Two Recent Appellate Division Decisions Reject Segmentation Arguments: It Cannot be Segmentation Unless There is a Plan

Two recent Appellate Division decisions addressed segmentation claims and concluded that there cannot be segmentation unless there is a plan. Under SEQRA (the State Environmental Quality Review Act), it is illegal to take a project that may have significant impacts and break it in to smaller parts (segments) for environmental review purposes, each of which taken alone is not likely to have significant impacts. The Fourth Department, in Court Street Development Project, LLC v Utica Urban Renewal Agency (2020 WL 6688830, November 13, 2020) addressed a case where the action subject to environmental review was clearly part of some larger action or series of actions, but the subsequent parts of the series of actions had not been decided. The City was condemning a property for urban renewal. The condemnation was clearly part of a larger plan that included redevelopment of the property and petitioner argued that the City violated SEQRA by breaking it into parts for environmental review. The City’s response was that no decision had been made regarding the next steps and the court agreed that it cannot be illegal segmentation if there is no plan for the next steps. Thus, even though we know there will be next steps, the City can take the property by condemnation and engage in environmental review of that segment, before examining its options for urban renewal and conducting a separate environmental review when it has a specific plan for the property.

The Second Department used essentially the same reasoning in Sandora v City of New York, (186 AD3d 1225 (September 2, 2020). The project set for environmental review was the conversion of two buildings in Ozone Park into a drop-in center and residence for homeless men. Petitioner argued that this was part of a larger plan and the City should not be permitted to segment it and engage in separate environmental review of a group of connected projects. Petitioner pointed to a report entitled, “Turning the Tide on Homelessness in New York City,” as the overall plan that should be subject to a broader environmental review. The court rejected the segmentation argument because, while the Turning the Tide report did indicate a plan to engage in a number of similar projects, it did not identify specific projects. The court reasoned that the environmental review requirement is not triggered until a specific project is proposed.

While these cases do not indicate a change in the law regarding segmentation, it is interesting to note that two projects that are substantially the same in scope and impact may have different levels of environmental review depending on how well the project was planned out. While it may seem counterintuitive, the better planned project will be the one that is subject to greater review.