## Facts

- A local industrial development agency (SIDA) and the City announced a master plan to redevelop roughly 800 acres along a lakefront area, including a large retail complex (the Carousel Landing Project).
- Several companies owned industrial and terminal properties within the targeted project area, including petroleum storage/distribution facilities and a dairy operation.
- SIDA entered a preferred developer agreement with a private developer (Pyramid) for the retail project.
- The agreement provided that SIDA would acquire the owners’ properties for the project, the developer would pay SIDA the value of the properties, and SIDA would use those funds to compensate the owners whose property was taken.
- Property owners proposed alternative development concepts to city officials, but were told the City was bound by the agreement with the preferred developer.
- SIDA issued findings and a determination authorizing condemnation of the owners’ properties.
- The owners brought a special proceeding under EDPL § 207 to annul SIDA’s determination; the trial court dismissed the challenges, and the owners appealed.

## Issues

1. Whether condemning private industrial property to facilitate a privately developed retail complex served a constitutionally sufficient public use, benefit, or purpose.
2. Whether the preferred developer agreement unlawfully delegated or contracted away SIDA’s eminent-domain discretion to a private developer.
3. Whether the statutory scheme authorizing industrial development agencies to exercise eminent domain was facially unconstitutional.
4. Whether SIDA’s SEQRA review was deficient, including whether environmental review was unlawfully segmented from related redevelopment activity.
5. Whether SIDA complied with EDPL § 207 standards governing jurisdiction, procedure, and rationality of the condemnation determination.

## Decision

- The appellate court affirmed the dismissal of the EDPL § 207 proceeding and confirmed SIDA’s condemnation determination.
- The court held the acquisition served a predominant public purpose tied to redevelopment objectives, despite private ownership and operation of the retail project.
- The court rejected the claim that SIDA unlawfully surrendered eminent-domain authority, concluding SIDA retained decision-making responsibility and made its own statutory findings.
- The court rejected the facial constitutional challenge to industrial development agencies’ condemnation authority.
- The court held SIDA satisfied SEQRA and did not engage in improper segmentation because broader redevelopment components were not sufficiently defined to require unified review.
- The court applied the limited, deferential EDPL § 207 review standard and found SIDA acted within its authority and followed lawful procedure.

## Legal Principles

- Under EDPL § 207, judicial review of a condemnation determination is limited to constitutional conformity, statutory authority/jurisdiction, lawful procedure, and whether the taking serves a public use, benefit, or purpose.
- A taking may satisfy the public-purpose requirement even if a private developer is an immediate beneficiary, so long as the project’s predominant objective is public (e.g., economic revitalization and blight reduction).
- A condemning authority may coordinate with private developers through agreements without unlawfully delegating eminent-domain power, provided the agency retains statutory discretion and makes independent determinations.
- A facial constitutional challenge to a condemnation-enabling statute generally fails absent a showing that the statute is incapable of constitutional application.
- Under SEQRA, segmentation is not established where the reviewed action is reasonably treated as a discrete project and other potential related actions are not sufficiently defined or imminent, and where the environmental review is rational and in good faith.

## Conclusion

The court upheld SIDA’s decision to condemn industrial properties for a lakefront retail redevelopment project, concluding the takings served a public purpose, the agency did not unlawfully cede its eminent-domain authority to a private developer, the enabling statute was not facially unconstitutional, and SIDA’s SEQRA process provided a rational basis for proceeding.


Sun Co. v. City of Syracuse Industrial Dev. Agency, 209 A.D.2d 34, 625 N.Y.S.2d 371 (N.Y. App. Div. 4th Dep’t 1995)