DECISION and ORDER I. INTRODUCTION Before they became the plaintiffs in this civil rights suit, Arizona Hudson Valley LLC (“AHV”) and Arizona Investissements US LLC (“Arizona”), along with their principal Jordan Bem (“Bem”) (collectively “plaintiffs”), were a property development group. In 2018, plaintiffs purchased a defunct resort property in the Town of Hurley, New York, with the intention of redeveloping and expanding the site. They received a site plan approval and a Special Use Permit from the Town’s Planning Board, but a group of disgruntled residents mounted a state court legal challenge that managed to send plaintiffs back to the Town’s Planning Board for some clarification about which “use” category should apply to plaintiffs’ proposed development under the local zoning law. The Town soon reaffirmed its approval of plaintiffs’ site plan. A renewed legal challenge followed. It was eventually rebuffed, but during the pendency of this second round of state court litigation there was some kind of shift in the local political landscape. Shortly afterward, the Town’s Acting Building Inspector and Code Enforcement Officer issued a letter revoking plaintiffs’ Special Use Permit. Plaintiffs quickly appealed the revocation but their case languished before the Town’s Zoning Board of Appeals for over six months. On December 6, 2022, believing their zoning appeal to be stuck in limbo, plaintiffs filed this 42 U.S.C. §1983 action alleging that defendants Town of Hurley (the “Town”) and Acting Building Inspector and Code Enforcement Officer David Allen (“Acting Code Enforcement Officer Allen”) (collectively “defendants”) violated their procedural and substantive due process rights by improperly revoking the Special Use Permit. On January 27, 2023, defendants moved under Federal Rule of Civil Procedure (“Rule”) 12(b)(6) to dismiss the complaint for failure to state a plausible claim for relief. The motion has been fully briefed and will be considered on the basis of the submissions without oral argument. II. BACKGROUND Unless otherwise noted, the following facts are taken from the complaint and attached exhibits and are assumed true for the purpose of evaluating the motion to dismiss. On November 8, 2018, plaintiffs purchased an old resort property located at 198 Heritage Drive in the Town of Hurley, New York.1 Compl.
1, 11. Known locally as “Twin Lakes,” the site was a “very popular wedding facility” that also offered “cabins for rent, hiking, [and] a pool.” Id. 12. Plaintiffs planned to redevelop the property by renovating the existing facilities and expanding the guest accommodations. Compl. 13; see also Ex. A to Compl. As relevant here, plaintiffs’ plans would add forty-two “mobile units” and two new “cabin units” to the resort’s footprint. Id. They submitted an application to the Town for site plan approval before they even closed the sale. Id. 14. On November 21, 2019, the Town’s Planning Board issued to plaintiffs a Special Use Permit (“SUP”) that permitted them to pursue their development proposal and to operate the Twin Lakes property as a resort subject to certain conditions and restrictions. Ex. A to Compl. A special use permit, which is sometimes called a special exception, “gives [a property owner] permission to use property in a way that is consistent with the zoning ordinance, although not necessarily allowed as of right.” Matter of Retail Prop. Trust v. Bd. of Zoning Appeals, 98 N.Y.2d 190, 195 (2002); see also N.Y. TOWN LAW §274-b. This distinguishes it from a variance, which “gives permission to an owner to use property in a way that is inconsistent with a local zoning ordinance.” Matter of Retail Prop. Trust, 98 N.Y.2d at 195. One consequence of this distinction is that the burden of proof on a party seeking a permit is a little lighter than that needed for a variance. Id. Even with a special use permit in hand, plaintiffs’ redevelopment plans for the old resort were somewhat controversial around Town. Some residents believed that plaintiffs’ “mobile cabin” plan was basically just another way to build a “motel” on the property, which would have been forbidden under the zoning law. Led by petitioner Lynne Bailey (“Bailey”), a trio of locals filed an Article 78 petition in Supreme Court, Ulster County, that sought vacatur of the Special Use Permit that had been issued to plaintiffs. Compl. 15; see also Ex. A to Defs.’ Mem., Dkt. No. 9-3.2 On April 29, 2020, the state court granted in part Bailey’s Article 78 petition. Compl. 16. In particular, the state court vacated the Special Use Permit to the limited extent that it had given approval for plaintiff’s proposed “mobile cabins.” Id. This was so, plaintiffs explain, because the state court found that the Town’s Planning Board had developed an “unclear” record about the appropriate “use” category for these mobile buildings. Id. The state court sent the matter back to the Town for further consideration. Id. In January of 2021, after some legal wrangling, Town Code Enforcement Officer Glenn Hofstatter (“Code Officer Hofstatter”) reviewed plaintiffs’ proposed use of the “mobile cabins” and concluded that these units should be classified as “cabins” under the relevant zoning law. Compl. 17. Code Officer Hofstatter further concluded that plaintiffs’ site plan qualified as a “cabin development” under the same body of zoning law. Id. 18. On February 8, 2021, the Town’s Planning Board relied on Code Officer Hofstatter’s findings to issue to plaintiffs an Amended Special Use Permit, which was subject to the same conditions and restrictions as the Special Use Permit that had previously been issued to plaintiffs. Compl. 20. Bailey challenged this revised determination in an appeal to the Town’s Zoning Board of Appeals, which rejected her appeal on May 13, 2021. Id.
