Complaint of Catskill Heritage Alliance v. New York State Department of Environmental Conservation...

8/20/2019 Complaint of Catskill Heritage Alliance v. New York State Department of Environmental Conservation and Crossro…

1/62

STATE OF NEW YORKSUPREME COURT COUNTY OF ALBANY

CATSKILL HERITAGE ALLIANCE, INC; KATHY NOLAN

AS SECRETARY/TREASURER OF THE FRIENDS OFTHE CATSKILL PARK; PUA ASSOCIATES, LLC; ANDBENJAMIN AND IDITH KORMAN, BEVERLYRAINONE, MARY GOULD, KINGDON GOULD III,THORNE GOULD, LYDIA BARBIERI, FRANK GOULD,CANDIDA LANCASTER, ANNUNZIATA GOULD,THALIA PRYOR, MELISSA GOULD AND CALEBGOULD,

Petitioners-Plaintiffs,

v.

NEW YORK STATE DEPARTMENT OFENVIRONMENTAL CONSERVATION ANDCROSSROADS VENTURES, LLC,

Respondents-Defendants.

SUMMONS

Index No. ___________

To the above named Defendants:

You are hereby summoned to answer the complaint in this declaratory

action and to serve a copy of your answer, or, if the complaint is not served with this

summons, to serve a notice of appearance, on the Plaintiff’s Attorney(s) within 20 days

after the service of this summons, exclusive of the day of service (or within 30 days after

the service is complete if this summons is not personally delivered to you within the

State of New York) and in case of your failure to appear or answer, judgment will be

taken against you by default for the relief demanded in the complaint.

Dated: November 13, 2015 BOND, SCHOENECK & KING, PLLC

By:_____________________________Robert H. Feller, Esq.

Attorney for PlaintiffOffice and P.O. Address111 Washington Avenue

Albany, New York 12210-2211Telephone: (518) 533-3000


2/62

TO: New York State Department of Environmental Conservation625 Broadway

Albany, New York 12233-0001

New York State Attorney GeneralOffice of the Attorney GeneralThe Capitol

Albany, NY 12224-0341

Crossroads Ventures, LLCPO Box 466Highmount, NY 12441


3/62



AS SECRETARY/TREASURER OF THE FRIENDS OFTHE CATSKILL PARK; PUA ASSOCIATES, LLC; ANDBENJAMIN AND IDITH KORMAN, BEVERLYRAINONE, MARY GOULD, KINGDON GOULD III,THORNE GOULD, LYDIA BARBIERI, FRANK GOULD,CANDIDA LANCASTER, ANNUNZIATA GOULD,THALIA PRYOR, MELISSA GOULD AND CALEBGOULD,


v.



NOTICE OF PETITION

Index No. ___________

PLEASE TAKE NOTICE that upon the annexed Verified Petition of CatskillHeritage Alliance, Inc.; Kathy Nolan as Secretary/Treasurer of Friends of the Catskill

Park; PUA Associates, LLC; Benjamin and Idith Korman; Beverly Rainone; Mary Gould;Kingdon Gould III; Thorne Gould; Lydia Barbieri; Frank Gould; Candida Lancaster;

Annunziata Gould; Thalia Pryor; Melissa Gould and Caleb Gould (collectively“Petitioners”), verified on the 10th day of November, 2015, an applicable will be made to

Albany County Supreme Court, located at 16 Eagle Street, Albany, NY 12207 onDecember 15, 2015, for an Order and Judgment:

1) Vacating the July 10, 2015 Decision of Respondent Department of EnvironmentalConservation and remanding this matter to an Administrative Law Judge to beadjudicated in accordance with the rules and regulations set forth at 6 NYCRRPart 624;

2) Annulling Ruling #15 in the December 29, 2006 Interim Decision of the DeputyCommissioner, grant CPC/CHA’s motion for reconsideration and remand theissue of community character back to DEC for adjudication before and ALJ;

3) Reopening the comment period of the DSEIS to permit submission of publiccomments on new studies filed after the early comment period expired;

4) Awarding costs and disbursements to the Petitioners-Plaintiffs;5) As against, Respondent-Defendant DEC, award legal fees and expenses

pursuant to the New York State Equal Access to Justice Act, CPLR Article 86


4/62

PLEASE TAKE NOTICE, that pursuant to CPLR § 7804(c), answering papers, ifany, shall be served at leave five (5) days before the aforesaid date of hearing pursuantto CPLR § 7804 and that reply papers shall be served at least one (1) day before theaforesaid date of hearing.

PLEASE TAKE FURTHER NOTICE, that Oral Argument is requested.

Petitioners-Plaintiffs designate Albany County as place of trial. The basis ofvenue is place of business of the defendants.

Dated: November 10, 2015 Respectfully submitted,

BOND, SCHOENECK & KING, PLLC

By: __________________________Robert H. Feller, Esq.

Attorneys for Petitioners-PlaintiffsOffice and P.O. Address22 Corporate Woods Blvd., Suite 501

Albany, NY 12211-2503Telephone: (518) 533-3000Facsimile: (518) 533-3299

TO: New York State Department of Environmental Conservation

625 Broadway Albany, New York 12233-0001

New York State Attorney GeneralOffice of the Attorney GeneralThe Capitol

Albany, NY 12224-0341

Crossroads Ventures, LLCPO Box 466Highmount, NY 12441


5/62

350630.4 11/10/2015



AS SECRETARY/ TREASURER OF THE FRIENDS OFTHE CATSKILL PARK; PUA ASSOCIATES, LLC; ANDBENJAMIN AND IDITH KORMAN, BEVERLYRAINONE, MARY GOULD, KINGDON GOULD III,THORE GOULD, LYDIA BARBIERI, FRANK GOULD,CANDIDA LANCASTER, ANNUNZIATA GOULD,THALIA PRYOR, MELISSA GOULD AND CALEBGOULD,


v.



VERIFIED PETITIONAND COMPLAINT

Index No.

This is a combined declaratory judgment action and proceeding pursuant to

Article 78 of the Civil Practice Laws and Rules (CPLR) to challenge the July 10, 2015

decision (the “Decision”) of the Commissioner of the New York State Department of

Environmental Conservation (“DEC”) in relation to the Applications of Respondent

Crossroads Ventures, LLC (“Crossroads” or the “Applicant”) for permits to construct and

operate a proposed development to be known as the Belleayre Resort at Catskill Park

in the towns of Shandaken, Ulster County and Middletown, Delaware County in close

proximity to the state-owned and operated Belleayre Ski Center (the “AIP Project”). The

Decision held that there were no issues that required adjudication pursuant to DEC

permit hearing rules, 6 NYCRR Part 624. It granted the motion filed by the DEC Staff

(“Staff”) to cancel the then-pending adjudicatory hearing in that matter and it denied an


6/62

2

outstanding motion filed by Petitioner Catskill Heritage Alliance, Inc. (“CHA”) seeking

reconsideration of the December 29, 2006 Interim Decision of Deputy Commissioner

Carl Johnson (the “Interim Decision”) which determined that issues related to the

Original Project’s impact on community character did not require adjudication.

The Decision denied motions to reopen the issues conference and petitions for

party status even though those motions and petitions were not fully submitted. In a

footnote, the Decision denied Petitioner Friends of the Catskill Park (FCP) motion to

strike part of Staff’s reply papers. The Decision remanded further proceeding to the

Staff with directions to issue a final environmental impact statement (FEIS) for the AIP

Project pursuant to the State Environmental Quality Review Act (SEQRA); to prepare

and issue a Findings Statement, also pursuant to SEQRA; and to issue the required

DEC permits to the Applicant as proposed in the draft permits consistent with the

Decision.

PARTIES

1. Catskill Heritage Alliance, Inc. (“CHA”) is a grassroots New York not-for-profit

corporation dedicated to preserving the harmony between people and wilderness

in the Central Catskills.

2. CHA was granted full party status to the DEC adjudicatory permit hearing

proceeding which resulted in the Decision.

3. CHA actively participated in the adjudicatory hearing and in the environmental

review process for both the Original Project and the AIP Project pursuant

SEQRA.


7/62

3

4. One or more members of CHA live in close proximity to the AIP Project and the

Decision causes those members environmental harm that differs from the public

at large.

5. Friends of the Catskill Park (“FCP”) is an unincorporated volunteer community-

based organization based in Shandaken, N.Y. It was formed in response to the

Original Project to ensure that the impacts would not adversely affect the

residents of the community or the quality of life in the community. Its members

include residents of the central Catskill area to be directly impacted.

6. The Secretary/Treasurer of FCP is Kathy Nolan.

7. FCP was granted full party status to the DEC adjudicatory permit hearing

proceeding which resulted in the Decision.

8. FCP actively participated in the participated in the adjudicatory hearing and in the

environmental review process for both the Original Project and the AIP Project

pursuant to the SEQRA.

9. One or more members of FCP live in close proximity to the AIP Project and the

Decision causes those members environmental harm that differs from the public

at large.

10. PUA Associates, LLC (“PUA”) is a New York limited liability corporation and is

the owner of the Galli-Curci Estate (the “G-C Estate”), a property which is listed

on both the National and State Registries of Historic Places.

11. Representatives of PUA actively participated in the SEQRA process for the AIP

Project.

12. PUA filed a petition for party status in the DEC administrative proceeding.


8/62

4

13. The property owned by PUA is in close proximity to the AIP Project and the

Decision causes it environmental harm that differs from the public at large.

14. Benjamin and Idith Korman (hereinafter, collectively “Korman”) are married

individuals that reside part-time at the G-C Estate.

15. Benjamin Korman is the property manager for PUA.

16. Both Benjamin and Idith Korman actively participated in the SEQRA process for

the AIP Project.

17. The Decision causes them environmental harm that differs from the public at

large.

18. Beverly Rainone (“Rainone”) is an individual residing at 316 Galli Curci Road,

Highmount, New York 12441, which is in close proximity to the AIP Project.

19. Mary Gould, Kingdon Gould III, Thorne Gould, Lydia Barbieri, Frank Gould,

Candida Lancaster, Annunziata Gould, Thalia Pryor, Melissa Gould and Caleb

Gould (hereinafter referred to collectively as the “Gould Family”) are individuals

who collectively own land adjacent to the Crossroads Ventures Highmount

Resort site along Route 49A and along the Fleischmanns Heights Road. They

are part time residents in the Dry Brook Valley south of the resort.

20. The New York State Department of Environmental Conservation (DEC) is a

governmental agency charged with the protection of the environment.

21. DEC served as lead agency under SEQRA for both the Original Project and for

the AIP Project.

22. DEC is also responsible for issuing several permits required for the AIP Project’s

construction and operation.


9/62

5

23. The Decision that is the subject of this Verified Petition was issued by Joseph

Martens, in his capacity as Commissioner of DEC.

24. Upon information and belief, Crossroads Ventures, LLC (Crossroads or the

Applicant) is a New York State limited liability corporation.

25. Crossroads is the sponsor of the AIP Project and is the applicant for permits to

build and operate the project.

VENUE

26. The venue is Albany County pursuant to CPLR § 7804(b) and/or CPLR § 506(b).

STATEMENT OF FACTS

27. In 1999, Respondent Crossroads proposed a major new resort with two major

components in the immediate vicinity of the state-owned Belleayre Ski Center

(“Belleayre”) in the towns of Shandaken, Ulster County, and Middletown,

Delaware County (Collectively referenced to the “Original Project”) to be known

as the Belleayre Resort at Catskill Park.

28. The Original Project had two principal development areas – the Big Indian

Plateau (east of Belleayre) and Wildacres (at the base of the mountain, west of

Belleayre). A small residential subdivision was also proposed in Highmount

(further up the mountain, west of Belleayre).

29. The Original Project was to consist of:

a. Big Indian Plateau (East of Belleayre Ski Resort)


10/62

6

i. A development of approximately 331 acres of Big Indian Plateau,

east of the Belleayre Ski Resort. It would consist of the Big Indian

County Club, including a 150-room hotel with two restaurants, a

ballroom, and spa (known as the Big Indian Resort and Spa).

Adjacent to the hotel would be an 18-hole championship golf

course.

ii. 55 buildings containing 95 detached lodging units to be built east of

Giggle Hollow. There would be a satellite golf maintenance

building and a wastewater treatment facility.

iii. Development of an area known as Belleayre Highlands to the west

of Giggle Hollow. This development would consist of 22-four unit

buildings containing a total of 88 detached lodging units. An

existing mansion would be preserved and used as a social and

activities center. Recreational amenities such as swimming and

tennis would be provided. Existing outbuildings associated with the

mansion would be maintained and adaptively reused as offices and

storage areas.

b. Wildacres (West of Belleayre, base of the mountain)

i. Development of approximately 242 acres consisting of a 250-room

hotel complex together with shops, two restaurants, a conference

center and a spa;

ii. An 18-hole championship golf course;

iii. 21 buildings containing 189 detached lodging units.


11/62

7

iv. A children’s center, lodging unit clubhouse, a gold maintenance

building complex, a satellite golf maintenance building, a

wastewater treatment plant and a potable water treatment plant.

v. Renovating the existing Marlowe Mansion which would be used as

a restaurant.

c. Highmount (West of Belleayre, up the mountain)

i. A 21-lot residential subdivision with lots ranging from approximately

2-16 acres, west of the former Highmount Ski Area.

ii. The Highmount Ski Area would be used as a wilderness center.

30. Several involved agencies vied to become lead agency for purposes of SEQRA.

31. In a decision issued on March 20, 2000, the Commissioner of DEC determined

that DEC should act as lead agency for the proposed project.

32. On or about December 10, 2003, a draft environmental impact statement (the

2003 DEIS) was accepted for public review.

33. Thereafter, the review of the draft 2003 DEIS and the related permits pending

before DEC were referred to an adjudicatory hearing before the Office of

Hearings and Mediation Services (OHMS).

34. An Administrative Law Judge (ALJ) was assigned to the case. He scheduled a

series of issues conferences further to determining what issues were

“substantive and significant” therefore requiring adjudication pursuant to the DEC

rules governing permit hearing; 6 NYCRR Part 624 (Part 624).

35. Pursuant to 6 NYCRR 624.4, the ALJ issued rulings which determined the issues

requiring adjudication and party status on September 7, 2005.


12/62

8

36. That ruling was appealed to the Commissioner. On December 29, 2006, then-

Deputy Commissioner Carl Johnson, the Commissioner’s designee, issued an

interim decision.

37. Under Part 624, there is no provision for any further administrative appeal.

38. Thereafter, the parties attempted to negotiate a settlement of the contested

matters. Starting in 2007, then-Governor Eliot Spitzer actively participated in

these negotiations.

39. On or about September 5, 2007, some of the parties to the adjudicatory hearing

executed a document known as the Agreement in Principal (AIP). A copy of the

main text of the AIP is attached hereto as Exhibit “A” to this Verified

Petition/Complaint.

40. None of the Petitioners-Plaintiffs in this proceeding who were then parties to the

adjudicatory hearing executed the AIP.

41. The AIP was also executed by the Governor of the State of New York.

42. The AIP contains numerous provisions requiring DEC to take action which it is

not otherwise required to take by either statute or rule.

43. The AIP describes the AIP Project, which differs significantly from the Original

Project.

44. For example, the development at Big Indian was abandoned and Crossroads

agreed to sell the large tract of land to New York State, which would

automatically be preserved as part of the State Forest Preserve pursuant to

Article XIV of the State Constitution.


13/62

9

45. Several of the components that were originally proposed to be built at the Big

Indian site were now proposed to be built at Highmount, a site where minimal

development was proposed as part of the Original Project.

46. As part of the overall agreement reached under the AIP, the State agreed to

update the Unit Management Plan (“UMP”) for Belleayre.

47. Many of the changes to the UMP negotiated as part of the AIP would be highly

favorable to the private development.

48. For instance, the AIP calls for ski-in ski-out facilities to be linked to the private

development.

49. The AIP Project includes the following key elements that are totally different than

those proposed for the Original Proposal:

a. the development of a Highmount Spa, lodge buildings and detached

lodging units with ski-in, ski-out facilities connected to the former

Highmount Ski Center and with a ski lift and ski trails that will provide

Highmount Spa guests with access to the state-owned Belleayre Ski

Center (AIP at ¶¶16-17);

b. the use of sewage treatment plants owned and operated by the New York

City Department of Environmental Protection (“DEP”) to support the

development at Wildacres and Highmount (AIP at ¶23);

d. the revision of unit management plan for the Belleayre Ski Resort and the

construction of significant capital improvements at the Belleayre Ski

Resort, including the ski lift, ski trails and snow making equipment to

accommodate the private development (AIP at ¶¶28-29);


14/62

10

e. the sale of lands from Crossroads through an intermediary to the State of

New York and the deed restriction of other lands owned by Crossroads

(AIP at ¶¶24-27); and

f. the upgrading of trailheads and increased usage of state-owned lands

under the jurisdiction of the DEC (AIP at ¶39).

50. At the time the AIP was executed, neither the components of the AIP Project that

differed from the Original Project nor the agreed upon modifications to the UMP

for Belleayre had been subjected to any public review.

51. After the AIP was executed, the DEC issued a draft scope for a supplemental

EIS. The supplement EIS was to contain three components – (1) environmental

analysis of changes to the private development project; (2) environmental

analysis of a proposed UMP which would implement the changes contemplated

in the AIP for the state-owned Belleayre Ski Center; and (3) environmental

analysis of the cumulative impacts.

52. DEC provided an opportunity for public input on the draft scope for all three

components.

53. Although the Petitioners-Plaintiffs provided comments on the scope which

requested the examination of alternatives that differed from those agreed upon in

the AIP, the DEC did not include any of the suggested alternatives in the final

scope.

54. A final scope was issued by DEC on February 28, 2008.

55. On March 28, 2008, Petitioners-Plaintiffs CHA and FCP filed a motion in the

context of the DEC adjudicatory proceeding seeking the recusal of the


15/62

11

Commissioner. The motion alleged that because the Governor executed the

AIP and the Commissioner serves at the pleasure of the Governor, it would be

inappropriate for the Commissioner to rule on issues relating to the AIP Project.

A copy of the motion is attached as Exhibit “B” to the Petition.

56. The motion was based on institutional conflicts that the Commissioner had

arising out of the grand bargain reached in the AIP which would prevent him from

objectively ruling on the AIP project.

57. The motion also argued that the terms of the AIP included findings that either

were or could be relevant to the approval of the AIP Project.

58. For example, the AIP concluded that “the modified project represents a new,

lower impact, alternative which minimizes or avoids the potential for significant

environmental impacts identified by the several of the Parties and others during

the public comment period and issues conference and which the State has

determined will provided significant economic benefits to the Central Catskill

Region.” (AIP, ¶ 10).

59. Such findings, which legally bound the AIP signatories were highly relevant to the

SEQRA findings that DEC would be required to make.

60. In addition, in exchange for the road map for project approval, Crossroads

agreed to convey the large tract on land known as the Big Indian to the State to

be incorporated into the Forest Preserve.

61. The fact that the AIP was executed by the Governor and that the Commissioner

served at the pleasure of the Governor raised concerns that decisions related to

the project approval might be politicized.


16/62

12

62. The motion sought to ensure that the processing of the applications for the

modified project would be done in accordance with established agency rules and

procedures and that any decisions would be made by officials have no stake

(political or otherwise) in the project’s success.

63. By Decision dated April 29, 2009, the Commissioner denied the motion. A copy

of his decision is attached as Exhibit “C” to the Petition.

64. In March of 2013, DEC issued a draft supplemental EIS (“DSEIS”). A period

was provided to submit public comments thereon.

65. After this public comment period was closed, Respondent Crossroads submitted

at least four (4) new reports to Respondent DEC. Because these reports were

submitted after the public comment period had closed, they were never subjected

to public comment or scrutiny.

66. As the major new components of the AIP Project were proposed at the

Highmount site, the comments submitted by the Petitioners-Plaintiffs focused to a

large extent on these new features.

67. In September of 2014, DEC staff issued a “preliminary final” EIS. This document

contained, among other things, a response to the public comments.

68. Contemporaneously, DEC staff filed a motion in the context of the pending

adjudicatory proceeding requesting that the adjudicatory hearing be cancelled.

That motion was directed to the Assistant Commissioner in charge of OHMS. A

copy of that motion, together with supporting papers, is attached as Exhibit “D”.


17/62

13

69. The motion was submitted to the Assistant Commissioner for OHMS, not to the

assigned ALJ as is required by the DEC hearing regulation. (See 6 NYCRR §

624.6(c)(1))

70. The grounds for relief as stated in the Staff motion was “...[T]he issues

determined to be subject to adjudication pursuant to the Interim Decision of the

Deputy Commissioner dated December 29, 2006, in the above referenced

matter, have been addressed by modifications to the project as described in the

Final EIS and Cumulative Impact Statement for the Belleayre Resort at Catskill

Park or are no longer relevant and staff have otherwise determined that there are

no substantive and significant issues requiring an adjudication under Part 624 of

6 NYCRR with respect to the modified project.”

71. On information and belief, in the entire history of DEC adjudications, neither staff

nor any other party has never filed such a motion. This motion sought the

cancellation of a hearing where the commissioner has issued a final non-

appealable ruling holding there were issues for adjudication. The motion also

sought any potential new issues occasioned by the project’s redesign to be

dismissed in the context of a motion rather than an issues conference. Both of

these elements are unprecedented in DEC hearing practice.

72. On information and belief, absent an agreement of the parties, a DEC

adjudicatory hearing has never been cancelled when there is a commissioner’s

decision finding issues for adjudication, so long as those issues are not moot.

73. On information and belief, there has never been a case in DEC administrative

hearing practice where the question of whether there are issues for adjudication


18/62

14

was determined in the context of a motion rather than in the context of an issues

conference.

74. Although the hearing rules allow parties to file motions, there are no provisions

that establish standards for ruling on a motion to cancel a hearing. By contrast,

there are very specific rules and jurisprudence associated with petitions for party

status, determinations regarding adjudicability of issues, and conducting and

reopening issues conferences. (See generally 6 NYCRR § 624.4; see id. §

624.5(d)(“Rulings on party status will be made by the ALJ … (emphasis added))

75. Staff supported its application with an affidavit from Daniel Whitehead and a

Memorandum of Law. Both documents focused entirely on the issues that were

set for adjudication in 2006.

76. With respect to any new issues that might arise due to the major redesign of the

project, Staff’s submittals merely state there are no substantive and significant

issues. No factual basis for that conclusion is provided.

77. The Assistant Commissioner issued a memorandum dated September 29, 2014

(the “September 29 Memo”) a copy of which is attached as Exhibit “E”.

78. The memorandum provided direction on a number of items related to the pending

motion. For example, the September 29 Memo:

a. Established a date by which all parties were to respond to the staff motion.

b. Ruled that the Department Staff, as the proponent of the motion, had the

burden of proof and granted it the right to file a reply to any responses to

its motion.


19/62

15

c. Directed that the responses to the Staff motion should state positons on

what issues that were set for adjudication in 2006 were rendered moot or

were adequately addressed by a project modification. With respect to

issues that did neither, directed that the parties provide support for the

contention that the issue continued to be substantive and significant.

d. Directed that, in the event a party contended that a new issue was raised

by the modified proposal, it should explain how that issue is substantive

and significant and present an offer of proof in support.

79. With respect to items (c) and (d), the memorandum did not merely require the

party to provide rebuttal to the Staff motion but rather it required them to provide

affirmative proof to support the proposition that the issue (existing or new) was

substantive and significant.

80. The September 29 Memo also directed that any parties who signed the AIP

identify whether the project was inconsistent with the terms of the AIP. It did so

notwithstanding the fact compliance with the AIP is wholly beyond DEC

jurisdiction and is completely irrelevant to whether there were any issues

requiring adjudication.

81. There is no authority in DEC hearing rules to require parties opposing a motion to

provide affirmative proof. Quite to the contrary, the rules place the burden of

proof on the sponsor of the motion. (See 6 NYCRR § 624.9[b][4] [“The burden of

proof to sustain a motion will be on the party making the motion”]).

82. The September 29 Memo was directed only to the existing parties to the

proceeding and made no provision for the possibility of other parties participating


20/62

16

the administrative hearing. It excluded several individuals who were remote

from the main component of the Original Project and had expressed interest in

participating in future administrative proceedings because they either owned or

resided at properties in close proximity to the vastly-expanded Highmount

development.

83. For example, it excluded Petitioner-Plaintiff Korman – a resident of the G-C

Estate, a property that is listed on the registries of both the State and Federal

Historic Properties and which is directly across the street from the entrance to the

newly-proposed Highmount development and immediately adjacent to the

proposed conference center.

84. It also excluded Petitioner-Plaintiff Rainone and Petitioner-Plaintiff Gould Family;

both of whom live in close proximity to the AIP Project, and both of whom

petitioned for party status.

85. After the Assistant Commissioner issued the September 29 Memo, counsel for

Petitioner-Plaintiff Korman sought clarification of the September 29 memo by

letter dated October 2, 2014. A copy of this letter is attached as Exhibit “F”.

86. The letter stated that no one other than the assigned ALJ had the authority to

make rulings or otherwise conduct the adjudicatory hearing. It questioned why

the Staff motion was not submitted to the assigned ALJ and why someone other

than the assigned ALJ was making rulings on the conduct of the hearing. See id.

87. No response was ever received to this letter.

88. On October 5, 2014, the Assistant Commissioner issued another memorandum

(the “October 5 Memo”) which stated, among other things, that individuals or


21/62

17

entities who were not parties in the prior proceedings could not participate with

respect to the Staff motion unless they submitted a petition for party status that

petition was subsequently granted the October 5 memo. A copy of that

memorandum is attached as Exhibit “G”.

89. On or around November 17, 2014 the parties filed their answers to the Staff

motion.

90. On or around November 17, 2014, PUA Associates, the owner of the Galli-Curci

Mansion, Rainone and the Gould Family filed petitions to intervene in the

adjudicatory proceeding. The petitions were directed to the assigned ALJ,

Richard Wissler.

91. On or around November 17, 2014, FCP filed a motion to reopen the issues

conference. The motion was directed to the assigned ALJ, Richard Wissler. A

copy of this motion, together with supporting papers, is attached as Exhibit “H”.

92. On or around November 17, 2014, CHA filed a cross-motion to reopen the issues

conference. The motion was directed to the assigned ALJ, Richard Wissler. A

copy of this cross-motion, together with supporting papers, is attached as Exhibit

“I”.

93. On November 19, 2014, the Assistant Commissioner sent an email stating that

the Commissioner had directed that the further processing of these petitions

were indefinitely suspended until after the submission of the Department Staff’s

reply. A copy of that e-mail is attached as Exhibit “J”.

94. On December 3, 2014, counsel for Petitioner-Plainitiff FCP sent a letter to

Commissioner Martens stating that the DEC hearing rules vested the authority to


22/62

18

conduct the hearing, rule on motions and petition solely with the ALJ. A similar

letter was sent by counsel for Plaintiff-Petitioner CHA on December 4, 2014.

Copies of these letters are attached as Exhibit “K”.

95. The letter requested that all rulings on pending motions and petitions be made by

the presiding ALJ and that another ALJ be assigned if ALJ Wissler was unable or

unavailable to serve.

96. The letter pointed out that Governor’s Executive Order No. 131 of 1989 (“EO

131”) directs that “every agency insure its proceedings are impartial, efficient,

timely, expert and fair.”

97. EO 131 has been continued by every Governor since its original issuance, and is

currently in effect.

98. In its preamble, EO 131 states that “administrative adjudication must meet due

process standards and should resolve disputes in a manner that is fair and

appears fair to the public.”

99. It also states that “the fairness of administrative adjudication and the appearance

of fairness are particularly important when a state agency is a party to the

administrative proceeding.”

100. EO 131 also directs each State Agency to develop an ‘adjudication plan’

to help ensure that the objectives set forth in EO 131 are achieved. A copy of the

adjudication plan adopted by DEC in response to EO 131, which incorporates EO

131, is attached hereto as Exhibit “L”.


23/62

19

101. In this subject case, not only is the State a party to the proceeding but the

Governor himself, on behalf of the State of New York, executed a key document

(the AIP) governing the redesign of the entire project.

102. Notwithstanding the directions of the EO 131 and its particular applicability

to this case where the State is involved in multiple and potentially conflicting

roles, Respondent DEC chose the occasion of this project to completely

circumvent the requirements of its own hearing rules and to eliminate the role of

the ALJ.

103. Moreover, on information and belief, the procedures employed by DEC in

this case have never been used in the history of the agency’s administrative

hearing process.

104. Those procedures were not only absent from DEC’s hearing rules, but

were in direct violation and/or contradiction of those rules.

105. The DEC made all of these “adjustments” to its hearing process without

providing prior notice to any of the parties nor any opportunity for those parties to

be heard on the use of these unprecedented procedures.

106. On December 4, 2014, Petitioner CHA sent a letter to Commissioner

Martens expressing similar concerns. In addition, CHA cited case law

prohibiting officials responsible for hearing appeals from interfering with the

independent adjudicatory of fact. A copy of this letter is attached as Exhibit “M”.

107. The letter pointed out that, the DEC rules provide an as-of-right appeal to

the Commissioner on any rulings on issues or party status. The letter pointed


24/62

20

out that it was improper for an appellate authority to interfere in the deliberations

of the original trier of fact.

108. No response was ever received to either FCP’s December 3 letter or

CHA’s December 4 letter.

109. On December 8, 2014, Department Staff filed reply papers related to its

motion to cancel the adjudicatory hearing.

110. The Staff reply papers contend that the other parties have the burden of

proof to demonstrate there are issues for adjudication notwithstanding the fact

that the Assistant Commissioner’s September 29, 2015 memorandum stated

unequivocally that the Staff had the burden of proof on all issues related to the

motion and, in fact, provided the Staff the opportunity to file reply papers based

on that very premise. The Assistant Commissioner denied any opportunity for

other parties to file reply papers based on the fact that the Department Staff, not

they, bore the burden of proof.

111. Although the November 19, 2015 e-mail from the Assistant Commissioner

indicated that the Commissioner had suspended the timeframes in the DEC

hearing rules for responding to all motions for party status and reconvening the

issues conference pending the Staff reply filing, no dates for filing responses to

these motions were ever established.

112. On December 17, 2014, FCP filed a motion to strike the portion of the

DEC Staff reply which raised a new basis to oppose the adjudication of aesthetic

impacts to the Galli-Curci Estate for first time in its reply pleadings. The motion


25/62

21

was filed with the assigned ALJ, Richard Wissler. A copy of that motion, together

with supporting papers, is attached as Exhibit “N”.

113. On December 22, 2014, the Assistant Commissioner sent a memorandum

to the parties which indicated, for the very first time, that the proceeding was

“before the Commissioner and not before the ALJ.” No reason was provided for

this significant change from the requirements of Part 624. A copy of this

Memorandum is attached hereto as Exhibit “O”.

114. All of the filings to the Staff motion had already been submitted when the

Assistant Commissioner stated that the pending motions and petition would be

ruled upon by the Commissioner, and not the assigned ALJ.

115. Notwithstanding the multiple inquiries of the parties and letters quoting the

hearing rule requirements for a presiding ALJ, this was the first time in the almost

four months that the Staff motion was pending that there was any statement

regarding who was presiding.

116. The December 22 memorandum provided no citation to the hearing rules

or to any other authority permitting this procedure nor did it provide any reason

for not following the requirements of the hearing rules or EO 131.

117. The memorandum also stated that no further motions would be permitted

in this proceeding without leave of the Commissioner. The hearing rules do not

require a party to get permission prior to filing a motion. The memorandum

provides no citation to the hearing rules or any other authority for imposing this

requirement. Moreover, it provides no reason for doing so.

118. Responses to FCP’s motion to strike were filed on December 29, 2014.


26/62

22

119. FCP filed a reply on February 24, 2015.

120. On or about July 1, 2015, Commissioner Martens announced that he was

resigning effective July 23, 2015.

121. On July 10, 2015, Commissioner Martens issued a decision granting the

staff motion and directing that the EIS be finalized and that all permits be issued

consistent with his decision. A copy of the Decision is attached hereto as Exhibit

“P”.

122. Although no schedule was ever established for the petitions for party

status and the motion to reopen the issues conference, these requests were

denied in the Decision.

123. The motion to strike was denied without any stated basis by the

Commissioner in a footnote to his July 10, 2015 Decision.

124. On or around September 2, 2015 the Department Staff issued a notice of

adoption of a final EIS.

AS AND FOR A FIRST CAUSE OF ACTION:

THE DECISION WAS PROCEDURALLY DEFECTIVE BECAUSE DECREGULATIONS REQUIRE THE STAFF MOTION BE RULED ON BY AN ALJ

IN THE FIRST INSTANCE, NOT THE COMMISSIONER. WITH LIMITEDEXCEPTIONS NOT RELEVANT HERE, THE COMMISSIONER’S AUTHORITY

WITH RESPECT TO DEC ADJUDICATORY HEARINGS IS APPELLATE INNATURE

125. Petitioners-Plaintiffs repeat and reallege the allegations made in

paragraphs “1” through “124” of this Verified Petition/Complaint as though each

paragraph was fully stated herein.

126. DEC’s own hearing procedure regulations provide that “[m]otions and

requests prior to the hearing must be filed in writing with the ALJ…During the


27/62

23

course of the hearing, motions may be made orally except where otherwise

directed by the ALJ. If no ALJ has been assigned to the case, the motion must

be filed with the Chief ALJ of the Office of Hearings.” (6 NYCRR § 624.6(c)(1)

(emphasis added)).

127. There is no provision in the hearing procedures that allows for motions of

any sort to be made to or decided by the Commissioner or the Assistant

Commissioner.

128. To the contrary, Part 624 limits the Commissioner’s role in the permit

hearing process to an appellate one. (See 6 NYCRR § 624.8(d)). Pursuant to

the rules, the Commissioner’s role is to review appeals of decisions issued by

ALJ’s, not to make decisions in the first instance.

129. On information and belief, in the history of OHMS, there has never been a

single case where a ruling whether adjudicable issues exist or a petition for party

status has been made by the Commissioner in the first instance. In every case,

the ruling has been made an ALJ.

130. Respondent DEC acted in a manner that was arbitrary and capricious, and

in violation of its own hearing procedures as set forth in 6 NYCRR Part 624 and

Executive Order 131.

AS AND FOR A SECOND CAUSE OF ACTION

THE COMMISSIONER IMPROPERLY WAIVED THE REQUIREMENT THATTHE STAFF MOTION BE RULED UPON BY AN ALJ





28/62

24

132. In the Decision, the Commissioner states that,

To the extent assertions are made that the regulations requiresubmission of staff’s motion to an ALJ, the hearings regulationsthemselves expressly provide that “[t]o avoid prejudice to any party

…. any … rule may be modified by the commissioner uponrecommendation of the ALJ or upon the commissioner’s owninitiative (6 NYCRR 624.6(g)). Exhibit P at page 12. ExecutiveOrder No. 131 protects the role of the independent ALJ and the

Adjudication Plan adopted by DEC in response to the ExecutiveOrder also reinforces that independence.

133. The provisions in Part 624 that require that motions be decided by ALJs is

a key guarantor of fairness and due process to the parties, particularly those that

are not aligned with the interests of the State.

134. No party had requested that any rule in Part 624 be waived.

135. The Commissioner waived the rule sua sponte and without providing any

notice to the parties or an opportunity to be heard.

136. In waiving the rule, the Commissioner held that “…[I]t is, of course,

prejudicial to require an applicant to bear the expense and delay of an adjudicatory

hearing if all proposed issues have been satisfactorily addressed in the record.”

(Exhibit P at p. 12).

137. He made this finding without providing any notice of his intent to waive

the rule or an opportunity to the parties to be heard on the issue of waiver.

138. The role of the ALJ in DEC adjudicatory hearings is fundamental as a

guarantor of a fair and impartial hearing and this ruling did away with this

protection without providing any notice or opportunity to be heard.

139. Petitioners-Plaintiffs CHA and FCP had no opportunity to contest whether the

applicant would be prejudiced under these circumstances or to demonstrate

whether they would be prejudice by the waiver.


29/62

25

140. The waiver by the Commissioner is a violation of fundamental procedural

due process rights, the regulations in Part 624 and the terms of Executive Order

No. 131, including DEC’s Adjudication Plan adopted thereunder.

AS AND FOR A THIRD CAUSE OF ACTION:

THE PROCEEDING WAS FLAWED IN THAT THE PARTIES WERE ONLYINFORMED THAT THE STAFF MOTION WOULD BE RULED UPON BY THE

COMMISSIONER AFTER ALL SUBMISSIONS WERE MADE




142. DEC rules provide that the ALJ will rule on all motions. (See 6 NYCRR §

624.6[c]).

143. The Petitioners-Plaintiffs made all of their filings in opposition to the Staff

Motion based on those provisions.

144. The Petitioners-Plaintiffs followed the rules and submitted all responses to

the motion to the assigned ALJ.

145. Petitioners-Plaintiffs repeatedly raised the question of the potential

usurpation of the role of the ALJ during the course of these proceedings.

146. Each time they were raised, these concerns were ignored.

147. On December 17, 2014, FCP filed a motion with the ALJ asking that

certain portions of the Staff’s reply papers be struck.

148. Shortly thereafter, the Assistant Commissioner informed the parties for the

very first time that this “proceeding was before the Commissioner, not the ALJ.”


30/62

26

No reason was cited by the Assistant Commissioner for handling the Staff motion

this way nor did he cite to any authority for doing so.

149. In addition, the Assistant Commissioner informed the parties that, contrary

to the requirements of Part 624, any future motions would require the

Commissioner’s permission before they could be filed.

150. This rule was applied without any party requesting such relief.

151. This rule was applied without any party having an opportunity to provide

arguments in opposition to this procedure.

152. This same rule was not applied to the Staff when it made its motion to

cancel the adjudicatory hearing.

153. When the Assistant Commissioner issued his memorandum, all authorized

filings by the Petitioners-Plaintiffs had been made.

154. During the entire period in which the Petitioners-Plaintiffs were responding

to the Staff motion, they understood that the Part 624 rules applied. All filings

were made under this assumption.

155. If the OHMS and the Commissioner had determined to amend and modify

the Part 624 requirements as they applied to this proceeding, due process

requires that the parties be informed prior to making their filings.

156. If OHMS and the Commissioner had determined to amend and modify the

Part 624 requirements as they applied to this proceeding, due process requires

that the parties be provided notice of intent to do so and the opportunity to be

heard prior to implementing such drastic changes.


31/62

27

157. The failure of the OHMS and the Commissioner to notify the parties of

these changes prior to filing their responses and the failure to provide any notice

and opportunity to be heard before these drastic changes were implemented is a

violation of substantive and procedural due process.

AS AND FOR A FOURTH CAUSE OF ACTION:

THE DECISION VIOLATES DEC REGULATIONS IN THAT IT DISPENSESWITH THE ADJUDICATION OF MATTERS IN CONTROVERSY THAT WEREPREVIOUSLY SET FOR ADJUDICATION IN AN IMPERMISSIBLE MANNER




159. On December 29, 2006, then-Deputy Commissioner Carl Johnson, on

behalf of the Commissioner, issued an interim decision which identified

numerous issues for adjudication in the Matter of the Application of Crossroads

Ventures for Permits to Construct and Operate a Proposed Development to be

Known as the Belleayre Resort .

160. Under the DEC hearing regulations, the Interim Decision represents a final

non-appealable agency ruling on the issues set for adjudication in the matter.

161. Under the DEC hearing regulations, the only circumstance under which an

issue identified by the Commissioner can be resolved without adjudication is

where all the parties to the adjudication reach a stipulation of that issue.

162. Petitioners-Plaintiffs CHA and FCP were full parties to the adjudicatory

hearing in Matter of the Application of Crossroads Ventures for Permits to

Construct and Operate a Proposed Development to be Known as the Belleayre


32/62

28

Resort . At no point did either Petitioner-Plaintiff stipulate to settle any of these

issues.

163. The agency has also ruled in administrative decisions interpreting this

rule that issues set for adjudication that are made moot by subsequent project

modification do not need to be modified. In their Memoranda of Law, the

Petitioners-Plaintiffs acknowledged this exception and did not contest it.

164. On information and belief, in the decades of DEC administrative permit

hearings there is not a single instance where an issue set for adjudication by a

decision of the Commissioner was not adjudicated unless that issue was either

(a) resolved by stipulation of all the parties or (b) rendered moot by subsequent

project modifications.

165. A number of specifically identified issues were set for adjudication in the

Matter of Crossroads by the Deputy Commissioner’s December 29, 2006 Interim

Decision. None of these issues were resolved by stipulation of all the parties.

Although the issues relative exclusively to the development at the Big Indian

Plateau are moot, those involving Wildacres are not moot.

166. Nonetheless, the Decision challenged in this lawsuit unilaterally ruled that

these issues, and others relating to the modified project, did not require

adjudication. The Commissioner simply dismissed them.

167. This ruling is inconsistent with the requirements of Part 624 and prior

agency precedent.


33/62

29

AS AND FOR A FIFTH CAUSE ACTION:

THE COMMISSIONER ERRED IN GRANTING STAFF’S MOTION AS IT WASDEFECTIVE AS A MATTER OF LAW




A. ISSUES SET FOR ADJUDICATION IN THE 2006 INTERIMDECISION

169. The Staff Motion requests the cancellation of the adjudicatory hearing

pursuant to 6 NYCRR Part 624.4(c)(5). That section states that “[i]f the ALJ

determines that there are no adjudicable issues, the ALJ will direct that the

hearing be canceled and that the staff continue processing the application to

issue the requested permit.”

170. As a matter of law, the cited section could never be adequate grounds for

relief as, in this very proceeding, the ALJ ruled that there were issues that

required adjudication. Moreover, as admitted by both the Department Staff and

the Commissioner, several of the issues identified by the ALJ and upheld by the

Deputy Commissioner were not moot.

171. Although the Petitioners-Plaintiffs identified this defect in their responses

to the motion, the Staff never amended its motion nor cited to any other rule or

statute as the basis for the requested relief.

172. In the Decision, the Commissioner ignores the authority and basis set

forth by Staff in its motion, which authority was vigorously contested by the

Petitioners-Plaintiffs.


34/62

30

173. Instead, the Commissioner sua sponte changed the basis of the Staff

Motion to cancel the adjudicatory hearing as one for reconsideration of the 2006

Interim Decision.

174. Staff never requested reconsideration of the 2006 Interim Decision and

the basis for its motion stands in stark contrast to the motion filed by CHA in

2007 which explicitly requested reconsideration of that Interim Decision.

175. The Commissioner improperly granted Staff’s Motion by treating it as

motion for reconsideration (which it was not) and without determining whether the

grounds cited by the Staff in support of its own motion were legally sufficient.

176. The Commissioner took this action without any prior notice to any of the

parties.

177. Accordingly, none of the parties had any opportunity to be heard on

whether the well-established standards in civil practice relating to reconsideration

were applicable in this instance.

B. NEW ISSUES RELATED TO THE REDESIGN OF THEPROJECT

178. Due to the fact that an area that had only been the subject of minor

development (Highmount) became one of two major development areas as a

result of the project changes, in order to grant Staff’s motion to cancel the

hearing, it was necessary to demonstrate that there were no new issues that had

arisen as a result of the substantial project modifications.

179. The Staff Motion provides no evidence whatsoever with respect to the

absence of issues arising out of the substantial project modifications. It merely


35/62

31

contains a conclusory statement that there are no such issues without citing to

any evidentiary foundation whatsoever.

180. The DEC hearing regulations place the burden of proof on the party

making a motion.

181. It is well settled that a party bearing the burden of proof on a motion must

provide a prima facie case in its motion to sustain the motion.

182. Petitioners-Plaintiffs FCP and CHA requested that the motion be

dismissed on the grounds that no such prima facie case was presented by Staff

in its moving papers.

183. Notwithstanding, the fact that the Petitioner lodged this objection, the

Commissioner failed to dismiss the Staff motion.

AS AND FOR A SIXTH CAUSE OF ACTION:

THE COMMISSIONER IMPROPERLY SHIFTED THE BURDEN TO THE NON-MOVING PARTIES




185. DEC rules unequivocally impose the burden of proof on the moving party.

(See 6 NYCRR § 624.9[b][4]).

186. In this case, the moving party was DEC Staff, which made a motion to

cancel the pending adjudicatory hearing.

187. Therefore, in order to prevail in their motion, the Staff had the burden to

demonstrate that there were no issues related to project modifications which

warranted adjudication.


36/62

32

188. The Staff Motion contains absolutely no evidence in support of the

proposition that the project modifications do not raise issues requiring

adjudication. Accordingly, the Staff Motion did not establish a prima facie case in

this regard.

189. Where, as here, Staff failed to meet this burned (i.e. failed to demonstrate

a prima facie case), the Petitioners-Plaintiffs bore no burden whatsoever.

190. Notwithstanding this fact, the September 29 Memo of the Assistant

Commissioner improperly shifted the burden to Petitioners-Plaintiffs by requiring

them to demonstrate that the issues set for adjudication in 2006 as well as new

ones arising out of the modifications to the project were substantive and

significant.

191. As the staff motion failed to identify its prima facie case, the September 29

Memo violated the hearing rules and fundamental principles of due process by

requiring a substantial response to a motion which lacked any identifiable prima

facie case.

192. In order to oppose the Staff Motion, the Petitioners-Plaintiffs were

improperly required to submit affirmative evidence demonstrating that issues

proposed for adjudication met the regulatory test as being “substantive and

significant.”

AS AND FOR A SEVENTH CAUSE OF ACTION:

THE COMMISSIONER IMPROPERLY ALLOWED STAFF TO SUBMIT PART OF ITSPRIMA FACIE CASE ON REPLY


37/62

33




194. After the Petitioners-Plaintiffs submitted their opposition to the Staff’s

motion to cancel, and come forward with the evidence supporting the need to

adjudicate certain issues, the Commissioner allowed Staff an opportunity to

reply.

195. In its Reply, the Staff asserted for the very first time that the Galli-Curci

Mansion was not afforded any protection against visual intrusions under the

State or Federal Historic Preservation Acts nor under the DEC’s visual impacts

policy because it was privately owned.

196. The rationale had never previously been offered in any written document

provided by Staff and hence was not addressed in Petitioner’s submittal.

197. At this stage of the proceeding, Petitioner had no right to respond to this

new rationale.

198. Petitioner FCP moved to have this new rationale struck in light of the fact

that it was raised for the first time on Reply and sought, in the alternative, an

opportunity to file a sur-reply rebutting this newly offered rationale.

199. The Commissioner denied this motion by way of a footnote in his July 10,

2015 Decision. (See July 10, 2015 Decision, p. 40, n. 31).

200. By considering evidence that was offered for the first time on Reply, and

by failing to rule on the motion to strike, Respondent DEC acted in a manner that


38/62

34

was arbitrary and capricious and in violation of its own hearing rules/procedures

and of due process.

201. Further, Plaintiff-Petitioners were denied due process in that they never

had any opportunity to rebut any part of this element of the Staff’s case.

202. By permitting the introduction of evidence in DEC Staff’s reply that was

never a part of any written document provided by DEC and which is an essential

part of Staff’s prima facie case, the Decision demonstrates further that it was not

possible for Petitioners-Plaintiffs to be on notice of the basis for Staff’s motion.

AS AND FOR AN EIGHTH CAUSE OF ACTION:

THE DECISION APPLIES THE WRONG STANDARD IN RULING ON STAFF’SMOTION: IT MISAPPLIES THE BURDENS OF PROOF AND IT MISAPPLIES

THE SUBSTANTIVE AND SIGNIFICANT STANDARD




204. In reaching a decision on the various issues proposed by the Petitioners-

Plaintiffs, the Decision repeatedly concludes that the Petitioners-Plaintiffs failed

to provide enough support to show that the proposed issue is substantive and

significant.

205. As Staff has the burden of proof on this motion, the Commissioner is

required to examine whether the Staff has put forth sufficient evidence to show

that proposed issues are not substantive or significant, not the other way around.

206. There is no provision in the hearing rules or elsewhere permitting the

Commissioner to create any presumptions in favor of the Staff.


39/62

35

207. In most instances, the Decision does not even identify Staff’s prima facie

case in support of its motion, much less analyze its sufficiency.

208. Even in its examination of the Petitioners-Plaintiffs evidence, it fails to

apply the substantive and significant standard.

209. That standard requires that an issue be adjudicated if, after examination of

all evidence for and against, a sufficient doubt remains regarding the applicant’s

ability to meet a regulatory standard or adequately mitigate an impact under

SEQRA that a reasonable person would inquire further.

VISUAL IMPACTS TO GALLI-CURCI ESTATE

210. Even in the context of an issues conference where the petitioning party

has the burden of proof, if there is sufficient doubt that the application meets

regulatory standards such that a reasonable person would inquire further, a

substantive issue is raised for adjudication. The Decision’s holding that there

was no substantive issue ignores the proof submitted and improperly defers to a

letter issued by the New York State Office of Parks Recreation and Historic

Preservation (“OPRHP”).

211. It is uncontested that the G-C Estate is a property that is listed (not merely

eligible for listing) on both the State and National Registers of Historic Properties.

212. The DEC Visual Impact Policy requires the agency to assess the potential

impact of a project on visual and aesthetic resources within a radius of 5 miles

from the project.

213. The VIP identifies properties on the National and State Registries of

Historic Properties as the number one aesthetic resource in the State.


40/62

36

214. Notwithstanding the historic registry status of the G-C Estate and the fact

that the G-C Estate would be only 50 feet from the modified development at

Highmount, the draft supplemental EIS that was circulated for public comment

contained no analysis of the visual impacts on the property.

215. The owner of the G-C Estate submitted comments on the impacts to the

property in response to the public notice.

216. In its response to comments on the DSEIS, DEC provided a very rough

sketch which it claimed showed that the project would cause no visual impacts to

the G-C Estate.

217. In its response to Staff’s motion, Petitioner FCP submitted an extensive

series of photos and profiles.

218. Staff was permitted to reply to FCP’s submittal. It provided no rebuttal to

the profiles but merely argued that no impact analysis was necessary because

the G-C Estate was privately owned.

219. In the Decision, the Commissioner held that the visual impact to the G-C

Estate were no greater than those it would have suffered under the original

project.

220. There is no citation to the record supporting this conclusion and the record

is devoid of any evidence to that effect.

221. The Commissioner also dismissed the issue because OPRHP had

advised that there were no impacts to the G-C Estate requiring mitigation. The

acceptance on the conclusion in the OPRHP letter without critical analysis is an


41/62

37

error of law in that it fails to apply the substantive and significant standard

required by Part 624.

222. The Commissioner ignored the entire analysis submitted by the FCP.

223. These actions demonstrate that the Decision fails to apply the substantive

and significant standard as defined and interpreted by DEC rules and prior

administrative decision.

AS AND FOR A NINTH CAUSES OF ACTION:

THE COMMISSIONER IMPROPERLY REFUSED TO PROCESS PETITIONSFOR PARTY STATUS AND MOTIONS TO REOPEN THE ISSUES

CONFERENCE




225. The DEC regulations provide the opportunity for the filing of party status

petitions at any point in the proceeding. (See 6 NYCRR § 624.5).

226. Due to the significant modifications in the project since the hearing was

adjourned, individuals in close proximity to the expanded development in

Highmount, several entities who had not previously been involved as a party

sought party status.

227. One of those filing a petition for party status was PUA Associates who

owned the property feet away from the Highmount development. Petitioners-

Plaintiffs Rainone and the Gould Family also filed petitions for party status.

228. On November 17, 2014, Petitioner FCP filed a motion to reopen the issues

conference. Petitioner CHA joined in this motion.


42/62

38

229. In an e-mail dated November 19, 2014, the Assistant Commissioner

conveyed the Commissioner’s decision to hold all petitions for party status in

abeyance until after he ruled on Staff’s motion.

230. The hearing rules contain specific time frameworks for addressing

petitions for party status and motions. There is no provision permitting such

petitions and motions to be held in abeyance indefinitely.

231. All the petitions for party status and the motion to reopen the issues

conference were never fully submitted due to the fact that Commissioner held

them in abeyance until his Decision effectively made them moot.

232. Notwithstanding the fact that the motions were not fully submitted, the

Commissioner impermissibly denied them in his Decision.

AS AND FOR A TENTH CAUSE OF ACTION:

DEC’S REFUSAL TO ADJUDICATE THE ISSUE OF ADVERSE IMPACTS TOEXISTING COMMUNITY CHARACTER WAS ARBITRARY AND CAPRICIOUS AND

AFFECTED BY ERROR OF LAW




234. The SEQRA regulations at 6 NYCRR § 617.7(c)(1) list the elements

of the environment that must be considered in the SEQRA process.

These include: (i) a substantial adverse change in existing air quality,

ground or surface water quality or quantity, traffic or noise levels; a

substantial increase in solid waste production; a substantial increase in

potential for erosion, flooding, leaching or drainage problems; ... (iv) the


43/62

39

creation of a material conflict with a community's current plans or goals as

officially approved or adopted; ... [and] (v) the impairment of the character

or quality of important historical, archeological, architectural, or aesthetic

resources or of existing community or neighborhood character; ... .

235. In these regulations, the “impairment of ... existing community or

neighborhood character” (6 NYCRR § 617.7(c)(1)(v)) is set forth in the

regulations as an element of the environment which is separate from other

elements such as traffic levels, noise levels, and air quality. 6 NYCRR §

617.7(c)(1)(i).

236. The drafters of the regulations specifically intended for community

character to be considered as an issue in its own right, separate and apart

from other, more specific, issues. See also ECL § 8-0105(6).

237. Following the issues conference, ALJ Wissler’s Ruling on Issues

and Party Status found that the adverse impacts of the project on the

existing character of the community was a substantive and significant

issue, as defined by 6 NYCRR § 624.4(c), that required adjudication.

Matter of Crossroads Ventures, LLC, Ruling on Issues and Party Status of

the ALJ, September 7, 2005 (Ruling #15). His detailed analysis of the

issue concluded:

This analysis, however, for the purpose of SEQRA review, leads toa fundamental question of balance, which must be the subject offurther inquiry through the adjudicatory process. In particular, atthis point, certain questions remain unanswered, including:

1. Will the project, if developed as proposed, overwhelm theexisting hamlets and villages to the significant detriment of theirpresent quality of life?


44/62

40

2. If such significant detriment to the quality of life of the hamletsand villages would result, should the proposed resort be reduced inscale or its elements be reconfigured in a manner so as to avoidthis consequence?

3. What, if any, alternative configuration of the proposed resort canbe achieved that would still provide the critical economic massnecessary for the resort's success and drive the economicrevitalization of the hamlets and villages?

Such questions of balance as they concern impacts to communitycharacter are clearly within the purview of SEQRA review andappropriate for adjudication. Indeed, such an inquiry reflects thelegislature's intent in the enactment of SEQRA. ECL 8-0103(7)states:

It is the intent of the legislature that the protection andenhancement of the environment, human and communityresources shall be given appropriate weight with social andeconomic considerations in public policy. Social, economic,and environmental factors shall be considered together inreaching decisions on proposed activities.

RULING NUMBER FIFTEEN

CPC has raised substantive and significant issues with respect tothe impact the proposed project will have on the communitycharacter of the hamlets and villages in the area of the proposedproject. The issues are substantive as they address questions ofbalance that can only be resolved through further inquiry. Theissues are significant since they could result in a major modificationof the proposed project. Moreover, their resolution is essentialbefore any determination may be made pursuant to 6 NYCRR617.11(d)(2) and (5).

238. On appeal, Deputy Commissioner Johnson overruled that finding

and held that the issue of impacts to existing community character would

not be adjudicated. Matter of Crossroads Ventures, LLC, Interim

Decision, December 29, 2006, pp. 71-73 (Ruling #15).


45/62

41

239. Thereafter, the Catskill Preservation Coalition (CPC) made a

motion to the Commissioner to reconsider this finding.1 Before that motion

was ruled upon, and before any answers to the motion were filed, the

Applicant made a motion to suspend any action by the Commissioner on

the motion to reconsider while settlement negotiations were pending.2

That motion was granted by the Commissioner. Matter of Crossroads

Ventures, LLC, Commissioner Ruling, November 9, 2007.

240. On September 10, 2014, the DEC Staff moved to dismiss

CPC/CHA’s motion to reconsider. In its answer to that motion dated

November 17, 2014 (Affidavit of John W. Caffry, pp.13-29 (Caffry

Affidavit)), CHA opposed that motion, and argued for the granting of the

long-delayed motion to reconsider.

241. CHA demonstrated (Caffry Affidavit ¶¶ 37-39) that the Deputy

Commissioner’s Ruling #15 incorrectly assumed that impacts to

community character are merely side effects of various “discrete

environmental issues”, so that community character need not be

separately adjudicated, and that the Deputy Commissioner also erred

when he held that DEC should merely defer to local land use plans and

zoning on this issue. Caffry Affidavit ¶¶ 40-52.

1 See Notice of Motion for Reconsideration, Affirmation in Support of Motion for Reconsideration by

Cheryl A. Roberts, Esq., and Catskill Preservation Coalition Memorandum in Support of Motion forReconsideration, all dated January 29, 2007. (The Notice of Motion contains a typographical error statingthat the date is January 29, 2006.)

2 These negotiations resulted in the signing of the AIP by some, but not all, of the parties to the hearing.

The Petitioners-Plaintiffs in this proceeding were not signatories to the AIP.


46/62

42

242. CHA also demonstrated that the recent changes to the project and

the filing of the DSEIS had not eliminated the need to adjudicate this

issue. Caffry Affidavit ¶¶ 32-35.

243. The primary witness that testified for CPC on this issue in the 2004

issues conference was Professor Thomas Daniels. Matter of Crossroads

Ventures, LLC, Ruling on Issues and Party Status of the ALJ, September

7, 2005 (Ruling #15). It was Professor Daniels’ professional opinion “that

the scale of the proposed Belleayre Resort is too large for this region of

small settlements and rural landscape”. Caffry Affidavit ¶¶ 32-33.

244. Based largely on this testimony, ALJ Wissler determined that this

issue should be adjudicated. Id. In 2014 Professor Daniels reviewed the

Draft Supplemental EIS (DSEIS) and related materials, and reaffirmed that

opinion, despite the changes that had been made to the project. Caffry

Affidavit ¶ 33.

245. The ALJ’s ruling approved adjudication of whether there were ways

to reduce or avoid such adverse impacts on community character:

What, if any, alternative configuration of the proposed resortcan be achieved that would still provide the critical economicmass necessary for the resort's success and drive theeconomic revitalization of the hamlets and villages? Matterof Crossroads Ventures, LLC, Ruling on Issues and PartyStatus of the ALJ, September 7, 2005 (Ruling #15).

246. CHA’s fiscal impact expert, Michael Siegel, also reviewed the

DSEIS and examined that issue. It was his opinion that construction of

the full project would not succeed economically and could adversely

impact local businesses, but that elimination of the Highmount section of


47/62

43

the project, and building only the Wildacres section, could be economically

feasible. Caffry Affidavit ¶ 34.

247. Therefore, the issue of the project’s adverse impacts to the existing

character of the community has not been rendered moot by the recent

changes to the project or the preparation and filing of the DSEIS.

248. On July 10, 2015, the Commissioner denied CPC/CHA’s motion to

reconsider, relying on the reasons set forth in the Deputy Commissioner’s

Ruling #15. Decision, p. 40.

249. DEC’s failure to adjudicate the substantive and significant issue of

adverse impacts to existing community character, as that issue was

defined by ALJ Wissler, was arbitrary and capricious and affected by error

of law.

250. The Deputy Commissioner’s Ruling #15 in Matter of Crossroads

Ventures, LLC, Interim Decision, December 29, 2006, and the denial of

CPC/CHA’s motion to reconsider by Commissioner Martens (Decision, p.

40) should both be annulled, and the issue of adverse impacts to existing

community character should be remanded to DEC for adjudication

pursuant to 6 NYCRR Part 624.

AS AND FOR AN ELEVENTH CAUSE OF ACTION

DEC’S REFUSAL TO ADJUDICATE THE ISSUE OF ALTERNATIVES WASARBITRARY AND CAPRICIOUS AND AFFECTED BY ERROR OF LAW

251. Petitioners-Plaintiffs- Plaintiffs repeat and reallege the allegations

made in paragraphs “1” through “250” of this Verified Petition/Complaint

as though each paragraph was fully stated herein.


48/62

44

252. The SEQRA Regulations at 6 NYCRR § 617.9(b)(5)(v) requires that

an EIS must include:

(v) a description and evaluation of the range of reasonable

alternatives to the action that are feasible, considering theobjectives and capabilities of the project sponsor. The descriptionand evaluation of each alternative should be at a level of detailsufficient to permit a comparative assessment of the alternativesdiscussed. … The range of alternatives may also include, asappropriate, alternative:(‘a’) sites; …(‘c’) scale or magnitude; [and](‘d’) design…”

253. Upon the completion of the SEQRA process an involved agency

may only approve “the reasonable alternative ... that avoids or minimizes

adverse environmental impacts to the maximum extent practicable”. 6

NYCRR § 617.11(d)(5).

254. Following the issues conference, ALJ Wissler’s Ruling on Issues

and Party Status found that the issue of alternatives was a substantive

and significant issue, as defined by 6 NYCRR § 624.4(c), that required

adjudication. Matter of Crossroads Ventures, LLC, Ruling on Issues and

Party Status of the ALJ, September 7, 2005 (Ruling #18). His detailed

analysis of the issue concluded:

As noted at the outset, 6 NYCRR 617.9(b)(5)(v) mandates that theDEIS must contain "a description and evaluation of the range ofreasonable alternatives to the action that are feasible, consideringthe objectives and capabilities of the project sponsor. Thedescription and evaluation of each alternative should be at a levelof detail sufficient to permit a comparative assessment of thealternatives discussed." In this matter it is clear that the DEIS isdeficient. … Though by no means an exhaustive list, this requiresan examination of certain questions not addressed in the DEIS, forexample:


49/62

45

1. What are the physical environmental impacts that wouldresult from the development of the Big Indian site only?

2. What are the physical environmental impacts that wouldresult from the development of the Wildacres site only? …

As to the economic analysis undertaken by the Applicant,questions have been raised by both CPC and the City as tothe proper application of the IRR analysis methodology andthe results thereby obtained. But in this economic analysis,certain questions remain unanswered by the DEIS. Again,while not an exhaustive list, these economic questions wouldinclude:

1. Will the project as proposed overwhelm the localeconomies?

2. Is the local labor pool adequate to meet the needs of theproject as proposed, or would a smaller project provide amore reasonable match between jobs and available labor?

3. How will the project affect local housing costs and theavailability of affordable housing for project employees?

4. Will the tax revenues generated by the project cover thecost of the municipal services local communities will have toprovide?

These environmental and economic matters raise issues that

are substantive and significant, requiring further inquiry.

RULING NUMBER EIGHTEENBoth CPC and the City have raised issues with respect tothe adequacy of the alternatives analysis in the DEIS thatare both substantive and significant. The lack of sufficientenvironmental and economic detail to allow the comparativeanalysis contemplated by SEQRA is substantive requiringfurther inquiry. Moreover, this deficiency in the DEIS issignificant since it can affect permit issuance. Accordingly,alternatives to the proposed project is a matter foradjudication. (emphasis added)

255. On appeal, Deputy Commissioner Johnson modified that finding

and upheld the ruling that the issue of alternatives, as modified, should be


50/62

46

adjudicated. Matter of Crossroads Ventures, LLC, Interim Decision,

December 29, 2006, pp. 71-73 (Ruling #18). In particular, he held that:

Accordingly, applicant is directed to prepare a supplement to

its alternatives analysis that addresses the environmentalimpacts of alternative layouts which will be consideredduring the adjudicatory phase of the proceeding. … AlthoughI am not designating a specific number of alternatives thatwould be included in this supplement, I would directapplicant to include an environmental evaluation of impactswith respect to the two alternatives already referenced in theDEIS (the one golf course and one hotel complex alternativeand the east resort/west resort alternative) and suchadditional smaller scale alternatives that would ensure that areasonable range is considered. In that regard, applicant

may wish to include, but is not obligated to do so, one ormore of the alternatives that have been referenced by otherparties in this proceeding (see, e.g., CPC Petition for PartyStatus, April 23, 2004

Complaint of Catskill Heritage Alliance v. New York State Department of Environmental Conservation...

Documents

Transcript of Complaint of Catskill Heritage Alliance v. New York State Department of Environmental Conservation...