the relocation of the CDCC and SASC to the Proposed Facility, BRC repeatedly emphasized the integrated and interdependent nature of the various programs within the Proposed Facility. For example, BRC's SASC application provides: "BRC will be moving several of our residential programs (over 300 beds) into the same building as SASC, creating a natural client base for which SASC will provide treatment" and enabling "BRC clients in Chelsea . . . to receive shelter, mental health treatment and substance abuse treatment all in the same building." Ex. 20, App. Summ. at 3. That same application stresses how "[t]he majority of the clients that SASC will be serving in the new location will be individuals residing in the shelters which BRC will be operating in same building," thereby allowing "SASC clients . . . access to range of housing and support services through [sic] several other BRC programs that will be co-located in the same building." Id., Part II - Site Info. at 3. 66. Similarly, BRC's CDCC relocation application to OASAS explains the benefits of

the relocation by highlighting that "CDCC clients will also have access to a range of housing and support services through [sic] several other BRC programs that will be co-located in the same building." Ex. 7, Part II - Site Info. at 3. Indeed, both applications underscore how the consolidation of such a troubled subset of the homeless population -- those suffering mental illness, often suffering from multiple, severe and persistent mental illnesses, and alcohol and substance addiction -- in one location "would bring a unique treatment approach and needed services to a population that may not be able to access such services in more limited or traditional treatment settings." Id., App. Summ. at 3 & Part II - Site Info. at 3; see Ex. 20, App. Summ. at 3 and Part II - Site Info. at 3.

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67.

The coordinated nature of the Proposed Facility is further evidenced by the use of

shared staff throughout the space. For example, a full-time psychiatrist will service the entire Proposed Facility and a medical director will oversee all medical-related policies and procedures at the Proposed Facility. See Ex. 14, at 3, No. 7. Additionally, BRC staff will provide security for the entire Proposed Facility and the security plan addresses the full Proposed Facility, not each program individually. See id. at 2, Nos. 4 & 5; see also BRC Strategy for Safety and Security at 127 West 25th Street, attached as Exhibit 27. Moreover, those same staff members will perform general administrative and custodial duties for the entire Proposed Facility, including distributing supplies, such as linens and toiletries, conducting fire drills and answering telephones. See Ex. 14 at 2, No. 5. 68. As noted above, all residents, as well as those patients enrolled in out-patient

programs, will be provided two to three meals each day in the second floor cafeteria, id. at 5, No. 23 & 6, No. 24, and are free to use the roof garden, id. at 10, No. 43. 69. Further, BRC has made clear that residents will be under the constant supervision

of BRC staff. "All the BRC programs at [the Proposed Facility are] staffed full time, with 24hour staffing in the three residential programs." Ex. 13 at 6, No. 25; see Ex. 7, Att. 10 (showing nurses' stations in all dormitory sleeping areas); see also Amended Plans for Job No. 120288054, A-101.01 - 105.01, attached as Exhibit 28 (showing security stations in all dormitory sleeping areas). Additionally, "[w]henever clients are on site, they are under supervision of BRC staff," including "meal times, recreation and leisure times." Ex. 16 at 6, No. 25; see Ex. 10 Att. 10 (showing nurses' stations in all dormitory sleeping areas); see also Amended Plans for Job No. 120288054, A-101.01 - 105.01, attached as Exhibit 28 (showing security stations in all dormitory sleeping areas).

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70.

In fact, no portion of the Proposed Facility is open to the public at large or even

the general homeless population. Rather, occupancy is restricted to those homeless that suffer from mental health issues or substance abuse addiction, see Ex. 13 at 4-5, Nos. 15-18; Ex. 25, Att. II.17 at 6 ("A substantial majority of our clients could just as easily and accurately be labeled: "addict," "alcoholic," "mentally-ill," or "ex-offender."), with the overwhelming majority of that specific population arriving at the Proposed Facility through referrals from DHS or other homeless service providers, see Ex. 13 at 9, No. 38; see also Ex. 14 at 4, No. 13. 71. BRC staff conducts "thorough screening" and "extensive intake evaluation" of all

the residents, including a "comprehensive psycho-social evaluation," see Ex. 13 at 9, No. 38; Ex. 14 at 4, No. 13, performed pursuant to State laws and regulations governing compliance with admission standards and social rehabilitation and supervision services for shelters and in-patient and out-patient programs, see 18 NYCRR 491.4 & 491.8; see also 14 NYCRR 818.4 & 822.4. 72. Further, BRC staff search all residents and their belongings upon their arrival for

weapons and illegal substances, and residents are subject to random searches of their person, belongings and living space at any time. See Ex. 14 at 2, Nos. 5, 6 & Safety Plan at 3. 73. Additionally, all residents of the Proposed Facility are subject to the nightly,

DHS-mandated curfew of 10 p.m., which prevents residents from arriving at or departing the Proposed Facility until the morning. Ex. 13 at 6, No. 23 & 7, No. 30. 74. The Proposed Facility does not limit how long a patient or resident can stay. BRC

"projects that the average duration of program participation . . . among the residential programs . . . will be 25 days." Ex. 14 at 4, Nos. 11 & 12. In fact, in at least the Reception Center, residents may stay longer than nine months, and are expected to be there for at least three to four

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months. See infra 228-231. Accordingly, many residents will stay longer than 25 days, and BRC has stated that it does not force anyone to leave its programs, but rather allows them to stay until they are capable of transitioning to more independent living arrangements. See Affirmation of Daniel S. Connolly, Esq. In Support of Amended Verified Petition, dated May 6, 2011 ("Connolly Aff."), 11. IV. Zoning A. 75. The Zoning Resolution The Property is located in an M1-6 zoning district. See New York City Zoning

Map, Section 8d, attached as Exhibit 29. For each zoning district, the ZR sets forth both the Use Groups ("UG"), and specific uses within each Use Group, that are permitted or prohibited. 76. The ZR also provides rules of construction that state, among other things, when

interpreting the text of the ZR, the "particular shall control the general," ZR 12-01(a), and in determining the applicable UG, [w]henever any provision of this Resolution and any other provisions of law, whether set forth in this Resolution or in any other law, ordinance or resolution of any kind, impose overlapping or contradictory regulations over the #use# of land, or over the #use# or #bulk# of #buildings or other structures#, or contain any restrictions covering any of the same subject matter, that provision which is more restrictive or imposes higher standards or requirements shall govern.8 ZR 11-22 (emphasis added). 77. The ZR further provides: "Whenever a #use# is specifically listed in a Use Group

and also could be construed to be incorporated within a more inclusive #use# listing, either in the same or another Use Group, the more specific listing shall control." ZR 22-00; see ZR 3300, 42-00.
8

Words within the ZR that are offset by # # are defined terms under ZR 12-10.

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B. 78.

The Proposed Facility ZR Designation UG 3 consists of various types of "community facilities," ZR 12-10, including:

Nursing homes and health-related facilities as defined in [the New York State Hospital Code], each of which have secured certification by the appropriate governmental agency [: philanthropic or non-profit institutions with sleeping accommodations . . . [and] . . . sanitariums . . . ]. ZR 22-13. 79. Pursuant to this definition, the Proposed Facility is properly designated a UG 3

non-profit institution with sleeping accommodations or, in the alternative, health-related facility. 80. However, UG 3 community facilities are prohibited in M1 zoning districts, such

as the zone in which the Proposed Facility has been sited.9 ZR 42-12. 81. Accordingly, BRC submitted plans and information designating the Proposed

Facility as a hotel under UG 5, and was, therefore, able to obtain DOB approvals and construction permits. See Ex. 27. UG 5 hotels are permitted as-of-right in M1 zoning districts. See ZR 42-11. V. BRC's Application Process A. BRC's Application to The Department of Housing, Preservation & Development of the City of New York In order to create the Proposed Facility, BRC first had to obtain approval for the

82.

dormitory-style sleeping accommodations from The Department of Housing, Preservation & Development of the City of New York ("HPD"). Pursuant to 27-2077 of the Housing Maintenance Code ("HMC"), a subdivision of the Admin Code, parties seeking to convert buildings to create "rooming units," which include living accommodations that do not have
9

The exceptions are limited. Only UG 3 "[m]useums that are ancillary to existing Motion Picture Production Studios or Radio or Television Studios" are permitted without special permit from the CPC or a use variance from BSA. ZR 42-12.

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bathrooms or kitchens for the exclusive use of the occupant, such as those in the Proposed Facility, must obtain pre-approval from HPD.10 See HMC 27-2077; see also HMC 272004(a)(15), (27)(d). 83. As the City sought to eradicate the rapid rise of tenement housing to protect lower

income families from the "fire and health hazards, . . . decline of neighborhoods and the creation of slums" that such illegal housing spawned, Local Law No. # 24 at 1, attached as Exhibit 30, the City promulgated the rooming unit restrictions in the HMC. Permission for these living arrangements can only be granted, therefore, in certain specifically enumerated circumstances, including where the rooming units will be "owned, operated or used by . . . a non-profit organization." HMC 27-2077(a)(4). 84. Accordingly, BRC "requested that [HPD] approve conversion of part of the

[Proposed Facility into "rooming units"] pursuant to Housing Maintenance Code 27-2077." Letter from HPD Deputy Commissioner Vito Mustaciuolo to DOB First Deputy Commissioner Fatma Amer, dated December 22, 2009, attached to ZRD1/CCD1 Response Form, dated January 4, 2010, at 8, attached as Exhibit 31. By letter dated December 22, 2009, HPD Deputy Commissioner Vito Mustaciuolo approved BRC's conversion request and, notably, transmitted it directly to DOB with only a copy to BRC. See id. at 8.

10

Under HMC 27-2004(a)(15):

Rooming unit shall mean one or more living rooms arranged to be occupied as a unit separate from all other living rooms, and which does not have both lawful sanitary facilities and lawful cooking facilities for the exclusive use of the family residing in such unit. It may be located either within an apartment or within any class A or class B multiple dwelling. A rooming unit shall not include a living room in a class B hotel or any other dwelling complying with section sixty-seven of the multiple dwelling law and so classified and recorded in the department.

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B. 85.

BRC's Initial Application to DOB On December 23, 2009, rather than submitting a standard work permit application

for construction of the Proposed Facility, BRC instead submitted a letter to DOB describing the Proposed Facility as a hotel and seeking pre-permit "confirmation that the proposed use of the Premises is permitted as-of-right, as a Use Group 5 transient hotel." Id. at 5. Within days of the request, even with the intervening Christmas and New Years' holidays, Respondent DOB Assistant Commissioner to Technical Affairs and Code Development James P. Colgate approved BRC's UG 5 transient hotel use on January 4, 2010.11 See id. at 4. 86. Notably, BRC's request to DOB made no mention of the Proposed Facility's

homeless shelter or medical in- and out-patient facilities. Instead, BRC simply stated that its facility, in accordance with the definition of "transient hotel" in ZR 12-10, would house "transient living and sleeping accommodations, in a dormitory configuration and accessory meeting rooms and offices," where "'one or more common entrances [will] serve all such living or sleeping units'" and residents would be provided with "twenty-four hour desk service, daily housekeeping, telephone service, and linens." Id. at 5, 6. 87. Indeed, BRC justified its characterization of the Proposed Facility as a transient

hotel by comparing itself to the Donald Trump-owned hotel located in Manhattan's Soho neighborhood. See id. at 6. BRC asserted that, because "the occupants of the [Proposed Facility] will occupy the accommodations on a day-to-day or week-to-week transient basis and will not be

Curiously, DOB's original January 4, 2010 confirmation of the Proposed Facility as a UG 5 transient hotel was not posted on BIS until on or about July 1, 2010. See BIS Screenshot of B-Scan Virtual Job Folder for Main Job Application, dated July 1, 2010, attached as Exhibit 32. That confirmation was removed from BIS on or about July 15, 2010, and was not re-posted until on or about July 21, 2010, following complaints to DOB by CFC. See BIS Screenshot of B-Scan Virtual Job Folder, dated July 22, 2010, attached as Exhibit 33.

11

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permanent residents," the Proposed Facility was consistent with a BSA decision that concluded the Trump hotel was a transient use.12 Id. at 6-7. 88. As indicated above, DOB accepted BRC's representations and approved its zoning

designation. DOB concurred with HPD's conclusion that the Proposed Facility would "result in the creation of new 'rooming units' as defined by [HMC] 27-2004(a)(15)," and found that HPD's letter granted the conversion in accordance with HMC 27-2077. Id. at 4. DOB further stated, "A transient facility with multiple beds rented to different individuals or families located within the same dwelling unit (per HMC 27-2004(a)(27)) can be appropriately classified as Use Group 5 'transient hotel' pursuant to the Zoning Resolution and, as such, may be located in the subject M1-6 district." Id. 89. DOB's approval required BRC's certificate of occupancy to note that any

certificate would expire if "ownership, operation or use by the approved institution or public agency for any of the purposes enumerated in [HMC 27-2077(a)] ceases and mandated that the Proposed Facility "must be operated as a transient hotel." Id. Interestingly, DOB also dictated that BRC's "proposed plans shall show compliance with the requirements of Multiple Dwelling Law ("MDL") 66 and 28 RCNY 25-51," which govern Building Code requirements for "lodging houses." Id. Multiple Dwelling Law 67 governs Building Code requirements for

That decision, however, actually is inconsistent with BRC's claim of a transient use. That decision was rendered in response to a dispute regarding individual ownership of certain units within the Trump hotel leading to possible apartment-like permanent occupancy, which would, if true, constitute an impermissible zoning use. See BSA No. 247-07-A, dated May 6, 2008. BSA affirmed DOB's conclusion that the transient nature of the hotel was apparent from the hotel's operating agreement, which contained a restrictive declaration that prohibited any unit from being continuously occupied for more than 29 days. See id. at 1. No such restriction exists for the Proposed Facility, and BRC has stated that residents will stay at the Proposed Facility continuously for in excess of 29 days and, in numerous instances, nine months or more. See supra 89.

12

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transient hotels. "Lodging houses," however, are a type of transient "multiple dwelling, other than a hotel." HMC 27-2004(a)(18). And, as indicated, the rooming units that HPD allowed BRC to create in accordance with HMC 27-2077 cannot, by definition, be placed in a transient hotel. 90. Neither HPD nor DOB made any attempt to reconcile these inconsistencies. As a

result, instead of classifying the Proposed Facility as a UG 3 and/or UG 4 use not permitted in an M1-6, and thus requiring BRC to apply for a special permit, DOB allowed BRC to circumvent the ZR and Admin Code and pre-approved the zoning as an as-of-right UG 5 transient hotel. C. BRC's Amended Applications and Plans 1. 91. First Set of DOB Plans

As part of its December 23, 2009 application to DOB for confirmation of its UG 5

hotel use, BRC submitted a set of plans, dated November 9, 2009, that disguised the true nature of the Proposed Facility. Ex. 31 at 9-21. This set of plans -- one of four sets created by the same architect -- shows "hotel dining" on the second floor, a "transient hotel" on floors three to nine and "offices" on floors ten to twelve ("First DOB Plans"). See id. More specifically, each of floors three to nine show "transient living and sleeping accommodations" containing dormitory style beds in the rear of the Building with "accessory office" and "accessory meeting" rooms in the front. Id. at 12-18. Moreover, floors four to nine include a "corridor" in the middle of the sleeping accommodation space. Id. at 13-18. Floors three to nine also contain a "reception" area leading to the offices and sleeping space. Id. Floors ten to twelve contain "meeting rooms," "offices," and "work stations." Id. at 19-22. 92. These plans were included with BRC's March 9, 2010 work approval application

seeking construction permits to perform an Alteration Type I renovation of the Building to

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convert the Building's existing factory use to a "transitory residential building with offices."13 See Plan/Work Approval Application for Job No. 120288054, dated March 4, 2010 ("Permit Application"), attached as Exhibit 35. As part of that Permit Application, BRC also submitted a proposed certificate of occupancy, known as a Schedule A, that changed the existing factory use for each floor in the Building to a Use Group 5 "lodging house."14 Schedule A to March 4 Plan/Work Approval Application for Job No. 120288054, dated March 4, 2010, attached as Exhibit 37. 2. 93. OASAS Plans

The First DOB Plans, however, are starkly different from another set of plans,

dated December 15, 2009, just one month after the First DOB Plans, created by the same architects and submitted by BRC to OASAS in order to gain relocation permission and operating

The renovation job, which is estimated to cost $14 million, "will take place on all floors, the roof and the basement," and will "include replacement of much of the infrastructure," including not only "replacement of HVAC, electrical and fire systems, but also demolition of interior structures to create the programmatic space for BRC's operations, installation of plumbing for sinks, showers and toilets, installation of a commercial grade kitchen, and creation of roof garden that will require removal and resupport of the base of the roof and installation of new roofing. Revised Addendum to BRC's Capital Funding Request Form for Not-for-Profit Organizations, Attachment B.12, dated April 5, 2010, attached as Exhibit 34. The "lodging house" designation was dictated by DOB. See supra 89. BRC, however, recognized that the designation created significant zoning problems and enlisted DHS's help in resolving them. According to BRC's Executive Director, the "most significant" problem "is that stays cannot exceed a week." See Email from BRC Executive Director Lawrence "Muzzy" Rosenblatt to DHS Deputy Commissioner for Adult Services George Nashak, dated January 16, 2010, attached as Exhibit 36. Rosenblatt complained, "Should HPD attempt to enforce this, [BRC] would not be able to cure, and therefore would be in violation of [BRC's] lease and subject to eviction." Id. Rosenblatt continued, noting that the "lodging house" designation "means never again being able to site a shelter in an M zone 'as of right', possibly having to vacate those that now exist, and only having the 'as of right' option in a residential zone, which is both programmatically and politically undesirable." Id.
14

13

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certification, as required by State law and regulations, for the CDCC and SASC ("OASAS Plans"). See Ex. 7. 94. Unlike the First DOB Plans, the OASAS Plans do not use the term "transient

hotel." Instead, the OASAS Plans expressly highlight the medical nature of the Proposed Facility. Thus, while the OASAS Plans also show "dorm beds" in the rear of the Building on floors three to nine, the "corridor" in the middle of the sleeping space has been relabeled a "nurses' station" and the wall that surrounds the corridor in the First DOB Plans has been replaced with a countertop in the OASAS Plans that allows the nurses' station to oversee the sleeping space. Id. at FL-3 to FL-9. Keeping with the medical nature of the Proposed Facility, the OASAS Plans designate a number of the "offices" on floors three to nine as "exam rooms" and include "nurses' stations" on floors seven and nine. Id. at FL-3 to FL-9. Moreover, even the tenth floor office space in the OASAS Plans contains two "exam rooms" that are listed as "office" in the First DOB Plans. 95. Crucially, the OASAS Plans are the same plans appended as an exhibit to BRC's

lease, and therefore are consistent with the fundamental purpose for which BRC leased the Building. See id. 3. 96. Second Set of DOB Plans

BRC created yet another set of plans on March 29, 2010 ("Second DOB Plans"),

just twenty days after it submitted its initial permit application and plans to DOB for BRC's gut renovation of the Building. See BRC 127 W. 25th St. Blueprints, dated March 29, 2010, attached as Exhibit 38; see also Ex. 34. These plans were created and submitted to DOB in connection with Building Code questions raised by DOB. See Connolly Aff., 6-7.

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97.

Those plans, similar to the First DOB Plans, do not contain exam rooms or nurses'

stations, and merely label the nurses' station overlooking the sleeping space as a "station." Ex. 38 at A-101.00 to A-105.00. 98. Tellingly, although the Second DOB Plans post-date the OASAS Plans by nearly

four months and reflect required DOB changes to the construction, these plans omit the medical service designations set forth in the OASAS Plans. See Exs. 38 & 7, Att. 8, Ex. N. 99. DOB issued BRC construction permits based upon the Second DOB Plans on or

about July 8, 2010.15 See DOB Work Permit, dated July 8, 2010, attached as Exhibit 40. 4. 100. Third Set of DOB Plans

In or around July 2010, after CFC provided information to DOB regarding the

validity of BRC's plans, including the Building lease and OASAS Plans, and after DOB had issued the permits, DOB and BRC met to discuss alleged improprieties in BRC's application process that were raised by CFC and elected officials. See Connolly Aff., 6. 101. CFC was informed that BRC created a third set of plans for the DOB ("Third

DOB Plans") as a direct result of its meeting with DOB.16 See Connolly Aff., 7.

BRC's plans for the Proposed Facility did not become public until a Wall Street Journal article in mid-May 2010 announced BRC's intentions. The article, which BRC's Executive Director Lawrence "Muzzy" Rosenblatt admitted took him "by surprise," offered the public its first glimpse into BRC's activities. See Anton Troianovski, Homeless Shelter Divides Chelsea, THE WALL STREET JOURNAL, dated May 19, 2010, attached as Exhibit 48. Nevertheless, even though construction permits were issued to BRC on or about July 8, 2010, no documents associated with the approvals were posted to BIS until August 4, 2010, and the full approval documents were not posted until August 5th and 10th. See BIS Screenshot of B-Scan Virtual Job Folder for Job No. 120288054, dated August 4, 2010, attached as Exhibit 41. BRC did not submit the Third DOB Plans -- and CFC was repeatedly refused the plans by DOB personnel -- until August 20, 2010. Upon information and belief, DOB policy requires all permit applicants to provide copies of their plans to the DOB Records Office before they can receive construction permits.
16

15

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102.

The Third Set of DOB Plans attempted to evade the requirements of the ZR, and

turn a community facility into a hotel, by inserting a fire wall with self-closing/exit only doors in between the sleeping and medical office space and installing a third elevator to serve the medical space. See Ex. 28 at T-104.00. In addition, BRC submitted an amended Schedule A proposed certificate of occupancy that simply split nearly every floor into Use Group 5 "lodging house" and Use Group 6 "professional offices" along with a comment that "floors occupied by lodging house (Use Group 5) and professional offices (Use Group 6B) are separated by fire rated walls equipped with alarmed fireproofed self closing doors." Ex. 1. 103. Just as in the First and Second DOB Plans, the Third Set of DOB Plans

intentionally omit any mention of exam rooms or nurses' stations, and simply label the nurses' station overlooking the sleeping space as a "security station." Ex. 28 at A-101.01 to A-104.01. 104. BRC began construction weeks before it submitted its Third Set of DOB Plans

and well in advance of DOB's approval of the Third DOB Plans on or about August 5, 2010. See Revised Work Permit, dated August 5, 2010, attached as Exhibit 41; see also BIS Screenshot of Post-Approval Amendment for Job #120288054, dated August 5, 2010, attached as Exhibit 42; Connolly Aff., 7. Even after the revised permit was issued, DOB did not fully approve the Third DOB Plans until August 13, 2010, when it issued a revised post-approval amendment and further revised work permit. See BIS Screenshot of Post-Approval Amendment, dated August 13, 2010, attached as Exhibit 43. D. 105. DOB Final Determination By letter dated August 16, 2010, sent by DOB in response to a letter from the

Honorable Christine Quinn, Speaker of the City Council, raising questions about DOB's zoning determination, DOB set forth its position with respect to the Proposed Facility. More

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specifically, DOB stated that the Proposed Facility qualified as a UG 5 transient hotel under the ZR because BRC informed DOB "that the sleeping accommodations will be made available on a daily basis and that the occupants will not remain in the same dwelling space for more than 30 days." Letter from DOB Assistant General Counsel Amandus J.M. Derr to City Council Speaker Christine C. Quinn, dated August 16, 2010, at 2, attached as Exhibit 44. According to DOB, this fact, in addition to the twenty-four hour desk, housekeeping and linen services and common entrance for all sleeping units, satisfied the definition of "transient hotel" under 12-10 of the ZR. 106. DOB thus ignored the abundant publicly available documents, BRC statements

and BRC applications to State agencies, all provided to DOB by CFC, that revealed the true nature of the Proposed Facility and made clear that Proposed Facility clients would reside there for significantly longer than 30 days. 107. DOB further concluded that the use of "fire-rated walls equipped with alarmed,

fireproofed self-closing doors" and use of "a different elevator" to separate the "Use Group 6 offices on the 3rd to 9th floor . . . from the Use Group 5 transient hotel" adequately satisfied the ZR, "[b]ased on the plans and representations made to [DOB] by BRC." Ex. 44 at 2. DOB's letter, therefore, relies entirely upon BRC's representations as to the use of the Proposed Facility and completely discounts the wealth of information belying those representations. 108. Incredibly, DOB acknowledged that it intentionally refused to consider the true

nature of the Proposed Facility as illustrated in the OASAS Plans under the guise that DOB lacked the authority to review and rely upon those plans: "[DOB's jurisdiction only extends to plans filed with [DOB]." Id.

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109.

By letter dated September 2, 2010, CFC requested that DOB revoke the permits

and, on September 9, 2010, DOB denied CFC's request and stated that was DOB's final determination. See Letter from Manhattan Borough Commissioner Derek Lee to Daniel S. Connolly, Esq., dated September 9, 2010, attached as Exhibit 45. VI. BSA Hearing and Resolution 110. On October 8, 2010, CFC filed an administrative appeal with BSA, requesting

that the permits and approvals issued by DOB for construction of the Proposed Facility be revoked. 111. DOB opposed CFC's appeal, by letter brief dated February 15, 2011. In its

opposition, DOB contended, in part, that the sleeping accommodations portion of the Proposed Facility was properly designated a UG 5 transient hotel, the programs portion of the facility was property designated a UG 6 professional office, and that the MDL and HMC did not prohibit its classification as a transient hotel. 112. BRC also opposed CFC's appeal, by letter brief dated February 18, 2011, arguing

much of the same. 113. By letter briefs dated February 23, 2011, CFC responded to BRC's and DOB's

oppositions. CFC highlighted the legion of BSA decisions and New York State Court decisions in which non-profit providers of homeless services like BRC classified themselves as UG 3 nonprofit institutions with sleeping accommodations. CFC contended that the nexus between the philanthropic purpose of the Proposed Facility and the provision of sleeping accommodations mandated that the facility be designated UG 3, and that the inclusion of a firewall did not separate, nor could it, the residents from the facility's programs. As such, CFC explained the

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facility must be classified a UG 3. Further, CFC clarified why the Proposed Facility could not be a UG 5 transient hotel. 114. A hearing on CFC's appeal was held before BSA on March 1, 2011. At the

conclusion of the hearing, BSA requested supplemental submissions from the parties, which were submitted by BRC and CFC on March 8, 2011 and March 15, 2011, respectively. DOB did not provide such a supplemental submission.17 CFC submitted an additional letter on March 25, 2011. See Ex. 47 (March 25, 2011 letter from CFC to BSA). 115. On April 5, 2011, BSA adopted the Resolution, and on April 6, 2011, BSA filed

and issued the Resolution. See Ex. 48. In its decision, BSA affirmed the DOB's determination primarily for five reasons: 116. First, BSA determined that the Proposed Facility was properly designated a UG 5

transient hotel and UG 6 professional offices under the ZR, explaining that the definition of UG 5 transient hotel was not ambiguous, did not require resorting to common experience or outside sources to understand its definition, and was satisfied merely by meeting the three, literal criteria included in the definition in ZR 12-10. See BSA Resolution No. 189-10-A, filed April 6, 2011, at 12-13, attached as Exhibit 48. Pursuant to ZR 12-10, a "transient hotel" is: . . .a building or part of a building in which: (a) living or sleeping accommodations are used primarily for transient occupancy, and may be rented on a daily basis; (b) one or more common entrances serve all such living or sleeping units; and
17

By letter dated March 29, 2011, DOB instructed BSA of a recent text amendment to ZR 32-15, which now permits "ambulatory diagnostic or treatment health care" in UG 6 offices, uses which were previously forbidden. Letter from Amandus J.M. Derr to the BSA, dated March 29, 2011, attached as Exhibit 46. CFC responded on March 31, 2011. See Letter from Daniel S. Connolly, Esq. to BSA, dated March 31, 2011, attached as Exhibit 47.

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(c) twenty-four hour desk service is provided, in addition to one or more of the following services: housekeeping, telephone, or bellhop service, or the furnishing or laundering of linens. 117. Second, BSA decided that, despite the evidence indicating that the facility's

occupants will stay longer than 30 days, it was reasonable for the DOB to rely on BRC's alleged representations that occupancy of the Proposed Facility will be less than 30 days, thus meeting the transient hotel definition, and that it would defer to DOB to enforce residency restrictions. Id. at 13. 118. Third, BSA noted that the fact that facilities similar to the Proposed Facility have

been designated UG 3 community facility does not impact its decision. Id. 119. Fourth, BSA asserted that precedent and rules of statutory construction did not

require BSA to find that the Proposed Facility was a UG 3 community facility. Id. 120. Fifth, BSA explained that it cannot be determined whether a UG 3 non-profit

institution Sleeping Accommodations is more or less specific than a UG 5 transient hotel, and that nothing in the ZR would prevent DOB from determining that the Proposed Facility could be concurrently a UG 3 and UG 5. Id. at 13-14. VII. Community Board 4 Determination 121. Following a series of public forums and public meetings hosted by CB4's

Housing, Health & Human Services Committee ("HHHS") and attended by BRC, CFC, elected official representatives and hundreds of community business and property owners and residents, on July 23, 2010, CB4 met and passed a resolution regarding the Proposed Facility. 122. The resolution expressly noted BRC's refusal to provide full and accurate

information to CB4 and the community: "At first BRC did not provide full information to the Board or the neighborhood regarding the project, the specifics of its programming, operation or

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security. . . . Some questions remained to be answered, and the Board has conditioned its position on that final information." Community Board 4 Resolution, dated July 23, 2010, at 2, attached as Exhibit 49. The resolution also challenged the sheer magnitude of the Proposed Facility as illegal under the 200-bed shelter capacity limit set by 21-312 of the Admin Code and Local Law 57 of 1998, and detrimental to both the Proposed Facility residents as well as the community at large. Id. 123. Consequently, CB4 approved only a 128-bed facility consisting of the 96-bed

Reception Center and 32-bed CDCC, which approval was conditioned upon (i) compliance with all zoning laws, (ii) a favorable Fair Share result, (iii) establishment of a Community Advisory Committee to address issues created by the Proposed Facility, and (iv) development of a final security plan that includes community input. See id. at 3. VIII. DHS Contracts with BRC A. 124. DHS Contract for 200-Bed Shelter On February 8, 2010, BRC submitted a proposal to build and operate a 200-bed

shelter in response to a DHS open-ended request for proposals. See Winnie McCroy, 25th St. Shelter Plans Elicit Concern, Controversy, Gay City News, dated July 15, 2004, attached as Exhibit 50. 125. The resulting contract for the 200-bed Shelter ("Shelter Contract") was not

publicly released until just prior to the Mayor's Office on Contract Services ("MOCS") public hearing on November 4, 2010. That hearing was held to discuss, among other contracts, the proposed Shelter Contract. See MOCS Calendar of Public Hearings on Contract Awards, dated November 4, 2010, attached as Exhibit 51.

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126.

The Shelter Contract is striking not only for the clear authority it grants DHS over

every facet of the Shelter's operations, but also for the financial responsibility DHS assumes over the Shelter's lease payments and debt service, its operations and its start-up and renovation costs. As DHS succinctly stated, "DHS's proposed contracts with BRC, like other provider contracts, impose obligations on the Provider with respect to, among other things, provision of services, facility maintenance, security, and financial documentation and reporting." Letter from DHS Commissioner Seth Diamond to Mayor Michael R. Bloomberg, dated April 14, 2011, at 7, attached as Exhibit 52; see also DHS Budget, dated November 8, 2010, attached as Exhibit 53. 127. As an initial matter, the Shelter Contract obligates BRC to "work with [DHS] to

ensure that the Shelter is operating as part of the City's homeless services system" and grants DHS the unilateral right to change the purposes of the Shelter at any time to comport with "the needs of the City." Contract Between DHS and BRC for the Proposed 200-bed Shelter at 127 W. 25th Street, New York, New York, arts. 2.A.3, 13, attached as Exhibit 54. 128. These provisions match statements made by Respondent Deputy Commissioner

Nashak in an affidavit submitted in the above-captioned proceeding. Affidavit of George Nashak in Opposition to Petitioners' Request for a Preliminary Injunction, dated January 24, 2011 (without exhibits) ("Nashak Aff."), 15, attached as Exhibit 55 (stating that the 200-bed Shelter is "part of [DHS's] plan to meet projected needs."). Nashak further states that the Shelter is necessary to meet the City's legal obligation to provide shelter to the homeless, and the procurement of the BRC's services at the Shelter is required to meet expected demand

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projections.18 See id., 9-15; see also id., 13 ("[W]e are procuring significant capacity to ensure we meet the projected demand."). 129. The Shelter Contract states that "[BRC] shall operate the Shelter in accordance

with . . . [DHS] policies and procedures." Ex. 54, art. 2.A.2. Indeed, "DHS oversees and monitors the performance of its shelter providers, including BRC, through comprehensive site inspections and performance reviews. The results of these evaluations and inspections, including deficiencies, are recorded in a report in response to which the provider must submit a corrective action plan." Ex. 59 at 7 (noting OTDA and other agency inspections and controls; see Ex. 54, art. 2.X ("[T]he Court-appointed monitoring agency for the City's shelters . . . is entitled access to the Shelter and Shelter clients, with the client's consent."). 130. Further, the Shelter Contract mandates that "[DHS] shall be the only referral

system and [BRC] shall accept all homeless adults referred to it by [DHS]." Ex. 54, art. 2.C.1 (emphasis added). Additionally, DHS requires BRC to "operate the Shelter at an average of 95% of the Shelter's full capacity." Id., art. 2.F.1. 131. DHS will pay BRC on a monthly basis not to exceed $7.2 million annually and

$76.1 million over the eleven-year Shelter Contract term. See id., art. 10.B, D. Importantly, DHS has directly accepted responsibility for the payment of BRC's lease for the Proposed

While this statement is consistent with the rapid rise of DHS shelters throughout the New York area, see Leslie Albrecht, City Officials Skip Out on UWS Homeless Shelter, DNAINFO.COM, dated Jan. 26, 2011, attached as Exhibit 56; Mosi Secret, Move to Double Capacity of a Shelter Raises Fears, THE NEW YORK TIMES, dated Jan. 19, 2011, attached as Exhibit 57; Patrick Rocchio, Highbridge protests 200-bed men's homeless shelter, YOURNABE.COM, dated Jan. 12, 2011, attached as Exhibit 58, DHS nevertheless has stated that, "in the event DHS were ordered to remove clients from the Shelter [as a result of CFC's legal challenge], DHS would have the capability to transfer them to other shelters within the Agency's single adult shelter system (or DHS-contracted facilities geared predominately to street homeless clients)," Ex. 52 at 20.

18

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Facility: "[DHS] acknowledges that [BRC]'s lease for the Shelter provides for annual increases in rent payments over the term of the lease [and DHS] represents that the yearly budgets for the operation of the Shelter shall include sufficient monies to pay for the annual lease payments and the yearly increases in rent." Id., art. 10.E (emphasis added). 132. DHS's lease payment obligations are consistent with provisions of BRC's lease,

one of which permits BRC to assign or transfer all or any portion of the Building space to the City without the landlord's consent. See Ex. 7, 10.2(a)(iii). Upon information and belief, DHS is aware of this provision and consented to its inclusion in BRC's lease.19 133. Even more importantly, DHS has agreed to repay BRC's multi-million loan,

which BRC obtained to pay for the renovation of the Proposed Facility. According to BRC and DHS communications, DHS built in "additional rent" payments to cover "the debt service required for the loan to build out the residential program spaces." See BRC Cost Allocation Plan, 127 West 25th Street, attached to an email exchange between Christine Chisholm and Alyson Zikmund, dated June 23, 2010, attached as Exhibit 59. The Shelter Contract includes "up to $1.2 million to cover planning and construction costs associated with the renovation." Ex. 25. Indeed, Respondent DHS Deputy Commissioner Nashak stated that a portion of the contract cost would be used to recoup construction costs. See Connolly Aff., 10. 134. The Shelter Contract's initial eleven-year term runs from September 1, 2010 to

June 30, 2021, may be extended at DHS's unilateral option for two, five-year terms and may be terminated only by DHS; BRC has no termination rights. See Ex. 54, arts. 9.A, 9.B, 10.

Consistent with the City and BRC's repeated efforts to keep the development of the Proposed Facility secret, the lease requires the parties to keep the existence and terms of the lease confidential. See Ex. 7, 44.1.

19

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135.

Numerous other provisions make clear that DHS maintains operational and

decision-making control over the entire Shelter. For example, BRC must "consult with, and receive written approval from, [DHS] before initiating any structural changes, including renovations and room reconfigurations, divisions or change in use." Id., art. 5.A.1 (emphasis added). 136. Similarly, Article 2 sets forth, in detail, the services that BRC must provide the

homeless residents and DHS retains audit and approval authority over the manner in which BRC provides those services. Id., art. 2.H-R, Y. Indeed, BRC may not make "[c]hanges in any major program component; or . . . [c]hanges in the level of paid or unpaid staff" without DHS's prior written approval. Id., art. 2.V.1. In fact, pursuant to the Shelter Contract residents are required to participate in the facility's programs. See id., Ex. 1, 1. If residents participate in a similar program outside the facility, BRC is required to actively monitor their participation in that thirdparty program. See id., 7. 137. Surprisingly, DHS must even approve not only the Shelter directors, but also the

Shelter's maintenance superintendant. See id., arts. 7.F, 5.A.1.d. IX. Capital Funding for the Proposed Facility 138. BRC publicly has stated that well in excess of 80 percent of the Proposed

Facility's operating expenses will be paid for by the City, whether through DHS, DOH or other City agencies.20 Connolly Aff., 10.

In FY 2010, BRC received 98 percent of its annual operating budget from government sources and expects to receive the same percentage in 2011. See Ex. 25 at Page II-6. In addition, BRC earned $22.5 million in City contracts in fiscal year 2009, expects to earn over $23 million in fiscal year 2010 and projects it will earn nearly $26.7 million in fiscal year 2011. See id. at Page II-8. Thus, government funds represent over half of BRC's annual income of $49 million, see id., with nearly a third of that from DHS contracts, see id.

20

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139.

By or about April 22, 2010, DHS already had completed its budget summary for

the Shelter for use in DHS's fiscal year 2011 budget review. See Ex. 19. The budget sets an annual DHS payment to BRC of $9.6 million, of which $2.9 million goes to personnel expenses, nearly $2 million covers rent expense and some $2.2 million is allotted for start up costs. See id. at 1. The personnel expenses cover the employment of nine certified nursing assistants, 1 fulltime and 1 part-time psychiatric nurse practitioner, two clinical supervisors, ten independent living specialists, two intake specialists, four retention specialists and some 29 back-office employees, including accountants, administrative assistants and six executive-level positions. See Ex. 25, Attachment II.5 at 2, 6. 140. Additionally, BRC submitted an application to the New York City Office of

Management & Budget ("OMB") to obtain $1.4 million in capital funds to purchase furniture and equipment for the Proposed Facility. See Exhibit 25; see Connolly Aff., 10. This includes all the "desks, chairs, moveable dormitory furniture for residential programs, and various moveable storage devices for both programmatic and administrative use." See Ex. 25 at B-3; see also id. at Attachment B.13 (containing itemized list and cost per unit of moveable property BRC plans to purchase). 141. This OMB funding is available only for "City Projects," which includes projects

by non-profit organizations that operate within the City, whether on City owned or leased property or not, that will be used for a "City Purpose." See id. at i, viii. A "City Purpose" includes any "specific purpose to be served by the Project for the benefit of the City" that "constitute[s] an eligible capital project according to the City Comptroller's Directive 10." See id. at i, iii. Under City Comptroller's Directive 10, "Capital Projects on privately-owned property," such as construction of a "social services organization in privately-owned space," are

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eligible to receive capital funds. See Directive 10 - Charges to the Capital Projects Fund, Internal Control and Accountability Directives, Office of the Comptroller, dated June 3, 2005, at 18, 10, attached as Exhibit 60. 142. As part of its funding request, BRC must consent to a covenant prohibiting the

use of the moveable property for any "non-City Purpose" and a lien to secure against such improper use. See 25 at III-1.

X.

City Reviews A. 143. Fair Share Review Shortly after BSA issued its Resolution and months after the City's repeated

statements that a Fair Share review was underway, DHS released the results of its Fair Share analysis ("Fair Share Review" or "Review").21 See Ex. 52. The Review is replete with

Section 203 of the Charter requires the City to perform a Fair Share analysis to determine whether the subject area can absorb another "City facility" into its neighborhood with minimal impact. According to Charter 203(c), a "city facility" is any "facility used or occupied or to be used or occupied to meet city needs that is . . . operated by the city or pursuant to a written agreement on behalf of the city." The RCNY further defines a "city facility" as [a] facility providing city services whose location, expansion, closing or reduction in size is subject to control and supervision by a city agency, and which is: (i) operated by the city on property owned or leased by the city which is greater than 750 square feet in total floor area; or (ii) used primarily for a program or programs operated pursuant to a written agreement on behalf of the city which derives at least 50 percent and at least $50,000 of its annual funding from the city. 62 RCNY App. A, art. 3(a). The City does not dispute that the Proposed Facility is a "City facility" for purposes of 203. See Connolly Aff., 13; Winnie McCroy, CB4, Elected Officials: BRC Shelter Plans Too Big, Gay City News, dated July 30, 2010, attached as Exhibit 61.

21

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statements describing the purpose and operation of the Shelter and Reception Center and Proposed Facility. 144. The Fair Share Review focuses on both the 200-bed Shelter and the 96-bed

Reception Center, and statements in the Review concede that the City participated in the site selection for both shelters and that the shelters are operated pursuant to contracts with DHS. See Ex. 52 at 1, 23 (noting contractual obligations and "significant DHS and state oversight" of both the Reception Center and Shelter). 145. Further, the Review states that, "[u]nder the [Shelter Contract], BRC will provide

a full complement of social services to its clients in an effort to assist them to move out of shelter and into housing options that will allow them to remain stably housed in the community." Id. at 2. Under the soon-to-be amended Reception Center contract, "BRC will provide social services aimed at assisting Reception Center clients to obtain long-term housing solutions." Id. at 2-3. 146. Illustrating the integrated and interdependent nature of the various programs

within the Proposed Facility, the Review states, "Clients' access to services in the Shelter, Reception Center and other programs housed in the Building, three meals a day, laundry services, and a roof garden will greatly reduce reliance on community service . . . ." Id. at 3. The Review also observes that all the programs in the Proposed Facility will be available to clients of the Shelter and "that the co-location of these programs in the same building as the Shelter and Reception Center would provide a substantial benefit to the Shelter clients by offering very convenient access to needed services." Id. at 7. 147. Further, the Review describes the shared use of BRC staff throughout the

Proposed Facility. Id. at 12 (noting some 79 employees will work throughout the Proposed Facility and are not assigned to any one program).

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B. 148.

Environmental Reviews As with the Fair Share Review, the City released its Environmental Assessment

Statement ("EAS") shortly after BSA issued its Resolution on April 5, 2011, even though the EAS certification form is dated February 15, 2011, and the EAS report is dated March 2011.22 See Environmental Assessment Statement (EAS) and Supplemental Studies to the EAS for the BRC Service Center, dated March 2011, attached as Exhibit 62. 149. The EAS was prepared for DHS by a third-party. The EAS analyzes the

environmental impact of the entire Proposed Facility, and, like the Fair Share Review, statements in the EAS establish important facts about the Proposed Facility. Indeed, many of the statements in the Fair Share Review are repeated in the EAS, including statements concerning the social services provided by Shelter staff as well as the co-located programs and the integrated nature of the Proposed Facility. See id., Supp. at 1, 2. 150. Notably, in concluding that no adverse impact to the neighborhood character

would result from the Proposed Facility, the EAS states that "the BRC Service Center will be a single vertically integrated campus with a full complement of on-site social and residential services for occupants," and concluded that "[t]he self-contained nature of the Service Center" would limit any adverse effects. Id. (emphasis added).

The State Environmental Quality Review Act ("SEQRA"), ECL 8-0101 et seq., and the New York City Environmental Quality Review ("CEQR"), 62 RCNY 5-01 et seq., were enacted "to incorporate the consideration of environmental factors into the existing planning, review and decisionmaking processes of state, regional and local government agencies at the earliest possible time." 6 NYCRR 617.1(c). To carry out this purpose, "all agencies" must "determine whether the actions they directly undertake, fund or approve may have a significant impact on the environment," 6 NYCRR 617.1(c), by assessing the impact of the proposed use on "noise, objects of historic or aesthetic significance, existing patterns of population concentration, distribution, or growth, and existing community or neighborhood character." ECL 8-0105(6).

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C. 151.

Comptroller Registration Section 328(a) of the Charter states that "[n]o contract or agreement executed

pursuant to this charter or other law shall be implemented until . . . a copy has been filed with the comptroller . . . ."23 152. The City has represented that its Shelter Contract has in fact been sent to the

Comptroller's Office for registration, and that registration would occur before the Shelter is opened. See Ex. 17. However, the City has made no such promise with respect to any other contract. For example, despite repeated statements that BRC and DHS will enter into a contract for the Reception Center, see Exs. 17, 52, 62, the City has made no representation about the timing of that contract or whether it will be registered prior to opening the Reception Center. Additionally, the numerous other programs -- CDCC, SASC, CDT, HBCM, MAP and Food Service -- all receive funding from City agencies. See Exs. 19, 52, 59. The City has made no mention of whether these City contracts have been registered with the Comptroller. 153. DHS, of course, has a lengthy history of not complying with the City's and

Comptroller's rules regarding procurement and contract registration. The Comptroller has issued several audits that detail DHS's willful noncompliance with procurement and contract registration law. See Office of the Comptroller, Audit Report on the Compliance of the Department of Homeless Services with City Procurement Rules and Controls Over Payments to Non-Contracted Providers, dated March 25, 2010, attached as Exhibit 63; Office of the Comptroller, Audit Report on Department of Homeless Services Controls Over Payments to

The registration requirement applies to all city contracts with certain limited exceptions, which are inapplicable here. Charter 328(d).

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Hotel and Scatter Site Housing Operators July 1, 2001-June 30, 2002, dated October 1, 2003, attached as Exhibit 64. 154. In its most recent audit report, issued on March 25, 2010, the Comptroller

observed that DHS made nearly $152.7 million in payments to non-contracted providers and, in derogation of the law and sound procurement practice, intentionally operated pursuant to "unwritten or handshake" agreements with providers. Ex. 63 at 1, 4. 155. Further, DHS's refusal to register the contract quashes any Comptroller review of

the service provider or the propriety of the procurement process. These practices have been the subject of recent investigation after allegations of fraud and corruption arose. See David Seifman, $2M for 'gimme, gimme!' shelter, New York Post, dated October 3, 2010, attached as Exhibit 65. ARGUMENT I. The Zoning Resolution and All Applicable Laws Regarding Use and Occupancy Must Be Properly Enforced 156. "The plan of the Zoning Resolution is to classify and list all permissible uses of

land in 'Use Groups', and to then specify in which districts the various use groups may be located." Manton v. N.Y.C. Bd. of Standards & Appeals, 117 Misc.2d 255, 256 (Sup. Ct. Queens Cty. 1982). As the Charter provides, the Board and DOB are responsible for administering and enforcing the ZR. Charter 643, 666; ZR 71-00; see Appelbaum v. Deutsch, 66 N.Y.2d 975, 977 (1985). 157. As the Court of Appeals has made clear, DOB is required to ensure that permits

are in compliance with all relevant laws: "There can be little quarrel with the proposition that [DOB] has no discretion to issue a building permit which fails to conform with applicable provisions of law, and that the Commissioner may revoke a permit which has been issued in

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error and conditions are such that a permit should not have been issued." Parkview Assocs. v. City of New York, 71 N.Y.2d 274, 281 (1988) (internal quotes omitted). 158. This responsibility to enforce the ZR is not to be understated. Allowing

impermissible uses to be sited in contravention of the City's land use regulations jeopardizes the fundamental purpose of the ZR to "promote and protect public health, safety and general welfare." ZR 11-21. As set forth in the ZR, "The zoning districts established in this Resolution . . . are designed to guide the future use of the City's land by encouraging the development of desirable residential, commercial and manufacturing areas with appropriate groupings of compatible and related uses and thus to promote and to protect public health, safety and general welfare." ZR 51-00. 159. Ensuring compliance with the ZR, therefore, is essential in order to prevent

abuses that would negate city planning in accordance with the goals of the ZR. Further, lack of diligent enforcement would result either in the City's sanctioning zoning violations or of a policy geared toward economic waste. See 9th & 10th St. L.L.C. v. Bd. of Standards & Appeals of N.Y., 10 N.Y.3d 264, 270 (2008) ("9th & 10th Street II") ("It would create needless problems if [an applicant] built a . . . building, only to find that it could not use it in a legally-permitted way. The City would then face a choice between waiving the legal restrictions and requiring the building to remain vacant or be torn down."); see also 9th & 10th St. L.L.C. v. Bd. of Standards & Appeals of N.Y., No. 116091/05, 2006 WL 2000128 (Sup. Ct. N.Y. Cty. July 18, 2006) ("9th & 10th Street I"), aff'd, 10 N.Y.3d 264 (2008) ("Once erected, the building cannot be unbuilt (without great expense), and its impact on the neighborhood cannot be undone."). 160. Accordingly, DOB has the power and authority to reject applications, and BSA

has the power and authority to affirm such rejections, where an applicant's proposed use does not

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match its truly intended use, and have in fact asserted this authority to prevent illegal uses at their inception. See 9th & 10th Street II, 10 N.Y.3d at 270 (in affirming DOB permit rejection, stating that DOB's request "[t]o seek such assurances" through documentary proof establishing that intended use would prove to be actual use "seems no more than prudent"); see also BSA Resolution No. 307-06-A, dated June 19, 2007 (affirming DOB's authority to request that applicant substantiate proposed use group classification); BSA Resolution No. 95-05-A, dated Oct. 18, 2005 ("Where two uses appear very similar on plan[s], yet result in very different zoning benefits . . ., it is incumbent upon [DOB] to ask for documentation to substantiate the particular community facility use."),24 aff'd 9th & 10th Street II. 161. Although the application process relies to a certain extent upon an applicant's

representations regarding its proposed use, see Pantelidis v. N.Y.C. Bd. of Standards & Appeals, Index No. 110531/01, 2001 WL 36197394 (Sup. Ct. N.Y. Cty. Dec. 26, 2001) ("When you apply to the DOB for a construction permit, you must be truthful and should 'say what you mean and mean what you say.'"), the courts have not permitted DOB, BSA or any agency to abdicate their authority, see 9th & 10th Street I and II, and have chastised them where the agency was not vigilant enough, see Pantelidis, 2006 WL 36197394 ("It is glaringly obvious that the petitioner had no intention of building a 'greenhouse' as the term is plainly understood and this nomenclature was improperly, albeit successfully, utilized in Pantelidis' DOB application to circumvent the applicable ZR roadblocks and gain DOB approval . . . ."). 162. Thus, while the Court of Appeals has made clear that the interpretation of the ZR

by BSA and DOB must be "given great weight and judicial deference," the state's highest court

Copies of BSA resolutions, cited herein, as well as unpublished court decisions, are provided in the accompanying CFC Compendium of Unreported Cases and BSA Resolutions.

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has also made clear that such deference is only afforded "so long as the interpretation is neither irrational, unreasonable, nor inconsistent with the governing statute." Appelbaum, 66 N.Y.2d at 977-78. Further, a BSA decision "'which neither adheres to its own prior precedent nor indicates its reasons for reaching a different result on essentially the same facts is arbitrary and capricious' and mandates reversal." See Lyublinskiy v. Srinivasan, 65 A.D.3d 1237, 1239 (2d Dep't 2009) (quoting Lucas v. Bd. of Appeals of Vill. of Mamaroneck, 57 A.D.3d 784, 785 (2008)); see generally CPLR 7803(3). 163. Moreover, "[w]here the question is one of pure legal interpretation of statutory

terms, deference to BSA is not required." Raritan Dev. Corp. v. Silva, 91 N.Y.2d 98, 102 (1997) (citations omitted). Similarly, where BSA's determination "runs counter to the clear wording of a statutory provision [it] is given little weight." Id. at 103 (citations omitted). 164. Here, BSA ignored the evidence establishing the true nature and purpose of the

Proposed Facility, as well as the plain language and legislative intent of the ZR and related regulations, in order to affirm DOB's approval of a prohibited use. Accordingly, BSA's determination is irrational, unreasonable and inconsistent with the governing statutes. Thus, as BSA's decision is arbitrary and capricious and affected by an error of law, it should be annulled by this Court. II. The Statute and Precedent Demonstrate That the Proposed Facility Violates the Zoning Resolution A. 165. Principles of Statutory Construction "In construing a zoning regulation, the issue is not whether the use is permissible,

but, rather, whether it is prohibited." Exxon Corp. v. Bd. of Standards & Appeals of N.Y., 128 A.D.2d 289, 293 (1st Dep't 1987) (citations omitted). "[T]he primary task of statutory construction, as applied to the interpretation of the New York City Zoning Resolution and more

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specifically to the terms employed in Section 12-10, is to give effect to the clear intent of the City Council." Mason v. Dep't of Bldgs. of N.Y., 307 A.D.2d 94, 100 (1st Dep't 2003). "The legislative intent is to be ascertained from the words and language used and the statutory language is generally interpreted according to its natural and obvious sense, without resorting to an artificial or forced construction." City of New York v. Stringfellow's of N.Y., Ltd., 253 A.D.2d 110, 1116 (1st Dep't 1999). Moreover, the "statute must be viewed as a whole, and, to that end, all of its parts, should, if possible, be harmonized to achieve the legislative purpose." Exxon, 128 A.D.2d at 295; see also People v. Mobil Oil Corp., 48 N.Y.2d 192, 199 (1979); N.Y. Stat. Law 97 (McKinney 2010). 166. The ZR expressly provides at the beginning of each Use Group section:

"Whenever a #use# is specifically listed in a Use Group and also could be construed to be incorporated within a more inclusive #use# listing, either in the same or another Use Group, the more specific listing shall control." ZR 42-00 (emphasis added); see ZR 22-00, 32-00. The ZR further provides: Whenever any provision of this Resolution and any other provisions of law, whether set forth in this Resolution or in any other law, ordinance, or resolution of any kind, impose overlapping or contradictory regulations over the #use# of land, or over the #use# or #bulk# of #buildings or other structures#, or contain any restrictions covering any of the same subject matter, that provision which is more restrictive or imposes higher standards or requirements shall govern . . . . ZR 11-22 (emphasis added). B. 167. The Proposed Facility Is Not a UG 5 transient hotel BSA incorrectly concluded that the Proposed Facility, in part, is "consistent with

a Use Group 5 transient hotel . . . ." Ex. 48 at 12. According to BSA's reasoning, any building -whether it be a hotel or not -- that satisfies the three criteria laid out within ZR 12-qualifies as a

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UG 5 transient hotel. As discussed below, the only reason for BRC to seek to such a designation for the Proposed Facility is because the proper designation, a UG 3 community facility, is prohibited in the zoning district where the facility is located whereas a hotel is permitted as of right and without approval. 168. As such, BSA's decision must be reversed. First, BRC's designation of the

Proposed Facility as a UG 5 hotel, in an attempt to qualify the Proposed Facility as an as-of-right use in the subject zoning district, ignores the clear and common meaning of the term "hotel," and improperly treats the provision as a broad, catch-all category. In fact, the overwhelming evidence of the nature and purpose of the Proposed Facility, including the medical and social services provided in the restrictive, closely monitored environment of the facility, illustrates that applying the hotel designation tortures the plain language of the ZR and stands not only principles of statutory interpretation on their head, but also contravenes the fundamental purpose of the City's land use laws. See ZR 11-22, 22-00, 32-00, 42-00; see also Soho Alliance v. N.Y.C. Bd. of Standards & Appeals, 264 A.D.2d 59, 83 (1st Dep't 2000) ("The Zoning Resolution has the force of statute in New York City, and neither its terms nor its over-all intent may lightly be cast aside by an administrative agency."). 169. Second, the City and State statutes and regulations governing the operation of the

Proposed Facility reveal the absurdity of employing an overly-broad term in the face of more specific terms and in light of the fundamental purpose of the ZR to control land use. 170. Third, given HPD's determination that the Proposed Facility creates "rooming

units" and, therefore, requires compliance with New York City Housing Maintenance Code ("HMC") 27-2077, the application of HMC 27-2077 lays bare the logical inconsistency in categorizing the Proposed Facility as a hotel.

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171.

Finally, assuming arguendo that the Proposed Facility can be construed as a hotel,

the evidence indicates that the duration of residency will exceed what is understood as transient and, thus, the facility cannot be designated a UG 5 transient hotel. Despite clear evidence that residents of the Proposed Facility will stay longer than 30 days, and thus not satisfy the requirement that residents at UG 5 hotels be transient, the Board chose to defer to DOB's acceptance of BRC's alleged representations, for which there is no evidence in the record, that residents will not stay longer than 30 days. BSA's disregard of this evidence -- especially in light of BRC's failure to present contradictory evidence -- renders its determination arbitrary and capricious. 1. As a Matter of Plain Meaning, the Proposed Facility Is Not a Hotel

The definition of a UG 5 "hotel, transient" is provided in ZR 12-10: A "transient hotel" is a #building# or part of a #building# in which: (a) living or sleeping accommodations are used primarily for transient occupancy, and may be rented on a daily basis; (b) one or more common entrances serve all such living or sleeping units; and (c) twenty-four hour desk service is provided, in addition to one or more of the following services: housekeeping, telephone, or bellhop service, or the furnishing or laundering of linens. Permitted #accessory uses# include restaurants, cocktail lounges, public banquet halls, ballrooms, or meeting rooms.25

Section 12-01(i) provides that "[t]he word 'includes' shall not limit a term to the specified examples, but is intended to extend its meaning to all other instances or circumstances of like kind or character." (emphasis added).

25

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172.

BSA decided that the definition of a transient hotel provides that as long as a

facility meets the three requirements enumerated therein, the facility is a "transient hotel." Ex. 48 at 12. 173. However, a forced construction of "transient hotel," as has been adopted here by

BSA, negates any import in the defined term having the word "hotel" in it. As such, the plain meaning of the definition of a transient hotel must include, and in fact, begin with, the term "hotel." Otherwise, the defined term would have no greater meaning than "transient accommodations or building." 174. In fact, under ZR Section 12-10, the defined term is "hotel, transient," placing

emphasis on the fact that the use is, first and foremost, a hotel, with the definition qualifying that hotel as one which is transient. That is, the ZR is attempting to distinguish this type of hotel, a transient hotel, from other types of hotels, such as "apartment hotels," see ZR 12-10 ("hotel, apartment"). 175. In Fischer v. Taub, 127 Misc.2d 518, 525-26 (1st Dep't 1984), the First

Department stated that the plain meaning of the relevant terms made patently clear that facilities like BRC's here are not hotels: A facility is the sum of its parts and not a manifestation of any one of them. Clearly the fact that the petitioner provides its residents with certain services generally provided by hotels -- i.e., a reception desk, housekeeping, linen, laundry services, entertainment, activities program, beauty and barber shops -does not render the petitioner a hotel where a) the facility is not open to the general public as is the traditional "inn"; b) the services performed by the operator for the benefit of the residents far exceed the ordinary and usual services performed by a hotel for its guests; c) these services are in any event performed by the operator pursuant to the mandate of the Social Services Law and regulations promulgated thereunder, not pursuant to the traditional business of inn keeping . . . ."

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176.

It is apparent that, as in Fischer, the Proposed Facility is not a hotel despite BRC's

assertions to the contrary. BRC represented to DOB in its initial December 23, 2009 letter request and its March 9, 2010 permit applications that the Proposed Facility would be a UG 5 transient hotel containing "transient living and sleeping accommodations, in a dormitory configuration and accessory meeting rooms and offices," that would also provide a 24-hour desk, housekeeping and linen service. See Ex. 31 at 5, 6; see generally Ex. 48 at 12. However, consistent with the court's decision in Fischer, merely meeting the general conditions of a transient hotel, without regard to actual use, does not a hotel make, especially where a more specific and more appropriate use applies. See ZR 11-21, 22-00, 32-00, 42-00. 177. BSA refused to apply the reasoning of the Appellate Division in Fischer,

asserting the court's analysis was irrelevant because it arose in the context of whether that facility constituted a hotel under the MDL rather than the ZR. However, the principles set forth in Fischer regarding application of statutory definitions and terms, here the term "hotel," are clearly instructive and mandate that rote and/or absurdly literal application is improper. 178. While both a hotel and the Proposed Facility provide a sleeping area, reception

desk, housekeeping and linen service, the level and type of integrated care and service for the homeless, mentally ill with substance and alcohol abuse conditions offered by the Proposed Facility is entirely inconsistent with that of a hotel. See Stmt. of Facts, Part III. Further, as in Fischer, "a) the facility is not open to the general public as is the traditional 'inn'; b) the services performed by the operator for the benefit of the residents far exceed the ordinary and usual services performed by a hotel for its guests; c) these services are in any event performed by the operator pursuant to the mandate of the Social Services Law and regulations promulgated thereunder, not pursuant to the traditional business of inn keeping . . . ." 127 Misc.2d at 525.

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179.

Moreover, the Proposed Facility's security protocols, including searching of the

residents' person and belongings at intake as well as random searching of their living space, and DHS-mandated curfew restricting departure after 10 p.m. is clearly incompatible with a hotel use. Ex. 13 at 6, No. 23 and 7, No. 30; Ex. 14 at 2, Nos. 5,6; Ex. 27. Further, the comprehensive medical services, 24-hour nursing staff and mandatory medication dispensed are not indicative of a hotel. See, e.g., Ex. 7, Part IV at 9, Att. 23; Ex. 10 at 6, 24; Ex. 11 at 2; Ex. 12 at 1, 2; Ex. 13 at 6, 16; Ex. 14 at 2-3, Nos. 3-8, March 1, 2011, BSA Hearing Transcript at 39-40, attached as Exhibit 66. Additionally, the OASAS Plans that BRC submitted to obtain operating licenses, revealed exam rooms and nurses' stations on nearly every floor in order to provide space for the comprehensive medical and psychiatric services for the Proposed Facility residents and nonresidents. See Ex. 7, Att. 8, Ex. N at FL-1 to FL-12. 180. The clear differences between any understanding of what constitutes a hotel and

the Proposed Facility highlight exactly why a "transient hotel" is not merely a facility that meets the three criteria in ZR 12-10. In fact, a proposed use must include those three elements and be, in fact, a hotel. If this were not the case, a detention center or a drug rehabilitation center could qualify as a transient hotel so long as it satisfied the three prongs, which is clearly not what the drafters intended. 181. Notably, the ZR's inclusion of permitted accessory uses such as "restaurants,

cocktail lounges, public banquet halls, ballrooms, or meeting rooms" further demonstrates that the legislative intent was to create a use group designation for a hotel as the term is commonly understood, with cocktail lounges and ballrooms, not as a generic term for all forms of transitory housing.

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182.

Lending support to this analysis, DOB explained to BSA that the plan for the

facility, as originally presented to DOB, was not a transient hotel, which is precisely why it advised BRC to amend its plans to include fire walls, separate entrances and separate elevators. See Ex. 66at 33-34. However, if the Proposed Facility were a UG 5 transient hotel merely by satisfying the three prongs of ZR 12-10, there would have been no reason for BRC to amend its plans as, under BSA's faulty rationale, the Proposed Facility was already a transient hotel. As such, BSA's understanding of what constitutes a transient hotel contradicts that of the DOB.26 183. Accordingly, the designation of the Proposed Facility as a transient hotel is

"absurd," People v. Garson, 6 N.Y.3d 604, 614 (2006), "irrational, unreasonable [and] inconsistent," Appelbaum, 66 N.Y.2d at 978-79. See also Raritan Dev. Corp., 91 N.Y.2d at 103, n.1. Here, the integrated and comprehensive medical and social services provided by the Proposed Facility, the restrictive rules and conditions under which residents must live, and the unavailability of residency to all but a specific population renders the "hotel" label inappropriate and incomprehensible under the plain command of the ZR. 2. New York State Regulations Governing Operation of the Proposed Facility Indicate That It Is Not a Hotel

184.

The State regulations governing BRC's operation of its Reception Center and

Shelter programs require BRC to obtain an operating certificate from the New York State Department of Social Services, now the New York State Department of Family Assistance's Office of Temporary and Disability Assistance ("OTDA"). See 18 NYCRR 485.2(p), 485.5, 485.6.

26

As explained below, the wall is a contrivance and, in any event, practically irrelevant.

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185.

Additionally, the State regulations set specific admission and discharge standards

and mandate that operators serving "a population with particular needs, e.g., . . . substance abusers, alcoholics or alcohol abusers, ex-offenders, or the mentally . . . disabled," provide a "program of service" to meet the special needs of that population. 18 NYCRR 491.8(b); see id. 491.4-.6.27 186. Similarly, State laws and regulations also govern the certification and operation of

the Proposed Facility's CDCC 24-hour, 32-bed, medically-monitored in-patient drug and alcohol detoxification facility as well as its SASC and CDT ambulatory, non-residential, medicallysupervised out-patient facilities for the treatment of drug and alcohol abuse and mental illness problems. See N.Y. Mental Hygiene Law 7, 19 & 31 et seq.; see also 14 NYCRR 587, 816 & 822 et seq. 187. Pursuant to the N.Y. Mental Hygiene Law ("MHL"), these facilities provide

services for the mentally disabled -- defined under the MHL to include those suffering from "mental illness, mental retardation, developmental disability, alcoholism, substance dependence, or chemical dependence," MHL 1.03(3) -- and includes New York State Office of Alcoholism and Substance Abuse Services ("OASAS") licensed in-patient "alcoholism facilities" as well as New York State Office of Mental Health ("OMH") licensed "outpatient facilities for the mentally disabled," such as "examination, diagnosis, care, treatment, rehabilitation, or training of the mentally ill, the mentally retarded, or alcoholics." 14 NYCRR 70.4(d); see id. 70.4(c); MHL 1.03(17).

The City laws similarly require that operators provide independent living skill training and case management services to shelter residents. Admin Code 21-302, -303 & -314.

27

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188.

As with the Reception Center and Shelter, the State regulations governing BRC's

operation of its CDCC, SASC and CDT programs require BRC to obtain an operating certificate from OASAS and/or OMH. See 14 NYCRR 70.4, 550.1 et seq., 551.1 et seq., 810.1 et seq., 814.1 et seq. Additionally, the State regulations set specific admission and discharge standards, medical staff requirements, physical and psychiatric medical review procedures and treatment plan programs. See 14 NYCRR 587.10, 587.16, 818.3 - .4, 818.8, 822.3 - .4, 822.7. 189. More specifically, in accordance with the State regulations, BRC's CDT program

provides "the diagnosis and treatment of mental illness on an ambulatory basis," 14 NYCRR 587.1(a), (c), through the provision of "active treatment designed to maintain or enhance current levels of functioning and skills, to maintain community living, and to develop selfawareness and self-esteem," id., 587.10(a). Mandatory services include, among other things, prescribing, administering and monitoring the effects of medication, symptom management and case management services, as well as optional services including crisis intervention services, clinical support services, skills training, and activity and verbal therapy, all of which are provided by licensed staff, including physicians and nurses, provides those services. See id., 587.4(d)(2), 587.10(c), 587.10(d), 587.16. 190. Similarly, the CDCC and SASC programs require an extensive medical

evaluation performed by and illness diagnosis made by a health care professional. See id. 816.5, 816.9, 822.4. Additionally, the medical staff are responsible for the creation and implementation of a treatment plan designed to help the patient reach sobriety before discharge from the facility and medical monitoring of the patient's progress throughout their stay at the facility. See id. 816.5(k), 822.2(b), 822.4(f) - (o)(1).

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191.

Although stating the obvious, by contrast, hotels have no such requirements and

provide no such services to its guests. As noted above, the Proposed Facility is not open to the public at large or even the general homeless population. Rather, occupancy is restricted to those suffering from mental health issues, and most likely substance abuse, who satisfy the statutory and regulatory admission criteria, with the overwhelming majority of that specific population arriving at the Proposed Facility through referrals from DHS. See Ex. 13, at 4-5, Nos. 15-18; see also Ex. 14 at No. 13. 192. Most importantly, consistent with the definitions of and requirements for these

facilities, as well as their specific purpose, BRC provides its patients and residents with "a complete range of mental health stabilization, medication management, case management and medical services," Ex. 11 at 2, in addition to "housing placement services, case management services, mental health treatment, substance abuse treatment, and vocational services," Ex. 10 at 1, 14-17, "all working in coordination" "under one roof," id. at 1, "to assist single adults in their efforts to return to the community as quickly as possible," Ex. 22. 193. Consequently, pursuant to New York State regulation, the Proposed Facility

cannot be considered a hotel. 3. Pursuant to City and State Laws Governing the Proposed Facility, the "Hotel" Designation Is Inapplicable

194.

The ZR often cross-references and relies upon related City and State laws, such as

the Admin Code, the MDL and New York State Hospital Code ("HC"). Moreover, approval of BRC's permit application by DOB was conditioned upon provisions of law in the HMC and MDL. See Ex. 31 at 4. In addition, BSA and DOB routinely rely upon such supplemental support when making zoning determinations. See, e.g., BSA Resolution 247-07-A; BSA Resolution 307-06-A. However, despite such express incorporation, BSA refused to consider

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those statutes because, according to BSA, they "have different purposes" than zoning regulations. Ex. 48 at 13. 195. Notably, under the HMC and the MDL, a "hotel" is defined as "an inn having

thirty or more sleeping rooms." HMC 27-2004(a)(12); MDL 4(12). Similarly, Admin Code 11-2501(5) defines "hotel" as a "building or portion of it which is regularly used and kept open as such for the lodging of guests," and lists "an apartment hotel, a motel, boarding house or club" as examples of a hotel. 196. These other City and State regulations make clear that the Proposed Facility

cannot fairly and accurately be considered a "hotel." Additionally, the designation of the BRC facility as a "hotel" is entirely inconsistent with the City and State laws governing operation of the BRC facility. Thus, not only is the Proposed Facility not a "hotel" based upon the plain meaning of the ZR, but also the Proposed Facility cannot be a considered a "hotel" pursuant to any relevant regulation. a. 197. Social Services Law

The Proposed Facility's Reception Center and Shelter are governed by Social

Services Law ("SSL"). See SSL 20, 34, 51, 56, 61(1); see also Charter 612; infra 292. Pursuant to 2(23) of the SSL, a "shelter for adults" is a type of "adult care facility" established and operated for the purpose of providing temporary residential care, room, board, supervision, information and referral, and where required by the department or otherwise deemed necessary by the operator, social rehabilitation services, for adults in need of temporary accommodations, supervision and services. SSL 2(23); see also 18 NYCRR 485.2(e), 491.2. Adult care facilities provide temporary or long-term residential care and services to adults who, though not requiring continual medical or nursing care as provided by facilities licensed pursuant to article twenty-eight of the public health law or articles nineteen, twenty-three, thirty-one and thirty-two of the mental hygiene law, are by reason of physical or other limitations associated with age, physical or mental -63-

disabilities or other factors, unable or substantially unable to live independently. SSL 2(21); see also 18 NYCRR 485.2(a). 198. Thus, a shelter for adults that satisfies these conditions is not a hotel. b. 199. Administrative Code Adult Care Facilities

The SSL definition of "adult care facilities" is strikingly similar to that contained

in the Admin Code section defining useable dwelling units, which defines an "adult residential care facility" as, among other things, a shelter for adults . . ., which contains three or more dwelling units and which provides board and temporary or long-term residential care and services to adults who, though not requiring continual medical or nursing care, are by reason of physical or other limitations associated with age, physical or mental disabilities or other factors unable or substantially unable to live independently. Admin Code 27-292.9(b)(2). Notably, that section of the Admin Code separates the requirements for useable dwelling units in an adult care facility from those in "hotels." Compare id. 27-292.9(b)(2), with 27-292.9(b)(1). c. 200. Multiple Dwelling Law

Hotels are classified as multiple dwellings under the Admin Code and MDL. See

MDL 4(8)(a), (9); HMC 27-2004(a)(8)(a), (9). However, multiple dwellings require occupancy not only by "three or more families living independently of each other," but also where the residents can live independently. See MDL 4(7); HMC 27-2004(a)(7); see also Fischer, 127 Misc.2d at 523-34. The statutory definitions and very nature of social services facilities, including the Proposed Facility, and the physical and mental limitations of the residents make clear that the residents cannot live independently and in fact depend upon the care, supervision and services of the facilities.

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201.

Accordingly, since the Proposed Facility cannot be a multiple dwelling, it cannot

be a hotel: "Since hotels are a form of multiple dwelling, having concluded that the petitioner's premises are not a multiple dwelling, it necessarily follows that the petitioner's premises are not a hotel." Fischer, 127 Misc.2d at 525; see 2009-2011 Third Ave. Corp. v. Fifth Ave. Cmty. Ctr. of Harlem, Inc., 169 Misc.2d 67, 68 (1st Dep't 1996) ("A group home [for the homeless] is a type of public institutional facility which is not encompassed within the definition of a 'multiple dwelling.'"). 202. Therefore, the plain meaning of the definitions of hotel provided in the SSL,

Admin Code, and MDL are entirely inconsistent with the Proposed Facility. Further, the Proposed Facility clearly falls within the definitions of adult care facilities, shelters for adults, alcoholism facilities and in-patient and out-patient programs provided in the SSL and MHL and the corresponding regulations, which "emphasize . . . personal care and supervision, services not generally provided by a hotel." Fischer, 127 Misc.2d at 525. 203. Additionally, and as explained in detail above, DOB repeatedly has drawn this

very distinction in the past by re-classifying similar facilities as non-hotel UG 3 social service community facilities, including, as in Fischer, buildings that were once actual hotels but had been converted to operate as adult care facilities or other social services facilities. Id. at 520; see supra Part II.B.1. 204. Consequently, the Proposed Facility cannot be considered a hotel under any

definition, and BSA and DOB improperly sanctioned the designation of the Proposed Facility as a hotel.

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4.

Because the Proposed Facility Contains Rooming Units Under HMC 27-2077, It Cannot Be a UG 5 Transient Hotel

205.

As explained in greater detail below, in order to operate the Proposed Facility,

BRC was required to, and did, receive permission from HPD to create "rooming units" under the HMC. See HMC 27-2077(a)(4). However, the legislative history to HMC 27-2077, and the limited circumstances under which rooming units are allowed, demonstrates that rooming units are disfavored and only to be used for certain purposes, such as hospital staff accommodations, education or religious institutional accommodations, or other non-profit purposes that require sleeping accommodations. HMC 27-2077(a). Hotel accommodations are not one of the enumerated exceptions or purposes for which rooming units are allowed. 206. Thus, while approval under HMC 2077(a) for rooming units is entirely

consistent with a Use Group 3 community facility, such as a non-profit institution with sleeping accommodations, approval for rooming units in a hotel is, in fact, in direct conflict with the language and purpose of the provision. BSA completely ignored this argument and simply refused to consider the mandate of HMC 27-2077, despite the fact that DOB approval of the Proposed Facility expressly relied upon HMC 27-2077. a. 207. A Transient Hotel Cannot Contain Rooming Units

As BRC intends to create dormitory-like sleeping accommodation for residents of

the Proposed Facility, BRC's construction of the Proposed Facility is predicated upon HPD's grant of permission to create such group rooms, classified as "rooming units" under the HMC. Pursuant to the HMC, rooming units may only be created with special permission granted by HPD and, even then, only under certain limited circumstances, and rooming units are clearly not intended for hotel use. HMC 27-2077. Under HMC 27-2077(a), rooming units may only be created where they are:

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(1) Owned or controlled and operated by a hospital for occupancy by nurses and interns on its staff; or (2) Owned and operated without profit by an educational, religious or charitable institution as a residence for the aged, or for working girls or women, or for working boys or men, or for delinquent, dependent or neglected children, or for students attending a school or college; or, (3) approved by the commissioner of the department and created with the substantial assistance of loans, grants or subsidies from any federal, state or local agency or instrumentality; or (4) approved by the commissioner of the department and owned, operated or used by any federal, state or local agency or instrumentality or by a non-profit organization. 208. The legislative history behind the promulgation of HMC 27-2077 reveals an

intent to protect certain classes of citizens against "fire and health hazards, . . . decline of neighborhoods and the creation of slums" by eliminating illegal housing. Ex. 30 at 1. Accordingly, unchecked creation of rooming units were prohibited, and such rooming units were permitted only where "operated by a religious, charitable or educational organization" for the purposes of providing "a residence for the aged, or for working girls or women, or for delinquent, dependent or neglected children, or for students attending a school or college." Id., 2.b. Indeed, the precursor to HMC 27-2077 contained an exception to the rooming unit prohibitions in multiple dwellings for rooming units "owned, operated or used by the department of welfare of the City of New York as a temporary residence for homeless men and women." Local Law No. 339 (1967) at D26-33.07.a.3, attached as Exhibit 67. 209. HPD granted BRC permission to create the rooming units within the Proposed

Facility pursuant to sub-section (a)(4). See Ex. 31 at 8. In its January 4, 2010 zoning approval, DOB required BRC's certificate of occupancy to note, consistent with 27-2077(b), that any certificate would expire if "ownership, operation or use by the approved institution or public

-67-

agency for any of the purposes enumerated in HMC 27-2077(a)(4) ceases." Id. at 1; see HMC 27-2077(b). 210. On its face, the approval by BSA and DOB of a facility with rooming units that

meets the requirements of HMC 27-2077(b) as a hotel is prohibited by both the legislative intent of HMC 27-2077 and its express language. b. 211. The ZR Prohibits Rooming Units

Pursuant to the ZR and related regulations, rooming units are, in fact, not

permitted in hotels. 212. Section 12-10 of the ZR defines "rooming unit," in relevant part, as any "living room," as defined in the Multiple Dwelling Law, in a #residential building# or a #residential# portion of a #building#, that is: (a) in a "class B multiple dwelling," a "rooming house," or a "furnished room house" as defined in the Multiple Dwelling Law; or (b) used "for class B occupancy," as defined in the Housing Maintenance Code; or ... (e) any other "living room" in a #residential building# or a #residential# portion of a #building# which is not a #dwelling unit# or part of a #dwelling unit#.28 213. Under the HMC, "rooming units" are "one or more living rooms arranged to be

occupied as a unit separate from all other living rooms, and which does not have both lawful sanitary facilities and lawful cooking facilities for the exclusive use of the family residing in such unit." HMC 27-2004(a)(15). Rooming units "may be located . . . within any class A or
28

Section 12-10 of the ZR defines "residence" as "one or more #dwelling units# or #rooming units#" but excluding "such transient accommodations as #transient hotels#." A "dwelling unit" means any room meant "for use by one or more persons living together and maintaining a common household, and which #dwelling unit# includes lawful cooking space and lawful sanitary facilities reserved for the occupants thereof."

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class B multiple dwelling," but "shall not include a living room in a class B hotel or any other dwelling complying with section sixty-seven of the multiple dwelling law."29 Id. 214. The definition of "rooming unit" under the ZR prohibits such units within

"transient accommodations as #transient hotels#," but permits them in class B multiple dwellings as defined in the MDL and HMC. See ZR 12-10 (definitions of "rooming units" and "residence"). Under the HMC, the definition of "rooming unit" explicitly states that rooming units "shall not include . . . room[s] in a class B hotel." HMC 27-2004(a)(9), (15). Additionally, the rooming unit definition in the HMC precludes such units from any structure subject to MDL 67, which governs the building code requirements for, among other structures, hotels. 5. 215. A Lodging House Cannot Be a Hotel

DOB has dictated that BRC's "proposed plans shall show compliance with the

requirements of Multiple Dwelling Law 66 and 28 RCNY 25-51," which govern Building Code requirements for "lodging houses." Ex. 31 at 4. 216. BRC also considers itself a lodging house.30 First, BRC's Schedule A proposed

certificate of occupancy lists "lodging house" as the Multiple Dwelling Law classification. Ex.

Under both the HMC and MDL, a class B hotel is a type of class B multiple dwelling that is "occupied, as a rule, transiently, as the more or less temporary abode of individuals or families who are lodged with or without meals." HMC 27-2004(a)(9); MDL 4(9). Whether the Proposed Facility can be properly labeled a "lodging house" is questionable. First, as demonstrated immediately below, the Proposed Facility is in fact a "dormitory" created pursuant to HMC 27-2077. Dormitories can either be lodging houses or 27-2077 rooming units, and BRC, HPD and DOB have all asserted the Proposed Facility falls under the latter classification. Second, as already discussed above, in Fischer the First Department concluded that facilities operating pursuant to the SSL do not even qualify as multiple dwellings. Residents of multiple dwellings must "not only live independently of one another but also [must] live independently." Fischer, 127 Misc.2d at 523. However, residents of -6930

29

1. Second, the Schedule A categorizes the proposed use for half of the third through ninth floors as a "lodging house." 217. a hotel However, "lodging houses," are a type of transient "multiple dwelling, other than

. . . in which persons are housed for hire for a single night, or for less than a week at

one time, or any part of which is let for any person to sleep in for any term less than a week." HMC 27-2004(a)18) (emphasis added); MDL 4(14); cf. Admin Code 11-2501(5) (providing examples of types of hotels, including "an apartment hotel, a motel, boarding house or club," but not listing lodging house). 218. Thus, the Proposed Facility cannot be a hotel, and BSA's failure to address this

argument entirely renders the decision arbitrary and capricious, as well as an error of law. 219. Further, BRC has stated that the Proposed Facility is a dormitory. See Ex. 31 at 5,

6; see also Ex. 7, Att. 8, Ex. N (blueprints showing dormitory layout in all sleeping spaces). This label is consistent with HPD's determination that the Proposed Facility would create "rooming units" under HMC 27-2077. The HMC defines a "dormitory" as a space occupied for sleeping purposes by three or more persons who are not members of a family maintaining a common household in: a. A lodging house, except for an apartment occupied solely by an owner, janitor or superintendent; or . . . . c. A dwelling owned and operated by a religious, charitable or educational organization for the purposes enumerated in section 27-2077 of article four of subchapter three of this chapter; or d. A dwelling owned, operated or used for the purposes enumerated in section 27-2077 of article four of subchapter three of this chapter. HMC 27-2004(a)(27) (emphasis added); see MDL 4(21) (defining "dormitory" as any space in "a lodging house . . . used for sleeping purposes"); see also Multiple Residence Law 4(31)

social services facilities like the Proposed Facility depend entirely upon the services and support provided by the facilities in which they reside. See id.

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(defining "lodging house" as a "dwelling, other than a hotel, in which persons are housed in a dormitory or dormitories . . . for a single night or for less than a week at one time"). 220. As dormitory is defined through a cross-reference to "lodging house," which

expressly rejects hotel use, and by a cross-reference to HMC 27-2077, which limits the use of dormitories to specific, non-hotel purposes, there can be no logical interpretation that allows a dormitory and lodging house under the HMC and MDL to be a hotel. The principles of statutory interpretation explicitly set forth in the ZR -- which state that if there is a contradiction, the more restrictive controls -- as well as those generally accepted, do not allow any contrary interpretation. 221. As demonstrated below, UG 3 community facility uses such as "non-profit

institution with sleeping accommodations" and "health-related facility" all more specifically capture the Proposed Facility use and, furthermore, are entirely consistent with the purpose and intent of HMC 27-2077(a). A contrary conclusion would impermissibly interpret particular provisions in isolation and in a manner inconsistent with the legislative purpose of the ZR and HMC. See State Farm Mut. Auto. Ins. Co. v. Amato, 72 N.Y.2d 288, 295 (1988) (quoting Matter of Allstate Ins. Co. v Shaw, 52 N.Y.2d 818, 820 (1980); see also N.Y. Stat. Law 98 (McKinney) ("All parts of a statute must be harmonized with each other as well as with the general intent of the whole statute, and effect and meaning must, if possible, be given to the entire statute and every part and word thereof.")). "[S]tatutes in pari materia are to be construed together and 'as intended to fit into existing laws on the same subject unless a different purpose is clearly shown.'" BLF Realty Holding Corp. v. Kasher, 299 A.D.2d 87, 93 (1st Dep't 2002) (quoting Matter of Lower Manhattan Loft Tenants v N.Y.C. Loft Bd., 66 N.Y.2d 298, 304 (1985)); see Mobil Oil Corp., 48 N.Y.2d at 199 ("It is a well-settled principle of statutory

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construction that a statute or ordinance must be construed as a whole and that its various sections must be considered together and with reference to each other."); see also N.Y. Stat. Law 97 ("A statute or legislative act is to be construed as a whole, and all parts of an act are to be read and construed together to determine the legislative intent."). 222. While the ZR does not define either "lodging house" or "dormitory," it is clear

that the ZR's definition of "rooming unit," when reconciled with the cross-referenced, applicable definitions in the HMC and MDL, is different and apart from a hotel and, therefore, cannot be listed as a UG 5 transient hotel use under the ZR. See ZR 11-22, 22-00, 42-00; see also Exxon Corp., 128 A.D.2d at 295 (basing decision on "the well-established principle of statutory construction that a statute must be viewed as a whole, and, to that end, all of its parts, should, if possible, be harmonized to achieve the legislative purpose"); see also City of New York v. Dezer Props., Inc., 95 N.Y.2d 771, 773 (2000) (in "construing the ordinance, we accord meaning to every section of the City's own Zoning Resolution"). 223. Accordingly, based upon the relevant statutory definitions and very statutes that

allow the creation of the Proposed Facility, the Proposed Facility cannot be a hotel, transient or otherwise, and therefore cannot be a UG 5 under the ZR. 6. The Proposed Facility Permits the Residents To Remain For Periods of Time Far Beyond a Transient Stay

224.

A "transient hotel," must consist of transient, not long-term, residency. Despite

this restriction on UG 5 hotels, DOB accepted without question, despite abundant contrary evidence, BRC's alleged representations that the occupants of the Proposed Facility will not be allowed to stay for longer than 30 days. BSA, in turn, also chose to ignore compelling evidence that residency will exceed 30 days. BSA's refusal to consider this evidence appears to be willful

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ignorance and an abdication of its responsibilities under the ZR, and, accordingly, renders its determination arbitrary and capricious. 225. Under 12-10 of the ZR, a "transient hotel" must be used "primarily for transient

occupancy" and "rented on a daily basis." Similarly, "lodging houses" are available "for hire for a single night, or for less than a week at one time, or any part of which is let for any person to sleep in for any term less than a week." HMC 27-2004(a)18); MDL 4(14). These definitions are consistent both with Class B multiple dwellings, which permit occupancy, "as a rule transiently, as the more or less temporary abode of individuals or families." HMC 272004(a)(9); MDL 4(9). 226. Moreover, recent amendments to the Admin Code and MDL establish that any

occupancy greater than 30 days is considered permanent occupancy.31 This comports with DOB's long-held position that transient occupancy requires a stay of fewer than 30 days. See City of New York v. 330 Continental LLC, 60 A.D.3d 226, 233 (1st Dep't 2009) (referring to DOB Assistant Commissioner Colgate's affidavit that noted DOB's forty-year-long-held position that transient means less than 30 days), superseded by statute, 2010 N.Y. Laws Ch. 225. Indeed, DOB revoked permits for construction of the Standard Hotel, located at 848 Washington Avenue, New York, New York, precisely because a portion of the hotel was slated to be used for permanent occupancy and "without any restriction on occupancy duration." BSA Decision No. 247-07-A at 6 (discussing revocation of permits for 848 Washington Avenue, New York, New York due to non-transient use).

On July 23, 2010, the Governor signed legislation that immediately changed the definition of permanent occupancy to mean occupancy for 30 consecutive days or more. See MDL 4(8)(a); see also 2010 N.Y. Laws Ch. 225. That law, known as the "illegal hotel bill," was targeted at eliminating illegal hotels providing transient occupancy in Class A multiple dwellings meant for permanent residency. -73-

31

227.

Here, DOB stated, based upon BRC's purported representations, that "homeless

occupants will not remain in the same dwelling space for more than thirty days at a time."32 Letter from Amandus J.M. Derr to BSA, dated Feb. 15, 2011 (without exhibits) at 4-5, attached as Exhibit 68. However, BRC made no such report to BSA, and neither BRC nor DOB provided evidence in support of this assertion to BSA. Further, neither DOB nor BRC provided the identity of the individual who made the alleged representation. In fact, BRC Executive Director Lawrence Rosenblatt submitted a 15-page affidavit to BSA in opposition to CFC's appeal with no mention of the duration of resident occupancy. See Affidavit of Lawrence Rosenblatt in Support of Submission By BRC, dated February 18, 2011, attached as Exhibit 69. 228. Moreover, this alleged assertion contradicts BRC's numerous public

representations and government applications. BRC has proudly proclaimed that no resident is forced to leave, and its program descriptions assert that transition from living at the Proposed Facility to more stable, independent living situations takes approximately nine months. See Ex. 11 at 4; Ex. 136 at 6, No. 24; Connolly Aff., 11. Additionally, BRC has declared, in writing, in response to questions at a CB4 public meeting, that "the average duration of program participation . . . among the residential programs . . . will be 25 days." Ex. 14 at 4, Nos. 11 & 12. This number necessarily indicates that residents will remain at the Proposed Facility well beyond the 30-day period for transient occupancy. In fact, there is no evidence that BRC imposes any limit on occupancy duration, and a 30-day limit would directly conflict with the stated purpose of the residential programs.

CFC assumes there is no possibility that DOB and BRC meant that BRC will shuffle occupants from room to room every 30 days to comply with such a representation. It goes without saying that such a plan is beyond the pale. -74-

32

229.

Notably, the Request for Proposal submitted by BRC to DHS to operate the

Proposed Facility highlights that residents will stay in the shelter "for at least three to four months." See Ex. 18 at 3. 230. Importantly, the Shelter Contract provides that "A Resident's stay in the Shelter

shall not exceed nine (9) months without the prior written approval of [DHS]. [DHS] reserves the right to modify the length of stay determination without appropriate notice to the Contractor." Ex. 53, pt. 1, art. 2(E)(1). 231. BSA dismissed the Shelter Contract provision simply by noting that "it does not

require [BRC] to allow stays of nine months or longer." Ex. 48 at 13. This rationale, of course, ignores the evidence highlighting that both DHS and BRC intend and expect stays by residents for longer than 30 days, and, in many cases, much longer. This is further demonstrated by the fact that the contract permits a stay of up to nine months, the same length of time that BRC has previously stated publicly is the amount of time it takes for its residents to successfully transition out of its programs. 232. In order to allow the Proposed Facility to maintain the UG 5 hotel designation,

BSA deferred occupancy issues at the Proposed Facility to later enforcement. See Ex. 48 at 13. However, such refusal to properly consider evidence that use will be contrary to the ZR constitutes an abuse of discretion. See Garson, 6 N.Y.3d at 614; Raritan Dev. Corp., 91 N.Y.2d at 102, 103 n.1; Appelbaum, 66 N.Y.2d at 978-79. Also, as in 9th & 10th Street II, this allows construction of a building that cannot be used in a legally-permitted way. See 10 N.Y.3d at 270. 233. Further, DOB, based upon its long-stated interpretation of "transient" and its past

practice of revoking permits absent clearly-imposed occupancy duration limits, should have rejected BRC's permit application and denied its UG 5 transient hotel designation, and BSA's

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affirmance of the determination must be reversed as arbitrary and capricious. See, e.g., In re Charles A. Field Delivery Serv., Inc., 66 N.Y.2d 516, 520 (1985) ("[F]ailure to conform to agency precedent will, therefore, require reversal on the law as arbitrary, even though there is in the record substantial evidence to support the determination made."); Matter of Civic Ass'n of the Setaukets v. Trotta, 8 A.D.3d 482, 483 (2004) (finding zoning board determination arbitrary and capricious where board granted application for zoning variance that was identical to application it denied a year earlier); Klein v. Levin, 305 A.D.2d 316, 317-18 (1st Dep't 2003) ("[A] decision of an administrative agency which neither adheres to its own prior precedent nor indicates its reason for reaching a different result on essentially the same facts is arbitrary and capricious.") (internal citations omitted). C. The Proposed Facility is a UG 3 Non-Profit Institution with Sleeping Accommodations Despite the voluminous briefing before BSA on why the Proposed Facility is

234.

properly classified as a Use Group 3 non-profit institution with sleeping accommodations, see ZR 22-13(A), and despite the extended discussion of the proper designation at the hearing by the commissioners, see Ex. 66, BSA's decision largely ignored the issue, explaining that it did "not need to evaluate whether or not [the Proposed Facility] is also a Use Group 3 because it accepts that it is a Use Group 5, an as of right use in the subject zoning district." Ex. 48 at 14. As explained below, the Proposed Facility is a Use Group 3 community facility due to the fundamentally integrated nature of the sleeping accommodations and the other services provided at the facility by BRC. 235. As indicated above, Stmt. of Facts, Part IV.A., UG 3 consists of various types of

"community facilities." ZR 12-10. The ZR provides that UG 3 community facilities are

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prohibited in M1 zoning districts, with certain limited exceptions inapplicable here. ZR 4211, 42-12. 236. A "non-profit institution with sleeping accommodations" is one type of UG 3

community facility. See ZR 22-13(A) ("Nursing homes and health-related facilities as defined in the New York State Hospital Code, each of which have secured certification by the appropriate governmental agency; sanitariums; and philanthropic or non-profit institutions with sleeping accommodations.") (emphasis added). 237. While the meaning of the term appears clear on its face, DOB, the New York City

Department of City Planning ("DCP") and BSA Resolutions provide further guidance. These interpretations indicate that the two primary indicia of any non-profit institution with sleeping accommodations are (1) "the fact of institutional management and control of the facility" by a recognized not-for-profit entity, BSA Resolution No. 95-05-A, and (2) a "clear" or "reasonable nexus between the non-profit purpose and [the] provision of sleeping accommodations," BSA Resolution No. 307-06-A. 238. BRC's Proposed Facility qualifies as a non-profit institution with sleeping

accommodations based simply upon the language of the ZR; however, when the agency-created indicia are applied it is clear that the Proposed Facility is a non-profit institution with sleeping accommodations. This conclusion is further supported by countless BSA Resolutions as well as several court decisions that label social service facilities like the Proposed Facility, that are operated by non-profits with the same mission as BRC, as UG 3 non-profit institutions with sleeping accommodations. Therefore, as UG 3 facilities are prohibited in an M-1 district, BRC must seek a special permit from the CPC or a use variance from BSA in order to obtain approval for the Proposed Facility. See ZR 22-13; 72-21; 74-90; 74-903; 74-921.

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1. 239.

Non-Profit Status and Control

The first element in assessing whether a proposed use qualifies as a non-profit

institution with sleeping accommodations, non-profit status, is easily satisfied. BRC is a registered not-for-profit corporation whose mission is to supply homeless men and women, especially those suffering from mental illness and/or drug or alcohol addiction, "a robust continuum of housing and nonresidential programs" designed to provide them "with the knowledge and skills to permanently overcome poverty, addiction, physical and mental illness, homelessness, and unemployment." Ex. 12. 2. Clear or Reasonable Nexus Between the Non-Profit Purpose and Provision of Sleeping Accommodations

240.

The second element in assessing whether a proposed use is a UG 3 non-profit

institution with sleeping accommodations requires an examination of the non-profit's purpose and the reason for providing the sleeping accommodations. This factor was at the center of a dispute before BSA that concerned the same situation in principle, though with the opposite facts -- the applicant had designated a proposed use as a UG 3 non-profit institution with sleeping accommodations in order to evade a zoning restriction rather than acknowledge its true UG 5 transient hotel use, which is prohibited in the district at issue. 241. In BSA Resolution No. 307-06-A, the applicant attempted to designate a youth

hostel as a UG 3 non-profit institution with sleeping accommodations in its DOB permit application. In the R5 zoning district at issue in that application, a UG 3 use would have been allowed as-of-right, but a UG 5 hotel was prohibited. However, DOB rejected the applicant's designation because it concluded that the hostel was in fact a transient hotel, and BSA agreed. In arriving at its decision, BSA relied heavily upon the interpretation of the term "non-profit

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institution with sleeping accommodations" offered by DCP in support of DOB's position. DCP stated: We understand [the term "non-profit institution with sleeping accommodation"] [w]as intended to apply to institutions for which the provision of sleeping accommodations is necessary to the accomplishment of a community facility purpose of providing ". . . essential services for the residents (ZR 22-13(1)) . . ." of the area in which the facility is located, such as shelter for the homeless, supportive housing, or drug rehabilitation. This is reflected in the language of the Zoning Resolution, which does not treat "nonprofit transient accommodations" as a Use Group 3 community facility, but instead refers to non-profit institutions "with sleeping accommodations." This formulation indicates that that the sleeping accommodations must be related to a philanthropic or non-profit purpose distinct from simply providing sleeping accommodations, and that providing sleeping accommodations does not, in and of itself, qualify as a community facility use under this rubric. BSA Resolution No. 307-06-A at 4-5 (emphasis added). 242. BSA determined that UG 3 non-profit institutions with sleeping accommodations

are predicated upon the "clear and necessary relationship between the sleeping accommodations and the philanthropic purpose" that gives rise to a "clear nexus" or "reasonable nexus between the non-profit purpose and its provision of sleeping accommodations." Id.; see BSA Decision No. 95-05-A (relying upon DOB and DCP statements in concluding that "other UG [community facility] uses that allow sleeping accommodations are clearly related to, and controlled by, the primary community facility use"). 243. It is worth emphasizing that DCP and BSA have stated that homeless shelters,

supportive housing and drug rehabilitation centers that provide sleeping accommodations are, in fact, intended to be UG 3 community facilities, or non-profit institutions with sleeping accommodations. 244. In BSA Resolution No. 307-06-A, BSA ultimately reasoned that the youth hostel

was not a non-profit institution with sleeping accommodations because the overwhelming

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majority of the space was simply for the sleeping accommodations, residents were not required to participate in any of the hostel's educational or cultural programs and the non-profits' purpose was geared merely to providing temporary living space to foreign students. 245. Here, remarkably, BRC claimed to BSA that the primary purpose of the Proposed

Facility is the provision of sleeping accommodations, and that the other programs were merely incidental to that primary purpose, similar to the youth hostel. See Letter from Randy Mastro, Esq. to BSA, dated Feb. 18, 2011 (without exhibits) at 8, attached as Exhibit 73. In similar fashion it characterized its 270-person staff, comprised of medical professionals and certified case workers, among others, as providing merely "complementary" or "supplemental" services that just happen, out of convenience, to be co-located in the same building. See Ex. 69 at 47-54. 246. In truth, the Proposed Facility's in-patient and out-patient programs and high level

of integrated, comprehensive care undeniably establishes the "clear and necessary relationship between the sleeping accommodations and [BRC's] philanthropic purpose," BSA Resolution No. 307-06-A, of helping mentally ill and alcohol and substance addicted homeless "break the cycle of homelessness" and achieve stability through on-site, coordinated alcohol and drug rehabilitation, medical and mental health treatment, and financial, life and career skill training, Ex. 10 at 1. See supra 24-25, 29, 31, 58-69. 247. Additionally, the provision of sleeping accommodations by BRC "is necessary to

the accomplishment of a community facility purpose," BSA Resolution No. 307-06-A, as the provision of beds, shelter, safety and oversight are the fundamental non-profit services of a homeless shelter, as DCP and BSA acknowledge. 248. BRC's gut renovation of the Building was intended to create a "new configuration

of rooms and facilities compatible with the use of the premises." Fischer, 127 Misc.2d at 526.

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The renovation is necessary to achieve BRC's goal, as announced to BRC's donors, the government agencies that license the Proposed Facility programs, CB 4 and elected officials, of supplying highly integrated programs, "all working in coordination" "under one roof," to provide " a multitude of services" . . . to BRC shelter residents [and out-patient clients], including but not limited to . . . housing placement services, case management services, mental health treatment, substance abuse treatment, and vocational services." Ex. 10 at 1, 14-17; Ex. 13 at 7, No. 26. 249. The nexus between the sleeping accommodations, which occupy only a small

portion of the overall square footage, see Ex. 14 at 3-4, No. 11, and these programs is without question. In fact, at the March 1, 2011 hearing, Vice-Chair Collins noted this truth, stating, "[W]hen you said that there's no nexus between the programs, it seems to me that there clearly is . . . . The people who sleep in the sleeping accommodations use the programs." Ex. 66 at 57. In addition, this nexus has been recognized by the City in both the Fair Share Report, see Ex. 52 at 7 ("the co-location of these programs in the same building as the Shelter and Reception Center would provide a substantial benefit to the Shelter clients by offering very convenient access to needed services") (emphasis added), and the EAS, see Ex. 62 at Supp. at 1, 2 ("the BRC Service Center will be a single vertically integrated campus with a full complement of on-site social and residential services for occupants") (emphasis added). 250. Further, BRC relied upon the nexus between services and sleeping

accommodations to secure state authorization to operate the Proposed Facility. More specifically, in its application to OASAS for permission to relocate its SASC daytime treatment program, BRC attested that it "will be moving several of our residential programs (over 300 beds) into the same building as SASC, creating a natural client base for which SASC will provide treatment" and enabling "BRC clients in Chelsea . . . to receive shelter, mental health

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treatment and substance abuse treatment all in the same building." Ex. 20, App. Summ. at 3. That same application stresses how "[t]he majority of the clients that SASC will be serving in the new location will be individuals residing in the shelters which BRC will be operating in same building," thereby allowing "SASC clients . . . access to range of housing and support services through [sic] several other BRC programs that will be co-located in the same building." Id., Part II - Site Info. at 3. 251. Similarly, BRC, in its CDCC relocation application to OASAS, highlights how

"CDCC clients will also have access to a range of housing and support services through [sic] several other BRC programs that will be co-located in the same building." Ex. 7, Part II - Site Info. at 3. Indeed, both applications underscore how the consolidation of BRC's varied programs within one facility "would bring a unique treatment approach and needed services to a population that may not be able to access such services in more limited or traditional treatment settings." Id., App. Summ. at 3 & Part II - Site Info. at 3; see Ex. 20, App. Summ. at 3 and Part II - Site Info. at 3. 252. Additionally, when touting the benefits of its residential programs, BRC

emphasizes that these programs will not merely provide sleeping accommodations but also provide all residents "a complete range of mental health stabilization, medication management, case management and medical services." Ex. 11 at 2. For example, BRC's mix of programs will provide Shelter residents "housing placement services, case management services, mental health treatment, substance abuse treatment, and vocational services designed to support residents in achieving full recovery and community reintegration goals." Ex. 13 at 6, No. 24. 253. So too, the residents of the Reception Center program will receive "psychiatric

and medical stabilization along with therapeutic and case management services," Ex. 11 at 4,

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from "social workers, case managers, and health and mental health professionals (all on-site)," Ex. 10 at 14-17 (parenthetical in original); see Ex. 19 at 2 (listing medical staff). 254. The Proposed Facility will not just offer these services, but in fact has repeatedly

proclaimed that residents "are required to participate" in these programs. Ex. 13 at 7, No. 26 ("Shelter residents are required to participate in any program groups, community meetings, individual meetings with their Independent Living Specialist and other BRC staff . . ."); see also id. at 6, No. 24. For example, BRC has emphasized that "[t]he majority of the shelter clients will be engaged in day treatment programs during the daytime hours at licensed programs like BRC's Continuing Day Treatment or Substance Abuse Services Center on the 10th floor," while those not attending such programs will be "provide[d] on site programming during the day that includes mental health and substance abuse groups." Id. at 5-6, No. 23. More specifically, residents "will be engaged by clinical staff to help them secure entitlements and/or employment, develop daily living skills, prepare for housing interviews, or arrange housing appointments" and will attend "[n]umerous workshops" including, among other things, "art therapy, budgeting, health and nutrition, men's groups, [and] women's groups." Id. at 6, No. 24. Indeed, "[m]ost of their waking hours, clients on site are engaged in specific program activities." Id. at 6, No. 25. 255. Further, despite BRC's claim to BSA that nearly 250 of the 270 workers at the

Proposed Facility are "non-medical," see Ex. 69, 47 the overwhelming majority of the Proposed Facility staff are medical professionals or certified social/case workers, see Ex. 12 at 1, 2; Ex. 14 at 2-3, Nos. 3-8 (indicating 24-hour nursing presences, as well as licensed physicians); Hearing Transcript, dated November 5, 2010, In re Chelsea Bus. & Prop. Owners' Assoc., LLC v. The City of New York, Index No. 113194/2010 (Sup. Ct. N.Y. County) at 39-40, attached as Exhibit 70.

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256.

Moreover, BRC has emphasized that residents will be under constant supervision

by the BRC staff, see Ex. 13 at 6, No. 25; see Ex. 7 Att. 10, and that there is no distinction in where the staff provides its services, see Ex. 14 at 2, Nos. 3-5 (79 staff that perform various functions and "conduct rounds throughout the facility"). Accordingly, services will be provided not only on the UG 6 professional offices side of the Proposed Facility, but in the sleeping accommodations, as well. See Amended Plans for Job No. 120288054, A-101.01 - 105.01, attached as Ex. 28 (showing security stations in all dormitory sleeping areas). 257. As a result, the Proposed Facility's sleeping accommodations are undoubtedly

directly related to and necessary for the provision of BRC's extensive programs designed to provide housing and help its residents achieve sobriety and stability in order to successfully reenter society. 3. BRC's Inclusion of a Firewall and Other Contrivances, at DOB's Suggestion, Does not Turn the Proposed Facility from a UG 3 into a UG 5 Transient Hotel

258.

DOB conceded to BSA that the plan for the facility, as originally presented to

DOB, was not a Use Group 5, and that DOB had informed BRC that "[the Proposed Facility] could not be a Use Group 5." See Ex. 66 at 33-34. Accordingly, in an attempt to convert the Use Group 3 into a Use Group 5, DOB advised BRC to insert a fire wall dividing the medical and counseling services from the sleeping rooms, and install separate entrances and elevators for the two sides. See Letter from Randy Mastro, Esq. to BSA, dated March 8, 2011 (without exhibits) at 3, attached as Exhibit 71; see also Ex. 66 at 33-34 . Consequently, BRC designated half the Proposed Facility as a UG 5 transient hotel and half as UG 6 "professional offices." 259. Further, DOB explained to BSA that, absent a separation of the services provided

at the facility from the residents, the Proposed Facility is, in fact, a Use Group 3. See Ex. 66 at

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34; see also id. at 40. The DOB confirmed, though, that a physical separation is not enough to turn a Use Group 3 into a Use Group 5. See id. at 34. Instead, the programs must be "separate and distinct from what's happening in the sleeping portions of the building." Id. 260. However, DOB's conclusion that the plan changes effectuated not only a physical

separation, but a practical one, as well, ignores the various plans, and the abundant materials and statements by BRC to DHS regarding the facility and its programs; instead, DOB admittedly relies on BRC's conclusory representations. See id. at 30. Accordingly, despite the overwhelming evidence indicating the clear nexus between the programs and the sleeping accommodations, DOB accepted that fire walls, separate entrances and separate elevators had removed the fundamental connection. However, this separation defies logic and common sense. 261. BSA's recognition of the folly of the wall and the attempted separation, see Ex. 66

at 40-41, 57, did not even address the contrivance in its decision. Rather, BSA simply ignored all the evidence as to the true nature and proper designation of the Proposed Facility, and compelled acceptance of the Proposed Facility as a hotel so that it could be sited where it is otherwise prohibited. 262. Thus, where DOB finds no hotel, but a community facility, noting that the

Proposed Facility as first presented to DOB "could not be a [transient hotel], see id. at 33-34, BSA finds a hotel, thereby contradicting the DOB. Either way, the Proposed Facility is a UG 3 non-profit institution with sleeping accommodations. 263. As a preliminary matter, if BRC truly intends to divide the residents of all the

programs in the Proposed Facility from the services intended to be provided to those residents, including 24-hour supervision by nursing and other trained staff, then BRC's representations to the public, to DHS, to OASAS and to all other government agencies as to the purpose, goals and

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operation of the Proposed Facility are fraudulent. In that event, all approvals for the Proposed Facility must be revoked and BRC should be prosecuted by the District Attorney's Office. If not, the representations to DOB are fraudulent and the same result is reached. 264. As demonstrated above, the plethora of public statements made by BRC indicate

that, with or without a wall, the programs and sleeping accommodations are fundamentally integrated. See supra 61-63 (listing quotes touting integrated and interdependent nature of programs) and Exs. 10 at 1, 14-17; 11 at 2, 4; 12 at 1, 2; 13 at 6-7, Nos. 24-26; 14 at 2, Nos. 3-5; see also Ex. 66 at 57 (where BSA Vice-Chair Collins recognizes the fundamental nexus). 265. In erecting the wall, BRC has not changed anything regarding the nature of the

programs it will provide at the Proposed Facility. In fact, eight days after BSA Hearing, DHS Commissioner Seth Diamond announced to the press that "this is the kind of project that advocates for the homeless have been asking for, one that integrates a variety of services and provides good programs for the people living in the shelter to get counseling and job training . . . ." Winnie McCroy, May Opening Date Likely for BRC 25th St. Facility, Chelsea Now, March 9, 2011 (emphasis added), attached as Exhibit 72. Further, two weeks thereafter, Mr. Diamond proclaimed that "[t]he 25th Street facility will house medical and rehabilitative services and is precisely the progressive service model for which City Council members and representatives for the homeless have long called." Ex. 24 at 2 (emphasis added). 266. Without doubt, and by definition, the monitoring and treatment of patients

overnight occurs within the sleeping accommodations area. See, e.g., Ex. 69, 51 (indicating that medical functions will be performed on either side of the wall); see also Ex. 7 (identifying that the side of the wall with the dorm beds will also host nurse's stations and exam rooms). However, even if, as proposed by BRC to DOB, in order to seek assistance, in the middle of the

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night, the patients must leave the inpatient program, exit the building, re-enter the building through the second entrance, ascend in a different elevator and re-enter the inpatient program, the program services are still being provided to the inpatient residents at night. See Ex. 66, 35-36, 38, 41. 267. Thus, the absurdity of the suggested plan not only is contrary to the fundamental

purpose of the programs, but also does not alter the fact that the services on one side of the wall are in place for, and being provided to, the inpatient residents on the other side of the wall. It is axiomatic that the clients at a 24-hour inpatient detoxification center are staying at the facility in order to benefit from the programs and receive services provided at that facility. The possibility that other homeless, mentally-ill, and substance addicted clients may also avail themselves of some of the daytime services offered at the facility does not change the fact that the program services are being provided to the residents at the facility, and are clearly intended to be provided to those residents. 268. Accordingly, it is apparent that the Proposed Facility is not meant merely to

provide sleeping accommodations. Rather, the shelter provides a secure sleeping arrangement with constant oversight and a platform for BRC to provide residents with the mental health and case management services that will ultimately permit them to live independently in a non-shelter environment. 4. BSA's Failure to Follow Precedent on Similar Facilities Renders its Decision Arbitrary and Capricious

269.

As a host of court decisions and BSA Resolutions make clear, DOB, DCP and

BSA repeatedly recognize that residential facilities, homeless shelters and drug rehabilitation facilities run by non-profits like BRC that offer the same type of programs as the Proposed Facility are UG 3 non-profit institutions with sleeping accommodations. See, e.g., Homes for

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Homeless, Inc. v. Bd. of Standards & Appeals, 24 A.D.3d 340 (1st Dep't), rev'd on other grounds 7 N.Y.3d 822 (2006) (recognizing and affirming BSA variance for applicant's requested change in use of former UG 5 transient hotel to UG 3 non-profit institution with sleeping accommodations in M1 to operate transitional housing facility for women and children that also provided medical care, food and life skills training); Manton, 117 Misc.2d at 258 (affirming DOB and BSA decisions finding drug rehabilitation center constituted UG 3 non-profit institution with sleeping accommodations and was most specific use designation in ZR); BSA Resolution No. 299-08-BZ, dated Dec. 15, 2009, at 3 (granting variance for 9-story, 104-unit non-profit institution with sleeping accommodations in an M1 for homeless families operated with state funding and reserving at least 30 percent of units for DHS-placed families that also provides "individualized services, which include case management, counseling, benefits counseling and services, multi-disciplinary counseling, and child and youth services" provided by "a professional staff of social workers and counselors"); BSA Resolution No. 210-08-BZ, dated Oct. 20, 2009 (granting variance to legalize existing use of OASAS-licensed, 32-bed, inpatient drug treatment facility in an M1 and permit two-story enlargement to the facility); BSA Resolution Nos. 26-09-BZ, & 48-09-A, dated June 16, 2009 and May 12, 2009 (granting variance to construct nine-story, 53-unit UG 3 non-profit institution with sleeping accommodations in R7 for transitional housing and social services with on-site case management); BSA Decision No. 307-06-A (noting that drug rehabilitation facility in Manton, 117 Misc.2d 255, was a UG 3 because there was a "clear nexus between the provision of sleeping accommodations and the philanthropic or non-profit purpose" of drug rehabilitation); BSA Resolution No. 7-00-BZ, Vol. III, dated Sept. 11, 2007 (granting variance to non-profit to complete construction to enlarge mens' homeless shelter in an M1); BSA Resolution No. 257-02-

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BZ, dated Feb. 11, 2003 (granting variance to fold an existing building into planned development of UG 3 non-profit institution with sleeping accommodations for residential and educational facility for troubled youth in an M1); BSA Resolution No. 193-02-BZ, dated Dec. 17, 2002 (granting variance to permit a UG 3 non-profit institution with sleeping accommodations in an M1 district to "house, educate and care for developmentally disabled and special needs children" in a 90-bed facility complete with gym, classrooms, offices, conference rooms and lounges); BSA Resolution No. 196-02-BZ, dated Nov. 19, 2002 (granting variance to construct UG 3 domiciliary care facility housing a 16-bed program "to provide a vehicle for recovered substance abusers to re-enter society in a systematic and planned manner"); BSA Resolution No. 69-02-A, dated Oct. 1, 2002 (granting variance to operate UG 3 "not for profit or philanthropic facility with sleeping accommodations" out-patient and 65-bed in-patient addiction services and counseling program in an M1). 270. These decisions also illustrate the numerous non-profit providers that self-

designate as UG 3 non-profit institutions with sleeping accommodations and adhere to the zoning requirements, seeking approvals necessary to construct such facilities in M1 zoning districts, the same zoning district at issue here. 271. BRC, of course, is familiar with the proper use of the UG 3 non-profit institution

with sleeping accommodation designation, as it has self-designated a number of its other, similar programs as such. These BRC programs include: (i) the Food Service Program, which is relocating to the Proposed Facility; (ii) the Lexington Avenue Women's Residence, a 103-bed shelter exclusively for homeless women suffering from "mental illness, substance abuse and serious medical problems," which provides "the full range of case management services as well as on-site psychiatric and medical care," in addition to employment development programs, see

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Ex. 11 at 4; (iii) Casa de Los Vecinos, a 32-bed, transitional residence for the mentally ill and chemically addicted homeless designed "to provide a safe and supportive environment where residents take part in rehabilitation interventions that will assist them in the attainment of their work, social and community living goals" and are supplied with "case management, substance abuse groups, medication monitoring, daily skills training and recreational activities," id. at 3; Ex. 11; and (iv), the Cecil Ivory House, a 24-bed, transitional residence for mentally ill and chemically addicted homeless that provides the same services as Casa de Los Vecinos, see id.33 272. Here, however, BSA and DOB intentionally ignored this overwhelming precedent

in derogation of their enforcement duties. See Charter 643, 666; ZR 71-00; see also 9th & 10th Street II, 10 N.Y.3d at 270; BSA Resolution No. 307-06-A; BSA Resolution No. 95-05-A. It is plain that BSA's position here is entirely opposite of past agency interpretations and rulings without justification. See Ex. 44. 273. It is well settled that where "a decision of an administrative agency which neither

adheres to its own prior precedent nor indicates its reason for reaching a different result on essentially the same facts is arbitrary and capricious." Klein, 305 A.D.2d at 317-18 (internal citations omitted); see also In re Charles, 66 N.Y.2d at 517 ("A decision of an administrative agency which neither adheres to its own prior precedent nor indicates its reason for reaching a

BRC pointed to its current Reception Center and CDCC programs at 324 Lafayette Street as examples of similar facilities which have been designated UG 5. See Ex. 73 at 5. Notably, BRC failed to acknowledge that these temporary certificates expired, that OTDA has issued violations to BRC for operating the facilities without a valid certificate of occupancy, and that BRC has failed repeatedly to garner permanent certificates of occupancy. See supra n.5. In fact, relying on DOB's explanation that a nexus of sleeping accommodations and programs requires a facility to be designated UG 3, Commissioner Eileen Montanez questioned at the March 1, 2011 hearing how the Reception Center and CDCC could be properly designated UG 5 where they do not have a physical separation of sleeping accommodations and programs, as has been contrived at the Proposed Facility. See Ex. 66, 40-41. BRC had no response. See id. -90-

33

different result on essentially the same facts is arbitrary and capricious."); Richardson v. Comm'r of N.Y.C Dep't of Soc. Servs., 88 N.Y.2d 35, 39-40 (1996); Matter of 2084-2086 BPE Assocs. v. State of N.Y. Div. of Hous. & Cmty. Renewal, 15 A.D.3d 288, 288 (1st Dep't 2005). BSA's failure to follow these past interpretations and rulings constitutes, as a matter of law, an arbitrary and capricious decision that must be overturned. 274. Accordingly, it is clear from BRC's own extensive statements and materials

produced to various governmental agencies and officials and the public that the Proposed Facility is most specifically and accurately captured in the ZR's UG 3 non-profit institution with sleeping accommodations designation, a designation fully supported by innumerable agency and court decisions. Accordingly, BSA's decision affirming DOB's designation of the Proposed Facility as a UG 5 should be reversed as the decision is arbitrary and capricious.

D.

In the Alternative, the Proposed Facility Should Be Designated a UG 3 Health-Related Facility In the unlikely event that the overwhelming factual evidence and both agency and

275.

court decisions do not sufficiently establish that the Proposed Facility constitutes a UG 3 nonprofit institution with sleeping accommodations, it is, at the very least, more appropriately classified as a UG 3 health-related facility. 34 See ZR 22-13(A). Accordingly, as this UG 3 use

CFC also argued before BSA that a portion of the Proposed Facility, those sections designated by BRC as UG 6 "professional offices, could qualify, alternatively, as a UG 4 ambulatory diagnostic and treatment health care facility. However, the City Council recently passed a text amendment to the ZR, effective February 2, 2011, which permitted "ambulatory diagnostic or treatment health care" facilities in UG 6 professional offices. This amendment was surprising, not only due to its timing, but also because it directly conflicts with the Community Facility Zoning Text Amendment (N 040202 ZRY) adopted by the City Council on September 9, 2004. The City Council amended the ZR in 2004 with the specific intent to clarify the designations of "medical offices." The previous designation of "Medical Office" was removed, -91-

34

is also prohibited in an M-1, BRC would need to apply for a special permit and/or use variance. See ZR 22-13, 72-21, 74-90, 74-903, 74-921. 276. Under ZR 22-13(A), UG 3 includes "health-related facilities as defined in the

New York State Hospital Code." The HC is codified in 10 NYCRR 700.1 et seq. ("This chapter shall be known and may be cited as the 'State Hospital Code'"). Under the HC, a "healthrelated facility" is defined as a facility, institution, intermediate care facility, or a separate or distinct part thereof, providing therein lodging, board and social and physical care, including but not limited to the recording of health information, dietary supervision and supervised hygienic services incident to such care to six or more residents not related to the operator by marriage or by blood within the third degree of consanguinity. 10 NYCRR 700.2(a)(4). Residents of such facilities include those who, because of social, physical, developmental or mental condition, require[] institutional care and services above the level of room and board in order to secure basic services necessary to function, but who does not require the inpatient care and services provided by a hospital or skilled nursing facility. 10 NYCRR 700.2(c)(9). These residents may possess "mental and emotional impairment requiring medications," typically stay in the health-related facility for extended periods of time, and "need[] assistance in securing planned, basic recreational and diversional activities and services of other disciplines such as nutritional and social

although it was a UG 4, and was replaced with "Ambulatory diagnostic or treatment health care facilities." As the City Planning Commission explained in support of the 2004 amendment, "'Ambulatory diagnostic or treatment health care facilities' would replace 'medical offices,' 'government operated health centers or independent out-of-hospital health facilities,' and 'health centers' as they appear throughout the Zoning Resolution. These existing categories have become functionally similar over time and, through self classification of the proposed uses to the Department of Buildings, health care providers have been able to avoid certain zoning restrictions which apply to one category but not to the other." City Planning Commission July 28, 2004 Application to Amend, attached as Exhibit 74. -92-

work counseling, through coordinated resident care plans . . . ." 10 NYCRR 700.2(c)(9). 277. Based upon the purpose of, and services offered by, the Proposed Facility, it is

beyond question that the Proposed Facility's CDCC, Shelter and Reception Center programs qualify as "health-related facilities" under the HC. See supra Stmt. of Facts, Part II.A-C. 278. UG 3 health-related facilities may only be located within Community District 4 --

the district in which the Proposed Facility is located by special permit of the CPC under ZR 74-90 and 74-903, and are otherwise prohibited in M1 districts. See ZR 42.12, 74-90, 74-903. Therefore, the Proposed Facility is not permitted as-of-right and must apply to CPC for a special permit. E. BSA Incorrectly Concluded that Fundamental Rules of Statutory Construction Do Not Forbid the Proposed Facility From Being Designated Both a UG 3 and UG 5 BSA resolved that there is nothing in the ZR that would prohibit the Proposed

279.

Facility from being both a UG 3 and UG 5, and that even if it were more properly a UG 3, it did not matter since it could be a UG 5, as well . See Ex. 48 at 13-14. To permit such a reading of the ZR violates fundamental canons of statutory construction. It would also permit applicants like BRC to flout the legislature's reasoned distinctions between Use Groups and impositions of zone restrictions, thereby permitting applicants simply to choose a convenient Use Group for a zoning district instead of adhering to the more restrictive, and thus appropriate, use group that would be prohibited. 280. Pursuant to well-established canons of statutory construction, it is assumed that

every provision of a statute was intended to serve some useful purpose, see Crimmins v. Dennison, 12 Misc.3d 725, 729-30 (Sup. Ct. N.Y. Cty. 2006) (quoting Allen v. Stevens, 15 E.H.

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Smith 122, 145 (1899)), and every statute should be construed to avoid rendering language superfluous, see Branford House, Inc. v. Michetti, 81 N.Y.2d 681, 688 (1993), or meaningless, see Stevens v. Wing, 293 A.D.2d 49, 54 (1st Dep't 2002). Moreover, the "statute must be viewed as a whole, and, to that end, all of its parts, should, if possible, be harmonized to achieve the legislative purpose." Exxon, 128 A.D.2d at 295; see also Mobil Oil Corp., 48 N.Y.2d at 199; N.Y. Stat. Law 97. 281. In fact, the ZR provides clear direction regarding construction of Use Group

provisions at the beginning of each Use Group section: "Whenever a use is specifically listed in a Use Group and also could be construed to be incorporated within a more inclusive use listing, either in the same or another Use Group, the more specific listing shall control." ZR 42-00 (emphasis added); see ZR 22-00, 32-00. 282. The ZR further provides: Whenever any provision of this Resolution and any other provisions of law, whether set forth in this Resolution or in any other law, ordinance, or resolution of any kind, impose overlapping or contradictory regulations over the #use# of land, or over the #use# or #bulk# of buildings or other structures, or contain any restrictions covering any of the same subject matter, that provision which is more restrictive or imposes higher standards or requirements shall govern . . . . ZR 11-22 (emphasis added). 283. The instant matter serves as an excellent example of these principles. The

legislature determined that a Use Group 3 Non-Profit with Sleeping Accommodations is prohibited in manufacturing districts and that a Use Group 5 Hotel is prohibited in residential districts. If either designation for the Proposed Facility were acceptable, the zoning restriction would be meaningless.

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284.

Allowing an applicant to label a facility either a Use Group 3 or Use Group 5

depending on which Use Group is not restricted in the applicant's preferred district would negate the ZR restrictions and run contrary to the legislature's intent. Where permit applicants like BRC are permitted to designate the same facility as one use or another, depending upon which is expedient, there is not longer a purpose for distinct Use Groups in the ZR nor restrictions on the location of those Use Groups. Accordingly, and reasonably, because the UG 3 designation is more restrictive than the UG 5 in an M1 zoning district -- as it is the UG 3 that is forbidden, not the UG 5 -- the ZR requires that the UG 3 designation control. See ZR 11-22, 42-00. 285. In support of its decision, BSA points to examples in the ZR where certain uses

can be classified within more than one Use Group. See Ex. 48 at 14. However, in these instances, the legislature has expressly included language in the ZR identifying that these delineated uses may qualify as multiple Use Groups. Contrary to BSA's argument, the specific list of uses that may fit into one or more uses makes clear that where the ZR does not expressly allow designation in two Use Groups, the legislature has not authorized dual designation. In fact, in most cases, the ZR requires just the opposite. That there are only limited occasions where a use can fit into more than one Use Group demonstrates the ZR mandate that the specific controls the general. See ZR 12-01(a), ZR 22-00; see ZR 33-00, 42-00. 286. In fact, being able to designate a facility as either one Use Group or another

depending on the zoning district is exactly what the Board has sought to prevent in the past. See, e.g., BSA No. 307-06-A. This is precisely why the Board took great pains to determine in BSA Resolution No. 307-06-A what was the appropriate use group for the youth hostel at issue. Thus, the Board prohibited the appellant from placing a transient hotel "under the guise of community facilities" in a district that specifically prohibited the construction of transient hotels because to

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do so would "impermissibly locate [] facilities in districts where such uses would otherwise be prohibited." BSA No. 307-06-A. Here, the Board should have prevented BRC from doing the same. 287. DOB recognized that the Proposed Facility could not be both a UG 3 and UG 5.

See Ex. 66 at 34. If the Proposed Facility could be both, there would have been no reason for DOB to insist that BRC amend its plans to insert a wall, second entrance and second elevator in an attempt to separate the programs from the residents. Further, DOB has insisted there be both a physical and practical separation of the sleeping accommodations from the programs to allow it to be a UG 5. See id.; see also id. at 40. Accordingly, BSA's conclusion directly contradicts DOB's understanding of the ZR. 288. DOB's position is entirely consistent with canons of statutory construction and the

purpose of the ZR. To permit a building or proposed development to be two Use Groups under the ZR at the same time would render the existence of Use Groups both superfluous and meaningless. Moreover, allowing a facility to be two Use Groups would likewise render the restrictions imposed by the ZR on the placement of Use Groups in zoning districts meaningless. Yet, the fundamental purpose of the ZR -- accomplished primarily through restrictions on the location of Use Groups -- is to "encourage the development of desirable residential, commercial, and manufacturing areas with appropriate groupings of compatible and related uses and thus to promote and to protect public health, safety, and general welfare." Toys R Us v. Silva, 89 N.Y.2d 411, 418 (1996) (internal quotations omitted). 289. As such, BSA's failure to abide by the canons of statutory construction, the

dictates of the ZR, and its own precedent, renders its decision arbitrary and capricious, an abuse of discretion and an error of law.

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III.

BRC's Proposed Facility Violates the Shelter Size Limits Imposed By Administrative Code 21-312 290. The City of New York is required by law and consent decree to provide housing

to the homeless. See Plaza v. City of New York, 305 A.D.2d 604, 604 (2d Dep't 2003). Responsibility for meeting this obligation lies with DHS. See id. DHS provides housing to the homeless both through City-owned and operated shelters as well as through third party social service providers such as BRC. That housing, however, is subject to both State and local laws concerning, among other things, shelter size. 291. Section 21-312 of the Admin Code restricts shelter size to no more than 200 beds.

Specifically, 21-312(b) provides, in pertinent part: "No shelter for adults shall be operated with a census of more than two hundred persons."35 The only exceptions to this restriction are contained in 21-312(c) and 21-315. Section 21-312(c) makes an exception for the provision of "short-term emergency shelter to persons in excess of the certified capacity only" in the case of emergencies, as defined in 18 NYCRR 491.4(h). Significantly, that emergency exception only allows a shelter to exceed the capacity limit for "no more than thirty days in any calendar year" and requires notice to the Speaker of the City Council. The other exception, as set forth in 21-315, grandfathers in certain shelters that maintained capacities in excess of 200 persons prior to the promulgation of 21-312 in 1998 and permits replacement of those oversized shelters in the event of closure.

The corresponding State law and related regulations do not impose any specific limitation on the capacity of shelters for adults, instead regulating capacity as "approved by the department at the time of certification, or subsequently at the request of the operator" based upon "compliance with department regulations and applicable local codes." SSL 41-52; 18 NYCRR 491.3(g). Prior to March 1997, the State regulations restricted shelters in cities with more than 500,000 people to no more than 200 persons. 18 NYCRR 491.3(g) (1996); see also Doe v. Dinkins, 192 A.D.2d 270, 271-72 (1st Dep't 1993) (citing former version of 18 NYCRR 491.3(g)). -97-

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292.

Section 21-312 defines "census" to "mean the actual number of persons receiving

shelter at a shelter for adults." Admin Code 21-312(a)(1). "Shelter for adults" is not defined within 21-312 and is listed only as a type of "adult residential care facility" under 27292.9(b)(2). Admin Code 27-292.9(b)(2) defines an "adult residential care facility" as, among other things, a shelter for adults . . ., which contains three or more dwelling units and which provides board and temporary or long-term residential care and services to adults who, though not requiring continual medical or nursing care, are by reason of physical or other limitations associated with age, physical or mental disabilities or other factors unable or substantially unable to live independently. This definition is substantially similar to the definition of "adult care facility" contained in the State regulations governing social services, including those social services regulated by OTDA. See 18 NYCRR 485.2(a) (including "shelter for adults" and same level of care). Additionally, the State regulations further define "shelter for adults" as an adult-care facility established and operated for the purpose of providing temporary residential care, room, board, supervision, information and referral, and, where required by the department or otherwise deemed necessary by the operator, social rehabilitation services, for adults in need of temporary accommodations, supervision and services. Such definition shall not include facilities providing such temporary residential services to fewer than 20 persons, unless such facility is operated by a social services district. 18 NYCRR 485.2(e); see SSL 2(23). 293. BRC's Proposed Facility, including its Shelter, Reception Center and CDCC,

qualifies as an adult care facility and shelter for adults. Each of its programs falls within the above-defined understanding of adult care facilities and shelter for adults in that each provides board as well as residential care and services to adults suffering from mental disability or other

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factors.36 Moreover, each program, upon relocation to the Proposed Facility, will be part of an "integrated service center" within a "vertical campus" that is controlled and operated by the same provider -- BRC. See supra 26-27, 61, 150. The Proposed Facility is predicated upon the compatibility of its programs and ability to offer all residents, regardless of program, social services housed within the same facility. Indeed, BRC touts the integrated nature of the Proposed Facility. Id. These unified programs will share programmatic space, including a common cafeteria, exam rooms, nursing stations, offices, staff, outdoor rooftop space and entryway, and residents will be required to participate in the programs provided, regardless of bed location. Id. In addition, non-residents coming to the Proposed Facility for case management, life and skill training and out-patient treatment services also will mix with the residential population, increasing the daytime census of the Proposed Facility beyond that indicated in the operating certificates. Id. 294. Thus, with 328 beds, the size of the Proposed Facility stands in contravention of

21-312, which was designed to prevent the very overcrowding and safety concerns -- both for the residents as well as the community -- that such large facilities pose. 295. These concerns served as the impetus behind 21-312's creation by the City

Council's Committee on General Welfare in 1998. During the hearings on the then-proposed

The Mental Hygiene Law ("MHL") defines "mental disability" as "mental illness, mental retardation, developmental disability, alcoholism, substance dependence, or chemical dependence." MHL 1.03(3) (emphasis added). State regulations further define "mental disability" as "mental illness, mental retardation, and alcoholism, or, except for the purposes of title 11, article 5 of the Social Services Law, narcotic addiction or drug abuse, either singly or collectively." 14 NYCRR 72.3(b) (emphasis added). The CDCC is licensed by OASAS and operated in accordance with its rules and regulations, which are promulgated pursuant to article 19 of the Mental Hygiene Law. However, the State and City definitions differ on the classification of "shelter for adults" within the definition of "adult care facilities" and the Admin Code's broader definition must apply when assessing the shelter capacity under 21-312. -99-

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law, numerous homeless rights organizations and homeless services providers spoke out about the importance of limiting shelter size. According to the Executive Director of the Coalition for the Homeless: Capacity limits are widely supported by shelter providers, by medical experts and by shelter residents themselves. Moreover, capacity limits have had an overwhelmingly positive effect on surrounding communities. Neighborhoods and community boards have found that small shelters make good neighbors, and do not generate the complaints that the massive armory shelters once did a decade ago. Testimony of Mary Brosnahan, Executive Director of Coalition for the Homeless, before the New York City Council's Committee on General Welfare Committee, March 22, 1999, regarding Local Law No. 19 (1999), attached as Exhibit 75; see Testimony of Steven Banks of the Legal Aid Society's Homeless Rights Project before the New York City Council's Committee on General Welfare, October 30, 1998, regarding Local Law No. 57, attached as Exhibit 76 ("This 200-bed cap is essential to prevent a return to the days when it was the norm to house hundreds of homeless adults in large, unmanageable barracks style shelters.") The point of the law was clear: This is a quality of life issue for both the homeless and the general population. Ensuring that the homeless are placed in decent temporary shelters improves everyone's quality of life. And decent means less than 200 beds. Large shelters are counterproductive; they can be devastating to the individual and in the long run more costly because they are obstacles to the individual's ability to obtain permanent housing. Testimony of Manhattan Borough President C. Virginia Fields before the New York City Council's Committee on General Welfare, October 30, 1998, regarding Local Law No. 57 at 2, attached as Exhibit 77. And the danger posed to the residents and the surrounding communities was a serious one. The New York State Assembly urged then-Speaker Vallone to pass the bill as necessary to protect the health and safety of residents of homeless shelters and the surrounding communities. . . . These standards were enacted in response to

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the terrible overcrowding and hazardous conditions in shelters in the 1980s and early 1990s[, which] created a dangerous environment for both the individuals residing in the shelters and the surrounding communities. There was a sharp increase in incidents of violence, notably several well-publicized stabbings in the shelters and a murder committed by a mentally ill resident of a City-run shelter. In addition, there was a rise in communicable diseases, particularly tuberculosis, attributable in part to overcrowding in the shelters. Letter from New York State Assembly to New York City Council Speaker Peter Vallone, dated October 6, 1998, attached as Exhibit 78. 296. Moreover, the law was passed during now-Respondent BRC's Rosenblatt's tenure

as DHS Commissioner so it is undeniable that he is not only aware of the law but also intimately familiar with its reasons: "[I]t is absolutely essential at this juncture to ensure that no other commissioner may [expand single adult shelters] in the future and that the lives and well-being of shelter residents and New York City neighborhoods be permanently safeguarded against the devastating impact of these human warehouses." Testimony of Michael J. Polenberg, Advocacy Department of the Coalition for the Homeless before the New York City Council's Committee on General Welfare, October 30, 1998, regarding Local Law No. 57, attached as Exhibit 79. 297. Accordingly, Admin Code 21-312(b) was focused on limiting the capacity of

any one building that was used as a shelter for adults to only 200 beds in order to ensure the health, treatment, recovery and safety of the homeless residents while also minimizing the impact on the surrounding neighborhood to absorb the influx of residents into the community. 298. Under Charter 645(b)(3)(a) and (d), DOB is required to ensure that buildings are

only occupied pursuant to valid certificates of occupancy, which can only issue after DOB certifies "that such building or structure conforms to the requirements of all laws, rules, regulations and orders applicable to it." It is incumbent upon DOB to exercise its enforcement obligations where any building presents a patent violation of the law. See 9th & 10th Street II,

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10 N.Y.3d at 270. This is especially true given the consequences of permitting otherwise illegal construction and occupancy. Id. ("It would create needless problems if [an applicant] built a . . . building, only to find that it could not use it in a legally-permitted way. The City would then face a choice between waiving the legal restrictions and requiring the building to remain vacant or be torn down."); see also 9th & 10th Street I, 2006 WL 2000128, at *5 ("Once erected, the building cannot be unbuilt (without great expense), and its impact on the neighborhood cannot be undone."). 299. Here, however, DOB has disclaimed enforcement responsibility for Admin Code

21-312. DOB has argued that it can only enforce this law when it inspects the Proposed Facility before issuing a final certificate of occupancy, and that only DHS has the power to enforce that law now. The absurdity of that position is obvious and stands in contravention of the letter and intent of the not only 21-312, but also Charter 645(b) and (d). 300. Similarly, the BSA erroneously agreed with DOB's absurd position because,

according the BSA, only DHS is responsible for enforcing Admin Code 21-312. See Ex. 48 at 15. Instead, the BSA simply "defer[ed] to DHS for interpretation and enforcement" of Admin Code 21-312 and "abstain[ed] from determining whether DHS has appropriately interpreted its own provision." Id. 301. DHS has authorized the construction and operation of the Proposed Facility's

integrated, 328-bed "vertical campus" by BRC in knowing and clear violation of the law and the intent of that law. Accordingly, the occupancy and operation of the Proposed Facility in excess of 200 beds permanently should be enjoined.

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302.

In a blatant misconstruction of the purpose and intent of 21-312, Respondents

contend that the 96 Reception Center beds "are not in fact shelter," but rather "short-term housing targeted exclusively to street homeless clients." Ex. 55 23; see Ex. 52 at 5. 303. Respondents' argument not only ignores common sense, the Admin Code's

applicable definition of "shelter for adults" to the Shelter, Reception Center and CDCC and the plain purpose of the law as expressed in the legislative history, but also contradicts DHS's stated purpose: "The mission of DHS is to prevent homelessness wherever possible and provide shortterm emergency shelter and re-housing support whenever needed." Ex. 52 at 8 (emphasis added); see Ex. 62, Supp. at 11 (same); id. at 12 (referring to Fair Share requirements for providers of "shelter or other short term housing"). 304. Moreover, Respondents' argument directly contradicts OTDA's own

categorization of the Reception Center as a "shelter for adults" under 18 NYCRR 491, the State regulations governing the operation of shelters. See Exs. 15, 16 (listing the Reception Center's violations of 491.1(d) and 491.3(g)); see also SSL 2(23) & 18 NYCRR 485.2(e), 491.2 (defining "shelter for adults"). Similarly, Respondents concede that the Reception Center is funded by, and will be operated pursuant to a contract with, DHS, just like every other shelter and the 200-bed Shelter here. See Exs. 17, 52. 305. Thus, as the Proposed Facility will shelter in excess of 200 residents through a

combination of three programs all run by the same provider in the same building -- an "integrated service center" within a "vertical campus" -- it is plain that Respondents are violating Admin Code 21-312(b). 306. Respondents, aware of the indefensible nature of their position that the Reception

Center is not "shelter," resort to claiming an exception under 21-315(a)(6), which permits DHS

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to open two, 400-bed shelters as a replacement for Camp LaGuardia, a former 1,700-bed armorystyle shelter. See Ex. 55, 37. This eleventh-hour assertion is disingenuous at best. 307. First, Respondents' invocation of the 21-315 exception is contrary to

Respondent DHS Commissioner Seth Diamond's statement to New York City Council Speaker Christine C. Quinn that DHS would not invoke the Camp LaGuardia exception. See Affirmation of Daniel S. Connolly in Further Support of Preliminary Injunction, dated Feb. 1, 2011 (without exhibits) ("Connolly Reply Aff."), 3, attached as Ex. 80. Upon information and belief, the invocation of the exception is not the unilateral right of DHS, but must be approved by, among others, the City Council. 308. Second, by claiming that the Proposed Facility's Shelter and Reception Center

qualify for the 21-315(a)(6) exception to the shelter census limits imposed by 21-312, Respondents concede that the Shelter and Reception Center are in fact "shelter." See City of New York v. Town of Blooming Grove Zoning Bd. of Appeals, 305 A.D.2d 673 (twice stating that Camp LaGuardia is a "shelter for homeless adults"). 309. Equally important, the City's invocation of the Camp LaGuardia exception

concedes that the Proposed Facility is a City facility subject to ULURP pursuant to the terms of 21-315(b). See infra Part IV.C.1. Section 21-315(b) states: "Each new shelter which replaces a shelter listed in subdivision a of this section shall comply with applicable statutes, laws, rules and regulations, including, but not limited to, section 197-c of the New York city charter." (emphasis added). This is a clear statutory acknowledgment that siting such large City shelters mandates ULURP review. And, as only the City can invoke the Camp LaGuardia exception -BRC may not -- the City implicitly admits that the Proposed Facility is a City facility.

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310.

Therefore, since the Proposed Facility's 328-bed capacity is in violation of the

law, the Court should revoke any permits and approvals, enjoin occupancy of the Proposed Facility, and bar DOB from issuing any certificate of occupancy for the Proposed Facility until BRC's project complies with all applicable laws, including Admin Code 21-312. IV. A ULURP Review Is Mandatory, But None Has Been Conducted 311. The City must perform a public ULURP review. A ULURP review ensures that

local decision-makers and citizens have an opportunity to participate in land use decisions that will affect their communities. The City must not be allowed to completely evade this crucial process. 312. As discussed above, this Court may compel an agency to take action when the

agency has "failed to perform a duty enjoined upon it by law," so long as the agency has no judgment or discretion in carrying out the duty. CPLR 7803(1); N.Y. Civ. Liberties Union, 4 N.Y.3d at 184. As the argument below shows, neither DHS nor DOB have any discretion with respect to this matter, and must submit its land use decisions regarding the Proposed Facility for a ULURP review. CFC accordingly asks this Court to compel DHS to satisfy its review obligation. A. 313. The ULURP Purpose and Procedures Section 197-c of the Charter establishes the ULURP review process. According

to CPC, the agency tasked with conducting ULURP reviews, ULURP's purpose is "to establish a standardized procedure whereby applications affecting the land use of the city [will] be publicly reviewed."37 THE UNIFORM LAND USE REVIEW PROCEDURE, http://www.nyc.gov/html/dcp/html/luproc/ulpro.shtml (last visited Oct. 5, 2010).

37

CPC's ULURP procedures mirror those included in the Charter. See 62 RCNY 2-01. -105-

314.

ULURP ensures that the local communities are involved in the land use decisions

that directly impact their homes and businesses. Before ULURP, "[c]ommunities [were] often not informed of pending land use plans and public improvements until after applications [had] been filed and reviewed by central City agencies." Lai Chun Chan Jin v. Bd. of Estimate, 115 Misc.2d 774, 777 (Sup. Ct. N.Y. Cty. 1982), rev'd on other grounds, 101 A.D.2d 97 (1st Dep't 1984) (citing State Charter Revision Comm'n, Planning for Land Use Recommendations (March 26, 1975)). The Court of Appeals has noted that ULURP has a "salutary and important purpose" in providing local communities with an opportunity to participate in land use decisions before the decisions are made. Waybro Corp. v. Bd. of Estimate, 67 N.Y.2d 349, 355 (1986). 315. The ULURP process "allows the community to measure the impact of the

proposed land use and, where possible, identify alternatives." Ferrer v. Dinkins, 218 A.D.2d 89, 94 (1st Dep't 1996); see also Council of N.Y. v. Giuliani, 172 Misc.2d 893, 901 (Sup. Ct. Queens Cty. 1997) (explaining that "ULURP was enacted in 1975, 'in response to a perceived need for informed local community involvement in land use planning . . . '" (quoting 2 MORRIS, NEW YORK PRACTICE GUIDE: REAL ESTATE 20.04, at 20-47)); Edward N. Costikyan and Maxwell Lehman, RESTRUCTURING THE GOVERNMENT OF NEW YORK CITY 99-100 (Mar. 15, 1972) (a report to the Temporary Commission to Make a Study of the Governmental Operations of the City of New York explaining that the process that would become ULURP would require DCP to discuss its land use plans with local decision-makers, which would allow "the local reactions [to] be ascertained long before any kind of final decision were made."). 316. ULURP requires several levels of review, including a certification of

completeness from the DCP, a review by the appropriate Community Board, a written recommendation from the Borough President, a review by CPC, a review by the City Council for

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certain applications, and a potential veto by the Mayor. See generally Charter 197-c(c), (e), (g); 62 RCNY 2-01 (providing procedures for ULURP review). 317. Pursuant to Charter 197-c, a ULURP review is required for "applications by any

person or agency for changes, approvals, contracts, consents, permits or authorization thereof, respecting the use, development or improvement of real property subject to city regulation" that fall into one of 12 categories, including: "Special permits within the jurisdiction of the city planning commission under the zoning resolution . . ."; "Housing and urban renewal plans and projects pursuant to city, state and federal housing laws"; or "Acquisition by the city of real property . . . by purchase, condemnation, exchange or lease . . . ."

197-c(a)(4), (8), (11). B. 318. The Issuance of Special Permits Require ULURP Review Applications for special permits under the CPC's jurisdiction are subject to the

ULURP review process. See Charter 197-c(a)(4); see also Charter 201 ("All . . . applications for the issuance of special permits shall be subject to review and approval pursuant to [ULURP]"); Starburst Realty Corp. v. New York, 125 A.D.2d 148, 155 (1st Dep't 1987) (noting that "special permits . . . must be reviewed by community boards and the [CPC] under ULURP"). 319. The Proposed Facility should have been classified as UG 3, which is not

permitted in an M1 zoning district absent, in the circumstances described above, a CPC special permit. See supra, Argument, Part II.C.; see also ZR 74-90, 74-903, 74-921. If either BRC or DOB had assigned the appropriate UG designation to the Proposed Facility, BRC would have been required, by the plain command of 197-c(a)(4) to obtain a special permit from CPC

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before it could be located on the Property and would, therefore, have had to undergo a complete ULURP review. C. 320. DHS Is Using BRC as a Pass-Through Lessee to Avoid ULURP Review Under 197-c(a)(11), "[a]cquisition by the city of real property . . . including . . .

by purchase, condemnation, exchange or lease" requires ULURP review. Although BRC technically maintains the 33-year lease for the Property, DHS is, for all intents and purposes, the effective lessee. 321. As an initial matter, application of ULURP must be "'liberally construed'" in order

to give effect to the statute's purpose and intent in controlling crucial land use decisions and ensuring that the local communities are involved in land use decisions that directly impact their homes and businesses. Giuliani, 172 Misc.2d at 901 (quoting Mauldin v. New York City Transit Auth., 64 A.D.2d 114, 117 (2d Dep't 1978)); Lai Chun Chan Jin v. Bd. of Estimate, 115 Misc.2d 774, 777 (Sup. Ct. N.Y. Cty. 1982), rev'd on other grounds, 92 A.D.2d 218 (1st Dep't 1983). As the Court stated in Coalition for Responsible Planning, Inc. v. Koch with respect to the importance of ULURP, "it does not elevate form over substance to require that a lawfully mandated procedure be followed." 142 Misc. 2d 1038, 1045-46 (Sup. Ct. N.Y. Cty. 1988). 322. The court's statement is particularly true here, where the Proposed Facility has

been created at the request of, in coordination with and through funds provided by DHS. Further, as described above, by alternatively pleading that the Proposed Facility is exempt from the 200-bed shelter limit imposed by Administrative Code 21-312 because it is replacing Camp LaGuardia, Respondents have conceded, as a matter of law, that the Proposed Facility qualifies as a City facility subject to ULURP. See supra 306-09. In addition, (1) the DHS-BRC Contract, (2) the terms of BRC's lease, including the provision permitting assignment to the City, and (3) the use of City funds from multiple City agencies, including DOH, OMB and DHS, to -108-

recoup construction costs and finance installation of essential medical and shelter equipment, undeniably renders the project a City facility subject to ULURP. 1. The Shelter Contract Illustrates that DHS's Complete Control Over the Shelter Establishes a Lease Subject to 197-c(a)(11)

323.

As just stated, Charter 197-c(a)(11) requires ULURP review for "[a]cquisition

by the city of real property . . . including . . . by . . . lease." An agreement constitutes a "lease" where it grants "the exclusive right to use and occupy that land . . . rather than a mere temporary privilege." Ferrer, 218 A.D.2d at 93. In determining whether the City has entered into a "lease," thereby subjecting it to ULURP review under 197-c(a)(11), "the prevailing issue is whether or not the City's interests will so predominate the use of the land, to exclusion of the owner's, that the effect on the community will be the same as if the City had taken title to the land." Id. at 94.38 324. The express terms of the Shelter Contract leave no doubt that DHS completely

controls the 200-bed component in the "vertically integrated" Proposed Shelter.39 Indeed, the contract expressly proclaims the City's predominate use of the land: "[BRC] shall work with [DHS] to ensure that the Shelter is operating as part of the City's homeless services system" and "[BRC] shall operate the Shelter in accordance with . . . [DHS] policies and procedures." Ex. 54, art. 2.A.2., 2.A.3 (emphasis added); see id., art. 2.X ("[T]he Court-appointed monitoring agency

City control over the Proposed Facility is further evidenced by the fact that the CDCC receives its primary funding from New York City's DOH, see Ex. 69, 33 (Rosenblatt Aff.), and the fact that the Reception Center operates pursuant to a contract with, and is fully funded by, DHS, see id., 35. BRC's as-of-yet undisclosed contract with DHS for operation of the Reception Center is likely to only further establish the City's predominate use of the Proposed Facility. -10939

38

for the City's shelters . . . is entitled access to the Shelter and Shelter clients, with the client's consent."). 325. Moreover, the fact that "[DHS] shall be the only referral system and [BRC] shall

accept all homeless adults referred to it by [DHS]," id., art. 2.C.1 (emphasis added), in addition to the fact that DHS requires BRC to "operate the Shelter at an average of 95% of the Shelter's full capacity" establishes the City's exclusive and predominate use of the Proposed Facility, id., art. 2.F.1. 326. In exchange, DHS will pay BRC on a monthly basis not to exceed $7.2 million

annually and $76.1 million over the term of operations. See id., art. 10.B, D. Nevertheless, "[DHS] acknowledges that [BRC]'s lease for the Shelter provides for annual increases in rent payments over the term of the lease [and DHS] represents that the yearly budgets for the operation of the Shelter shall include sufficient monies to pay for the annual lease payments and the yearly increases in rent."40 Id., art. 10.E (emphasis added). 327. Crucially, the Shelter Contract term runs from September 1, 2010 to June 30,

2021, may be extended at DHS's unilateral option for two, five-year terms and may be terminated only by DHS; BRC has no termination rights. See id., art. 9.A, 9.B; id., app. A, art. 10; see also SSL 43(7). Additionally, DHS may change the purposes of the Shelter at any time to comport with "the needs of the City." Id., art. 13 (emphasis added).

It is clear that DHS and other City agencies, including DOH, are funding at least 80 percent of the Proposed Facility, including the predominate, if not entire, expense associated with the Shelter, Reception Center, CDCC, SASC and Food Service Programs. See Ex. 59 at 513 (attachments showing City budgeted to provide furniture for multiple different programs and facility generally, including roof deck and food service supplies; budgeted to provide "base rent" "allocated to all occupants" of entire facility as well as "additional rent" to repay "the debt service required for the loan to build out the residential program spaces"); see also Ex. 53 at 2532 (showing building allocation costs among programs, which reflects DHS paying for Shelter, Reception Center and Food Service Program and DOH paying for CDCC and SASC). -110-

40

328.

Numerous other provisions make even more clear that DHS maintains operational

and decision-making control and review over the entire shelter. For example, BRC must "consult with, and receive written approval from, [DHS] before initiating any structural changes, including renovations and room reconfigurations, divisions or change in use." Id., art. 5.A.1 (emphasis added). Similarly, Article 2 sets forth, in detail, the services that BRC must provide the homeless residents and DHS retains audit and approval authority over the manner in which BRC provides those services. Id., art. 2.H-R, Y. Indeed, BRC may not make "[c]hanges in any major program component; or . . . [c]hanges in the level of paid or unpaid staff" without DHS's prior written approval. Id., art. 2.V.1. DHS must even approve not only the shelter directors, but also the shelter's maintenance superintendant. See id., arts. 7.F, 5.A.1.d. 329. Accordingly, there can be no doubt that DHS's complete control of the Proposed

Facility "so predominate[s] the use of the land, to the exclusion of the owner's, that the effect on the community will be the same as if the City had taken title to the land." Ferrer, 218 A.D.2d at 94. 330. It can fairly be said that BRC is a "state actor" with regards to the Proposed

Facility, in that BRC is acting as an agent of the City. See generally Brown v. City of New York, No. 09 Civ. 6834, 2010 WL 3565171, at *3 (S.D.N.Y. Mar. 2, 2010); Marcus Garvey Park Homes Hous. Dev. Fund Corp. v. Franco, 12 Misc.3d 840, 842-44 (City Civ. Ct. N.Y. Cty. 2006) (where entities are subject to stringent City regulations, they act not as private actors but as agents of the City); Buffalo News, Inc. v. Buffalo Enters. Dev. Corp., 84 N.Y.2d 488 (1994); Holden v. Bd. of Trs. of Cornell Univ., 80 A.D.2d 378 (3d Dep't 1981). 331. In Community Planning Board No. 4 v. Homes for the Homeless, the court stated

that a facility may be "subject to control" by the City when, as in the present case, the facility

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"shelters some of New York's burgeoning homeless population, and the City . . . unquestionably [is] involved with the project's planning and siting." 158 Misc. 2d 184, 192 (Sup. Ct. N.Y. Cty. 1993). 332. The Shelter Contract gives the City far greater control over the Proposed Facility

than described in Community Planning Board No. 4. Furthermore, the presence of a written agreement here, as well as the extent of the City's control over the Proposed Facility, raises the Proposed Facility to the level of a city facility, whereas other cases deciding similar issues arose in factual contexts where there were no written agreements and the provider surrendered little control over their property. Cf. Ferrer, 218 A.D.2d at 95-96 (holding that Fair Share did not apply to a motel that had only a verbal "day-rate agreement" with the City for accepting homeless families); W. 97th-W. 98th Streets Block Assoc., v. Volunteers of Am. of Greater N.Y., 190 A.D.2d 303, 308 (1st Dep't 1993) (holding that Fair Share did not apply to "incidental contracts executed after the site for an anticipated facility has been selected"). 333. Here, the City conducted both Fair Share and environmental reviews, thus

conceding that the Proposed Facility constitutes a City facility. See 143 -150 & n.22-23. 334. It is telling that, in other contexts, New York courts have found private

institutions like BRC to be running public facilities. In Buffalo News, the Court of Appeals held that a non-for-profit corporation was an "agency" within the meaning of the Freedom of Information Law ("FOIL"). 84 N.Y.2d at 490. The corporation was privately owned, but the Court concluded that it was a "governmental entity" because it was "performing an essential governmental function," "created to lessen the burdens of government" and "channel[ing] public funds into the community." Id. at 490, 492-93.

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335.

Similarly, in Holden, the Third Department concluded that Cornell University's

Board of Trustees is a "public body" for purposes of the Public Officers Law. 80 A.D.2d 378, 380-81 (3d Dep't 1981). The court held that the Board was "a public body" in regard to its management of State-funded colleges because it was required to act on the State's behalf, was supervised by the State, and had to consult with the State about budgets and expenditures. Id. 336. Just like the private corporation in Buffalo News, BRC is performing an essential

governmental function by providing legally obligated homeless shelter and support on behalf of the City and channels public funds into the community in carrying out its governmental function. Further, consistent with the ruling Holden and as demonstrated immediately above, the City exercises control over the Proposed Facility's budget and is supervised by DHS and the relevant State agencies. 337. The City's funding of and oversight over the Proposed Facility and the City's

ability to dictate the occupancy of the Proposed Facility renders BRC's relationship to the City materially different than those cases that have determined the Buffalo News decision inapplicable. See, e.g., Ervin v. S. Tier Econ. Dev., Inc., 26 A.D.3d 633, 635 (3d Dep't 2006) (explaining that defendant was created by private interests and was not overseen by government); Metro. Museum Historic Dist. Coal. v. Montebellow, 20 A.D.3d 28, 37 (1st Dep't 2005) (explaining that Metropolitan Museum's "operating and capital budgets are primarily privately funded, and its budgets are not subject to city approval or public hearings"); Farms First v. Saratoga Econ. Dev. Corp., 222 A.D.2d 861, 862 (3d Dep't 1995) (explaining that defendant was formed to further private interests and had merely contracted with government). Further, as made clear above, unlike these cases, the Proposed Facility does not serve private interests, but rather public, City obligations.

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2.

The Lease Terms and Funding Conditions Further Demonstrate the City's Complete Control

338.

In addition to the Shelter Contract, BRC's lease and the conditions on the City

funds used to finance the construction and start-up costs for the Proposed Facility further evidence the City's predominate use of the Proposed Facility. 339. First, the lease expressly allows BRC to assign the lease to DHS without the

landlord's consent, a provision that hardly could have been included absent DHS's consent. See Ex. 7, Att. 8, at 10.2(a)(iii). 340. Second, as explained supra 131, 133, 139-40, the City is providing millions of

dollars in funds from various agencies, including DHS, DOH and OMB. Those funds will pay not only for the staff, equipment, supplies and food service for the Shelter, Reception Center, CDCC and SASC, but also the rent and debt service associated with those programs. See id. 341. BRC and DHS communications reflect that the City built in "additional rent"

payments to cover "the debt service required for the loan to build out the residential program spaces." Ex. 59 at Cost Allocation Plan. Additionally, the Shelter Contract includes "up to $1.2 million to cover planning and construction costs associated with the renovation." Ex. 25. Indeed, Respondent DHS Deputy Commissioner Nashak stated that a portion of the contract cost would be used to recoup construction costs. See Connolly Aff., 10. 342. OMB is providing roughly $1.4 million in capital funds to purchase furniture and

equipment for the Proposed Facility. See Ex. 25. This includes all the "desks, chairs, moveable dormitory furniture for residential programs, and various moveable storage devices for both programmatic and administrative use." See Ex. 25 at B-3; see also id.. (containing itemized list and cost per unit of moveable property BRC plans to purchase).

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343.

OMB funding is available only for "City Projects," which includes projects by

non-profit organizations that operate within the City, whether on City owned or leased property or not, that will be used for a "City Purpose." See Ex. 25 at i, viii. A "City Purpose" includes any "specific purpose to be served by the Project for the benefit of the City" that "constitute[s] an eligible capital project according to the City Comptroller's Directive 10." See id. at i, iii. Under City Comptroller's Directive 10, "Capital Projects on privately-owned property," such as construction of a "social services organization in privately-owned space," are eligible to receive capital funds. See Ex. 60, 10 (June 3, 2005). 344. As part of its funding request, BRC must consent to a covenant prohibiting the

use of the moveable property for any "non-City Purpose" and a lien to secure against such improper use. See Ex. 25 at III-1. 345. Therefore, based upon the Shelter Contract terms, the lease provisions, and the

funding conditions, it is beyond cavil that the City "predominates the use of the land." In effect, BRC is acting on behalf of DHS in order to circumvent the clear application of the law. However, the plain language, purpose and intent of 197-c(a)(11) demands a ULURP review in order to fully and fairly address the potentially significant changes in land use that will occur as a result of the Proposed Facility. D. 346. The Proposed Facility Is a City Project and Part of the City's Legally Obligated Homeless Housing Plan Housing plans and projects conducted pursuant to city and state law require

ULURP review. See Charter 197-c(a)(8). Since the Proposed Facility is such a housing plan developed pursuant to city law in order to meet the City's legal obligation to provide housing for the homeless, its construction necessitates a ULURP review.

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347.

As described above, the City is required by law and consent decree to provide

housing to the homeless, and the responsibility for meeting this obligation rests with DHS. See supra 290; see also Plaza v. City of New York, 305 A.D.2d at 604. In order to comply with this legal mandate, the DHS Commissioner is required to submit to the City Council a "Five-Year Plan" to combat homelessness, which, in the fifth year, DHS is required to revise and submit to City Council. See Admin Code 21-308; see also SSL 79 (requiring Mayor to submit the Five-Year Plan to the State Legislature and Governor). All actions taken and money spent by DHS in combating homelessness are pursuant to these statutorily-required plans, which detail the City's homeless housing needs, projected budgets and "projected number of facilities to be constructed or rehabilitated to accommodate homeless individuals and families." Admin Code 21-308(1) (d); see id., 21-308(1)(a)-(c); Charter 612(a)(1) (charging DHS with "responsib[ity] for transitional housing and services provided by the city for eligible homeless families and individuals" and empowering DHS to contract for and "develop, maintain and, where necessary, strengthen the system for the provision of transitional housing and services for homeless families and individuals"). 348. Additionally, Respondent Nashak, on behalf of DHS, stated that the 200-bed

Shelter is "part of [DHS's] plan to meet projected needs." Ex. 55, 15. Nashak further stated that the Shelter is necessary to meet the City's legal obligation to provide shelter to the homeless, and the procurement of the BRC's services at the Shelter is required to meet expected demand projections. See id., 9-15; see also id., 13 ("[W]e are procuring significant capacity to ensure we meet the projected demand.").

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349.

These admissions notwithstanding, the City would have the Court -- and the

taxpaying public -- believe that the City is haphazardly proposing budgets and spending tens, if not hundreds, of millions of dollars on homeless housing without any plan. 350. As recent cases and news articles make clear, the Proposed Facility is not just

another shelter, but part of a fully planned and budgeted expansion of the City shelter system.41 Exs. 56, 57, 58. 351. The Proposed Facility is therefore part of DHS's plan to combat homelessness.

The Proposed Facility was fashioned in response to an open-ended RFP, which expressly provides that facility construction costs will be reimbursed by DHS. See DHS Request for Proposals & Addendum 7, dated December 31, 2009, attached as Exhibit 81; see also Ex. 25. Moreover, nearly the entire Proposed Facility cost is absorbed by DHS: over 80 percent of the Proposed Facility's operating expenses will be paid for by the City. See Connolly Aff., 10. Further, the additional $1.4 million funding request to cover the furniture and equipment for the Proposed Facility demonstrates that such funding is available to BRC only because it is creating a "City Project" and city facility. See supra 141. Finally, DHS's contract with BRC for the Proposed Facility requires BRC "to ensure that the [Proposed Facility] is operating as part of the City's homeless service system." Ex. 54 at 2.A.2., 2.A.3. 352. Accordingly, the evidence establishes that BRC's Proposed Facility is a DHS

facility created in response to its housing plan for the homeless. 353. The few cases to address 197-c(a)(8) are easily distinguishable on the facts, and

actually support the proposition that the Proposed Facility is being constructed pursuant to the

It is not surprising that, like here, the City is accused of circumventing all legal processes in constructing these shelters. -117-

41

type of housing plan envisioned by ULURP. See, e.g., West 97th-98th Sts. Block Ass'n v. Volunteers of Am., 190 A.D.2d 303 (1st Dep't 1993); Neighborhood in the Nineties, Inc. v. City of N.Y. Bd. of Standards and Appeals No. 115705/07, 2009 WL 2579315 (Sup. Ct. N.Y. Cty. Aug. 13, 2009). In both Neighborhood in the Nineties and West 97th, the courts were faced with renovations to existing single room occupancy buildings. Because the facilities at issue in those two cases would largely remain the same -- requiring only a change in the number and type of tenants -- the courts determined that the referral and service contracts were too inconsequential a change to warrant ULURP review. Id. Moreover, neither case concerned a DHS-sponsored, funded or directed facility. 354. By contrast, here the proposed BRC facility constitutes a brand new facility that

drastically changes the existing, largely vacant factory use through a gut renovation to create a "vertical campus" that will house and treat in excess of 328 people and was created in response to a DHS RFP, in coordination with DHS, to satisfy the City's legal obligation to provide homeless housing pursuant to DHS's housing plan. Thus, the very reason why the courts in Neighborhood in the Nineties and West 97th-98th found those projects did not require ULURP are completely opposite here and indicate that a City project of the size, scale, scope and expense as the Proposed Facility warrants a ULURP review. 355. Accordingly, DHS's powers and legal duty to prepare and implement a

comprehensive plan, submitted to City Council, designed to satisfy the City's legal obligation to provide and pay for homeless housing, when coupled with DHS's involvement in and funding of the Proposed Facility, compels the conclusion that the plain meaning and intent of Charter 197c require the Proposed Facility to go through the ULURP review.

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356.

Therefore, the Court should enjoin occupancy and operation of the Proposed

Facility until the City has performed a ULURP review. See Stop BHOD v. City of New York, No. 31301/08, 2009 WL 692080, at *13-14 (Sup. Ct. Kings Cty. Mar. 13, 2009) (enjoining construction and expansion of prison pending litigation into whether proper procedures were followed and necessary reviews were conducted "since to do otherwise would thwart the very purposes of the legally mandated reviews"); see also Wyndham Co. v. Wyndham Hotel Co., 236 A.D.2d 220, 221 (1st Dep't 1997) (citing J.A. Preston Corp. v. Fabrication Enters., 68 N.Y.2d 397, 405 (1986)) ("On any view of the matter, the status quo should be maintained until judgment in the action is rendered.").42 V. DHS Must Register Its Contracts With the Comptroller 357. Although the City has represented that it has submitted the Shelter Contract to the

Comptroller for registration, that contract has not yet been registered. Moreover, Respondents have repeatedly referenced a DHS contract for the Reception Center, yet have made no representations regarding the completion or registration of that contract. Further, although the

Although some cases decline to grant injunctive relief pending ULURP reviews, those cases are easily distinguishable on the facts. For example, while the court in Davis v. Dinkins, 154 Misc.2d 518 (Sup. Ct. Queens Cty. 1992), rev'd on other grounds, 206 A.D.2d 365 (2d Dep't 1994), did not enjoin use of a shelter despite the City's violation of City planning laws, the facility in Davis was already occupied and therefore imposition of injunctive relief would have itself altered the status quo. See Dodgertown Homeowners Ass'n, Inc. v. City of New York, 235 A.D.2d 538 (2d Dep't 1997) (refusing to close operation of psychiatric treatment and homeless shelter pending ULURP review). Similarly, the court in Stop BHOD, while granting an injunction against the unoccupied portion of a prison, refused to enjoin occupancy of the portion of the facility housing 31 inmates. See Stop BHOD, 2009 WL 692080, at *14. Here, however, failure to enjoin Respondents from opening the Proposed Facility will alter the status quo. Moreover, the inequity associated with removing the homeless from their temporary shelter and the overriding need to keep criminals behind bars that influenced the decisions of the Davis, Dodgertown and Stop BHOD courts does not exist here. Finally, no emergency exists here, and, in fact the City has conceded that its has sufficient shelter capacity to house the prospective Proposed Shelter residents. See Ex. 52 at 20.

42

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City is funding, at least in part, every other program in the Proposed Facility as well, Respondents have made no representations about the existence or registration of contracts for those programs. 358. Section 328(a) of the Charter states that "[n]o contract or agreement executed

pursuant to this charter or other law shall be implemented until . . . a copy has been filed with the comptroller . . . ."43 Contract registration plays a crucial role in ensuring that the City's contracts are acceptable and comply with applicable law. Registration allows the Comptroller to determine whether funding exists to pay for the contract, whether proper certifications have been gathered, whether the vendor is acceptable, and whether the contract or contractor is tainted by corruption. See Charter 328(b),(c); see also Tully Constr. Co. v. Hevesi, 214 A.D.2d 465, 466 (1st Dep't 1995) (explaining that 328(c) authorizes "the Comptroller and the Mayor to reject a bidder, even . . . after the award of the contract, on the ground that the bidder has failed to manifest the requisite integrity to perform the contract"). This process ensures that taxpayer dollars are not wasted or used improperly or illegally. 359. Accordingly, as the Court of Appeals has explained, "(a)lthough a contract has

been awarded by a municipal agency, such contract is not effective until it has been registered." DeFoe Corp. v. N.Y.C. Dep't of Transp., 87 N.Y.2d. 754, 760 (1996); see also Nefesh v. N.Y.C. Dep't Emp't, 254 A.D.2d 76, 76 (1st Dep't 1998) (explaining that pursuant to 328(a), a "contract was not effective until registered by the Comptroller"). 360. Here, DHS and BRC are moving forward with occupancy of the Proposed Facility

as if the contract were effective even though it has not yet been registered. Moreover, neither the

The registration requirement applies to all city contracts with certain limited exceptions, which are inapplicable here. Charter 328(d). -120-

43

City nor BRC has made any representation about the registration of the contract for the Reception Center or any other contracts the City may have for Proposed Facility programs. 361. The decision to move forward with occupancy without registering these contracts

is wholly improper and in violation of the Charter. This, of course, is not the first time DHS has failed to comply with these laws. The Comptroller has issued several audits that take DHS to task for its willful noncompliance with procurement and contract registration laws. Exs. 63 & 64. In its most recent audit report, issued on March 25, 2010, the Comptroller observed that DHS made nearly $152.7 million in payments to non-contracted providers and, in derogation of the law and sound procurement practice, intentionally operated pursuant to "unwritten or handshake" agreements with providers. See Ex. 63 at 1, 4; see also Ex. 65 (noting fraud surrounding DHS contracts). 362. These reports establish that DHS has a pattern and practice of refusing to register

its contracts in order to avoid the legally required reviews, including Fair Share review, that flow from registration. See, e.g., Wallabout Cmty. Ass'n v. City of New York, Index No. 104351/2003, 2004 WL 2480017, at *5 (Sup. Ct. N.Y. Cty. Oct. 15, 2004) (noting petitioners' argument that respondents had "violated the City Charter by failing to submit a written agreement to the New York City Comptroller," but concluding that the issue was not before the court and, therefore, that no fair share review was needed); Ferrer, 218 A.D.2d at 95-96. 363. Moreover, DHS's refusal to register contracts quashes any Comptroller review of

the service provider or the propriety of the procurement process. These practices have been the subject of recent investigation after allegations of fraud and corruption arose. See Ex. 65. 364. Here, in light of the landlord's mortgage default on the Property and prolific

litigation concerning ownership interest of the Property in which one New York court found that

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"the specter of foul play was palpable," Comptroller review of the City's contracts for Proposed Facility programs is crucial. See Ex. 2 at 11. 365. Therefore, the Court should compel the City to submit its various contracts to the

Comptroller for registration, and enjoin occupancy and operation of the Proposed Facility until the Comptroller has performed his duty under the law.

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