Copy of Letter to Boards of HHC, Coney Island Hospital and Univ. Group Medical Assoc. RE: Postponement of Board Vote

    SUPREME COURT OF THE STATE OF NEW YORK 
COUNTY OF QUEENS 
ne ne ee 2m we Jem a er rr a a X 

THE COUNCIL OF THE CITY OF NEW YORK, et al. 

Plaintiffs, INDEX NO. 004897-96 

- against - 

RUDOLPH W. GIULIANI, THE MAYOR OF THE 

CITY OF NEW YORK, et al, 

Defendants. 
oy a mm er rw a eo ee ee X 

CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - , 
QUEENS COALITION, an unincorporated eA 
association, et al., Te 

™D) 

Plaintiffs, INDEX NO. 10763/96 

- against - 

RUDOLPH W. GIULIANI, THE MAYOR OF THE 

CITY OF NEW YORK, et al., 

Defendants. 
i me a oe ae ee a X 

PLAINTIFFS’ REPLY MEMORANDUM OF LAW 
IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT 

KENNETH KIMERLING 

PUERTO RICAN LEGAL DEFENSE & 

EDUCATION FUND, INC. 

99 Hudson St., 14th Floor 

New York, N.Y. 10013 

212-219-3360 

ELAINE R. JONES 
Director-Counsel 
NORMAN CHACHKIN 
MARIANNE L. ENGELMAN LADO 
RACHEL D. GODSIL 
NAACP LEGAL DEFENSE & EDUCATIONAL 
FUND, INC. 
99 Hudson St., leth Floor 
New York, New York 10013 

212-219-1900 

BARBARA OLSHANSKY 
CENTER FOR CONSTITUTIONAL RIGHTS 
666 Broadway, 7th Floor 
New York, N.Y. 10012 
212-664-6464 

 



SUPREME COURT OF THE STATE OF NEW YORK 
COUNTY OF QUEENS 

THE COUNCIL OF THE CITY OF NEW YORK, et al. 

Plaintiffs, INDEX NO. 004897-96 

- against - 

RUDOLPH W. GIULIANI, THE MAYOR OF THE 
CITY OF NEW YORK, et al, 

Defendants. 

CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - 
QUEENS COALITION, an unincorporated 
association, et al., 

Plaintiffs, INDEX NO. 10763/96 

- against - 

RUDOLPH W. GIULIANI, THE MAYOR OF THE 
CITY OF NEW YORK, et al.; 

Defendants. 

PLAINTIFFS’ REPLY MEMORANDUM OF LAW 
IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT 
  

PRELIMINARY STATEMENT 
  

Plaintiffs’ are entitled to summary judgment as a matter of 

law. The Uniform Land Use Review Procedure ("ULURP") applies to 

the disposition of the Coney Island Hospital, and the Queens and 

Elmhurst Hospital Centers (the "target hospitals"). Defendants’ 

attempts to evade the requirements of ULURP are unavailing. 

ULURP applies to any "[s]ale, lease (other than the lease of 

office space), exchange, or other disposition of the real property 

of the city" by "any person or agency." New York City Charter § 

197-C. ULURP applies to these transactions since the target 

hospitals are real property of the City, and defendants, who are  



  

seeking to sublease the target hospitals, clearly fall under the 

definition of "any person or agency." 

Defendants argue that ULURP only applies when the City seeks to 

dispose of the City’s interest in City-owned property. This argument 

flies in the face of the plain language of ULURP. As stated above, 

ULURP is written broadly and explicitly applies to applications by 

‘any person" for the sale, lease, exchange, and the catch-all "other 

disposition" of City property. The language of ULURP clearly 

reflects the overriding interest of the City of New York in any 

decisions to dispose of its property. The ULURP process provides 

the opportunity for City government and the affected community to 

review and approve decisions concerning the disposition of City 

property. 

Defendants’ argument that ULURP is precluded by the HHC Act is 

also wrong. To the contrary, the HHC Act incorporates ULURP. The 

Act explicitly provides for Board of Estimate consent to any 

dispositions of City property by HHC. Unconsolidated Law § 

7385(6) . It is undisputed that when the HHC Act was enacted, the 

Board of Estimate was empowered by the City Charter to review both 

the land use and business effects of any disposition of City 

property. With the demise of the Board of Estimate, the City 

Charter has delegated the land use component of the Board of 

Estimate’s authority to ULURP. Thus, as a matter of law, ULURP 

applies to a disposition by HHC of the target hospitals. 

Finally, even if defendants were correct -- which plaintiffs 

dispute -- that ULURP does not apply to leases and dispositions of 

2 

 



  

City property by HHC, plaintiffs would still be entitled to summary 

judgment because the City is also a party to this transaction. 

Defendants concede to the facts submitted by plaintiffs, see 

Defendants’ Reply Memorandum at 5, but attempt to avoid the 

application of ULURP to the City by discounting the legal 

implications of these facts. Defendants’ contention that the Mayor 

is merely supporting a transaction by HHC to dispose of HHC'’s 

interest in the target hospitals is contradicted by the reality 

that the Mayor is an integral legal actor in the disposition of the 

target hospitals -- and in fact the only actor since the HHC Board 

has not voted on the privatization of the public hospitals in 

general or the disposition of the target hospitals in particular. 

The Mayor’s legal status is also reflected in the fact that the 

Mayor is a signatory to the letter of intent. Accordingly, if the 

defendants are willing to concede to the facts submitted by 

plaintiffs, ULURP applies as a matter of law to the City’s 

disposition of the target hospitals. 

ARGUMENT 

AS A MATTER OF LAW, ULURP APPLIES TO 
THE DISPOSITION OF THE TARGET HOSPITALS 
  

The City Charter provides in pertinent part: 

§ 197-c. Uniform land use review procedure. a. Except 
as otherwise provided in this charter, applications by 
any person or agency for changes, approvals, contracts, 
consents, permits or authorization thereof, respecting 
the use, development or improvement of real property 
subject to city regulation shall be reviewed pursuant to 
a uniform review procedure in the following categories: 

* * * 

 



    

(10) Sale, lease (other than the lease of office space), 
exchange, or other disposition of the real property of 
the city 

§ 197-c New York City Charter (1995) (emphasis added). 

In direct contrast to defendants’ assertion, it is clear from 

its plain language that ULURP applies to the disposition of real 

property of the City byanyone. Cf. Defendants’ Reply Memorandum at 

5. Defendants also attempt to obscure the clear language of ULURP 

by claiming that ULURP only applies to a disposition of the "City’s 

real property interests." Defendants’ Memorandum at 5 (emphasis added) . 

Defendants provide no support for these assertions, which fly in 

the face of the plain language of ULURP.' Had the intention been 

to limit the application of ULURP only to sales and leases by the City 

of certain property interests, the statute would have so provided. 

Instead, ULURP governs "applications by any person or agency" for 

"sale, lease (other than the lease of office space), exchange, or 

other disposition of the real property of the city." Clearly, the 

intention of the City Charter Commission was broader than 

defendants’ interpretation suggests. 

ULURP is written to reflect the overriding principal at issue: 

  

' The landlord-tenant case law upon which defendants rely is 
utterly irrelevant to this inquiry. Whether or not property is 
leased, even defendants cannot ignore that the property is "real 
property of the City." Defendants’ Reply Memorandum at 7; Charter 
197-c. The property law concepts upon which defendants rely were 
applicable when ULURP was enacted, and thus the City Charter 
Commission could have chosen to incorporate them. However, the 
City Charter chose to exempt from ULURP only leases of office 
space; other leasehold interests and other dispositions fall within 
ULURP’s ambit. 

 



    

the City’s continuing interest in any disposition of its land by 

any person. ULURP is intended to identify, at the earliest 

possible stage, those activities by any person or agency concerning 

the use of City-owned land that will have a "significant impact on 

the community." Ferrer v. Dinkins, 218 A.D.2d 89, 635 N.Y.S.2d 965   

{1st Dept. 1996), appeal denied, 88 M.Y.2d 801, 644 N.Y.S.2d 493. 666 

N.E.2d 1366. ULURP was adopted specifically to provide greater 

participation by local communities in the development and use of 

such land. See Lai Chun Chan Jin v. Board of Estimate, 92 A.D.2d 
  

218, 460 N.Y.S.2d 28 (1st Dept. 1983). In short, ULURP is intended 

to apply to all dispositions of City-owned property because the 

government of the City and the community have an interest in such 

dispositions. The sublease of the target hospitals falls squarely 

in the realm of significant decisions concerning the property of 

the City that ULURP is intended to govern. Defendants’ stilted 

interpretation of ULURP is contrary to that purpose. 

A. ULURP Applies to a Disposition by HHC of City Property   

ULURP clearly applies to a disposition of the target hospitals 

by HHC. Defendants’ unsupported and conclusory argument that ULURP 

does not apply is explicitly contradicted by the HHC Act. See U.L. 

§ .7582(6}., As plaintiffs demonstrated in their principal 

memorandum on this cross motion for summary judgment, not only does 

the HHC Act not preclude ULURP review, it in fact requires ULURP 

review for any disposition of City-owned property. See Plaintiffs’ 

Opening Memorandum at 18-20. 

The HHC Act requires consent by the Board of Estimate of HHC'’s 

 



      

decision to dispose of City-owned property. U.L. § 7582(6). As 

defendants note in their opening memorandum, under the City Charter 

in effect when the HHC Act was enacted, the Board of Estimate had 

authority to review both the land use and the business terms of 

dispositions of City-owned property .? Defendants Opening 

Memorandum at 18; see generally Tribeca Community Ass’ns Inc. et 
  

al. v. New York State Urban Dev. Corp., Index No. 20355 (April: 1,   

1993 Sup. CL. N.Y. Co.) (attached to Plaintiffs’ Opening 

Memorandum). The former Charter § 384 provided: 

Disposal of property of the city. a. No property of the 
city may be sold, leased, exchanged or otherwise disposed 
of except with the approval of the board of estimate 

Mirroring § 384, HHC Act § 7385(6) provides: 

No property of the city may be sold, leased, exchanged or 

  

? Defendants do not dispute that under the City Charter when 
the HHC ACt was enacted, the Board of Estimate had authority over 
both the business terms and the land use impacts of dispositions of 
City property. However, defendants argue inexplicably in their 
preliminary statement, but not in the body of their reply 
memorandum, that the HHC Act granted the Board of Estimate 
authority only to review the business terms of a disposition of 
City property. Defendants’ Reply Memorandum at 3. In supposed 
support of this argument, defendants point to one document related 
to the approval of a sublease in 1985 that does not mention land 
use impacts. As the Supplementary Affidavit of Gail Benjamin, the 
Board of Estimate did consider the land use impacts of that 
transaction as well. 

Moreover, defendants are unable to point to anything in the 
HHC Act itself or the legislative history to the Act to suggest 
that the Legislature intended to limit the Board of Estimate’s 
consent to consideration of the business terms of a transaction. 
In fact, in the legislative history of the Act, all references to 
the disposition of City-owned property are accompanied by the broad 
provision that the consent of the Board of Estimate is necessary 
prior to such a disposition. See Governor’s Bill Jacket, Chapter 
1016 (1969) 14, 29. There is not a single suggestion that the 
Board of Estimate’s consideration of a disposition is limited to 
the business terms of the disposition. 

6 

 



otherwise disposed of except with the approval of the 
board of estimate : 

Accordingly, it is clear that the HHC Act granted the Board of 

Estimate the same authority to review dispositions of City property 

by HHC that the City Charter granted the Board to review all other 

dispositions of City property. 

With the demise of the Board of Estimate, the City Charter now 

divides the authority to consent to dispositions of City-owned land 

between the Mayor and ULURP. New York City Charter § 384. It 

clearly follows that, for purposes of the HHC Act, the Board of 

Estimate’s authority is similarly divided. Therefore, for purposes 

of the HHC Act, a ULURP review must take place prior to any 

disposition by HHC of the property of the City. 

Ignoring both plaintiffs’ argument in its opening memorandum 

and § 7582(6) of the HHC Act, defendants make the conclusory 

assertion~ that the HHC Act’s purpose of freeing HHC from the 

restrictions "on the delivery of health care services to which the 

City was subject" somehow exempts HHC from ULURP. Defendants’ 

Reply Memorandum at 9. They are clearly mistaken. 

Defendants are unable to offer any indication that the 

Legislature intended to free HHC entirely from restrictions on the 

disposition of City-owned property. To the contrary, the HHC Act 

specifically requires consent from the Board of Estimate. 

Defendants cannot apply the general principle that the Legislature 

intended to free HHC from local restriction regarding the provision 

of health care but ignore the Legislature’s specific instruction to 

limit HHC’s freedom to dispose of City property. U.L. § 7582(6). 

7  



  

Defendants seek to gloss over the fact that the State 

Legislature has varied considerably the limitations from local 

restrictions that it has granted public benefit corporations. As 

a result of this considerable variation, courts must scrutinize 

each statute to glean the legislative intent. See Connor v. Cuomo, 
  

161 Misc 2d. 889, 614 N.Y.S.2d 1011 (Sup. Ct. N.Y. County 1994) 

(requiring an inquiry into the Facilities Development Corporation 

Act to determine whether local restrictions apply). 

In the context of land use restrictions specifically, the 

Legislature has explicitly granted to some public benefit 

corporations -- but not the HHC -- complete freedom to supersede 

local land use restrictions. For example, the Legislature provides 

the New York State Urban Development Corporation ("UDC") with 

unique authority to "override" local land use regulatory provisions 

for itself and any municipality with whom it contracts for a 

redevelopment project. See Waybro v. Board of Estimate, 67 N.Y.2d 
  

349,355, 502 N.Y.S.2d4 707, 710 (1986), citing New York State Urban 

Development Act, ch. 252, § 16 (McKinneys). By contrast, the 

Legislature did not include a corollary to § 16 in the HHC Act;3 

instead, the Legislature explicitly required consent from the Board 

of Estimate for any disposition of City property. 

ULURP then clearly applies to a disposition by HHC of City- 

owned property since it is indisputable that ULURP applies by its 

  

° Another examples of public benefit corporations that was 
not granted override power include the Facilities Development 
Corporation, U.L. § 4409 et seq. 

8 

 



  

terms to a disposition by any person of City-owned property. The 

target hospitals are City-owned property; the HHC Act specifically 

provides for review of the disposition of City-owned property by 

the Board of Estimate; and the authority of the Board of Estimate 

for land use review now resides in the ULURP process. Plaintiffs 

are thus entitled to summary judgment as a matter of law. 

B. The City is also Engaging in a Disposition of City-Owned 
Property 
  

Even assuming arguendo that defendants are correct that ULURP 

does not apply to HHC -- which plaintiffs dispute -- it is beyond 

question that ULURP applies to a disposition by the City of City- 

owned property, and plaintiffs are entitled to summary judgment as 

a matter of law. Plaintiffs’ Opening Memorandum at 18. 

Defendants’ legal argument that the Mayor is merely exercising 

his "legitimate interest in the delivery of health services" and 

"significant authority over the Board through his [HHC] appointment 

powers" 1s a ruse. The facts conceded by defendants? -- most 

  

The facts conceded by defendants include: 

® The Mayor decided to embark upon a privatization 
initiative that included the HHC health facilities 
without consulting or seeking approval from the HHC 
Board. 

® The Mayor decided to retain the New York City Economic 
Development Agency to manage the privatization without 
consulting or seeking approval from the HHC Board. 

[J BDC, with authority only From the Mayor, commissioned 
J.P. Morgan to conduct a study of the financial 
advantages for the City of privatizing the hospitals 
without consulting or seeking approval from the HHC 
Board. 

» The Mayor announced his decision to sell the target 
hospitals without consulting or seeking approval from the 
HHC Board. 

 



  

notably the fact that the Mayor is a signatory to the letter of 

intent -- make abundantly clear that the Mayor is engaging in the 

lease of the target hospitals. That the HHC Board of Directors has 

a legal right to vote upon the lease does not undercut the fact 

that the Mayor is also a party to the transaction.’ In fact, the 

Mayor is the only person currently undertaking to lease the target 

hospitals since the HHC Board has neither voted for privatization 

nor the lease of the target hospitals.® 

CONCLUSION 
  

For the foregoing reasons, it is respectfully requested that 

  

® The Mayor announced a schedule for the disposition of the 
hospitals without consulting or seeking approval from the 
HHC Board. 

® EDC, with authority only from the Mayor, retained J.P. 
Morgan to act as financial advisor for the disposition of 
the target hospitals without consulting or seeking 
approval from the HHC Board. 

» “EDC, with authority only from the Mayor, issued Offering 
Memoranda to a confidential list of potential purchasers 
without consulting or seeking approval from the HHC 
Board. 

® The Mayor and the President of HHC signed a letter of 
intent to sublease Coney Island Hospital to PHS-NY 
without consulting or seeking approval from the HHC 
Board. See Plaintiffs’ Memorandum at 15-16. 

°* If defendants are not willing to concede that the Mayor is 
a party to this transaction, an issue of fact remains and summary 
judgment is inappropriate. 

§ Notwithstanding defendants’ concession of the facts 
concerning the Mayor’s involvement in the privatization effort, see 
Defendants’ Reply Memorandum at 5, defendants assert that HHC has 
been involved in the privatization effort as a result of the 
participation of Maria Mitchell, the Chairperson of HHC, in the 
transaction. Defendants’ Reply Memorandum at 6. Plaintiffs, on 
the other hand, submit that Ms. Mitchell has been involved in her 
capacity as a Mayoral aide, specifically as Special Advisor to the 
Mayor for Health Policy and Executive Director of the Mayoral 
Advisory Panel. 

10 

 



    

(1) plaintiffs’ cross-motion for summary judgment in its favor be 

granted in its entirety; and (ii) the Court grant plaintiffs such 

other and further relief as may be deemed just and proper. 

Dated: New York, New York 

September 20, 1996 

RESPECTFULLY SUBMITTED 

KENNETH KIMERLING 
PUERTO RICAN LEGAL DEFENSE & 
EDUCATION FUND, INC. 
99 Hudson St., 14th Floor 

New York, New York 10013 

(212) 219-3360 

ELAINE R. JONES 

Director-Counsel 

NORMAN CHACHKIN 

MARIANNE L. ENGELMAN LADO 

RACHEL D. GODSIL 
NAACP LEGAL DEFENSE & 
EDUCATIONAL FUND, INC. 
99 Hudson St., 16th Floor 

New York, New York 10013 

(212) 219-1900 

G BARBARA OLSHANSKY 

CENTER FOR CONSTITUTIONAL 
RIGHTS 
666 Broadway, 7th Floor 
New York, New York 10012 

(212) 664-6464 

ATTORNEYS FOR PLAINTIFFS 

11