In the Matter of Perlbinder Holdings, LLC, Appellant-Respondent,v.Meenakshi Srinivasan,, et al., Respondents-Appellants.BriefN.Y.February 17, 2016 REPRODUCED ON RECYCLED PAPER JANE L. GORDON (15 Minutes Requested) COURT OF APPEALS STATE OF NEW YORK PERLBINDER HOLDINGS, LLC, Appellant-Respondent, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules -against- MEENAKSHI SRINIVASAN, CHAIRPERSON, CHRISTOPHER COLLINS, VICE-CHAIRPERSON, DARA OTTLEY-BROWN, SUSAN M. HINKSON, R.A., and EILEEN MONTANEZ, P.E., COMMISSIONERS, constituting THE BOARD OF STANDARDS AND APPEALS OF THE CITY OF NEW YORK; THE NEW YORK CITY DEPARTMENT OF BUILDINGS; THE NEW YORK CITY ENVIRONMENTAL CONTROL BOARD and THE CITY OF NEW YORK, Respondents-Appellants. APL-2014- 00270 BRIEF FOR RESPONDENTS-APPELLANTS ZACHARY W. CARTER Corporation Counsel of the City of New York Attorney for Respondents-Appellants 100 Church Street New York, New York 10007 Tel: (212) 356-046 jgordon@law.nyc.gov RICHARD DEARING JANE L. GORDON of Counsel February 27, 2015 TABLE OF CONTENTS Page TABLE OF AUTHORITIES ................................................................................... iii PRELIMINARY STATEMENT ............................................................................... 1 QUESTIONS PRESENTED ...................................................................................... 6 STATEMENT OF THE CASE .................................................................................. 7 A. The Board of Standards and Appeals ............................................... 7 1. The Zoning Variance Process ...................................................... 7 2. The Interpretative Appeal Process .............................................10 B. Factual Background .......................................................................12 C. Perlbinder's Administratve Appeal Before the BSA ...............................................................................................16 D. The Rulings Below .........................................................................18 ARGUMENT ...........................................................................................................20 POINT I.................................................................................................. 20 THE APPELLATE DIVISION CORRECTLY REJECTED PERLBINDER'S CONTENTION THAT IT HAS A COMMON-LAW VESTED RIGHT TO MAINTAIN ITS DOUBLE-SIDED ADVERTISING SIGN A. The Erroneous Grant of a Permit in 2008 Cannot Give Perlbinder Common-Law Vested Rights to Maintain an Advertising Sign that Violates the Zoning Resolution. .................................21 Page ii B. Perlbinder’s Arguments Misconstrue and Misapply the Doctrines of Common-Law Vested Rights and Equitable Estoppel . .....................................25 C. Perlbinder’s Alternative Suggestion of an Unconstitutional Taking is Unripe and Also Meritless . ...................................................................................31 POINT II ................................................................................................ 32 THE APPELLATE DIVISION ERRED IN REMANDING THE MATTER INSTEAD OF DISMISSING THE PROCEEDING, GIVEN THAT PERLBINDER SHOULD NOW PROCEED BY APPLICATION FOR A ZONING VARIANCE POINT III ............................................................................................... 40 THE APPELLATE DIVISION FURTHER ERRED IN DETERMINING THE GOOD-FAITH RELIANCE ISSUE IN THE FIRST INSTANCE CONCLUSION ........................................................................................................45 APPENDIX ............................................................................................................. A1 iii TABLE OF AUTHORITIES Cases Pages 149 Fifth Avenue Corp. v. Chin, 305 A.D.2d 194 (1st Dep’t 2003) .......................................................................29 Matter of 515 East 5th Street, LLC v. New York City Board of Standards and Appeals, 2008 N.Y. Misc. Lexis 8976 (Sup. Ct. N.Y. Co. May 6, 2008) .........................38 Amorosi v. South Colonie Ind. Cent. School Dist., 9 NY3d 367 (2007) .............................................................................................35 Bella Vista Apt. Co. v. Bennett, 89 N.Y.2d 465 (1997) ............................................................................ 33, 36, 39 Church of St. Paul & St. Andrew v. Barwick, 67 NY2d 510 (1986) ...........................................................................................31 Cintron v. Calogero, 15 NY3d 347 (2010) ...........................................................................................35 E.F.S. Ventures Corp. v. Foster, 71 N.Y.2d 359 (1988) .........................................................................................26 Galvez v. Srinivasan, 71 A.D.3d 1019 (2d Dep’t 2010) ........................................................................27 Gazza v. New York State Dep’t of Envtl. Conservation, 89 N.Y.2d 603(1997) ..........................................................................................31 Hirschfield v. Burke, 20 A.D.2d 130 (1st Dep’t 1963), aff'd no opinion, 14 N.Y.3d 889 (1964) ...............................................................23 Matter of Hoffman v. Bd. Of Zoning & Appeals of the Incorporated Village of Russell Gardens, 155 A.D.2d 600 (2d Dep’t 1989) ........................................................................29 Pages iv Jayne Estates, Inc. v. Raynor, 22 N.Y.2d 417 (1968) ................................................................ 22, 30, 36, 41, 44 Kaslow v. City of New York, 23 N.Y.3d 78 (2014) ...........................................................................................34 KSLM-Columbus Apts., Inc. v. N.Y. State Div. of Hous. & Cmty. Renewal, 5 NY3d 303 (2005) .............................................................................................34 Lyublinskiy v. Srinivasan, 65 A.D.3d 1237 (2d Dep’t 2009) ........................................................................27 Natchev v. Klein, 41 NY2d 833 (1977) ...........................................................................................22 New York Botanical Garden v. New York City Board of Standards and Appeals, 91 N.Y.2d 413 (1998) .........................................................................................41 New York State Psychiatric Assn., Inc. v. New York State Dept. of Health, 19 N.Y.3d 17 (2012) ...........................................................................................35 Pantelidis v. New York City Board of Standards and Appeals, 10 N.Y.3d 846 (2008) .................................................................................. 25, 42 Pantelidis v. New York City Board of Standards and Appeals, 43 A.D.3d 314 (1st Dep’t 2007) .........................................................................42 Pantelidis v. New York City Board of Standards and Appeals, 13 A.D.3d 242 (1st Dep’t 2004) .........................................................................42 Parkview v. City of New York, 71 N.Y.2d 274 (1988) ................................................................ 24, 26, 27, 30, 31 Perrotta v. New York, 107 A.D.2d 320 (1st Dep’t), aff’d, 66 N.Y.2d 859 (1985) .................................................................................25 Pages v People v. Mobil Oil Corp., 48 N.Y.2d 192 (1979) .........................................................................................34 People v. Zephrin, 14 N.Y.3d 296 (2010) .........................................................................................34 SoHo Alliance v. New York City Board of Stds. & Appeals, 95 N.Y.2d 437 (2000) .....................................................................................8, 33 State of New York v. John S., 23 N.Y.3d 326 (2014) .........................................................................................33 State of New York v. Patricia II., 6 N.Y.3d 160 (2006) ...........................................................................................33 Sohn v. Caderon, 78 N.Y.2d 755 (1991) .........................................................................................41 Tall Trees Construction Corp. v. Zoning Board of Appeals, 97 N.Y.2d 86 (2001) ...........................................................................................10 Town of Orangetown v. Magee, 88 N.Y.2d 41 (1996) ...........................................................................................22 Toys “R” Us v. Silva, 89 N.Y.2d 411 (1996) ........................................................................ 8, 28, 34, 44 Village Board of Fayetteville v. Jarrold, 53 N.Y.2d 254 (1981) .........................................................................................35 Watergate II Apartments v. Buffalo Sewer Auth., 46 N.Y.2d 52 (1978) ...........................................................................................41 Westbury Laundromat, Inc. v. Mammina, 62 A.D.3d 888 (2d Dep’t 2009) ................................................................... 23, 25 Woods v. Srinivasav, 34 Misc. 3d 632 (Sup. Ct. Bx. Co. 2011) ...........................................................25 Pages vi Yonkers v. Rentways, Inc., 304 N.Y. 499 (1952) ...........................................................................................27 Statutes N.Y.C. Charter § 659 ................................................................................................. 7 N.Y.C. Charter § 659(b) ............................................................................................. 7 N.Y.C. Charter § 661 ................................................................................................. 7 N.Y.C. Charter § 662 ................................................................................................. 7 N.Y.C. Charter § 666 .................................................................................. 16, 35, 37 N.Y.C. Charter § 666(5) .................................................................................. passim N.Y.C. Charter § 666(6)(a) .............................................................................. passim N.Y.C. Charter § 666(7) ................................................................................... passim N.Y.C. Charter § 666(6)(c) ......................................................................................11 N.Y.C. Charter § 668 .................................................................................... 8, 35, 37 N.Y.C. Charter § 668(a) ............................................................................................. 8 N.Y.C. Charter § 668(b) ............................................................................................. 9 2 RCNY § 1-05.6 .....................................................................................................10 N.Y.C. Zoning Resolution § 52-61 ................................................. 15, 16, 28, 29, 44 N.Y.C. Zoning Resolution § 52-83 ................................................................... 15, 19 N.Y.C. Zoning Resolution § 72-21 .................................................................. passim Pages vii Internet Sources 669 Second Avenue, New York, N.Y. (2007), GOOGLE MAPS, https://www.google.com/maps/@40.746328,- 73.97472,3a,75y,313.66h,100.14t/data=!3m4!1e1!3m2!1sUWMvSrnt75q kj9JfbdT3rA!2e0 ..................................................................................................16 669 Second Avenue, New York, N.Y. (2014), GOOGLE MAPS, https://www.google.com/maps/@40.746255,- 73.974773,3a,75y,296h,90t/data=!3m4!1e1!3m2!1sc58ofJvBoX6Rbok9p Y4d1Q!2e0 ...........................................................................................................16 N.Y.C. Dep’t of City Planning, Commercial Districts: C1 & C2, http://www.nyc.gov/html/dcp/html/zone/zh_c1_c2.shtml ..................................13 N.Y.C. Dep’t of City Planning, Commercial Districts: C6, http://www.nyc.gov/html/dcp/html/zone/zh_c6.shtml ........................................12 Stuart Miller, Hungry? Buy This Billboard, N.Y. Times CityRoom Blog (Jan. 12, 2014, 11:00 AM) http://cityroom.blogs.nytimes.com .....................................................................30 PRELIMINARY STATEMENT In this article 78 proceeding, petitioner Perlbinder Holdings LLC challenges a June 19, 2012 resolution of the New York City Board of Standards and Appeals that ratified the revocation of erroneously issued New York City Department of Buildings permits, where the permits conflicted with provisions of the New York City Zoning Resolution (353-363). The erroneously issued permits had allowed Perlbinder to install a nonconforming, double-sided, illuminated and free-standing advertising sign on property it owns facing the Manhattan side of the Midtown Tunnel. Perlbinder had incorrectly asserted that the new sign constituted a grandfathered, “direct replacement” for a single-sided sign that had previously been located on the property at a different height, in a different position, on a different zoning lot, and had been attached to a since-demolished building. Perlbinder now seeks a court order authorizing it to continue to display its large double-sided advertising billboard in perpetuity, although Perlbinder (a) does not seriously dispute that the sign is prohibited by the applicable terms of the New York City Zoning Resolution, and (b) has never applied for a variance from the provisions of the Zoning Resolution under the well- established standards and procedures for obtaining a zoning variance. 2 The Appellate Division, First Department, correctly rejected Perlbinder’s request for an order endowing it with a permanent right to display its nonconforming sign, and that portion of the decision below should be affirmed. Perlbinder argues that it has a common-law vested right to maintain the nonconforming sign in perpetuity simply because a former Borough Commissioner of the Department of Buildings erroneously granted the company permits for the double-sided sign in 2008, before the permits were revoked after a 2010 audit showed that they had been issued in error. Perlbinder’s argument misconstrues and misapplies the vested-rights doctrine. Under settled precedent, common-law vested rights are recognized only where a property owner has relied to its detriment on a validly issued permit and there is later a change in the law. The doctrine does not apply where, as here, permits were erroneously issued based on an incorrect application of the law in existence at the time of their issuance. A party’s claim that it relied in good faith on an erroneously issued permit is properly considered under the well-settled standards and procedures for the grant of a zoning variance, not under the common-law vested rights doctrine. On the question of a potential variance, the Appellate Division mistakenly remanded the matter to the New York City Board of Standards and Appeals for reconsideration via the appeal process reviewing Buildings’ revocation of the 3 permits. The court should have dismissed the article 78 proceeding and directed Perlbinder to present its contentions, if it chose, by filing an application for a zoning variance. The Appellate Division failed to recognize that the New York City Charter and the Zoning Resolution set forth the exclusive standards and procedures by which a party may obtain a variance from the terms of the Zoning Resolution, and the portion of its decision remanding the matter to the Board of Standards and Appeals to consider whether to grant a zoning variance under a different process, not authorized by the City Charter or Zoning Resolution, should be reversed. The Appellate Division’s decision also should be reversed insofar as the court determined, as a matter of law, that Perlbinder had relied in good faith on the erroneously issued permits—a question that bears on whether a zoning variance should be granted. The City Charter commits primary jurisdiction over zoning variances to the Board of Standards of Appeals, to be addressed following a public hearing and receipt of a recommendation from the appropriate community or borough board. The Appellate Division had no jurisdiction to adjudicate the issue of good-faith reliance in the first instance, before the matter had been heard and determined by the administrative body designated by the City Charter to do so. 4 In addition to mistakenly addressing the issue at all, the Appellate Division also erred in concluding that the record established good-faith reliance as a matter of law. The record here certainly is not sufficient to permit the fact- intensive question of good-faith reliance to be resolved in Perlbinder’s favor as a matter of law. First, there are significant unresolved issues as to whether Perlbinder acted in good-faith reliance on the erroneously issued permits. Perlbinder constructed the double-sided sign on a different zoning lot from that authorized in the approval for the erroneously issued permits, and so does not appear to have relied on the actual terms of the permits at all. Moreover, Perlbinder was aware that DOB staff had, over a lengthy period of discussion, registered numerous objections to issuance of the permits—such as the fact that the new sign would be double-sided, though the former sign had been single-sided, and that the new sign would be placed at a different height and position, and on a different zoning lot, as compared with the original billboard. Perlbinder also knew that a single Borough Commissioner, without any apparent resolution of those objections, had approved the permits, and Perlbinder today does not dispute that the objections in question were legally well founded. All of these facts raise questions about Perlbinder’s good faith. 5 Second, there are also significant unresolved issues as to whether Perlbinder suffered any detriment as a result of any reliance on the erroneously issued permits. Perlbinder repeatedly stresses that it spent money to construct the double-sided sign, but ignores the fact that the advertising sign has generated substantial revenue since 2008. Perlbinder may already have earned well more in revenue from the display of the sign than it has spent to construct and maintain it. Here, too, the Appellate Division had no basis to resolve the issue in Perlbinder’s favor as a matter of law. Consequently, the Court should (1) affirm the Appellate Division’s ruling that Perlbinder accrued no common-law vested rights to permanently display its nonconforming double-sided advertising billboard; (2) reverse the Appellate Division’s ruling remanding the matter to the Board of Standards and Appeals; and (3) reverse the ruling adjudicating the good-faith reliance issue in the Perlbinder’s favor as a matter of law. Instead, the Court should dismiss the article 78 petition, with the recognition that Perlbinder may present its further contentions by filing an application for a zoning variance as directed by the City Charter and Zoning Resolution. 6 QUESTIONS PRESENTED 1. Where the permits for Perlbinder’s nonconforming advertising billboard were mistakenly issued based on an erroneous application of the City’s Zoning Resolution, did the Appellate Division correctly reject Perlbinder’s claim to common-law vested rights to continue to display its nonconforming double- sided sign based on the invalid permits? 2. Did the Appellate Division err in remanding this matter to the BSA under the interpretative appeal process, where Perlbinder’s appropriate recourse, if any, is to apply for a zoning variance pursuant to the well-established zoning variance procedures and standards established under City Charter §§ 666(5) and 668, and Zoning Resolution § 72-21? 3. Did the Appellate Division further err in adjudicating the issue of whether Perlbinder acted in good-faith reliance on the erroneously issued permits, where that is one of many fact-intensive issues that the BSA has primary jurisdiction to determine in the first instance as part of the zoning variance review procedure? 7 STATEMENT OF THE CASE A. The Board of Standards and Appeals Chapter 27 of the New York City Charter establishes the Board of Standards and Appeals as an independent body consisting of commissioners appointed by the Mayor and subject to removal by the Mayor only for cause. See Charter §§ 659, 662. The Charter mandates that at least one member must be a qualified planner with at least ten years’ experience, another must be a licensed architect with such experience, and a third must be a licensed engineer with such experience. Charter § 659(b); see also Charter § 661 (authorizing the hiring of a staff of engineers, architects, and other experts). This case implicates two distinct administrative procedures that are carried out by the Board of Standards and Appeals. The first is the well-settled procedure for the determination of applications for a variance from the New York City Resolution, and the second is the different “interpretative appeal” procedure by which the Board reviews a range of determinations by the Department of Buildings, Fire Commissioner, Commissioner of Transportation, and Commissioner of Ports and Trade as to buildings and structures in New York City. 8 1. The Zoning Variance Process The Board of Standards and Appeals is “the ultimate administrative authority charged with enforcing the Zoning Resolution” in New York City. Toys “R” Us v. Silva, 89 N.Y.2d 411, 418-419 (1996). Charter § 666(5) thus specifically authorizes the BSA to hear and decide applications “to vary the application of the zoning resolution as may be provided in such resolution and pursuant to section six hundred sixty eight” of the Charter. See also generally SoHo Alliance v. New York City Bd. of Stds. & Appeals, 95 N.Y.2d 437, 440 (2000). The substantive criteria governing the zoning variance process are set forth in Zoning Resolution § 72-21. Section 72-21 requires an examination of five specific criteria: (1) practical difficulties or unnecessary hardship in complying with the zoning; (2) unique physical conditions that prevent a reasonable return from the zoned property; (3) that the proposed variance would not alter the essential character of the neighborhood; (4) that any practical difficulties or unnecessary hardship were not created by the owner; and (5) that only the minimum variance necessary is sought. See NYC Zoning Resolution § 72-21; SoHo Alliance, 95 N.Y.2d at 440. Charter § 668 sets forth detailed and extensive procedural requirements for the zoning variance review process. Section 668(a) requires that 9 the application first be submitted for review by interested community boards and borough boards, so that those groups may make a recommendation on the application. Section 668(b) requires that, after receipt of the recommendations of the community or borough boards, the BSA must hold a public hearing, giving advance notice to the interested community and borough boards, and allowing the City Planning Commission an opportunity to participate and be heard. Section 668(b) further mandates that the BSA’s decision on the application for a zoning variance “shall indicate whether each of the specific requirements of the zoning resolution for the granting of variances has been met and shall include findings of fact with regard to each such requirement.” A variance application involves a “deep inquiry” into the specific characteristics of the property and the proposed variance (Affirmation of former BSA General Counsel Becca Kelly, dated November 25, 2013, annexed to the City’s November 25, 2013 Motion for Reargument or Leave to Appeal, at ¶9 (“Kelly Aff.”)).1 Because a variance application affects a particular site and its immediate community, the affected community board(s), borough president, and 1 The reargument motion practice that led to the Appellate Division’s February 13, 2014 order, including the Kelly Affirmation, is properly part of the Record on Appeal but was not included. For the Court’s convenience, we are annexing a copy of the Kelly Affirmation in the Appendix to this brief. 10 city councilmember, as well as the Buildings Department, the City Planning Commission, and all building owners within a 400-foot radius of the site, must be given notice of the BSA’s public hearing pursuant to 2 RCNY §1-05.6 (Kelly Aff., at ¶¶18, 20). The affected community board also has 60 days to hold its own public hearing on the matter (id., at ¶20). In determining a zoning variance application, the BSA “is required to engage in a balancing test, weighing the benefit to the applicant against the detriment to the health, safety and welfare of the neighborhood or community” if the variance is granted. Tall Trees Constr. Corp. v. Zoning Bd. of Appeals, 97 N.Y.2d 86, 93 (2001) (internal citations omitted). 2. The Interpretative Appeal Process Entirely distinct from the specialized zoning variance review procedure, Charter § 666(6)(a) separately authorizes the BSA to broadly hear and decide interpretative “appeals” to review orders of the Department of Buildings,2 as well as certain orders of the City’s Fire Department, Department of Transportation, and the Department of Ports and Trade related to matters involving 2 Section 666(7) permits a property owner to seek review via the interpretative appeals process of the Buildings Department’s interpretation of, among other things, the text of the Zoning Resolution (Kelly Aff., at ¶9). The BSA then makes an independent determination of the meaning of the text, based on submissions from the Buildings Department, the property owner, and other affected parties (id.). 11 buildings and structures. Chapter § 666(6)(c) directs that, when passing upon an appeal, the BSA “shall have the power of the officer from whose ruling the appeal is taken.” Section 666(7) provides that, when passing on interpretative appeals, the BSA may “vary or modify” rules, regulations or provisions of law relating to the “construction, use, structural changes, equipment, alteration, or removal of buildings or structures, or vaults in sidewalks.” The BSA may only exercise this power where (1) there are “practical difficulties or unnecessary hardships” in carrying out the strict letter of the law; (2) the spirit of the law is observed; (3) the public safety is secured; (4) substantial justice is done; and (5) if the Housing Maintenance Code is varied, the variance is limited only to what is allowed under the code. Charter § 666(7). An applicant filing an interpretative appeal involving the Zoning Resolution need only notify the Buildings Department and the City Planning Commission (Kelly Aff., at ¶18). That is because these appeals resolve a discrete interpretative issue that clarifies the requirements of the law and has citywide applicability (id., at ¶20). The record contains several examples of Charter §666(6) and (7) appeals (332-344). 12 B. Factual Background Perlbinder’s property consists of a series of formerly independent tax lots located on the west side of Second Avenue, between East 36th Street and East 37th Street, facing the Manhattan entrance to the Midtown Tunnel (20, ¶3; 370, ¶46). The property is currently vacant, except for a public parking lot and an illuminated, double-sided, free-standing advertising sign and sign structure that was installed in 2008 (20, ¶3; 370, ¶46). Prior to 2008, the property consisted of a mixed-use residential/commercial building located mid-block between East 36th and 37th Streets, with the address 669 Second Avenue (39; 354; 372, ¶51). At the time, the property was within a C6-4 zoning district, which includes high-bulk commercial uses such as corporate headquarters, large hotels, and advertising billboards (354).3 In August 1980, the Buildings Department granted a prior owner permits to legalize a then-existing single-sided advertising sign and an accompanying sign structure, measuring 14 by 48 feet, which was affixed to the north wall of the building, 35 feet above curb level (id.; 38-39; 107-108). The building was located on Lot 28 (39). 3 N.Y.C. Dep’t of City Planning, Commercial Districts: C6, available at http://www.nyc.gov/html/dcp/html/zone/zh_c6.shtml (last accessed Feb. 23, 2015). 13 The City’s Zoning Map was subsequently amended to change the property’s zoning district to C1-9, which is predominately residential in character, and where advertising signs are not permitted as-of-right, subject to the grandfathering of existing uses (54; 372, at ¶¶50, 52).4 In May 2002, Perlbinder sought, and the BSA granted, a zoning variance for the construction of a new 34-story mixed-use building on the property (354; 372, ¶53). At that time, the Board also approved the relocation of the single- sided advertising sign, with modified dimensions (173; 372, ¶53). However, Perlbinder has not yet built the mixed-use building or the advertising sign approved under the 2002 zoning variance (id.). The BSA has granted Perlbinder three extensions of time to complete construction under that variance, most recently on July 15, 2014, extending its time until May 7, 2018. By July 2008, the existing building on Perlbinder’s property was in such disrepair that the Buildings Department issued an emergency declaration to demolish it, along with the original single-sided advertising sign affixed to its north wall (88; 176-179; 198). Perlbinder then sought to replace the demolished advertising sign and structure with a free-standing, illuminated, double-sided 4N.Y.C. Dep’t of City Planning, Commercial Districts: C1 & C2, available at http://www.nyc.gov/html/dcp/html/zone/zh_c1_c2.shtml (last accessed Feb. 23, 2015). 14 billboard to be relocated to the corner of Second Avenue and East 36th Street, on Lots 26 and 27 (39-40; 88; 373, ¶¶55-56). In August 2008, the Department of Buildings issued an initial series of objections to the sign (49-51), and then issued additional objections on October 15, 2008 (51). All but three objections were thereafter resolved. The remaining objections distinguished the original and proposed replacement sign on the following bases (51): the double-sided sign increased the square footage of the sign (#13); the replacement sign was not located in the same position as the original (#14); and the replacement was 25 feet lower than the original (#16). Two weeks later, Perlbinder filed a one-page application, under Lot 25, seeking reconsideration of objections 14 and 16, regarding the location and height of the proposed replacement sign (135). It contended that the location of the new sign was “substantially in the same location” as the original but “much lower” and thus “making a lesser impact on the community” (135). A former Borough Commissioner immediately approved the reconsideration application with the following language: “OK to accept prior sign as grandfathering of existing nonconforming sign. OK to accept lower sign as no increase in degree of noncompliance” (135). A subsequently issued permit described the new sign as a “direct replacement” for the original sign (52). According to Perlbinder, it installed 15 the double-sided advertising sign by the end of 2008 (89), though the sign was located on a different zoning lot, from that authorized by the permit. In order for the replacement billboard to qualify for grandfather protection under Zoning Resolution § 52-83, it had to be “in the same location and position” and not create a new or increased degree of non-conformance (356). Under Zoning Resolution § 52-61, the nonconforming use could not have been discontinued for a continuous period of two years (id.). Because the replacement sign did not conform to those Zoning Resolution provisions, the Buildings Department began an audit of the permit approvals in April 2010 (138; 374, ¶61; 54), and advised Perlbinder of its intent to revoke the permits because they had been issued in error (54-56; 374, ¶¶53, 63). The revocation was based on the height and size of the replacement advertising sign and its new location (138). The Department also determined that the original sign had been discontinued for more than two years under Zoning Resolution § 52- 61 (55) and that the illumination of the sign exceeded permissible limits (205). Google Maps has a September 2007 photograph of the original, north- facing, single-sided sign that was affixed to the building on Perlbinder’s property that was demolished in 2008. The site also has a 2014 photograph of the new 16 freestanding, double-sided, illuminated sign, oriented diagonally on a southeast- northwest axis. Internet links to those images are in the footnote below.5 C. Perlbinder’s Administrative Appeal Before the BSA In June 2011, Perlbinder appealed the Building Department’s April 2010 permit revocations pursuant to Charter § 666 (85-138; 378, ¶72). Conceding that the new double-sided advertising sign was not in the same location and position as the original sign, it urged that it was “in substantially the same location” (90-91). Perlbinder also challenged the Department’s finding that the prior nonconforming use had been discontinued for at least two years under Zoning Resolution § 52-61 (93), arguing that its replacement sign should be deemed a continuation of the demolished original sign (93-95). Perlbinder did not seek a § 666(7) variance of any rule, regulation, or provision of law. Instead, it argued, based on two appellate division cases, that the two-year discontinuance period under Zoning Resolution § 52-61 should be “tolled” based an alleged delay by the City in revoking the permits and 5 https://www.google.com/maps/@40.746328,- 73.97472,3a,75y,309.27h,107.83t/data=!3m4!1e1!3m2!1sUWMvSrnt75qkj9JfbdT3rA!2e0 (2007 image); https://www.google.com/maps/@40.746277,- 73.974756,3a,75y,296h,90t/data=!3m4!1e1!3m2!1slQ2-lB38hgczt9635buqhQ!2e0 (2014 image) (both last accessed Feb. 26, 2015). 17 Perlbinder’s good-faith reliance on the 2008 erroneously issued permits (92-96). At the BSA hearing, Perlbinder denied that it was seeking a variance of any kind and instead asked for relief based on the “unique circumstances” and its “good-faith reliance,” asking the BSA to do “substantial justice under § 666(7)” (85-96; 309- 310; 323-324). Both the Buildings Department and Manhattan Community Board Six opposed the appeal (141; 378, at ¶73). Following a public hearing (301-319) and submissions (378, ¶76; 379, ¶77), the BSA ratified the Building Department’s determination to revoke the permits for the billboard, agreeing that Perlbinder’s free-standing double-sided sign was not a “direct replacement” for the original advertising sign because it was not in the same position and location (361; 379, ¶79). The BSA noted that the replacement sign was “at least” 27 feet south of the original sign, on a different tax lot, in a different position, was now double-sided, was mounted 25 feet lower than the original sign, and required greater illumination because it was double sided (id.). By adding a second side to the billboard, the BSA further found that Perlbinder had also increased the degree of non-compliance permitted under current zoning (361). The BSA agreed that, because the original sign had been demolished more than two years earlier, the terms of the Zoning Resolution did not allow Perlbinder now to seek to continue its prior nonconforming use by erecting a 18 true replacement sign (362). The BSA declined to consider whether Perlbinder had established its good-faith reliance on the erroneously issued permits, deferring that issue to the zoning variance application Perlbinder represented it would be making (363). Notwithstanding the BSA’s determination, Perlbinder has been able to rent out its double-sided billboard from 2008 until the present, and presumably has more than recouped the $188,000 it claims to have spent on the sign (89). Although the Buildings Department began issuing violations for the advertising sign in June 2010, following its revocation of the erroneously issued permits (57- 73), the City agreed to stay all enforcement proceedings related to those violations pending the outcome of this litigation. D. The Rulings Below In July 2012, Perlbinder filed an Article 78 petition contending, inter alia, that it had been deprived of a “property right” to a “legal nonconforming use” and had relied on the Department’s permit approvals in good faith, even if they had been issued in error (19-20). The Supreme Court, New York County (Lobis, J.), dismissed the petition and found the BSA’s determination to be rational (12). The court reasoned that the “undisputed facts” show that the double-sided sign was not in the same position or location as its prior sign and therefore “could not properly 19 be considered a replacement” under Zoning Resolution § 52-83 (id.). Supreme Court also agreed that, since the original sign had been demolished more than two years earlier, there had been no continuous nonconforming use (id.). On appeal, the Appellate Division, First Department, initially reversed in full and reinstated the permits (400) but then recalled and vacated the decision and substituted a new decision on reargument. In its decision following reargument, the Court agreed that the new sign was “in a different location and position” and thus rejected, as “without merit,” Perlbinder’s contention that its display of the sign was legally authorized absent a variance of the Zoning Resolution (396-397). The Appellate Division remanded the matter to BSA for further proceedings (394-397), determining that Perlbinder was “in effect” seeking a variance under Charter §§ 666(6)(a) and 666(7) and that the BSA should have considered Perlbinder’s good faith in connection with the interpretative appeal (395-396). The Court directed the BSA to treat Perlbinder as seeking a variance under Charter §§ 666 (6)(a) and 666(7) and also determined, as a matter of law, that Perlbinder had established that it had relied on the previously issued permits in good faith (396). This Court then granted motions by both Perlbinder and the City for leave to appeal (393). 20 ARGUMENT POINT I THE APPELLATE DIVISION CORRECTLY REJECTED PERLBINDER’S CONTENTION THAT IT HAS A COMMON-LAW VESTED RIGHT TO MAINTAIN ITS DOUBLE-SIDED ADVERTISING SIGN Perlbinder’s core contention is that it has a common-law vested right to permanently display its free-standing, double-sided, illuminated billboard, notwithstanding that this display is prohibited by the terms of the Zoning Resolution, simply because a former Borough Commissioner erroneously granted it permits for the sign back in 2008. Perlbinder does not seriously dispute that the permits were issued in error. Nor could Perlbinder meaningfully dispute that point, where it is clear that (a) the Zoning Resolution does not permit display of advertising signs in the zoning district in question, and (b) the new sign does not qualify as a grandfathered, direct replacement for the former sign located on the property, because the new sign is double-sided, whereas the former sign was single-sided, and the new sign is located at a different height, in a different position, and on a different tax lot, and faces a different direction, than the original sign. 21 Without disputing the proposition that its display of the new sign is contrary to the Zoning Resolution, Perlbinder essentially argues that the City is barred from correcting the earlier error in the issuance of the 2008 permits. But settled law holds that government cannot be estopped from correcting its errors except in the rarest of circumstances. This established legal doctrine ensures the consistent application of the law, advances the public interest, and protects against spot rezonings. As Perlbinder’s claimed common-law vested right is derived from erroneously issued permits, the Supreme Court and the Appellate Division both correctly determined that Perlbinder had no common-law vested right to maintain its new billboard. Perlbinder’s arguments regarding purported unfairness and hardship in the application of the Zoning Resolution’s terms in its particular case should be channeled into the zoning variance process, which is the time-tested and long accepted procedure for addressing such contentions. A. The Erroneous Grant of Permits in 2008 Cannot Give Perlbinder Common-Law Vested Rights to Maintain an Advertising Sign That Violates the Zoning Resolution. The vested rights doctrine is designed to protect against certain hardships resulting from changes in the law, and in certain circumstances prevents the government from revoking a permit that was legally issued before a subsequent change in the law. “In New York, a vested right can be acquired when, pursuant to 22 a legally issued permit, the landowner demonstrates a commitment to the purpose for which the permit was granted by effecting substantial changes and incurring substantial expenses to further the development.” Town of Orangetown v. Magee, 88 N.Y.2d 41, 47 (1996). The first essential requirement for application of the vested rights doctrine, therefore, is that the permit was legally issued in the first place. But neither the issuance of a valid permit nor substantial improvements and expenditures, standing alone, will establish the right. Id. at 47-48. Moreover, the detrimental reliance on the valid permit must be “so substantial” that the permit revocation “results in serious loss rendering the improvements essentially valueless.” Id. Perlbinder cannot rely on the vested-rights doctrine as a basis to compel the City’s sufferance of its new nonconforming double-sided sign, because the 2008 permits for the sign were erroneously issued under the law existing at the time and they were therefore invalid. It is settled that a claim of vested rights cannot be premised on work performed under an invalidly issued permit, and a property owner does not acquire vested rights when he builds in reliance on an invalid permit. Matter of Natchev v. Klein, 41 N.Y.2d 833, 834 (1977); Jayne Estates Inc. v. Raynor, 22 N.Y.2d 417, 422 (1968); Perotta v. City of New York, 66 N.Y.2d 859 (1985), aff’g for reasons stated at 107 A.D.2d 320, 325 (1st Dep’t). 23 Where a permit was erroneously issued in the first place, the vested rights doctrine does not prevent the government from revoking the permit to correct its error. The DOB and the BSA determine the technical questions as to the validity of a permit and zoning compliance, because they are the agencies with the expertise to resolve those issues. See Perotta v. City of New York, 107 A.D.2d at 324; Matter of Westbury Laundromat, Inc. v. Mammina, 62 A.D.3d 888, 890 (2d Dep’t 2009); Matter of Hirschfield v. Burke, 20 A.D.2d 130, 132 (1st Dep’t 1963), aff’d no opinion, 14 N.Y.2d 889 (1964). That inquiry “must, of necessity, involve an examination of the validity of the permit, as well as compliance with technical provisions of the Zoning Resolution, and this is clearly an appropriate inquiry for agency expertise.” Westbury Laundromat, 62 A.D.3d at 890. The Buildings Department found numerous objections to Perlbinder’s replacement sign, including that the new sign had been moved to another zoning lot, repositioned, and its dimensions and design had increased the degree of non- compliance (54). The Department determined that the new sign did not comply with the zoning variance that the BSA had granted Perlbinder in May 2002 for construction of a new mixed-use building and a relocated sign, and the Department further determined that it lacked the authority to modify that variance (55). The BSA agreed and ratified the revocation of the erroneously issued permits (361). 24 The Court’s decision in Matter of Parkview Association v. City of New York, 71 N.Y.2d 274 (1988), directly refutes Perlbinder’s vested-rights argument here. In Parkview, the Buildings Department initially rejected the building application as not complying with height limitations of the applicable special zoning district. The developer then revised its application, and the Borough Superintendent erroneously approved the building permit. 71 N.Y.2d at 279-280. Like here, there was no dispute that the permit had been issued in error. Id. After the developer had completed substantial construction of what was to be a 31-story apartment building, the Department of Buildings revoked the building permit on the ground that the permit was invalid when issued, thus requiring the removal more than ten stories of the building under construction. The developer challenged the revocation, in part, by arguing that it had obtained vested rights in the erroneously issued permit, and this Court resoundingly rejected that assertion. “There can be little quarrel with the proposition that the New York City Department of Buildings has no discretion to issue a building permit which fails to conform with applicable provisions of law,” and that such a permit may be revoked. Parkview, 71 N.Y.2d at 281-282. The Court found that when the BSA ratified the revocation of the permit, it had “a sound legal basis” to do so and that there was “no discretion” to do otherwise. Id. The Court rejected any notion that 25 the City was “estopped from enforcing its zoning laws either by the issuance of a building permit or by laches.” Id. at 282. Thus, where the Buildings Department erroneously issues a permit due to its own misapplication of code provisions, no vested rights are acquired, since the permit could not have been validly granted in the first place. Matter of Perrotta v. New York, 107 A.D.2d at 324-325; Westbury Laundromat, 62 A.D.3d at 890. These controlling principles defeat Perlbinder’s claim of vested rights. B. Perlbinder’s Arguments Misconstrue and Misapply the Doctrines of Common-Law Vested Rights and Equitable Estoppel. Perlbinder either ignores recent decisions of this Court or misapplies the case law. It cites no decision that recognizes a common-law vested right deriving from an invalid permit. Perlbinder first contends that Matter of Pantelidis v. N.Y. City Bd. of Stds. & Appeals, 10 N.Y.3d 846 (2008), supports its claimed vested right based purely on good-faith reliance (App. Br., at 23). Pantelidis, however, recognized only that good-faith reliance on an erroneously issued permit could constitute grounds for the granting of a zoning variance application, so it provides no legal support for Perlbinder’s asserted common-law vested right. Indeed, Pantelidis only underscores that the proper outlet for Perlbinder’s contentions regarding supposed 26 hardship would be for Perlbinder to file an application for a zoning variance that would authorize the display of the freestanding, double-sided sign, an application that Perlbinder for some reason has declined to file up to this point. Perlbinder’s reliance on Woods v. Srinivasan, 34 Misc. 3d 632 (Sup. Ct. Bx. Co. 2011), to argue that it has an “absolute right” to rely on the erroneously issued permits because they were approved by a “high level official” (App. Br., at 23-24), fares no better. That decision was reversed on appeal, 108 A.D. 3d 412 (1st Dep’t 2013). It is, moreover, contrary to Parkview, where an equally high-level official (the Borough Superintendent) approved the building permit and the Court nonetheless found no common-law vested right. 71 N.Y.2d at 279-280. High-level government officials may make mistakes or intentionally act for improper purposes, just as lower-level government employees may do so, and this Court has recognized that the public interest commands that government not be estopped in litigation from correcting officials’ past errors or improper acts. E.F.S. Ventures Corp. v. Foster, 71 N.Y.2d 359, 370 (1988) (governmental agencies are not subject to the defense of estoppel “as a matter of policy, because to do so could easily result in large scale public fraud”). Perlbinder also repeatedly cites cases decided well before Parkview to argue that the strict limitations on recognizing estoppel against a municipality 27 constitute a “simplistic and obsolete doctrine” (App. Br., at 24-25; 27-28; 31-32). However, Parkview represents the continuing vitality of the principle that a municipality “is not estopped from enforcing its zoning laws either by the issuance of a building permit or by laches,” even where the results are harsh. 71 N.Y.2d at 282. See also Yonkers v. Rentways, Inc., 304 N.Y. 499 (1952); Matter of Galvez v. Srinivasan, 71 A.D.3d 1019 (2d Dep’t 2010) (issuance of alteration permit did not estop the BSA from determining that residence was not being enlarged); Lyublinskiy v. Srinivasan, 65 A.D.3d 1237 (2d Dep’t 2009) (same). Perlbinder’s inability to find case law on point is also reflected in its reliance on decisions that do not even involve zoning issues (App. Br., at 24-25), and cases involving common-law vested rights where there was good-faith reliance on a validly issued permit prior to a change in zoning (App. Br., at 28-30; 34-35). As we demonstrate above, that line of cases is simply inapplicable where, as here, there was never a validly issued permit. Perlbinder’s effort to distinguish Parkview, supposedly because the company “exercised more than reasonable diligence” and could not have uncovered the error (App. Br., at 26) is also unconvincing. First, Parkview’s discussion of the developer’s reasonable diligence was a minor consideration in the context of that case, discussed only in connection with the Court’s determination 28 that the “policy reasons which foreclose estoppel against a governmental entity in all but the rarest cases thus have irrefutable cogency in this case.” 71 N.Y.2d at 283. Moreover, Perlbinder’s assertions of diligence are not compelling, given (1) that Perlbinder knew the Buildings Department had numerous unresolved objections to the sign permit a mere two weeks before its reconsideration application was erroneously approved (51), and (2) without any resolution of those objections. Perlbinder today does not seriously dispute that those objections were legally correct. Alternatively, Perlbinder urges that its replacement sign should be deemed a continuation of the original sign under Zoning Resolution § 52-61 because it had relied on a “validly issued building permit” (App. Br., at 35). As indicated above, the billboard permit was invalid. The BSA, moreover, correctly determined that Perlbinder’s new sign was not a continuation of the original sign, and did not qualify for grandfather protection under the Zoning Resolution, because it was not in the same location, position, or height as the original sign, and the new sign increased the degree of non-compliance with the Zoning Resolution (353; 361-362). Perlbinder does not genuinely contest those factual determinations, and the BSA’s ratification of those determinations must be confirmed because it 29 has a rational basis and is supported by substantial evidence, Toys “R” Us, 89 N.Y.2d at 423, as both of the lower courts found. In this regard, Perlbinder’s reliance on Matter of Hoffman v. Bd. of Zoning & Appeals of the Incorporated Village of Russell Gardens, 155 A.D.2d 600 (2d Dep’t 1989) (App. Br., at 35) is misplaced. First, this Court has cautioned against using zoning laws from other jurisdictions to interpret Zoning Resolution § 52-61. Toys “R” Us, 89 N.Y.2d at 420. Moreover, Hoffman concerned a validly issued permit to a fire-damaged restaurant and a discontinuance that occurred during the building’s reconstruction. Id. That did not occur here. Similarly, Perlbinder’s reliance on 149 Fifth Avenue Corp. v. Chin, 305 A.D.2d 194 (1st Dep’t 2003) (App. Br., at 36) is also misplaced. That case involved the temporary removal of a longstanding advertising sign during “legally mandated, duly permitted and diligently completed repairs.” Id. at 195. On that basis, the Appellate Division found no discontinuance. Those cases therefore fail to support Perlbinder’s asserted entitlement to common-law vested rights in the display of a free-standing double-sided sign at a different height, in a different position, on a different tax lot, and facing a different direction from the former single-sided sign affixed to the wall of the building previously located on the property. 30 Perlbinder’s arguments not only ignore the settled law under the vested-rights doctrine, but they also ignore the fact that the company has profited from the erroneously issued permits by collecting advertising revenue on its double-sided sign for more than six years. This Court has observed that where a building permit has been declared invalid, a landowner “should gain no vested rights principally because of the damage to the zoning plan and also because he might find it quite feasible to recover his expenditures by using the property for a permitted use.” Jayne Estates, Inc. v. Raynor, 22 N.Y.2d 417, 423 (1968). The latter point carries special force in this case, because unlike the building under construction in Parkview, where more than ten floors had to be removed, the nonconforming advertising sign Perlbinder has displayed for years has already generated substantial revenue for the company. Thus, while Perlbinder repeatedly complains that it has suffered a hardship by spending money to build the new sign, the company fails to acknowledge that it has also earned substantial revenue from the display of that double-sided billboard. Indeed, New York City billboards can earn rents of between $20,000 and $50,000 a month. http://cityroom.blogs.nytimes.com/2014/01/12/billboards-by-stuart-miller/?_r=0 (last accessed Feb. 26, 2015). 31 C. Perlbinder’s Alternative Suggestion of an Unconstitutional Taking is Unripe and Also Meritless. Perlbinder also suggests that depriving it of the ability to display its double-sided billboard would raise a question as to whether a confiscatory taking has occurred (App. Br., at 37-38). The Court should not reach or consider any takings issue because it is entirely premature. The Court declined to reach an identical contention in Parkview, because the developer in Parkview, like Perlbinder, had failed to apply for a zoning variance. Parkview, 71 N.Y.2d at 283. Where further administrative action might obviate judicial intervention, such a claim is not ripe for review. Church of St. Paul & St. Andrew v. Barwick, 67 N.Y.2d 510, 519 (1986). Perlbinder’s reference to takings doctrine only underscores, once again, that the proper avenue for its contentions is the filing of an application for a zoning variance, not the present court proceeding. Though any takings claim is premature until an application for a zoning variance is filed and determined, it bears noting that a takings claim would appear to have little merit. Perlbinder had no “absolute right” to a permit for its double-sided billboard. Its taking claim must necessarily fail because it cannot base a taking claim upon an interest it never owned. Gazza v. New York State Dep’t of Envtl. Conservation, 89 N.Y.2d 603, 615 (1997). Moreover, Perlbinder has failed 32 to establish the requisite elements of a taking, namely, the economic impact of the regulation, the extent to which the regulation has interfered with its reasonable investment-backed expectations, and the character of the governmental action. Id. at 617. Perlbinder cannot seriously claim that a taking will occur unless it is allowed to continue to display its nonconforming freestanding and double-sided advertising sign at its current location, position, and height, when no such sign had ever been displayed or authorized on the property before Perlbinder bought it. Moreover, Perlbinder still holds an unused variance from 2002 authorizing it to build a large mixed-use building on the property, along with a new billboard. Hence, Perlbinder’s references to a potential takings problem ring hollow. POINT II THE APPELLATE DIVISION ERRED IN REMANDING THE MATTER INSTEAD OF DISMISSING THE PROCEEDING, GIVEN THAT PERLBINDER SHOULD NOW PROCEED BY APPLICATION FOR A ZONING VARIANCE The established and time-tested procedure for Perlbinder to obtain the relief it seeks, and to resolve the issue of its asserted good-faith reliance on the erroneously issued permits, is through a zoning variance application. The Appellate Division should have affirmed the dismissal of the article 78 proceeding so that Perlbinder could pursue that relief. The Appellate Division’s remand of the 33 existing interpretative appeal proceeding to the BSA pursuant to Charter §§ 666(6) (a) and 666(7) should therefore be reversed. The BSA determined (361-362), and both lower courts agreed (12; 396-397), that Perlbinder’s double-sided billboard does not meet the requirements of the Zoning Resolution. In order to maintain the sign, Perlbinder needs a zoning variance (363). The procedures and substantive standards for obtaining a zoning variance are specifically established by Charter §§ 666(5) and 668 and Zoning Resolution § 72-21. SoHo Alliance, 95 N.Y.2d at 440; Bella Vista Apt. Co. v. Bennett, 89 N.Y.2d 465, 469 (1997). On that basis, the Appellate Division should have dismissed the article 78 petition challenging BSA’s determination in the interpretative appeal process so that Perlbinder could file an application for a zoning variance and thus commence the appropriate administrative proceeding for consideration of the relief that it seeks. That is the only conclusion that is consistent with the plain text of the Charter and standard principles of statutory construction. In interpreting a statute, a court must try to discern and effectuate the legislative intent, and the “starting point” is always the language itself. Matter of State of New York v. John S., 23 N.Y.3d 326, 340 (2014) (citing State of New York v. Patricia II., 6 N.Y.3d 160, 162 (2006)). Where the statute’s language is clear 34 and unambiguous, courts must give effect to the plain meaning of the words used. Id.; Toys “R” Us, 86 N.Y.2d at 420-421. A specific statutory provision also governs over a more general provision. People v Zephrin, 14 N.Y.3d 296, 301 (2010); People v. Mobil Oil Corp., 48 N.Y.2d 192, 200 (1979) (“Construing the entire law as a whole and bearing in mind the rule that a general provision of a statute applies only where a particular provision does not”). Where the interpretation of a statute involves specialized “knowledge and understanding of underlying operational practices,” courts should also ordinarily defer to the administrative agency’s interpretation unless irrational or unreasonable. Matter of Kaslow v. City of New York, 23 N.Y.3d 78 (2014); KSLM-Columbus Apts., Inc. v. N.Y. State Div. of Hous. & Cmty. Renewal, 5 N.Y.3d 303, 312 (2005). The mandate of Charter § 666(5) could not be clearer or more specific. The provision authorizes the BSA to “determine and vary the application of the zoning resolution” in accordance with § 668 and the Zoning Resolution itself. Section 668, in turn, describes the specific and distinctive procedures for the review of zoning variance applications. In instead ordering a remand under the different procedures applicable to the interpretative appeal process under Charter §§ 666(6)(a) and 666(7), the Appellate Division misconstrued the relevant provisions of the Charter and the Zoning Resolution and failed to interpret those 35 provisions so that each would “have their due, and conjoint effect.” New York State Psychiatric Assn., Inc. v. New York State Dept. of Health, 19 N.Y.3d 17, 23-24 (2012). The Court failed to harmonize all parts of Charter § 666 to give each effect and meaning. Matter of Cintron v. Calogero, 15 N.Y.3d 347, 355 (2010). Its interpretation renders § 666(5) “superfluous,” a result which must be avoided. Matter of Amorosi v. South Colonie Ind. Cent. School Dist., 9 N.Y.3d 367, 373 (2007). It is plain that Charter §§ 666(5) and 668 specifically govern the procedures for obtaining a zoning variance, including the requirement of a public hearing, a process for recommendations and further participation by borough and community boards, and an express right to participate on the part of the City Planning Commission. By contrast, the more general provisions of Charter §§ 666(6) (a) and 667 address interpretative appeals from many agencies and officials and pertaining to a variety of matters, and are not directed at the issue of zoning variances. Moreover, the substantive standards for granting a zoning variance are specifically described in the Zoning Resolution itself, and those standards are far more rigorous than the criteria permitting BSA to “vary” provisions of the law in the course of the interpretive appeal process. The zoning variance process involves 36 the specific five-part substantive inquiry set out in Zoning Resolution § 72-21, including a showing of practical difficulties or unnecessary hardship in complying with the zoning. Because a variance is in derogation of the citywide zoning plan, a variance applicant must demonstrate “factually, by dollars and cents proof, an inability to realize a reasonable return under existing permissible uses.” Bella Vista Apt. Co. v. Bennett, 89 N.Y.2d at 469, citing Matter of Village Bd. v. Jarrold, 53 N.Y.2d 254, 256 (1981). In recognition of these requirements, courts, in limited circumstances, have permitted property owners seeking a zoning variance to invoke good-faith reliance when an erroneously issued building permit has been revoked, typically under the hardship finding of zoning variance review. Jayne Estates, Inc. v. Raynor, 22 N.Y.2d at 423. Charter § 666(7), governing interpretative appeals, also contains the phrases “practical difficulties” and “undue hardship” to describe when to vary a rule or regulation, but that is where the similarities to the zoning variance process end. Unlike Zoning Resolution § 72-21, there is no mandated multi-part substantive component to interpretative appeals. Instead, § 666(7) envisions administrative flexibility and equitable considerations, such as observing the “spirit” of the law and doing “substantial justice.” That is a far less rigorous 37 standard, as reflected in the § 666(7) decisions that are included in the Record (332-337; 339-344). The § 666(7) power to determine and “vary” is a general reference to a broad range of administrative actions described in § 666(6), including those of the Department of Buildings, the Fire Department, and the Department of Transportation. This provision permits a property owner to seek review of the Buildings Department’s interpretation of, among other things, the text of the Zoning Resolution but does not apply to applications for a zoning variance (Kelly Aff., at ¶9). The BSA’s practical experience implementing these Charter provisions, as described in the Kelly Affirmation, is coherent and reasonable and gives meaning and effect to all parts of Charter § 666. Importantly, in the course of the interpretative appeal proceeding, Perlbinder never identified any rule, regulation, or provision of law that the BSA should or could purportedly “vary” pursuant to Charter § 666(7) and emphatically denied it was seeking any variance (309). The Appellate Division, on its own, nonetheless decided that Perlbinder’s appeal was “in essence, a request for a variance” under Charter § 666(7) and based its remand of the interpretative appeal proceeding on that provision (395). But, as the foregoing establishes, the remand was mistaken, and the Appellate Division should instead have dismissed the article 38 78 proceeding, with the recognition that the proper avenue for Perlbinder to proceed, if it chose to do so, would be the filing of an application for a zoning variance and commencement of an administrative proceeding under Charter §§ 666(5) and 668. Under settled principles of statutory construction, the interpretative appeal process necessarily applies in instances other than a zoning variance and does not extend to matters requiring a zoning variance, for which different standards and different procedures are specifically set forth in the Charter and the Zoning Resolution. The decision in Matter of 515 East 5th Street, LLC v. New York City Board of Standards and Appeals, 2008 N.Y. Misc. Lexis 8976, 11-13 (Sup. Ct. N.Y. Co. May 6, 2008) is directly on point. In that case, the developer obtained the necessary Buildings Department permits to add four duplex apartments to an existing five-story building in Manhattan. On an interpretative appeal pursuant to Charter § 666(7), the BSA found that the addition violated height restrictions in the “Sliver Law.” The developer had asked for a hardship waiver of the relevant zoning pursuant to § 666(7) because the Buildings Department had approved the addition. In denying that relief, the BSA determined that it lacked the authority to grant that relief under § 666(7) and that the developer should instead apply for a zoning variance. The Supreme Court agreed. It recognized that a § 666(7) hardship 39 waiver “may be more advantageous” than seeking a variance, but that, based on statutory construction rules, the BSA’s refusal to entertain a § 666(7) hardship application was rational. The Court reasoned that although the “general language” of § 666(7) seemingly included a zoning variance application, § 666(5) “is particular” and specifically addresses applications for a zoning variance. Noting that a general provision of a statutory scheme prevails over a specific provision only when the specific enactment is inapplicable, the Court determined that it was reasonable for the BSA to conclude that § 666(7) was inapplicable to zoning variances. The Appellate Division’s contrary ruling undermines the BSA’s ability to review zoning variance applications “to preserve coherent land use determinations and adherence to the zoning plan itself.” Bella Vista Apt. v. Bennett, 89 N.Y.2d at 471. The Court should have instead deferred to BSA’s operational knowledge regarding the distinction between § 666(5) variances of the Zoning Resolution and § 666(7) interpretative appeals, and its remand order should be reversed. 40 POINT III THE APPELLATE DIVISION FURTHER ERRED IN DETERMINING THE GOOD-FAITH RELIANCE ISSUE IN THE FIRST INSTANCE The Appellate Division not only erred in failing to recognize that Perlbinder needed to apply for a zoning variance under the specific procedure designated by the Charter, it further erred by not deferring to the BSA on the factual issue of Perlbinder’s good-faith reliance and instead deciding that issue as a matter of law. That portion of its order should also be reversed. Perlbinder’s asserted good-faith reliance implicates a number of factual issues, including its knowledge of the Buildings Department’s unresolved objections to its permit application for the billboard (objections whose legal validity the company does not now dispute); Perlbinder’s repeated misidentification of the zoning lot for the proposed replacement sign (111; 116; 281, ¶11; 133; 135); questions by the Buildings Department as to whether Perlbinder had been candid in the reconsideration request to the Borough Commissioner (54-55); the fact that Perlbinder erected its double-sided billboard on a different tax lot from the one authorized by the erroneously issued billboard permit (54; 355); and the question whether Perlbinder has actually suffered any financial loss or other detriment and in what degree, particularly since Perlbinder 41 has been collecting an undisclosed amount of monthly income from the display of the sign for approximately more than six years (id.). These are precisely the type of questions that are, in the first instance, committed to an agency’s particular expertise under the doctrine of primary administrative review, and why the Appellate Division erred in deciding the good- faith reliance claim on the merits. Sohn v. Calderon, 78 N.Y.2d 755, 768 (1991); Matter of New York Botanical Garden v Board of Stds. & Appeals of the City of N.Y., 91 N.Y.2d 413, (1998). This doctrine of primary administrative review also serves the important goals of allowing agencies to address questions entrusted to it and prevents premature judicial interference with efforts to develop a coordinated and consistent scheme of regulation. Watergate II Apartments v. Buffalo Sewer Auth., 46 N.Y.2d 52, 57 (1978). The City Charter directs the BSA to consider and address, after recommendation by borough and community boards and after a public hearing, the factors set forth in the Zoning Resolution for the grant of a zoning variance. See Charter §§ 666(5) and 668. This Court has held that claims of good-faith reliance on an erroneously issued permit are relevant under the hardship prong of the zoning variance analysis. Jayne Estates, 22 N.Y.2d at 423 (“if there was good-faith reliance on the invalid permit, it should be considered in determining whether Jayne has suffered ‘unnecessary hardship’”). The question of 42 good-faith reliance should therefore be left for the BSA to decide in the first instance in connection with a properly presented application for a zoning variance. The BSA appropriately declined to reach the issue of Perlbinder’s good-faith reliance in the interpretative appeal proceeding, and properly deferred the resolution of the issue until Perlbinder filed an application for a zoning variance (363). This case contrasts sharply with Matter of Pantelidis v. New York City Board of Standards and Appeals, 10 N.Y.3d 846 (2008), where this Court affirmed a lower court’s course of action in holding a hearing on, and adjudicating, the issue of good-faith reliance, rather than remanding the issue to the agency for further proceedings. In Pantelidis, the agency had already held a hearing on an application for a zoning variance, and, according to the courts, had declined to address two of the five factors for such a variance and specifically refused to address the issue of good-faith reliance. The Appellate Division described the agency as showing a “pointed resolve, in determining petitioner’s variance application, not to consider” the issue of good-faith reliance. Matter of Pantelidis v. N.Y. City Bd. of Stds. & Appeals, 13 A.D.3d 242, 243 (1st Dep’t 2004). See also Matter of Pantelidis v. New York City Bd. of Stds. & Appeals, 43 A.D.3d 314, 315 (1st Dep’t 2007) (holding that forgoing remand was appropriate where it would 43 have resulted in “the agency’s third hearing on th[e] matter” and litigation had already been pending for “more than seven years”). Nothing similar has occurred here that would justify departing from usual principles of deference to administrative jurisdiction. Here, Perlbinder has not yet filed any application for a zoning variance as to the display of the double- sided sign, and no administrative proceeding addressing whether to grant such a zoning variance has yet occurred. Nor is there any good reason to resolve the particular issue of good-faith reliance now, as part of this litigation, where even the Appellate Division recognized that further administrative proceedings would be necessary on other issues. Moreover, no hearing on Perlbinder’s asserted good faith has ever occurred here, whether before the agency or before the courts. And where, as here, the record shows that there are substantial factual issues to be resolved on the question of good-faith reliance, it was inappropriate for the Appellate Division to decide Perlbinder’s asserted good-faith reliance as a matter of law. The proper step is to defer the matter to be addressed in the first instance by the BSA, should Perlbinder opt to file an application for a zoning variance. Alternatively, the Appellate Division erred in determining that Charter § 666(7) implicitly includes a good-faith reliance element. First, § 666(7) contains the kind of “carefully chosen words” that contradict a conclusion that a good-faith 44 standard should be inferred. Toys “R” Us, 89 N.Y.2d at 421 (the “carefully chosen words” of § 52-61 contradict the conclusion that the provision “implicitly contains a good-faith standard”). Second, the equitable doctrine is recognized in very limited circumstances and for reasons that do not apply to Charter § 666(7). This Court recognized a “strictly applied” good-faith test to address a specific problem that arose when a building permit was declared invalid after the landowner had expended more than $100,000 in construction costs. Jayne Estates v. Raynor, 22 N.Y.2d at 422. The Court reasoned that those expenses ought to be considered under the hardship prong of the landowner’s variance application based on good-faith reliance, much in the same way that those costs are considered where common-law vested rights are based on a validly issued permit but where there has been a subsequent change in the law. Id. Section 666(7), however, already embodies equitable flexibility by directing that “the spirit of the law shall be observed” and “substantial justice done.” Consequently, the Court should find that the Appellate Division erred in deciding Perlbinder’s good-faith reliance as a matter of law. 45 CONCLUSION The Appellate Division’s decision remanding the proceeding to the BSA pursuant to Charter § 666(7) should be reversed, and the proceeding dismissed. Should the Court direct a remand, it should be in accordance with Charter § 666(6), with direction that the BSA decide the good faith issue in the first instance. The decision and order should otherwise be affirmed. Dated: New York, New York February 27, 2015 Respectfully submitted Zachary W. Carter Corporation Counsel of the City of New York Attorney for Respondents-Appellants By: Jane L. Gordon Senior Counsel