## Facts

- MacMillan, Inc. held a long-term commercial lease in the Macmillan Building at 866 Third Avenue in Manhattan, occupying nearly all usable space above the first floor.
- The block also contained separate parcels, including a “development lot” on the Lexington Avenue side where a larger building was planned.
- In July 1981, Campeau Corporation (U.S.), Inc. purchased the Macmillan Building and became MacMillan’s landlord.
- On September 30, 1981, Campeau, CF Lex Corp., and other fee owners executed a declaration of zoning lot restrictions to merge their separately owned parcels into a single zoning lot under the New York City Zoning Resolution.
- CF Lex Corp. bought the air rights associated with the land under the Macmillan Building from Campeau for about $5,060,000 to increase the permissible bulk of the planned development on the development lot.
- The Zoning Resolution required consent of each “party in interest” in the “tract of land” for the zoning lot merger.
- MacMillan challenged the merger, asserting it was a “party in interest” because “tract of land” should include the building and long-term leasehold interests, making its consent necessary.

## Issues

1. Whether a substantial commercial space tenant is a “party in interest” in the “tract of land” whose consent is required to execute a zoning lot declaration and effect a zoning lot merger under the New York City Zoning Resolution.
2. Whether “tract of land” in the Zoning Resolution includes buildings and leasehold interests in building space, or refers only to the surface land.

## Decision

- The Court of Appeals reversed the Appellate Division and reinstated the trial court’s dismissal of the complaint.
- The court held that “tract of land,” as used in the Zoning Resolution, refers to surface land only and does not include buildings erected on it.
- Because MacMillan held only a leasehold interest in building space, it was not a “party in interest” whose consent was required for the zoning lot merger.

## Legal Principles

- In New York City zoning lot mergers, “tract of land” refers to the underlying surface land, not the structures on it.
- The “party in interest” consent requirement for a declaration of zoning lot restrictions is directed to holders of interests in the land title (such as fee ownership), not space tenants whose rights are defined by lease.
- Zoning lot merger and bulk-allocation mechanisms are land-area based; interpreting “party in interest” to include building tenants would conflict with the zoning scheme and impede the merger process.

## Conclusion

The New York Court of Appeals held that a dominant commercial space tenant is not a “party in interest” for purposes of consenting to a zoning lot merger, because the Zoning Resolution’s “tract of land” refers only to the surface land and excludes buildings and leasehold space interests.


MacMillan, Inc. v. CF Lex Assocs., 56 N.Y.2d 386, 437 N.E.2d 1134 (N.Y. 1982)