## Facts

- New York City created a Theater Subdistrict in 1983 to protect designated Broadway theaters by restricting demolition and allowing limited transfers of unused development rights to specified receiving sites.
- In 1998, the City amended the Zoning Resolution to expand theater development-right transfers, including:
  - an as-of-right mechanism allowing transfers to receiving sites anywhere within the Theater Subdistrict, coupled with design controls; and
  - discretionary mechanisms allowing developers, via permits subject to City Planning Commission approval, to obtain additional floor area ratio (FAR) beyond as-of-right limits.
- The Department of City Planning conducted SEQRA/CEQR review, prepared an environmental assessment statement, and issued a negative declaration finding no significant environmental impacts requiring an environmental impact statement (EIS) for the as-of-right transfer mechanism and related controls.
- For the discretionary FAR mechanisms, the City did not perform a programmatic analysis at the amendment stage, stating that impacts would be reviewed case-by-case when permit applications were filed.
- Petitioners commenced an Article 78 proceeding challenging the negative declaration and the failure to prepare an EIS for the 1998 amendments, arguing the City underestimated development and improperly deferred review of foreseeable cumulative impacts from discretionary bonuses.
- The trial court annulled the zoning amendments and ordered preparation of an EIS; the City appealed.

## Issues

1. Whether the City rationally issued a SEQRA/CEQR negative declaration for the zoning amendments’ as-of-right development-right transfer mechanism and design controls without preparing an EIS.
2. Whether the City could lawfully defer environmental analysis of the zoning amendments’ discretionary FAR bonus mechanisms to later, project-specific permit reviews.

## Decision

- The Appellate Division modified the trial court’s judgment.
- It upheld the negative declaration and allowed the as-of-right transfer mechanism and related design controls to remain in effect.
- It severed and annulled the portions of the amendments authorizing discretionary grants of additional FAR due to the City’s failure to analyze their potential environmental impacts.
- It remanded the discretionary provisions to the City Planning Commission for further environmental review.

## Legal Principles

- A SEQRA negative declaration is upheld if the agency identified relevant areas of environmental concern, took a “hard look,” and provided a reasoned elaboration for its determination.
- Courts do not substitute their judgment for the agency’s where the record shows rational environmental review; disagreement or public opposition does not, by itself, invalidate a negative declaration.
- SEQRA review may not omit analysis of reasonably foreseeable impacts that flow from discretionary components embedded in a broader zoning action; deferring such analysis entirely to later permit stages is improper where the zoning framework itself enables additional development.
- When defects are confined to discrete provisions, courts may sever and annul only the offending portions while leaving valid portions in place.

## Conclusion

The court sustained the City’s SEQRA determination for the as-of-right theater development-right transfers and design controls, but annulled the discretionary FAR bonus mechanisms because the City failed to analyze their potential environmental impacts at the time it adopted the zoning amendments.


Matter of Fisher v. Giuliani, 280 A.D.2d 13, 720 N.Y.S.2d 50 (1st Dep’t 2001)