## Facts

- A portion of a 16-story Manhattan building built in 1926 was used exclusively as a warehouse after its 1956 purchase by Morgan Manhattan Storage and Warehouse Company.
- A 1961 zoning change rendered warehouse use no longer permitted as of right, allowing it only as a lawful nonconforming use.
- In connection with a planned 1989 sale that fell through, Morgan ceased warehouse operations and emptied the building; for about 20 months, the premises were virtually unused for warehouse purposes.
- In July 1991, Morgan placed a limited amount of goods back into the building with minimal activity, purportedly to resume the nonconforming warehouse use.
- Chase Manhattan Bank acquired the building in 1992 and was advised by the Department of Buildings (DOB) that the nonconforming use had been reestablished in 1991.
- Toys “R” Us later purchased the basement and first two floors and obtained a DOB permit to convert the space into a retail toy store, relying on continuation/extension of the prior nonconforming status.
- Neighborhood opponents challenged the permit; after DOB declined to revoke it, the Board of Standards and Appeals (BSA) concluded the nonconforming warehouse use had not been preserved and revoked the permit.

## Issues

1. Under New York City Zoning Resolution § 52-61, what standard determines whether a nonconforming use has been “discontinued” for two years: complete cessation or substantial discontinuation of active operations?
2. Whether an owner’s good faith or intent to resume the use affects the discontinuance analysis under § 52-61.
3. Whether the BSA’s determination revoking the permit was supported by substantial evidence and therefore binding on judicial review.

## Decision

- The New York Court of Appeals reversed the lower courts and reinstated the BSA’s determination revoking the building permit.
- The court held that § 52-61 requires only substantial, not total, discontinuation of active nonconforming operations to terminate nonconforming status after the statutory period.
- The court held the owner’s good faith or subjective intent to resume is irrelevant to whether discontinuance occurred.
- Applying substantial-evidence review, the court upheld the BSA’s finding that the 20-month stoppage and later minimal activity did not amount to continued “active operation of substantially all” of the nonconforming warehouse use.

## Legal Principles

- Under NYC Zoning Resolution § 52-61, nonconforming use rights are forfeited when substantially all active nonconforming operations are discontinued for two years; complete cessation is not required.
- Discontinuance under § 52-61 is assessed objectively by actual activity and continuity of operations, not by the owner’s intent or good faith.
- Zoning board determinations must be upheld on judicial review when supported by substantial evidence in the record, and courts should not substitute their view of the facts for the agency’s.

## Conclusion

The court upheld the BSA’s revocation of Toys “R” Us’s permit, ruling that substantial discontinuation of active nonconforming operations for the statutory period ends nonconforming use rights and that minimal, token activity cannot preserve those rights; the owner’s intent does not alter that result.


Toys “R” Us v. Silva, 89 N.Y.2d 411 (N.Y. 1996)