Memorandum in Support of Plaintiffs' Cross Motion for Summary Judgment and in Opposition to Defendants' Motion for Summary Judgment

    SUPREME COURT OF THE STATE OF NEW YORK 
COUNTY OF QUEENS 

Index No.: 004897-96 

THE COUNCIL OF THE CITY OF NEW YORK, 
PETER F. VALLONE, SPEAKER OF THE 
COUNCIL, and ENOCH H. WILLIAMS, CHAIR OF: 

> 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 $i . 

Defendants. 

MEMORANDUM IN SUPPORT OF PLAINTIFFS’ 
CROSS MOTION FOR SUMMARY JUDGMENT AND IN 

OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT 

TENZER GREENBLATT LLP 

COUNSELLORS AT LAw 

THE CHRYSLER BUILDING 

405 LEXINGTON AVENUE 

NEw York, 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. 

MEMORANDUM IN SUPPORT OF PLAINTIFFS’ 
CROSS MOTION FOR SUMMARY JUDGMENT AND IN 

OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT 
  

PRELIMINARY STATEMENT 

Three issues are presented by this action. 

1. May the Health and Hospital Corporation, to whom 

the City has leased its hospitals, sublease those 

same hospitals by means of a negotiated 

transaction to a private profit-making 

corporation? 

May the Mayor of the City of New York, by 

executive fiat, privatize the municipal hospital 

system without the participation or consent of the 

City Council? 

Is the sublease of hospitals that are owned by the 

City governed by the City’s Uniform Land Use 

Review Procedure?  



  

As defendants concede, the issue in this case is not 

the wisdom of privatization of the City’s hospitals. Instead, 

the issue is whether the Mayor is to be permitted to usurp the 

statutory role of the City Council as the elected local 

legislative body of the City in accomplishing this end. At 

issue here is the Mayor’s disregard for the Council’s role under 

State law and the City Charter, which embody a public policy 

determination that there must be a countervailing structural 

balance to the Mayor’s power to propose dispositions of the 

City’s property. While this case is about the distribution and 

sharing of power among the branches of New York City’s 

government, it is also, fundamentally, about democratic decision- 

making with respect to unprecedented and fundamental changes in 

the provision of essential services to the people of the City. 

FACTUAL AND LEGISLATIVE BACKGROUND 
  

The Health and Hospitals Corporation ("HHC") was 

created by the state legislature in 1969 at the request of then 

Mayor John V. Lindsay. The Mayor, in a letter addressed to 

Governor Rockefeller urging the approval of the Act, stated: 

In establishing a public benefit corporation, the City 
is not getting out of the hospital business. Rather it 
is establishing a mechanism to aid it in better 
managing that business for the benefit not only of the 
public served by hospitals but the entire City health 
service system. 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 Weinberg affidavit, emphasis added). 

 



  

This commitment by the then Mayor that the City would 

operate and remain in control of the City’s hospitals is 

reflected throughout the legislation creating the HHC (the "HHC 

Act?) , 

HHC is a public benefit corporation charged by law with 

the duty of operating, managing, and maintaining the City’s 

public hospitals for the benefit of all of the people of the 

State and City of New York. Unconsolidated Laws ("U.L.") §§ [2], 

[5]; New York City Health and Hospitals Corp. - Goldwater Mem. Hosp. v. Gorman, 113 

Misc.2d 33, 448 N.Y.8.2d 623 (Sup. Ct. N.Y. Co. 1983). ‘The HHC 

Act’s Declaration of Policy and Statement of Purpose (UL § 7382) 

declares that the City’s hospitals "are of vital and paramount 

concern and essential in providing comprehensive care and 

treatment for the ill and infirm...and are thus vital to the 

protection and promotion of the health, welfare and safety of the 

people." It further states that the HHC’'s exercise of its 

functions, powers and duties (i.e., the operation of the 

hospitals) "constitutes the performance of an essential public 

and governmental function.” 

To onsite that the performance of this essential public 

and governmental function would remain under the control of the 

City, the HHC Act requires that the HHC must exercise its powers 

to provide and deliver health and medical services to the public 

 



  

in accordance with policies and plans formulated by the City 
  

(U.L..§ 7386(7)). 

One of the ways in which the City maintains its control over 

the hospitals is by continuing to own them. In 1970, following 

passage of the HHC Act, the City entered into an agreement with 

HHC in which it, among other things, leased all of its public 

hospitals (including Coney Island Hospital) to HHC for a term 

consisting of the corporate life of HHC, and at an annual rent of 

$1 (the "Lease"). (Weinberg Aff. Ex. B). The Lease requires HHC 

to operate the facilities (Section 2.3) and further stipulates 

that "the services that [HHC] will render are particularly for 

those who can least afford such services." (Section 2.1) The 

Lease was authorized by the vote of the Board of Estimate, and it 

provides that it can only be amended by written consent of the 

parties and the approval of the Board of Estimate (Section 12.1). 

The Lease also provides that the City’s Corporation Counsel shall 

serve as the attorney for HHC, at the expense of the City, but 

that in the event of a conflict of interest between the City and 

HHC, or if the HHC Board otherwise deems it desirable, HHC may 

engage its own attorney (Section 4.1). 

The ownership by the City of the real property on which 

the hospitals are situated and of the hospital facilities 

themselves is likewise assured by the HHC Act’s requirement that 

 



  

the HHC may not lease any of its properties "without the consent 

of the Board of Estimate of the City," U.L.§ 7385(6). However, 

this grant of power is subject to further limitations arising 

- from the HHC's relationship with the City, as more fully set out 

in U.L. § 7386 and § 7387 of the HHC Act. Thus, the HHC is 

authorized to sublease its properties to the City (U.L.§ 

7386 (2) (a)), and the City is empowered to sublease any health 

facility from the HHC (U.L.§ 7386(2) (b)). However, any such 

sublease must be either for the operation or construction of a 

health facility {(U.L.§ 7386(3)). 

In addition, if, and only if, the HHC determines that 

the use and occupancy of any of its real property is no longer 

required for its corporate purposes and powers (i.e., its 

operation as a health facility), it may then either surrender the 

property to the City or lease it subject to the approval of the 

Board of Estimate as above stated, U.C.§ 7387. 

The City, moreover, is required to subsidize the HHC 

for medical services rendered to the indigent. The amount of the 

subsidy is to be no less than $175 million a year and is adjusted 

annually to take account of increases in the cost of health care. 

The amount of such subsidy and the use thereof is a part of the 

City’s expense budget U.L.§ 7386(1) (a). It, therefore, must be 

approved annually by the City Council. 

 



The City’s control of the hospitals is further assured 

by the composition of the HHC’s board. The Chair is designated 

by the Mayor. Four other members serving ex officio are heads of 

City agencies appointed by the Mayor. Five additional members 

are appointed by the Mayor and Live are designated by the City 

Council. The remaining director is the chief executive officer 

of the HHC chosen by the other 15 directors, HHC Act, U.L.§ 7384. 

Consistent with the legislative purpose in establishing 

the HHC, therefore, the HHC may not lease its real estate unless 

it is no longer required for a health facility. Clearly, Coney 

Island Hospital continues to be required as a health facility. 

The letter of intent, annexed to the affidavit of Luis Marcos as 

Exhibit G, states that the proposed subtenant must operate the 

hospital as a community-based acute care in-patient hospital, 

including specific indigent care obligations (Letter of Intent, 

99 4 and 5). 

The Board of Estimate, whose consent was required for 

any sublease at the time the HHC Act was adopted, consisted of 

five elected members, the Mayor, the City Comptroller, the 

President of the City Council and the five Borough Presidents. 

Each of the citywide officers had four votes and each of the 

Borough Presidents two votes. Any combination of 12 votes, 

therefore, could defeat a proposal of the Mayor.  



The voting in the Board of Estimate was challenged as 

unconstitutional in violation of the requirement of one person, 

one vote in Morris v. Board of Education, 551 F.supp. 652 (E.D.N.Y. 

1982). The District Court initially held that the Board was a 

hybrid body having both administrative and legislative powers 

and, therefore, was not subject to the one person, one vote rule. 

The Court of Appeals reversed and remanded the case to the 

District Court to consider whether the voting patterns violated 

the one person, one vote rule 707 F.2d 686 (2nd Cir. 1983). 

After remand the District Court decided that the distribution of 

votes among members of the Board of Estimate was unconstitutional 

592 F.supp. 1462 (E.D.N.Y. 1984). This ruling was affirmed by 

the Court of Appeals 831 F.2d. 384 (2nd Cir. 1987) and the 

Supreme Court in NYC Board of Estimate v. Morris, 489 U.S. 688 (1989). 

The Court of Appeals in its first consideration of the 

case held that the Board's exercise of both administrative and 

legislative functions (i.e., the grounds on which the District 

Court had determined that the one person, one vote rule did not 

apply), did not protect the Board against a claim of 

unconstitutionality, noting that governmental activities "cannot 

easily be classified in the neat categories as favored by civic 

texts." - 707 FP.24 686, at. p. 690.  



  

- 

As a result of these decisions the City enacted a new 

City Charter in which the Board of Estimate was abolished. The 

powers formerly held by the Board of Estimate were distributed 

elsewhere. Certain powers were distributed to the Mayor, others 

to the City Council. Among the powers of the Board of Estimate 

distributed to an enlarged City Council were the powers of land 

use review. As stated in the Memorandum of the Legislative 

Representative of the City of New York to the State Legislature, 

urging approval of the new Charter: 

[T]he City Council will exercise substantial 

powers with respect to land use review under the 

Uniform Land Use Review Procedure of the Charter. See 

Charter §§ 197-d, 1152(d). The City Council 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). See Charter § 197-4. 

(1990 McKinney's Session Laws of New York, p. 2457). Concomitant 

with the City Council’s succeeding to the power to review 

dispositions of City-owned real property as to land use, the 

Mayor succeeded to the power to approve the business terms and 

conditions of dispositions of City-owned property, subject to 

certain limitations including public bidding requirements. (See 

Charter, § 384). 

 



  

In 1994, the Mayor proposed to sell! three municipal 

hospitals--Coney Island Hospital, Queen Hospital Center, and 

Elmhurst Hospital Center -- in the first round of privatization. 

Bypassing the Board of the HHC, the Mayor used the New York City 

Economic Development Corporation (the "EDC") which he controls 

through appointment of EDC’s President and the majority of EDC’s 

Board, to engage the investment banking firm of J.P. Morgan 

Securities, Inc. ("Morgan") to act as financial advisor with 

respect to the disposition of the City hospitals -- again without 

the authorization or approval of the HHC Board in which the 

powers of the HHC vest (U.L. § 7384) (See agreement between EDC 

and Morgan, annexed to the Weinberg Affidavit as Exhibit C). 

The Mayor imposed a virtual veil of secrecy upon the 

entire endeavor, such that current information was routinely 

withheld from the HHC Board and others. See Affidavit of HHC 

Board member David Jones, sworn to August 22, 1996 (the "Jones 

Affidavit"), submitted by the plaintiffs in connection with their 

motion for summary judgment in Campaign to Save Our Public Hospitals v. 

Giuliani, and a copy of which is annexed to the Weinberg Affidavit 

  

Initially, the Mayor proposed to sell the hospitals outright but then, 
realizing that they were subject to permanent lease to the HHC, restructured 
the transactions so as to provide for long-term subleases -- really the same 
as a sale given the useful life of a hospital facility. 

 



  

as Exhibit D.? In March 1995, Morgan issued a report to the 

Mayor recommending privatization by the City of the three 

hospitals. The HHC Board did not receive this report until it 

had already been approved and made public by the Mayor. These 

documents, and the Jones Affidavit, show that it has been the 

Mayor, and not HHC, that has controlled and directed the 

disposition of these City-owned properties. 

In October 1995, the EDC issued Offering Memoranda for 

the three hospitals, prepared by Morgan. EDC retained counsel of 

its own choosing to handle the legal aspects of the transactions. 

Again, the HHC Board was not consulted. 

After many more months of private negotiations, the 

Mayor now proposes to sublease Coney Island Hospital to profit- 

making private companies. This is so even though the Offering 

Memorandum for Coney Island Hospital (Weinberg Aff. Ex. E) 

expressly limited bidding solely to "qualified parties [who] must 

be bona fide 501 (c) (3) organizations," and no amendment to the 

Offering Memorandum was ever effectuated so as to encourage other 

private bids. Once again, the HHC Board was not consulted 

regarding this shift in strategy. (See the Jones Affidavit) 

  

‘While plaintiffs are not opposing the defendants’ motion to consolidate these 
cases, plaintiffs believe that the cases should be treated separately, due to 
the direct governmental interests represented by the Council plaintiffs 
herein, and the different issues and goals involved in the two actions. 

10 

 



  

The City is a signatory party to a letter of intent 

dated June 26, 1996, to sublease the hospital for at least forty- 

nine years to such a corporation by means of a private 

negotiation (Exhibit G annexed to the affidavit of Luis Marcos). 

The Mayor’s press release announcing the Letter of Intent also 

leaves no doubt as to who is directing the transaction. (Press 

Release #302-96, "Mayor Giuliani Announces City Will Enter Final 

Negotiations for Lease of Coney Island Hospital," annexed to 

Weinberg Aff. as Exhibit F.) 

Thus, 27 years after Mayor Lindsay assured the governor 

and the state legislature that the City would not get out of the 

hospital business if the HHC Act was passed, and 27 years after 

the hospitals were leased by the City to HHC with the proviso 

that HHC operate them, Mayor Giuliani now urges that the time has 

come for the City to get out of the hospital business. He 

proposes to use HHC’s purported power to sublease to profit- 

making corporations real property belonging to the City of New 

York as a vehicle by which his goals may be achieved. 

However, the HHC's power to sublet is strictly 

circumscribed and, in any event, cannot be exercised without the 

consent of the City, including the consent of the City Council, 

and the application of the Uniform Land Use Review Procedure of 

the City Charter. 

11 

 



POINT I 

THE HHC DOES NOT HAVE UNFETTERED POWER 

TO SUBLEASE THE HHC FACILITIES, AND TO THE 

EXTENT IT MAY DO SO, CITY COUNCIL APPROVAL IS REQUIRED 
  

The HHC Does Not Have the Power 

to Sublease City-Owned Facilities 

For the Operation of a Health Facility 
  

The defendants contend that the HHC has the unfettered 

power to sublease the property that it has leased from the City 

to any party, for any purpose, relying on U.L.§ 7385(6). That 

argument, however, ignores the limitations on the power of the 

HHC to sublet contained in other sections of the HHC Act, and the 

provisions of the Lease with the City that require HHC to operate 

the hospitals (Weinberg Aff., Ex. B, Article 2 "Conditions of 

Service.” §§ 2.1-2.3). 

The HHC may return a leased property to the City when 

it no longer wishes to operate it as a public hospital. See eg, 

Matter of Greenpoint Renaissance Enterprise Corp. v. City of New York, 137 A.D.2d 

597, 524 N.Y.S.2d 488 (2d Dep’t 1988) (Greenpoint Hospital 

returned to the City after the hospital was closed). The HHC may 

sublease to the City for the purpose of the operation or 
  

construction of a health facility, U.L.§ 7386 (3). However, its 

power to sublease its property to third parties requires that it 

make a determination that the use and occupancy of the property  



  

is no longer required for the operation and control of a 

hospital, U.L.8 7387. 

The legislative intent could not be clearer. The HHC 

operates the hospitals on behalf of the City, which owns them. 

It can give back a hospital to the City when it is no longer 

required for hospital use (which it has done in the past), but it 

may lease a hospital facility to third persons only if it is no 

longer required as a public hospital. Otherwise, the legislative 

declaration that the municipal hospitals perform an essential 

public function would be frustrated as would the City’s 

commitment to the Governor and state legislature that the City 

would not get out of the hospital business. 

The HHC has not made a determination that Coney Island 

Hospital is no longer required as a health facility. Any such 

determination, in fact, is directly to the contrary because the 

letter of intent with respect to Coney Island Hospital states 

that it must be used by the potential subtenant for a hospital. 

The only determination that the Mayor, not HHC, 

apparently has made is that he no longer wants HHC to operate the 

hospital and believes that it should be turned over to a private 

owner. Whatever the merits of private ownership, for the HHC to 

implement such a determination is in defiance of the purpose for 

which the HHC was formed, the City’s intent in seeking the HHC 

13 

 



  

Act, and the State legislative declaration of policy and purpose. 

In 1984 the HHC sought an opinion from the Attorney 

General as to whether it could create a profit-making subsidiary 

(1984 Op. Atty Gen. 93). The Attorney General concluded that the 

HHC did not have the power to do so. This opinion serves to 

emphasize that the HHC is a public corporation formed to do the 

public’s business, including operating the hospitals owned by the 

City. Since the HHC cannot privatize itself, it certainly cannot 

unilaterally accomplish the same result through subterfuge. 

Indeed, it cannot employ the ruse of privatizing the City 

hospitals through subleases when HHC, itself, was formed to lease 

and operate those hospitals for the public benefit, and where HHC 

is contractually obligated under the lease with the City to 

operate the hospitals for the primary benefit of the indigent. 

B. Assuming the HHC Could Enter 

Into the Sublease, the Approval 

of the City Council is Required 
  

Even if the HHC had the power to make the sublease, its 

action would require the approval of the City Council which for 

the purposes of the HHC Act must be construed to be the successor 
  

to the Board of Estimate. The City Council is truly the 

successor to the Board of Estimate’s review and approval powers 

under § 7387 of the HHC Act, because the Act intended to subject 

14 

 



  

any plan for the disposition of the City-owned hospitals, a 

matter so vital to the public health, to local legislative 

review. The clear purpose of the HHC Act was to ensure that in 

certain key situations, such as a fundamental change in the way 

health care is provided to the City, the local legislative body 

would have a say in the process. The Mayor’s argument that he 

succeeded to the powers of the Board of Estimate with respect to 

the City’s approval of a sublease is nothing less than the 

assumption of imperial power pursuant to which the Mayor both 

proposes the privatization of hospitals and then approves his own 

proposal. It is also analytically faulty in its reliance on § 

384 of the New York City Charter. 

The Mayor argues that because § 384 of the Charter 

gives him authority with regard to terms and conditions of 

dispositions of City property, the sale or lease of City property 

requires only his approval. He acknowledges that prior to the 

abolition of the Board of Estimate, the power of approval was 

vested in the Board of Estimate. Then in a leap of faith, but 

hardly an exercise of logic, he proposes that the State 

legislative intent can now be achieved by a finding that the 

Mayor succeeded, by reason of the amendment to the City Charter, 

to the power of the Board of Estimate under the HHC Act. 

15 

 



  

In support of his proposition, the Mayor argues that 

under the City Charter the disposition of real property is an 

administrative function which devolved upon him when the Board of 

Estimate was abolished, as distinguished from a legislative 

function. He cites in support of this position the United States 

District Court’s first decision in Morris v. Board of Estimate, supra, in 

which the court characterized the Board of Estimate as a hybrid 

body having both administrative and legislative functions, and 

listed the disposition of real estate as an "administrative" 

function as distinguished from a "legislative" function. 

The difficulty with this argument is that the District 

Court’s analysis was expressly overruled by the Court of Appeals. 

The Mayor states in his brief that the reversal by the Court of 

Appeals was on other grounds. This is not at all the case 

because, as previously noted, the Court of Appeals held that 

governmental activities cannot be classified into such neat 

categories and that its functions were such as to require the 

application of the one person, one vote rule. Indeed, a prime 

example is City Charter § 197(c) ("ULURP"). The Mayor’s 

assertion that he has succeeded to all the powers of the Board of 

Estimate totally ignores the Council’s role under ULURP. This 

leap also ignores the fundamental balancing-of-power goal of the 

HHC Act and ignores the fact that the land use powers, formerly 

16 

 



  

held by the Board of Estimate, devolved to the Council under the 

1989 City Charter. 

Beyond this however, the Mayor’s reliance upon § 384 of 

the City Charter is an assault both on the intent of the State 

Legislature in establishing the HHC in the first place, and the 

public policy of the State of New York as expressed in the HHC 

Act that there be local legislative approval of any disposition 

of hospitals operated by the HHC. The importance of public 

health issues was the impetus for a local legislative check on 

any Mayoral plan to alter the City hospital system. The 

wholesale privatization of the entire City hospital system goes 

well beyond the purposes ehit § 384 of the City Charter were 

intended to serve in terms of routine approvals of ordinary 

business terms and conditions -- and no more than that -- of City 

leases. 

The Mayor’s reliance upon § 1152 of the City Charter is 

similarly misplaced, because such reliance simply begs the same 

issues as apply to § 384. The Board of Estimate, wielding the 

power to approve or disapprove of any HHC dispositions of City- 

owned hospital properties, was acting as a legislative check to 

ensure that the fundamental goals of the HHC Act were being met, 

and that the City’s significant interests therein were being 

safeguarded. 

17 

 



  

As noted above, Mayor Lindsay in his letter of support 

for the legislation creating the HHC stated that the municipal 

health care system would continue to be governed by policies 

determined by the City Council and other branches of the City 

government. The present Mayor’s position would subvert this 

intention and leave all of the decision-making powers of City 

government (the power to propose, the power to negotiate, and the 

ultimate power to review and approve the disposition of City- 

owned property) entirely in his own hands. 

(i) The Mayor Has Failed to Observe the 

Requirement of the General City Law 
  

Section 23 (b) of the General City Law provides that the 

real property of a city may not be sold or leased without the 

approval of the legislative body of the city. However, the 

Attorney General has stated that § 23(b) of the General City law 

is not a "general" law as defined by state law and may be 

superseded by local law, 1983 Op. [Inf] Atty Gen. 93. The 

Attorney General in that opinion cited as an example New York 

City’s original Charter which provided that real property of the 

City could be sold under auction by the appropriate head of a 

department, but which was amended by a result of home-rule 

request by the City authorizing the Board of Estimate to sell or 

18 

 



    

. » 

lease real property at public auction or by sealed bids. It was 

this amendment, incorporated into § 384 of the City Charter (the 

section from which the Mayor claims he derives unilateral 

authority to conduct this transaction), that was in effect at the 

time that the HHC Act was adopted. Section 384 is very similar 

today except the Mayor has been substituted for the Board of 

Estimate as approving business terms and conditions, whereas 

Section 384 and other sections of the City Charter recognize that 

the City Council has been substituted with respect to other 

powers formerly held by the Board of Estimate. Therefore, the 

Mayor's power under § 384 of the Charter is limited by other 

provisions, including § 384 (b)1l, requiring public auction or 

sealed bids. Those provisions were never followed here. 

Section 23 (b) of the General City law, also provides 

that such sales or leases shall be made by auction or sealed 

bids. However, both the State Comptroller and the Attorney 

General have opined that a city, by local law, may authorize a 
  

negotiated sale or lease (1983 Atty Gen. supra, Op. State 

Comptroller 67-504). The City Council of New York has not 

enacted such a local law. Indeed, under the City’s Uniform Land 

Use Review Procedure, the City Council is part of the process 

whereby dispositions of City property are made (See Point III, 

infra.) 

13 

 



  

The HHC Act specifically authorizes the HHC to enter 

into a negotiated lease. As long as the Board of Estimate was in 

existence, a statutory scheme existed which was consistent with 

the mandates of § 23 (b) of the General City Law. The HHC could 

enter into a negotiated lease which would require "legislative" 

approval by the Board of Estimate. This would ensure that a 

consensus would be reached by the people of the City through 

their elected local legislative representatives as the General 

City Law commands, and not by a mandate of the Mayor. Even 

though the voting in the Board of Estimate was unfairly weighted, 

12 votes out of 22 could have defeated the Mayor’s proposal had 

the Mayor proposed the privatization plan while the Board was 

still in existence. 

Under the Mayor’s analysis, no such consensus is 

required. The Mayor's contention that he alone may both propose 

and approve the privatization of hospitals is an untenable 

position, contrary to the legislative intent in establishing the 

HHC, contrary to other law, and an affront to democratic 

procedures. 

20 

 



  

POINT II 

THE CITY’S UNIFORM LAND USE PROCEDURES 

APPLY TO THE CITY'S APPROVAL OF THE PROPOSED SUBLEASE 
  

All dispositions of City property must be subject to 

New York City’s Uniform Land Use Review Procedure, ULURP, which 

applies to "the use, development or improvement of real property 

subject to city regulation" and applies specifically to the lease 

or other disposition of any of the City’s real property (§ 197- 

c(10)). Notably, the Mayor’s reading of § 384 is belied by its 

very language, which specifically requires the application of 

ULURP to dispositions of city-owned property. Thus, § 384(b)1l 

provides: 

Any application for the sale, lease (other than lease 

of office space), exchange or other disposition of real 

property of the city shall be subject to review and 

approval pursuant to sections [197-6 and 197-d]. Such 

review shall be limited to the land use impact and 

implications of the proposed transaction. 

Indeed, as the Mayor and his Counsel have previously 

stated in connection with the City’s disposition of Van Voorhis 

Park to Long Island College Hospital, § 384 reflects nothing more 

than that the Board of Estimate’s former power, to approve 

"business terms for the conveyance of City-owned property," 

devolved to the Mayor, and that " [t]he body that exercises the 

[Board of Estimate’s] authority to take final action with respect 

21 

 



to applications subject to land use review under the City’s 

Uniform Land Use Review Procedure, Charter Section 197-c, is the 

City Council." Brief of City Respondents in Friends of Van Voorbis Park, 

Inc. v. City of New York, at p. 8. The Mayor cannot now argue, 

contrary to his and his Counsel’s prior statements, that the 

power to approve dispositions of City property devolved to 

himself rather than to the City Council. 

ULURP ensures community, borough and, ultimately, City 

Council input into all land use subject to city regulation. 

Thus, even if the HHC Act were to be held not to require City 

Council approval of the disposition of the hospitals, ULURP still 

requires such approval. The City’s standard land use review 

procedures apply even where State legislation permitted the Board 

of Estimate to set terms and conditions of property transfer. 

Friends of Van Voorbis Park, Inc. v. City of New York, 216 A.D.2d 259, 628 

N.Y.S.2d 688 (1st Dep’t 1995). 

Since the hospitals are owned outright by the City, 

since their disposition into private hands requires approval by 

the City, and since the City is a party to the Letter of Intent 

to sublease the hospitals, they are clearly subject to City 

regulation, and thus subject to ULURP. A sublease is a 

"disposition" and therefore subject to ULURP. Under basic 

landlord-tenant law, a lessee (HHC) cannot have greater rights  



  

than its lessor (the City). As a landlord, the City must go 

through ULURP. Matter of Greenpoint Renaissance Enterprise Corporation v. City of 

New York, 137 A.D.2d 597, 524 N.Y.S.2d 488 (2d Dep’t 1988) 

(Hospital property surrendered by HHC to the City subject to 

ULURP) . 

The sublease, which is subject to City approval, is 

also subject to the review procedures set forth in § 197-c, 

unless the state legislature intended otherwise. (Waybro v. NYC 

Board of Estimate, 67 NY2d 349,355, '502 N.Y.8.2d4 707, 710 {(1986)) 

(involving unique provisions of the UDC Act); Connor v. Cuomo, 161 

Misc.2d 889, 614 N.Y.S8.24 1011 (Sup. Ct. Kings Co. 1994). 

As the affidavit of HHC Board member David R. Jones 

shows, the claimed "independence" of HHC is a myth by which the 

Mayor attempts to orchestrate and conduct this transaction 

unimpeded by the City’s democratic and land use processes. 

Indeed, this is not the first time that a Mayor has 

unsuccessfully attempted to evade ULURP by using another entity 

or through a legal fiction or similar ruse. In Connor v. Cuomo, 

supra, it was held that the Mayor and the State could not use the 

condemnation process to avoid compliance with ULURP. In issuing 

a preliminary injunction to the plaintiffs, the Court held that 

the Mayor’s consent to the transfer of the City-owned property to 

23 

 



  

the State for $1 constituted a voluntary disposition of property 

pursuant to the Charter, and thus required compliance with ULURP. 

The Mayor argues that since ULURP’s provisions were not 

in effect at the time the HHC was created, the City is not bound 

by those regulations, that the City has no real property interest 

in the hospitals and that the application of ULURP would 

interfere with the "independent" HHC. None of these arguments 

withstand scrutiny. 

Since the hospitals are City-owned, and their 

disposition must be City-authorized, their disposition is subject 

to ULURP. It is absurd to argue that the hospital transaction 

"does not involve any real property interest the City has" 

(defendant’s brief p. 16) in the hospitals in view of the fact 

that the HHC Act Srovides that any sublease is subject to the 

City’s approval and, furthermore, because the City’s hospitals 

must be operated in accordance with policies and plans formulated 

by the City, U.L. § 7386(7). 

Moreover, inasmuch as the lease between the City and 

HHC expressly requires that HHC operate the hospitals, City 

approval in the form of a lease amendment is required before HHC 

can turn the operation of the hospitals over to any sublessee. 

That lease amendment is subject to ULURP. 

24 

 



  

The defendants’ other arguments are resolved by a 

reading of Waybro v. NYC Board of Estimate, supra. In that case the Court 

of Appeals considered the application of ULURP to the 

redevelopment of the Times Square area under the auspices of the 

Urban Development Corporation, which like the HHC is a public 

benefit corporation. The UDC, like the HHC, had been formed 

prior to the advent of ULURP, but the Court did not consider this 

a bar to determining whether ULURP applied to the UDC project. 

The Court of Appeals ruled that to determine whether 

ULURP applied, it was required to examine the legislative intent 

in forming the UDC. It found that despite the "salutary and 

important purpose" of ULURP, its provisions would not apply if 

the state legislature intended otherwise. It carefully examined 

the UDC act and noted that the UDC had been given specific 

authority to override any city policy or procedure. It 

concluded, therefore, that ULURP did not apply to the UDC. No 

such language appears in the HHC Act. 

Cases involving dispositions of property by the UDC, 

such as Tribeca Community Ass'n, Inc. v. N.Y.S. Urban Dev. Corp., 200 A.D.2d 536, 

607 N.Y.S.2d 18 (1st Dep't), app. dism., 83 N.¥.2d4 905, 614 N.Y.5.2d 

387, lv. toapp.den., 84 -N.Y.24 805, 6182 N.Y.85.2d 7 (1994), relled 

upon by the Mayor, are, therefore, sui genesis and inapplicable 
  

to dispositions of property that are subject to other state laws, 

25 

 



  

such as the HHC Act, that contain no similar override provisions. 

Connor v. Cuomo, supra, * 161 Misc.2d 889, 614 N.Y¥.S.2d°1011 (Sup. Ct. 

Kings Co. 1994). In Connor, the court rejected the City’s 

argument, based upon Waybro, supra, that the FDC has the same power 

as the UDC to override ULURP, because the FDC Act is "different 

in scope and intent" (ld. at 1016) from the UDC Act, and that "no 

similar provisions authorizing the avoidance of complying with 

local laws and charters exist in the FDC Act." (Hd at 1017). 

The Court held that Waybro was inapplicable and that the 

disposition of property required ULURP (161 Misc.2d at 895-96). 

A reading of the HHC Act shows conclusively that the 

legislature did not express a similar intent with respect to the 

HHC as it had with the UDC. Rather it expressed the exact 

contrary intent, at the request of the City, by requiring the HHC 

to operate under policies and procedures set by the City. 

Since ULURP is a City procedure, its provisions 

necessarily apply to any disposition, whether by sublease or 

otherwise, of the City’s hospitals to private operators. 

In this respect, Matter of Greenpoint Renaissance Enterprise Corp. v. City of New 

York, supra, is instructive. In that case, the City’s attempt to 

turn Greenpoint Hospital -- which had been returned to the City 

by HHC -- into a homeless shelter was held to be subject to 

ULURP. 137 A.D.2d at 601. See also, Gerges v. Koch, 62 N.Y.2d 84, 476 

26 

 



  

N.Y.S.2d 73 (2d Dep't 1984). The Greenpoint case is dispositive of 

the issue here, inasmuch as whether the hospital is first 

returned to the City before its manner of operation is changed is 

irrelevant to the analysis, since in either case the City still 

owns the property, and is approving the disposition of such 

property. There can be no doubt that ULURP applies to so 

fundamental a change in use as the transfer of the City-owned 

hospital system -- and the mission of providing care for the 

indigent of our City -- into private, for-profit hands forever 

(i.e., for the rest of the useful life of the hospital 

facilities.) 

POINT III 

ALTERNATIVELY, THE DEFENDANTS’ 

MOTION FOR SUMMARY JUDGMENT SHOULD BE DENIED 
  

The affidavit of HHC Board member David Jones directly 

contradicts factual statements made in the affidavits submitted 

by the defendants, particularly with respect to the defendants’ 

claims that the HHC has acted independently and in conformity 

with the requirements of the HHC Act and City law with respect to 

the disposition of the hospitals. Summary judgment should not be 

granted where there is any doubt as to the existence of a triable 

issue, Rotuba Extruders v. Ceppos, 46 N.Y.2d 223, 413 N.Y.S.2d 141 

(1978), or where the issue is arguable or debatable, Stone v. 

27 

 



  

Goodson, 8 N.Y.2d 8, 200 N.Y.S.2d 627 (1960). In view of the 

existence of these material factual controversies, the 

. defendants’ motion for summary judgment should be denied. 

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 

August 22, 1996 

TENZER GREENBLATT LLP 

Edward L. Sadowsky 

: Ira A. Finkelstein 

” Of Counsel 

The Chrysler Building 

i 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 

28