## Facts

- In 1985, the Board of Trustees of the Village of Westhampton Beach amended the Village zoning law so that the Village’s only asphalt plant no longer conformed to zoning.
- The asphalt plant continued as a lawful, preexisting nonconforming use.
- In 1994, Suffolk Asphalt Supply, Inc. purchased the property and continued operating the asphalt plant.
- In 2000, the Board adopted a local “phase-out” (amortization) law that would terminate the nonconforming asphalt-plant use unless the owner applied for, and obtained, an extension from the appropriate local board; any extension could not exceed five years.
- Suffolk Asphalt applied for and received the maximum extension and continued to operate for approximately five additional years.
- After the extension period, the Zoning Board of Appeals directed Suffolk Asphalt to cease asphalt-plant operations.
- Suffolk Asphalt brought an action seeking a declaration that the local law terminating the nonconforming use was invalid and unconstitutional as applied.
- Before trial, the parties asked the court to resolve three threshold questions bearing on whether the amortization period provided a constitutionally adequate opportunity to recover the owner’s investment: (1) the time period to be considered, (2) how to measure the investment to be amortized, and (3) whether litigation costs incurred to continue operations could be included in that investment.

## Issues

1. For an as-applied constitutional challenge to an amortization ordinance, what time period should the court consider when evaluating whether the owner had a reasonable opportunity to amortize and recoup its investment?
2. What measure or method should be used to value the owner’s “investment” for purposes of the amortization analysis?
3. May the owner treat litigation expenses incurred in efforts to keep operating the nonconforming use as part of the investment to be amortized?

## Decision

- The court issued pretrial rulings to set the legal and evidentiary standards that would govern the upcoming trial on Suffolk Asphalt’s as-applied constitutional challenge.
- On the relevant time period, the court rejected a view that the reasonableness inquiry is confined to only the final, fixed phase-out window; instead, the court indicated the analysis may consider the broader period during which the use was nonconforming and the owner’s overall opportunity to recoup investment while operating under nonconforming status and under any extensions.
- On investment valuation, the court required an economically based assessment of the owner’s recoverable investment tied to the nonconforming use; the court did not treat tax-depreciation treatment as controlling of the constitutional question, though it could be considered as part of the proof.
- On litigation costs, the court ruled that expenses incurred litigating to resist termination of the nonconforming use are not part of the capital investment that the amortization period is meant to allow the owner to recover.
- The court did not finally determine the ordinance’s constitutionality in these threshold rulings; the merits of the as-applied challenge remained for trial under the standards the court announced.

## Legal Principles

- A municipality may terminate a lawful nonconforming use by an amortization (phase-out) ordinance if the period provided is reasonable under the circumstances.
- The constitutional reasonableness inquiry focuses on whether the owner had a fair opportunity to recoup the investment associated with the nonconforming use before termination is required.
- In evaluating reasonableness, a court may look beyond a narrow phase-out date range and consider the owner’s actual time and opportunity to recover investment while continuing the nonconforming operation, including time operating under any authorized extensions.
- The “investment” relevant to amortization is measured by economic reality tied to the nonconforming use; accounting and tax concepts may be evidence but do not decide the constitutional question.
- Litigation costs incurred to contest enforcement or to continue operating are collateral to the investment in the use and are not included in the amortizable investment.

## Conclusion

Suffolk Asphalt Supply, Inc. v. Board of Trustees of the Village of Westhampton Beach addresses how a court should set the ground rules for trying an as-applied constitutional challenge to a zoning amortization law that phases out a nonconforming asphalt plant. Before trial, the court resolved three threshold questions: it allowed a broader look at the time available for amortization than the final phase-out window alone, required an economically grounded method for valuing the owner’s recoverable investment rather than treating tax depreciation as dispositive, and excluded litigation costs from the investment the amortization period must allow the owner to recoup, leaving the ultimate constitutionality determination for trial.


Suffolk Asphalt Supply, Inc. v. Board of Trustees of the Village of Westhampton Beach, 51 Misc. 3d 303 (2016)