Summary
The U.S. Supreme Court considered whether New York City's landmark-preservation restrictions on Grand Central Terminal constituted a taking of private property requiring just compensation under the Fifth and Fourteenth Amendments. The Court affirmed the judgment upholding the restrictions, applying an ad hoc inquiry focused on the regulation's economic impact, interference with investment-backed expectations, and character of the governmental action. The Court concluded on the presented record that no taking had occurred.
Topics
Practice areas
Questions Presented
- Whether application of New York City's Landmarks Preservation Law to Grand Central Terminal effected a taking of private property for public use under the Fifth and Fourteenth Amendments.
- Whether the restrictions on development were unconstitutional because they substantially interfered with the owners' property rights and investment-backed expectations.
- Whether transferable development rights constituted just compensation if a taking had occurred.
Holdings
- New York City's application of its Landmarks Preservation Law to Grand Central Terminal did not effect a taking requiring compensation because the regulation served a legitimate public purpose, did not interfere with the Terminal's existing use, permitted a reasonable return, and allowed valuable transferable development rights.
- Takings analysis does not divide a single parcel into discrete segments and ask whether rights in one segment, such as airspace, have been entirely abrogated; the relevant unit is the parcel as a whole.
Key quotations
“The economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations are, of course, relevant considerations. So, too, is the character of the governmental action.” (438 U.S. at 124)
“Taking jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated.” (438 U.S. at 130-131)
“On this record, we conclude that the application of New York City's Landmarks Law has not effected a "taking" of appellants' property.” (438 U.S. at 138)
Factual background
Grand Central Terminal, owned by Penn Central and affiliated entities, was designated a New York City landmark in 1967. Penn Central sought approval to construct a 55-story office tower cantilevered above the Terminal and a revised 53-story tower that would have altered or removed portions of the building's facade; the Landmarks Preservation Commission denied approval of both proposals. The Terminal continued to operate as a railroad station with commercial tenants, and the owners retained transferable development rights usable on other nearby parcels.
Procedural history
Penn Central sued in New York Supreme Court, Trial Term, after the Landmarks Preservation Commission denied approval for two proposed office towers above Grand Central Terminal. The trial court granted declaratory and injunctive relief and severed damages for an alleged temporary taking. The Appellate Division reversed, holding that the owners had not shown deprivation of all reasonable beneficial use. The New York Court of Appeals affirmed, and the Supreme Court affirmed the judgment.