Land Use—Food Town Failed to Obtain Injunctive Relief Against Landlord of a New Whole Foods Store—Alleged Misrepresentations to the NYC Dep't of Buildings That a Project Was an “Alteration,” as Opposed to a New Building—Standing—Right to Challenge a Competitor's Project

A plaintiff is the lessor of property and operates a Food Town supermarket. The defendant owns nearby property and is developing a commercial retail center (project) which will include a Whole Foods Market. In 2011, the defendant filed a Form ZRD1 with the NYC Department of Buildings (DOB), “seeking pre-approval” of the project's construction plans as a “Type Alt-1, or major alteration, as opposed to a Type NB, or new building.” The defendant sought to convert two manufacturing use buildings into a single retail use building. If the project was characterized as a Type NB (as opposed to an Alt-1), it would “significantly increase the costs and complexities associated with the project.” The defendant's architect stated that “[r]equiring a filing as a new building would eliminate the economic feasibility of the project as it is impossible to provide the then required parking for all the commercial floor area on the site or within 500' of the site.” The DOB approved the defendant's ZRD1 with certain conditions.

In November 2012, the defendant filed a second Form ZRD1 (ZRD1#2), “requesting a modification of the original ZRD1.” The 2012 application stated that during the prior 18 months, economic conditions in the local neighborhood improved enough that the neighborhood could now support additional retail space. Therefore, the defendant sought to add “the maximum as of right commercial bulk to the site as allowed.” The ZRD1#2 application stated that “the proposed plan would as qualify as an Alt-1,” because “no floor area would be removed” and “no exterior walls would be removed.” The DOB approved the ZRD1#2 with conditions. The DOB did not agree that the plan did not involve removal of any floor area. However, the DOB approved the plan “based upon the representation that no perimeter walls were to be removed.” The defendant thereafter filed the project as an Alt-1 and the DOB approved the application. The DOB issued a building permit for the project on or about Dec. 31, 2013. Construction began thereafter.