NY judge orders Port Chester to pay $3 million for property taken by eminent domain

On Friday, New York State Supreme Court Judge John R. LaCava issued an opinion in the eminent domain case known as In Re Matter of Village of Port Chester v. Village of Port Chester, 2010 NY Slip Op 50532(U),  Supreme Court, Westchester County (Decided April 2, 2010), ordering the Village of Port Chester to pay the property owners $3,062,000.00, plus interest, for the taking of their commercial properties.  (Disclosure: Michael Rikon, OCA New York Member, represented Messrs. Didden and Bologna as well as their businesses in the New York State Court condemnation action.)  This case might be more recognizable by the names of the business partners – Bart A. Didden and Domenick D. Bologna – who individually and collectively owned the properties prior to Port Chester’s seizure by condemnation in 2004 and challenged the condemnation in federal court in Didden v. Village of Port Chester.

Business partners Didden and Bologna acquired and assembled their commercial properties in downtown Port Chester with the hopes to develop their contiguous parcels.  For years the partners pursued various opportunities to develop their land and continued to acquire additional parcels adjacent to their assembled properties for this purpose.

In 1999 following a lengthy environmental review process and in keeping with New York’s Eminent Domain Procedure Law, the village officially published public notice of its intent to establish an “urban renewal project” in an area of downtown near the waterfront.  The village held the necessary public meetings and published its “Determination and Findings” specifying the public benefit of the urban renewal project.

Port Chester’s published findings stated that the public purpose of the redevelopment project required the condemnation of private property within the project footprint “for the purpose of clearing and reconstructing this area to enhance public access to the waterfront, protect and encourage water dependant uses, promote the development of mixed use and commercial retail uses on the waterfront, remediate environmental problems, and have a positive impact on the existing and continued development of the Village waterfront and downtown business areas.” Port Chester then began acquiring the parcels in the project footprint in three phases.

In 2003, a broker approached Didden and Bologna on behalf of CVS about locating a pharmacy on their property.  While negotiating with the national pharmacy chain, the partners began to submit the required plans for Village approval.  The Village Board of Trustees approved the plan in the summer of 2003 and the Planning Commission granted preliminary approval in November 2003.  As the properties were zoned General Business and preliminary approval had been granted, the partners faced no further procedural hurdles.  However, the Mayor’s office requested that Didden and Bologna meet with the Village’s “preferred developer,” G & S Investors (G & S), before further action would be taken with respect to their proposed plan.

On November 5, 2003, Didden, Bologna and their attorney met with the developer, Greg Wasser, and his attorney at the developer’s office.  During the meeting, the developer advised the partners that the developer would require either a lump sum payment of $800,000.00 or a 50% interest in the partner’s CVS project to allow it to move forward,  or alternatively, the parcels would be taken by eminent domain.  The partners rejected this offer, called it “extortion,” and adjourned the meeting.  The following day, November 6, 2003, the Village of Port Chester initiated eminent domain proceedings to acquire two of the parcels.

Didden and Bologna challenged the condemnation in U.S. District Court in January 2004 on the basis that the taking was not for a “public use” as guaranteed by the Fifth Amendment and sought injunctive relief to stay the condemnation as well as monetary relief.  Their argument was simple: Extortion for the benefit of a private party is not a public use.  The federal court found in favor of  the village and its preferred developer.  In 2006, U.S. Supreme Court Justice Sonia Sotomayor, then a federal court judge, was on the appellate panel that affirmed the lower court’s findings and upheld the taking in Didden v. Village of Port Chester.  (See our previous post here.)   

The partners petitioned the U.S. Supreme Court for a writ of certiorari but the Court did not grant review.  The Institute for Justice filed the petition for writ of certiorari to the Supreme Court on behalf of Didden.  (Disclosure: IJ senior attorney Dana Berliner is a member of OCA.)  Throughout the legal battle, the partners continued to pursue the approval for the CVS project and were granted final site plan approval in February 2004.

Judge LaCava’s April 2, 2010 opinion awards just compensation to the property owners for the taking of their properties and for “consequential damages.”  Since Port Chester has made an advance payment of $975,000.00, the remainder plus approximately $600,000.00 in accrued interest remains due to partners Didden and Bologna.  Although, the Village of Port Chester is responsible for paying just compensation, in reality its preferred developer, G & S, will foot the bill.

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