Matter of Wyandanch Union Free School District v Town of Babylon Industrial Development Agency
Attorneys and Parties
Brief Summary
Whether an industrial development agency (IDA) may grant tax abatements and exemptions for an affordable senior housing project as a qualifying project under the New York State Industrial Development Agency Act (General Municipal Law §§ 852 [states State policy to promote economic welfare and economically sound projects to prevent unemployment and economic deterioration], 854(4) [defines project broadly, including other economically sound purposes], 858 [sets IDA purpose to promote facilities and advance job opportunities and economic welfare]).
The Supreme Court denied the CPLR article 78 petition [special proceeding to challenge state or local agency action] and dismissed the proceeding, holding the Babylon IDA acted within its statutory authority and its determination was not arbitrary or capricious.
Nothing; the Supreme Court’s judgment was affirmed.
Applying deferential arbitrary-and-capricious review, the court held the IDA’s interpretation of project under § 854(4) was consistent with the statute’s plain text—particularly the inclusive phrase including, but not limited to and the catchall other economically sound purposes—and with the Act’s purpose to promote employment and prevent economic deterioration. The record showed rational findings that the affordable senior housing would promote job opportunities, combat economic deterioration, and support broader urban revitalization.
Background
After a public hearing, the Town of Babylon Industrial Development Agency approved a February 26, 2020 resolution granting WR Communities-D, LLC financial assistance for an affordable senior housing project in Wyandanch, including a 30-year real property tax abatement and exemptions from sales and use tax and mortgage recording tax. The IDA found the project would promote job opportunities, address a local need for affordable senior housing, and further revitalization of an economically distressed urban renewal area. The Wyandanch Union Free School District, its Board of Education, and James Crawford commenced a CPLR article 78 proceeding [special proceeding to challenge state or local agency action], arguing the Act does not authorize IDA benefits for residential construction. The IDA, joined by Albanese Development Corporation and the LLC, countered that the project is a commercial or otherwise economically sound project under the Act (General Municipal Law §§ 852, 854(4), 858) and that the assistance was critical to feasibility.
Lower Court Decision
The Supreme Court (Suffolk County) denied the petition and dismissed the proceeding, holding that the IDA’s determination that the affordable senior housing qualified as a project under the Act was rational, within the agency’s statutory authority, and neither arbitrary nor affected by an error of law.
Appellate Division Reversal
Affirmed. The Appellate Division held the Act’s text is unambiguous and broad, with including, but not limited to and other economically sound purposes encompassing projects beyond those expressly listed. The IDA’s findings that the project would promote employment and combat economic deterioration provided a rational basis. The court rejected reliance on expressio unius, cited supportive Comptroller Opinion 85-51, and found consistency with related authority such as Nearpass (casino project) and American Rock Salt (equipment as part of a project).
Legal Significance
First-impression holding in the Second Department that an IDA may extend benefits to residential affordable housing where the agency rationally finds the project promotes employment and prevents economic deterioration. It reinforces broad, text-driven interpretation of General Municipal Law § 854(4) and deference to IDA determinations when grounded in the Act’s purposes, and clarifies that expressio unius does not narrow statutes using inclusive phrasing.
Industrial development agencies may treat affordable senior housing as a qualifying project under General Municipal Law § 854(4) when supported by rational findings that the project advances jobs and economic revitalization; courts will defer under the arbitrary-and-capricious standard.