OPINION AND ORDER Plaintiff Mill Street Partners, LLC (“Mill Street”) brings this action under the Fair Housing Act (“FHA”) and various New York state laws against the City of Newburgh (the “City”) and Michael G. Ciaravino, the City manager, in connection with Mill Street’s failed attempt to build a mixed-use commercial and residential building for low-income residents in downtown Newburgh. Before the Court is defendants’ motion to dismiss the amended complaint pursuant to Rules 12(b)(1) and 12(b)(6). (Doc. #23). For the following reasons, the motion is GRANTED IN PART and DENIED IN PART. The Court has subject matter jurisdiction under 28 U.S.C. §§1331 and 1367. BACKGROUND In deciding the pending motion, the Court accepts as true all well-pleaded factual allegations in the amended complaint and draws all reasonable inferences in Mill Street’s favor, as set forth below. I. The Development Agreement In or around May 2011, the City solicited proposals from private developers to redevelop an abandoned city property along the downtown Broadway corridor. Bounded by 1st Street, Broadway, Johnston Street, and Lander Street, the nearly 2.5-acre property consists of seventeen city-owned parcels and one privately-owned parcel. Mill Street, a private developer that specializes in affordable housing, submitted a proposal, and on May 29, 2012, the City designated Mill Street as its “preferred developer” for the project. On October 23, 2012, Mill Street and the City entered into the Development Agreement. (See generally Doc. #18 (“Am. Compl.”) Ex. F). By the terms of the agreement, the project would consist of 103 residential rental apartments, a ground floor supermarket, other retail space, and at least one parking space per residential unit. Mill Street would obtain all the necessary permits, licenses, easements, and local government approvals at its own expense and seek public funding for the project. Upon securing all approvals and funding, the parties agreed Mill Street would purchase all the City-owned parcels of land. For its part, the City agreed to sell its parcels with insurable titles “at or prior to closing of the construction financing.” (Am. Compl. 87). The city also agreed to “cooperate…in good faith” with Mill Street, and specifically stated it would issue the appropriate letters or resolutions of support and assist in obtaining licenses, approvals, and permits. (Id.
80-84). The Development Agreement had a term of twenty-four months and would expire in October 2014. II. The City’s Initial Cooperation Mill Street alleges the City initially adhered to its obligations under the Development Agreement. For instance, in 2013, the City created a specially permitted use for the project in its zoning district, granted Mill Street a special permit to construct the property, and adopted a resolution of support endorsing Mill Street’s application for public funding. When Mill Street did not secure the necessary funding by the 24-month term in the Development Agreement, the City also voted and passed the first amendment to the Development Agreement, ultimately extending Mill Street’s deadline to secure approvals and public funding until May 1, 2015. On December 12, 2013, local landlords who opposed the project brought an Article 78 proceeding against the City and Mill Street to challenge the special use permit. In June 2014, the Supreme Court, Orange County determined that the project was not permitted in the zoning district where it was located and remitted the matter to the City. In July 2015, the City adopted a form-based zoning code for its entire downtown. As part of this zoning update, the City included various provisions in the new zoning code to permit the project to proceed without the need for variances. While the term of the Development Agreement was tolled during the pendency of the lawsuit, the lawsuit “significantly delayed” the project. (Am. Compl. 141). III. The New City Administration Seeks to Undermine the Project In 2015, the City administration changed. Several new city council members were elected and Ciaravino was appointed to be city manager. Local landlords still opposed the project, and Mill Street alleges this opposition was racially motivated. According to Mill Street, the project’s opponents said Newburgh was already a “dumping ground” and “every time the City starts getting better, we put in another low income Project.” (Am. Compl. 136). Opponents allegedly said the project units “are not for people who are working”; it “would allow Orange County to drop off their problems in Newburgh”; and it would “attract more of them.” (Id.
