A unanimous Appellate Division, First Department, panel refused on Tuesday to shut down a controversial homeless shelter in Chelsea, rejecting a challenge brought by a community group, Chelsea Business & Property Owners’ Association. The group claimed New York City’s Department of Buildings should not have approved the shelter, which is operated by the homeless services group Bowery Residents’ Committee Inc. The group said the shelter was improperly classified as a "transient hotel" when it should have been classified as a "non-profit institution with sleeping accommodations" or a "health related facility," which would exclude it from its light manufacturing zoning district.

The city’s Board of Standards and Appeals rejected the group’s challenge, prompting it to file an Article 78 petition in Manhattan Supreme Court. Justice Joan Madden (See Profile) denied that petition in December 2011. The First Department likewise upheld the city’s determination. "The BSA rationally determined that the definition of ‘transient hotel’ in section 12-10 of the Zoning Resolution is clear and unambiguous and that the proposed use of the building meets the three criteria of the definition, i.e., it (1) provides sleeping accommodations used primarily for transient occupancy; (2) has a common entrance to serve the sleeping accommodations; and (3) provides 24-hour desk service, housekeeping, telephone and linen laundering," the panel of Justices Peter Tom (See Profile), Karla Moskowitz (See Profile), Sallie Manzanet-Daniels (See Profile) and Judith Gische (See Profile) wrote in Chelsea Business & Property Owners’ Association v. City of New York, 113194/10.

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