Reply Memorandum in Further Support of Plaintiffs’ Cross-Motion for Summary Judgment

    SUPREME COURT OF THE STATE OF NEW YORK 
COUNTY OF QUEENS 

THE COUNCIL OF THE CITY OF NEW YORK, 

PETER F. VALLONE, SPEAKER OF THE : 

COUNCIL, and ENOCH H. WILLIAMS, CHAIR OF: Index No.: 004897-96 

THE COUNCIL HEALTH COMMITTEE, : 

Plaintiffs, 

-against- 

RUDOLPH W. GIULIANI, THE MAYOR OF THE, 

CITY OF NEW YORK, NEW YORK CITY HEALTH 

AND HOSPITALS CORPORATION, and NEW YORK 

CITY ECONOMIC DEVELOPMENT CORPORATION 

Defendants. 

REPLY MEMORANDUM IN FURTHER SUPPORT OF PLAINTIFFS’ 
CROSS-MOTION FOR SUMMARY JUDGMENT 

TENZER GREENBLATT LLP 

COUNSELLORS AT LAw 

THE CHRYSLER BUILDING 

405 LEXINGTON AVENUE 

NEw YorEK, N.Y. 10174 

 



  

SUPREME COURT OF THE STATE OF NEW YORK 
COUNTY OF QUEENS 

THE COUNCIL OF THE CITY OF NEW YORK, 

PETER F. VALLONE, SPEAKER OF THE 

COUNCIL, and ENOCH H. WILLIAMS, CHAIR OF; Index No.: 004897-96 

THE COUNCIL HEALTH COMMITTEE, 

Plaintiffs, 

-against- 

RUDOLPH W. GIULIANI, THE MAYOR OF THE, 

CITY OF NEW YORK, NEW YORK CITY HEALTH 

AND HOSPITALS CORPORATION, and NEW YORK 

CITY ECONOMIC DEVELOPMENT CORPORATION 

Defendants. 

REPLY MEMORANDUM IN FURTHER SUPPORT OF PLAINTIFFS’ 

CROSS MOTION FOR SUMMARY JUDGMENT 

PRELIMINARY STATEMENT 
  

The arguments presented by the defendants in the Reply 

Memorandum are contrary to the express language and plain meaning 

of the HHC Act and every intention of the State Legislature in 

creating the HHC. The defendants’ tortured analysis is yet another 

indication of their inability to legally justify the Mayor’s 

unilaterally reviewing and approving the HHC'’s proposal to turn a 

City-owned hospital over to a for-profit corporation, and thereby 

to frustrate the HHC Act’s provisions requiring independent City 

legislative review and approval of such a transaction. The 

defendants, moreover, have not refuted the Council’s arguments that 

they must comply with ULURP requirements. 

 



  

ARGUMENT   

POINT TI 

The defendants’ reply memorandum is most notable for its 

striking failure to even attempt to refute the most significant 

indication of legislative intent in connection with the adoption of 

the HHC Act and the formation of the HHC: Mayor Lindsay’s 

remarkable letter of assurance to the Governor and the State 

Legislature that in proposing the HHC Act and the formation of the 

HHC as a public benefit corporation, "the City is not getting out 

of the hospital business [and that] the municipal and health care 

system will continue to be the City’s responsibility governed by 

policies determined by the City Council, the Board of Estimate, the 

Mayor, and the Health Services Administration on behalf of and in 

consultation with the citizens of New York City." (Exhibit A to 

Affidavit of Richard Weinberg, sworn to August 23, 1996). 

The defendants have not responded because there is no 

response to make. There can be no question that it is the Mayor’s 

intent to ignore Mayor Lindsay’s pledge to the State Legislature by 

taking the City out of the hospital business, and that it is his 

further intent to deny the City Council its stated right to 

participate in such a decision of fundamental importance to the 

health and welfare of the people of the City, and to deny the 

citizens of the City their right to be represented with respect to 

an action that will absolve the City of its statutory obligation to 

deliver health care to those least able to afford it. 

 



  

The defendants go so far as to assert that the HHC has no 

obligation to operate the City hospitals under the lease agreement 

with the City. This assertion is incorrect, not only because the 

HHC’s obligation to operate the City hospitals is expressly stated 

in the Lease Agreement (Weinberg Aff. Ex. B, 99 2.1, 2.2, 2.3), but 

also because it is expressly stated in the HHC Act itself. Thus, 

the HHC was expressly created as a public benefit corporation to 

"provide the needed health and medical services and health 

facilities . . . for the benefit of the people [and] the 

performance of an essential public and governmental function." HHC 

Act, U.L. § 7382. Moreover, the HHC Act specifically directed the 

preparation and execution of the Lease Agreement and, in so doing, 

expressly provided that the purpose of the Lease Agreement was that 

HHC "shall operate the hospitals then being operated by the city 

for the treatment of acute and chronic diseases." HHC Act, U.L. § 

7386 (1) (a) ("Relationship to the City"). Finally, the HHC Act 

expressly requires that the HHC "operate, manage, superintend and 

control any health facility under its jurisdiction."  HHC Act, U.L. 

§ 7385(7). 

The most specious of all of the defendants’ assertions is 

their assertion that HHC is free to lease the hospitals under 

Section 7385(8) of the Act (general leasing powers of the HHC), a 

provision that does not mandate either a public hearing by the HHC 

or approval by any officer or body of the City. This contention 

ignores the fact that another subsection (6) of the same section of 

 



  

the HHC Act, specifically and unambiguously provides for the manner 

in which hospitals under the jurisdiction of the HHC may be leased: 

[N]o health facility or other real property 
acquired or constructed by the corporation 
shall be sold, leased or otherwise transferred 

by the corporation without public hearing by 
the corporation after twenty days public notice 
and without the consent of the board of 
estimate of the'city .. . . .” 

HHC Act, U.L. § 7385(6). This language could not be more direct, 

nor could it be more directly applicable to the proposed 

transactions. The defendants’ interpretation of the general powers 

conferred to the HHC under U.L. Section 7385(8) is patently absurd 

because it would directly negate the gpecific intent of Section   

7385 (6). 

It is hornbook law that a statute may not be read so that 

its general language contravenes its unambiguous specific 

directives. McKinney's Consolidated Laws, Statutes, Vol. 1, Section 

238: 

Whenever there is a general and a particular provision in 
the same statute, the general does not overrule the 

particular but applies only where the particular 
enactment is inapplicable. 

See, e.g., People v. Mobil Oil Corp., 48 N.Y.2d 192, 422 N.Y.S.2d 33 (1979); 

Prospect v. Cobalan, 109 A.D.2D 210, 490 N.Y.S. 2d 795 (2d Dept), 

affirmed, 65 N.Y.2d 867, 493 N.Y.S.2d 293 (1985). 

Moreover, a plain reading of Subsection 7385(8), as well 

as the context in which it was enacted, shows that it deals with 

agreements and leases merely incidental to the HHC’s own operation 
  

 



  

of the health facilities, e.g., the provision of certain health and   

medical services by affiliated institutions or specific service 

providers. Indeed, when HHC took over the City hospitals in 1970, 

it did so with several third party leases already in existence. 

(Weinberg Aff., Ex. B, Secs. 1.2 and 1.3). 

The defendants’ final argument is that the devolution 

under the new City Charter of the land use powers formerly 

possessed by the Board of Estimate to the City Council, is not 

relevant to the determination as to whether the City Council 

succeeds the Board of Estimate in connection with review of HHC 

leases of the City hospitals under Section 7385(6). This argument 

is, however, directly contradicted by a memorandum that the Mayor's 

office prepared for the State Legislature in support of the "clean- 

up" legislation drafted in 1990 to conform Section 7385(6) of the 

HHC Act (and provisions of several other state laws) to the recent 

1989 City Charter amendments. That memorandum, prepared by the 

Mayor, supported the substitution of a reference in Section 7385 (6) 

to the City Council for the existing reference to the Board of 

Estimate, in connection with approval of HHC determinations 

involving land use. (A copy of the Mayor’s 1990 Memorandum in 

Support is annexed to the Affidavit of Gail Benjamin, sworn to 

September 20, 1996, as Exhibit A.) 

The Mayoralty’s Supper of the 1990 proposed clarifying 

amendment to Section 7385 (6) mirrored the scheme of Section 384 of 

the new City Charter which confers upon the Mayor the power to 

determine business terms of dispositions of real property, and upon 

 



  

the City Council the power as to land use issues in place of the 

Board of Estimate. The Mayor’s office supported the clarification 

because, in the words of the Mayor’s Memorandum of Support: 

This approach is consistent with the powers of 
the Mayor and the City Commissioner of General 
Services, a Mayoral appointee, with respect to 
the acquisition and disposition of real 
property (NYC Charter §§ 384, 1602), as well as 
the authority over land use conferred upon the 
City Council and the Mayor by Chapter 8 of the 
Charter. 

  

  

  

  

Memorandum in Support at p. 8; emphasis supplied. As stated in the 

Mayor’s Memorandum in Support, under the 1989 Charter amendments 

"the City Council will exercise substantial powers with respect to 

land use review under [ULURP,] . . . will have automatic land use 

review jurisdiction over some land use matters (e.g., zoning 

amendments, and will have discretionary authority to review certain 

other matters (e.g., most acquisitions or dispositions of real 

property). (Id. at. p. 2) 

The 1990 public Mayoral concession, as set forth in the 

Memorandum of Support, that the City Council is the rightful 

successor to the Board of Estimate in connection with the power to 

review the land use implications of proposals by the HHC to lease 

the City-owned hospitals, directly contradicts the position he 

takes here. 

The HHC Act itself clearly reflects that the grant of 

approval power to the Board of Estimate under Section 7385(6) was 

related to the specific powers of the Board regarding the 

disposition of City-owned property because other provisions of the 

 



  

HHC Act, that did not directly involve such land use issues, 

expressly granted approval power to the Mayor alone. For example, 

subsection 7385(20) of the HHC Act, permitting the formation by HHC 

of subsidiary corporations, requires only approval by the Mayor. 

The Mayor has conceded that under the new City Charter the City 

Council has succeeded to land use powers of the Board of Estimate. 

Thus, the Mayor’s interpretation of Section 7585(6), collapsing the 

powers of the Mayor and the Board of Estimate into the purview of 

the Mayor alone, does not merely render the statutory reference to 

such legislative approval into mere surplusage; the Mayor’s 

interpretation also ignores the devolution of the land use powers 

of the Board of Estimate to the City Council, an interpretation 

that is directly contradicted by the scheme and language of the HHC 

Act. 

The Mayor further attempts to deny the City Council its 

official land use role by suggesting that when, in prior charter 

revision circumstances, the Board of Estimate exercised approval 

power under Section 7385(6) of the HHC Act, it did not consider the 

land use consequences of the transactions. The Mayor’s suggestion 

is not established by the evidence he cites in support of it, an 

excerpt from a 1985 Board of Estimate determination approving, 

pursuant to Section 7385(6), a sublease by HHC. (See Turbow Aff., 

Ex. C). Moreover, the Affidavit of Gail Benjamin, sworn to 

September 20, 1996, shows that the Mayor’s assertion is belied by 

the record. The Board of Estimate’s determination therein actually 

involved several land use issues. (See Benjamin Affidavit, 9 4) 

 



  

The defendants also assert that the HHC Act "recognizes 

the primacy of the Mayor in the oversight of HHC" through his 

domination of the HHC Board by reason of the power of appointment. 

(Reply Brief pp. 12-13) This assertion of Mayoral power, in fact, 

defeats his attempt to usurp all review and approval powers over 

the disposition of the City hospitals, because it supports the 

plaintiffs’ position that the State Legislature intended the 

participation by a City legislative body in the approval process 

for divestiture of hospitals as an important check upon the 

substantial powers of the Mayor under the HHC Act. The State 

Legislature determined that the Mayor alone should not have the 

power to take the City out of the hospital business and thereby to 

divest the HHC of its statutory obligation, as a public benefit 

corporation, to operate the City hospitals for the benefit of the 

people of New York City. Accordingly, it gave approval power to 

two City bodies -- the Mayor and the Board of Estimate. 

POINT II   

There can be no question that the proposed lease 

transaction involves a disposition of real property of the City 

within the meaning of Charter § 197-c, and thus is subject to 

ULURP. The defendants incorrectly assert that ULURP does not apply 

because it is the HHC and not the City that is leasing the 

hospitals. However, this assertion ignores the fact that the 

"subject hospitals are real property of the City." (Reply 

Memorandum p. 7) Nothing in Section 197-c of the City Charter 

 



  

limits its ambit to dispositions by the City of its real property; 

rather, it is applicable to any dispositions of City-owned real 

property. It is clear that the proposed lease of Coney Island 

Hospital, by a public benefit corporation that leased it from the 

City pursuant to statutory direction, to a for-profit private 

entity for a 49 year term that effectively subsumes the hospital’s 

remaining useful life, is a disposition of real property of the 

City. The transaction is clearly a disposition of real property of 

the City within the intent of City Charter Section 197-c. 

Further, the evidence indisputably shows and, indeed, the 

defendants admit, that the Mayor’s office has micro-managed and 

dictated this proposed lease transaction from the get-go, during 

which time the HHC’s Board has been kept in the dark by the Mayor’s 

hand-picked HHC appointees. The Mayor, in conjunction with EDC, 

prepared and issued the Offering Memorandum, considered the bids 

and the bidders, conducted the negotiations, became a signatory 

party to the Letter of Intent to lease Coney Island Hospital to a 

for-profit corporation, and continues to be intimately involved in 

myriad other details involved in the dismemberment of the HHC. 

Thus, the defendants’ assertion that this is a lease by the HHC and 

not by the City is patently ridiculous. 

The proposed lease is, in fact, a disposition by the 

City, notwithstanding the citation in the defendants’ Reply Brief 

of hoary and inapplicable precedent to the effect that a tenant has 

exclusive ownership of the leased property. That rule of law is 

 



  

applicable only to leases as to which there are no statutory or 

contractual limitations upon the rights of the lessee. 

Here, the HHC Act itself contains express limitations 

upon the HHC’s right to sublease any hospital facility, by 

requiring Mayoral and Board of Estimate approval before any 

sublease may be effectuated. U.L. § 7385(6). Because approval by 

the City is expressly required by the statute, it is clear that the 

instant transaction involves a disposition of real property of the 

City, thus giving the City Council ultimate jurisdiction pursuant 

to ULURP, 

CONCLUSION 
  

For the reasons stated above, plaintiffs’ cross-motion 

for summary judgment should be granted, and the defendants’ 

motion for summary judgment should be denied. 

Dated: New York, New York 

September 20, 1996 

TENZER GREENBLATT LLP 

Edward L. Sadowsky 
Ira A. Finkelstein 
Of Counsel 

The Chrysler Building 
405 Lexington Avenue 
New York, New York 10174 

(212) 885-5000 

-and- 

RICHARD M. WEINBERG, ESQ. 

General Counsel 
The Council of the City of New York 

Gail R. Zweig 
Of Counsel 

75 Park Place, 5th Floor 

New York, New York 10007 

(212) 788-7000 

Attorneys for Plaintiffs 

“10+