SEQRA Use Can Be Curbed

January 07, 1998

Court Approves Abbreviated Type I Action, If Process is “Open” When a developer seeks government approvals and permits for a project, the State Environmental Quality Review Act (SEQRA)/1 and the regulations of the Department of Environmental Conservation (DEC)/2 issued under that law require that the lead government agency determine the environmental significance of the proposed action.
For so-called unlisted or less-intensive projects, DEC regulations allow the lead government agency to issue a Conditioned Negative Declaration. A decision to issue a CND recognizes that the action, as initially proposed, may result in one or more significant adverse environmental effects but concludes that mitigation measures identified and required by the government will modify the proposed action so that no significant environmental impacts will result./3 Therefore, the project, as modified, may proceed.

This procedure allows for a relatively more economical and expedited procedure in unlisted actions. Although not prohibited by statute, DEC regulations do not provide for conditioned negative declarations for larger, or “Type I,” projects. The New York Court of Appeals recently held, however, that under certain circumstances a negative declaration may be issued under SEQRA for a Type I action even if the project was modified during the initial review process to accommodate environmental concerns./4 Such modifications, the Court ruled, do not automatically convert a determination of nonsignificance in a Type I action into an improperly CND.

In theory, the decision should make it easier for Type I actions to be approved and, ultimately, to be constructed. However, the Court’s repeated emphasis on an “open” process, “open” discussions, and “open” considerations may provide opponents of particular real estate projects with another basis for objecting to, delaying, or blocking that development.

The new ingredient added is public awareness, if not public participation, of the give and take of the SEQRA process. In this regard, the court specifically stated:

“A SEQRA review process conducted through closed bilateral negotiations between an agency and a developer would bypass, if not eliminate, the comprehensive, open weighing of environmentally compatible alternatives both to the proposed action and to any suggested mitigation measures.”

Having thus set the stage, the Court proceeded to disagree with the Appellate Division’s holding in the case that “any significant modification during the review process” constituted a CND which is not permitted under the SEQRA regulations. It is important, according to the Court, significant modifications occurring during the SEQRA process of a Type I action would not result in a CND, if the procedures set forth in Merson are followed. The Merson Case

The Merson case involved the Philipstown Industrial Park, Inc., (PIP) which owns more than 80 acres of land in an industrial zoning district in a town in upstate New York. When the company sought to surface mine some of the property, to regrade and reclaim another portion and to subject a third section to various activities necessary to operate the mine, it applied to the DEC for a “mined land reclamation permit.” It also applied to the town planning board for a temporary Town Special Use Mining Permit pursuant to the Town Mining Law.

The planning board reviewed the permit application and declared itself the lead agency. It then determined that the mining project qualified as a Type I action under SEQRA because it “involve[d] the physical alteration of 10 acres.”/5 Accordingly, PIP submitted a draft of a full Environmental Assessment Form (EAF) pursuant to SEQRA regulations./6

During the review process, the planning board identified several “potentially large” environmental impacts from the proposed project. In response to concerns raised by the interested agencies, the planning board, and community members during public meetings and hearings, PIP continually revised portions of its project plans. All of the modifications were discussed and considered by the planning board during these open meetings and the entire project proposal was reduced to a single bound volume, including a completed EAF, which the company submitted to the board.

Two weeks later, the planning board received an opinion from the DEC that a determination of nonsignificance in the form of a negative declaration was appropriate. The planning board then issued a negative declaration and granted the temporary special use permit (subject to the final approval of the town board) on its finding that “the applicant has met or exceeded the performance standards outlined” in the town zoning law.

Soon afterward, a group of community residents filed an Article 78 petition seeking to annul the negative declaration of the planning board. The court dismissed the proceeding and concluded that the determination of the planning board had not been improperly issued. The appellate division reversed, finding that the planning board’s negative declaration was the “functional equivalent” of a CND, and thus improper. PIP appealed that ruling to the Court of Appeals. Two-Fold Inquiry

In its decision, the Court of Appeals recognized that classification of an action as a Type I action merely identifies the type of action involved but does not evaluate the environmental significance of the action. A completion of the EAF Part 3 is necessary in order to fully analyze the significance, if any, of the action./7

Upon analysis of the EAF, Part 3, if the agency determines that the implementation of the action as proposed will not result in any significant environmental effect, the agency may issue an unqualified negative declaration. Critically, this means that, if the action has the potential for a significant environmental impact, but, because it is proposed in such a manner with certain restrictions imposed by the applicant, it does not have such an impact, the agency may issue an unqualified negative declaration.

The Court of Appeals declared that in connection with a Type I action, courts must make a two-fold inquiry to determine whether a negative declaration has been impermissibly conditioned. First, they have to decide whether the project, as initially proposed, might result in the identification of one or more “significant adverse environmental effects.”

Second, if there are significant environmental effects, the inquiry must be as to whether the proposed mitigating measures incorporated into the EAF were “identified and required by the lead agency” as a condition precedent to the issuance of the negative declaration.

The Court of Appeals stated that at the second phase of analysis, courts must determine whether the proposed mitigating measures negated the project’s potential adverse effects.

It added that a revised proposal could result in a determination of nonsignificance and the issuance of a valid negative declaration. In this regard, it said, mitigating measures could be viewed as part of the “give and take” of the application process. Ambient Noise Level

The Court stated that in the case before it the town planning board had identified a number of impacts as “potentially large.” For example, the town’s planning consultant articulated his concern about “ambient noise level.” The consultant also stated that the board “must consider the noise issue more in depth as it has been shown to be one of the most complex and important matters in connection with the application.”

According to the Court, the concerns about noise levels were alleviated through the review process. In response to these concerns, PIP explained that it had taken several surveys and readings of the ambient noise in the area of the mining operation and, as a result of its analysis, concluded that “an ambient noise level within the guidelines of the [local] zoning law will be maintainable by the mining operation.” Additionally, the planning board suggested that Saturday hours and operations be limited only to the sale of materials. The company agreed.

The Court indicated that a similar process resolved the concerns relating to increased traffic stemming from the project: The planning board suggested that the company “consider” a separate access road. PIP accepted the recommendation and amended the plan to lessen the traffic on residential streets.

The Court emphasized that these and other modifications were not conditions unilaterally imposed by the planning board but essentially were adjustments proposed by PIP to mitigate the concerns identified by the public and the reviewing agencies, and that the lead agency requested only minor variations during the review process. It then emphasized that “[o]f distinguishing import here is that the modifications were examined openly and with input from all parties involved.” The Court concluded that this process met the overriding purposes of SEQRA. Open Question

Significantly, the Court declared that a lead agency may not issue a negative declaration on the basis of conditions contained in the declaration itself. It also may not “achieve the same end by other means,” such as supporting a negative declaration with a statement that conditions to reduce environmental impacts would be imposed only in the resolution granting the underlying special use permit; extracting concessions from a developer as necessary prerequisites to the issuance of a negative declaration; or requiring specific mitigation measures, and then approving a proposal revised in compliance with that mandate.

The Court stressed that the environmental review process is not a bilateral negotiation between a developer and lead agency but “an open process” that also involves other interested agencies and the public. Notably the Court does not say that public hearings are required at any stage of the process. Just how “open” that process must be and how deeply involved the public must be are new issues that New York courts are going to face in the future.

Based on this opinion it is clear that the Court of Appeals is going to permit what is tantamount to a CND in a Type I action provided the restrictions are imposed by the project sponsor and are part of an open and deliberate process in which other agencies and the public have had a full and fair opportunity to participate. Under such circumstances, the Court will literally read the regulation which defines a CND. In Type I actions, the mitigation measures, although raised and discussed by the lead agency, the public, and other agencies, cannot be required and imposed by the agency. Rather, they must be voluntarily imposed by the project sponsor by restricting the application at the initial stages.

NOTES:

1. ECL Article 8.

2. 6 NYCRR Part 617.

3. 6 NYCRR 617.2[h].

4. Merson v. Philipstown Industrial Park, Inc., __ NY2d __ (Oct. 30, 1997), reported in New York Law Journal, Oct. 31, 1997 at 26.

5. 6 NYCRR 617.12[b][6][I].

6. 6 NYCRR 617.5[b].

7. The Court’s distinction between an EAF and an Environmental Impact Statement (EIS) is important: “While an EAF is used to determine significance or non-significance, the purpose of an EIS is to examine the identified potentially significant environmental impact which may result from a project.”

John M. Armentano, a partner with the Long Island law firm of Farrell, Fritz, Caemmerer, Cleary, Barnosky & Armentano, P.C., represents local governments and developers in zoning, land use and environmental matters, including litigation.

This article is reprinted with permission from the January 7, 1998 edition of the New York Law Journal.

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