Looking Ahead: What to Expect in 2023
Dominating our Environmental and Land Use practice in 2022 have been the topics of sustainability, climate change and energy efficiency. We have assisted New York State in its solicitations for off-shore wind farms, advised building owners on New York City’s greenhouse gas emission law and assisted clients with environmental impact review of projects designed to address storm surges and sea level rise. These themes will continue in 2023 regardless of how economic conditions impact the pace of new construction and development.
Our New York City clients should remain focused on these requirements in 2023. Of particular importance for owners of operators of buildings will be Local Law 97, which starting January 1, 2024 imposes mandatory green-house gas limits on buildings of 25,000 square feet or greater. New York City’s 2019 Climate Mobilization Act, also known as Local Law 97, requires owners of most buildings over 25,000 square feet to dramatically reduce their building emissions in phases or face progressively steeper penalties. The law sets emissions limits based on square footage and occupancy category (i.e., commercial, residential, etc.) and ratchets those limits down over time. New York State is considering a state-wide variation on this law as well.
For example, a typical commercial office building under occupancy group B may emit no more than .00846 metric tons of carbon dioxide per square foot (tCO2e/sf) between 2024 and 2029, and no more than .00453 per square foot between 2030-2034. Likewise, a typical apartment building under occupancy group R-2 (residential) may emit no more than .00675 metric tons of carbon dioxide per square foot between 2024 and 2029 and no more than .00407 per square foot between 2030-2034. Most (but not all) buildings will comply with 2024 limits or pay nominal penalties. Most buildings will not comply with 2030 limits without changes to emissions through building efficiency upgrades, electrification of HVAC systems and other efforts. The law and its new implementing regulations permit the purchase of credits to meet LL97 limits although the market for such credits for this type of program is untested.
Legal Challenges. Beyond the technical and financial challenges imposed by LL97, the law presents legal ones too, particularly in the case of residential and commercial landlords who must change tenant behavior within the confines of fixed cooperative proprietary leases or long-term commercial leases that cannot be modified in the short term. The terms of these relationships in most cases predate LL97 and even newer documents rarely allocate responsibility for energy efficiency matters.
Thought Leadership and Advisories
- New York City’s Ambitious Green Buildings Law Faces Legal Challenge
In June 2022, members of Carter Ledyard’s Environmental and Land Use Group, Karen Meara, Chris Rizzo and Nick Tapert, detail the lawsuit challenging the Climate Mobilization Act – a centerpiece of the City’s efforts to combat climate change – that was recently filed by small group of building owners and individuals. The challenge highlights some important policy issues that already loom large in policymakers’ minds as the Act’s first compliance deadlines approach.
- The U.S. Senate’s Rule Allowing Filibusters Is Unconstitutional and Stands in the Way of Meaningful Action on Environmental Challenges
In October’s New York Law Journal column, Chris Rizzo and Karen Meara contend that there are examples abound of how the Senate’s “filibuster” rule has led to legislative paralysis, including on climate change and other environmental challenges.
- Local Law 97: Q&A for Property Owners, Including Commercial Landlords, on NYC’s Groundbreaking Climate Change Law
In a November 2022 advisory, members of the Environmental and Real Estate groups detailed the special considerations facing commercial property owners, co-ops and condos in complying with Local Law 97, including the constraints of long-term leases that make it hard to change tenant behavior.
- New York State Making Substantial Progress on Offshore Wind
In their June 2022 New York Law Journal column, Karen Meara and Chris Rizzo detailed the progress New York State is making on its offshore wind goals—putting it far ahead of any other states.
- NY Budget Bill Institutes Historic Reforms to the Protection of Freshwater Wetlands
In a May 2022 advisory, Nick Tapert detailed the 2022-23 budget passed by the New York State Legislature and signed into law by Governor Hochul on April 9, 2022, which includes a historic expansion in the protection of New York’s freshwater wetland resources (S.8008C/A.9008). The budget bill’s amendments (Part QQ) to the state Freshwater Wetlands Act place strict limitations and permitting requirements on development in and around wetlands.
- Multi-family Housing: Carter Ledyard client Angelina Gatto Trust marked a major land use milestone on October 25th, 2022, when the New York City Council approved the zoning actions required to develop an under-utilized parcel of land in Gowanus, Brooklyn. The City Council vote, which approved a rezoning, zoning text amendment and special permit, is the culmination of years of planning efforts on behalf of our client and marks the successful completion of the public and environmental review processes under the Uniform Land Use Review Procedure (ULURP) and City Environmental Quality Review (CEQR). The Trust property was originally improved with housing, which was demolished over 50 years ago. Due to a restrictive manufacturing zoning designation imposed in 1961, development options were limited. The proposed rezoning would allow residential uses on the Trust property and improvements to other grandfathered residential buildings located on the block. The accompanying Special Permit would waive the parking requirement for the proposed building. The land use approvals will facilitate badly needed housing in a transit rich location.
- Hotels: In 2022, Carter Ledyard hotelier clients relied on our land use attorneys to protect their development projects. When the City of New York adopted certain text amendments to the Zoning Resolution, requiring zoning special permits for new hotels in manufacturing districts, many projects struggled to complete construction before the new law went into effect at the end of 2021. The developers of these projects either had to comply with the new law or build a conforming commercial project instead. Carter Ledyard pursued a third option under state law and sought to establish that the projects had vested rights to continue construction under the old law. We assembled the evidence required by state common law, to establish that substantial expenditures and constructure occurred prior to the change in law and filed appeals with the NYC Board of Standards and Appeals to win four additional years to construct the two hotels.
- State Agencies: We have continued our work with the Lower Manhattan Development Corporation and Empire State Development in the redevelopment of the World Trade Center Site. In 2021 and 2022, the firm is advising on redevelopment of Site 5, the sole remaining site that is undeveloped following the attacks of 9/11/2001. The project will conclude the firm’s 20 years of work for New York State on the environmental reviews and land-use planning process for the World Trade Center site.
- Our work in 2022 continues the Firm’s valued practice with New York State agencies and public benefit corporations such as the Battery Park City Authority, Hudson River Park Trust, Long Island Power Authority and others. For example in 2022, we assisted the Roosevelt Island Operating Corporation in its closure of long-term ground lease to a joint venture of the Hudson Companies and Related Companies for a new residential building with 357 units of new rental housing. This project follows the Corporations’ prior ground lease to the same joint venture for an all-affordable rental building with 341 units of new rental housing.
- Renewable Energy: In 2022 we began exciting work with New York State in meeting its ambitious goals under the State’s 2019 Climate Leadership and Community Protection Act to produce 70% of electricity from renewable sources by 2030 particularly offshore wind. The State is well on its way to meeting this goal.
- Gaming: We advised clients on New York State’s amended Racing, Pari-Mutuel and Breeding Law (i.e., Gaming Law) that permits the Gaming Commission’ issuance of casino licenses downstate for the first time.
- Public Open Space: The group continues to advise a wide range of nonprofit clients on land-use matters and operating agreements with New York City for public open spaces and more. These include the Hudson Yards/Hell’s Kitchen Alliance; Hudson Square Business Improvement District and Greenacre Foundation.
- Nonprofit clients: The group works with a wide variety of religious and nonprofit organizations in their land-use matters, dealings with municipal government, nonprofit corporate affair and more. These include Heartshare Human Services, which provides affordable housing to special needs individuals, and Leslie Lohman Museum of Lesbian and Gay Art, the City’s only museum focusing on LGBTQ art and one of only a few in the nation.