| Matter of Barker Cent. School Dist. v Niagara County Indus. Dev.Agency |
| 2009 NY Slip Op 03557 [62 AD3d 1239] |
| May 1, 2009 |
| Appellate Division, Fourth Department |
| In the Matter of Barker Central School District et al., Appellants, vNiagara County Industrial Development Agency et al., Respondents, et al.,Respondents/Defendants. (Proceeding No. 1.) In the Matter of Town of Somerset et al.,Appellants, v Niagara County Industrial Development Agency et al., Respondents.(Proceeding No. 2.) (And Another Proceeding.) |
—[*1] Andrews, Pusateri, Brandt, Shoemaker & Roberson, P.C., Lockport (Robert S. Roberson ofcounsel), for petitioners-appellants. Harris Beach PLLC, Buffalo (Richard T. Sullivan of counsel), forrespondent/defendant-respondent Niagara County Industrial Development Agency andrespondents-respondents Niagara County Industrial Development Agency and Henry M. Sloma,Chairperson, Niagara County Industrial Development Agency. Hiscock & Barclay, LLP, Buffalo (Mark R. McNamara of counsel), forrespondents/defendants-respondents AES Somerset, LLC, AES Eastern Energy, L.P., AES NY,L.L.C. and AES Corporation and respondents-respondents AES Somerset, LLC and AES EasternEnergy, L.P. James R. Sandner, Latham (James D. Bilik of counsel), for New York State United Teachers,Barker Teachers Union and Barker Central School Support Staff, amici curiae.
Appeal from a judgment of the Supreme Court, Niagara County (Richard C. Kloch, Sr.,A.J.), entered November 14, 2007. The judgment, insofar as appealed from, dismissed thepetition/complaint in proceeding No. 1 and the petition in proceeding No. 2 and dismissed theReal Property Tax Law article 7 proceedings commenced by respondent/defendant andrespondent AES Somerset, LLC with respect to the Somerset Generating Station.
It is hereby ordered that the judgment insofar as appealed from is unanimously reversed onthe law without costs, the petition/complaint in proceeding No. 1 and the petition in proceedingNo. 2 are granted, the final resolution of the Niagara County Industrial Development Agencydated October 27, 2006 and the resulting agreements are annulled and the Real Property TaxLaw article 7 proceedings commenced by respondent/defendant and respondent AES Somerset,LLC with respect to the Somerset Generating Station are reinstated.
Memorandum: In proceeding No. 1, petitioners/plaintiffs (collectively, District petitioners)appeal from a judgment dismissing their petition/complaint seeking to annul the determination ofrespondent/defendant Niagara County Industrial Development Agency (NCIDA) granting taxabatement relief in the form of a payment in lieu of taxes (PILOT) agreement andlease/leaseback agreements to respondents/defendants AES Somerset, LLC, AES EasternEnergy, L.P., AES NY, L.L.C., and AES Corporation (collectively, AES respondents) withrespect to their electrical generating station in Somerset, New York (Somerset GeneratingStation). In proceeding No. 2, petitioners (collectively, Town petitioners) appeal from the samejudgment, which dismissed their petition seeking the same relief as that sought by the Districtpetitioners. We note at the outset that a declaratory judgment action is not an appropriateprocedural vehicle for challenging NCIDA's administrative determination, and thus theproceeding/declaratory judgment action in proceeding No. 1 is properly only a proceedingpursuant to CPLR article 78 (see Matterof Potter v Town Bd. of Town of Aurora, 60 AD3d 1333 [2009]).
We conclude that Supreme Court erred in dismissing the petition/complaint in proceedingNo. 1 and the petition in proceeding No. 2. The relief sought therein was judicial review ofNCIDA's final resolution dated October 27, 2006, issued following a hearing, pursuant to whichNCIDA determined that financial assistance in the form of a PILOT agreement andlease/leaseback agreements was warranted for the Somerset Generating Station. The recordestablishes, however, that the AES respondents presented no financial statements to NCIDAfrom which NCIDA could determine whether financial assistance to the Somerset GeneratingStation was necessary. While one NCIDA board member reviewed the financial statementscontained on the Internet Web site of the AES respondents, he informed the remainder of theboard only that the AES respondents were financially stable and capable of ensuring a long-term[*2]PILOT agreement. The financial information contained onthe Web site in any event related only to one of the AES respondents, i.e., the parent company,and did not specify that it concerned the Somerset Generating Station. The AES respondents alsofailed to present any evidence supporting the conclusion that the benefits of the PILOTagreement and lease/leaseback agreements outweighed the costs of that tax abatement relief.There was no evidence supporting the conclusion of NCIDA that the agreement of the AESrespondents, pursuant to which AES Somerset, LLC agreed to discontinue the tax certiorariproceedings it commenced with respect to the Somerset Generating Station in exchange for thePILOT agreement, would make up for the loss of tax revenue resulting from the PILOTagreement. There also was no evidence supporting the court's calculations with respect to thecost of the litigation in the event that AES Somerset, LLC prevailed in those tax certiorariproceedings. In addition, there was no evidence presented to establish that a deviation fromNCIDA's Uniform Tax Exemption Policy was warranted. We therefore conclude that NCIDA'sdetermination that the tax abatement relief in the form of the PILOT agreement andlease/leaseback agreements was warranted for the Somerset Generating Station is not supportedby substantial evidence (see generally 300 Gramatan Ave. Assoc. v State Div. of HumanRights, 45 NY2d 176, 180-181 [1978]).
We further agree with the District petitioners and the Town petitioners that sections 1.3 and1.4 of the PILOT agreement are invalid. Although section 1.3 of the agreement apportionsPILOT payments between the taxing jurisdictions based upon tax rates, General Municipal Law§ 858 (15) requires that such apportionment be based upon the amount of taxes that thetaxing jurisdictions would have received but for the PILOT agreement, unless the affected taxjurisdictions agree otherwise. Section 1.4 of the agreement improperly authorizes NCIDA todetermine the assessed value of any future additions made to the Somerset Generating Station.
We therefore conclude that the court should have granted the petition/complaint inproceeding No. 1 and the petition in proceeding No. 2, thereby annulling the final resolution ofNCIDA with respect to the PILOT agreement and the lease/leaseback agreements, and the courterred in dismissing the Real Property Tax Law article 7 proceedings filed by AES Somerset,LLC with respect to the Somerset Generating Station. Present—Scudder, P.J., Hurlbutt,Peradotto and Gorski, JJ.