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1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 B E F O R E: 20 HONORABLE JOAN A.

MADDEN, 21 Justice 22 A P P E A R A N C E S: 23 24 25 26 BRACEWELL & GIULIANI ATTORNEYS FOR THE PETITIONER 1251 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10020 BY: DANIEL S. CONNOLLY, ESQ., RACHEL B. GOLDMAN, ESQ., AND: DAVID J. BALL, ESQ., CONTNUED:
VINCENT PALOMBO - OFFICIAL COURT REPORTER

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK - CIVIL TERM - PART 11 -------------------------------------------------------X In the Matter of the Application of CHELSEA BUSINESS & PROPERTY OWNERS ASSOCIATION, LLC, d/b/a, CHELSEA FLATIRON COALITION, Petitioner, For an Order Pursuant to Article 78 of the Civil Practice Law and Rules Index No. -against113194/10 THE CITY OF NEW YORK, SETH DIAMOND, Commissioner for the Department of Homeless Services for the City of New York ("DHS"); GEORGE NASHAK, Deputy Commissioner for Adult Services for DHS; ROBERT D. LIMANDRI, Commissioner for the Department of Buildings of the City of New York ("DOB") FATMA AMER, P.E., First Deputy Commissioner for DOB; JAMES P. COLGATE, R.A., Assistant Commissioner to Technical Affairs and Code Development for DOB; VITO MUSTACIUOLO, Deputy Commissioner for the Department of Housing, Preservation & Development of the City of New York; BOWERY RESIDENTS' COMMITTEE, INC.; 127 West 25th, LLC; and DANIEL SHAVOLIAN, Respondents. -------------------------------------------------------X 60 Centre Street MOTION New York, New York February 7, 2011,

2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 VINCENT J. PALOMBO, RMR, CRR OFFICIAL COURT REPORTER, CLAUDE CASTRO & ASSOCIATES, PLLC ATTORNEYS FOR RESPONDENT 127 W 25TH 355 LEXINGTON AVENUE NEW YORK, NEW YORK 10017 BY: CLAUDE CASTRO, ESQ., GIBSON DUNN & CRUTCHER LLP ATTORNEYS FOR RESPONDENT BRC 200 PARK AVENUE NEW YORK, NEW YORK 10166 BY: RANDY MASTRO, ESQ., AND: GEORGIA K. WINSTON, ESQ., NEW YORK CITY LAW DEPARTMENT OFFICE OF THE CORPORATION COUNSEL 100 CHURCH STREET NEW YORK, NEW YORK 10007 BY: CHRISTOPHER G. KING, ESQ., APPEARANCES CONTINUED:

VINCENT PALOMBO - OFFICIAL COURT REPORTER

3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 THE COURT: all again. MR. CASTRO: THE COURT: Good afternoon, your Honor. I will hear movant in support of PROCEEDINGS Good afternoon. Nice to see you

their preliminary injunction. MR. CONNOLLY: Daniel Connolly from Bracewell

& Giuliani, on behalf of Chelsea Flatiron Coalition. Good afternoon, your Honor. The papers and briefing in this case are significant and I don't want to over burden the record, so I'll just focus on a couple of what I think are the key issues here. Just by way of quick catching us up, the Court has already ruled in this case, and has sent a portion of the case to be heard before the Bureau of Standards and Appeals. That matter is scheduled for a

hearing, this is on the zoning piece of the action that was commenced before your Honor back in October. hearing will take place on March the first, or the first hearing, as we understand it, will take place on March the first, and beyond that, I don't have any other information. And so we will obviously not That

discuss that aspect of the case today. What is left before your Honor is our application for a preliminary injunction for relief in

VINCENT PALOMBO - OFFICIAL COURT REPORTER

4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS connection with other aspects of this project. Again, this is the Bowery Residents Committee is seeking to construct, renovation, do a gut renovation of a facility at 127 West 25th Street, a building that was both a factory and a warehouse converted into a -- a homeless shelter, and what they refer to as a vertical campus that will provide services for the homeless residents. There will be three identified groups of residential homeless in the facility segregated into one group of two hundred; another group of 96 and a third group of 32 for a total of 328 homeless people -will be the census of that facility. THE COURT: Now, what is your understanding

as to who is operating those three separate groups, if you can call them -MR. CONNOLLY: The three are all operated by

the -- I'm going to call them BRC for ease of this discussion, your Honor. BRC will be operating all three programs. They will be using -THE COURT: So BRC has a contract with the

City regarding the operation of the two hundred bed homeless shelter. MR. CONNOLLY: Well, there's a little bit of

VINCENT PALOMBO - OFFICIAL COURT REPORTER

5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 shelter. an issue. PROCEEDINGS I'm not 100 percent sure, but in their

papers, BRC has indicated that -THE COURT: Your argument is that all three

are actually City facilities and that they are going to be completely funded by the City, if I understand your argument correctly, and therefore they should be considered City facilities for ULURP and certain other legal requirements. MR. CONNOLLY: That's correct. Again, it's

not my assertion, it is what is in the myriad of public documents and public statements that have been -THE COURT: those facilities? MR. CONNOLLY: THE COURT: How do I? How do you get there for each of

How do you get to that position

based upon the three different programs? MR. CONNOLLY: homeless -- the -THE COURT: Two hundred bed --- the two hundred bed There is a dispute, So the first program is the

MR. CONNOLLY:

So there is a contract.

I think, as to whether or not it's fully executed, but there is a contract which we have been provided, provides for the provision of those services by BRC funded entirely by the City of New York.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS In addition, there's a program called the reception center, which is a preexisting program funded by the City of New York at a different location which, according to statements made by the BRC -THE COURT: present time? MR. CONNOLLY: THE COURT: BRC. Who operates that program at the

Is that the program that is at

the Lafayette Street facility? MR. CONNOLLY: THE COURT: That's correct.

Okay. And so that facility will be

MR. CONNOLLY:

moved up to 127 West 25th Street under their plan and so that's how you get to 296. THE COURT: distinctions. No, I understand the numerical

I'm interested in the relationships. And the final program is the

MR. CONNOLLY:

32 bed detox center, which is also funded in part by the City of New York, not necessarily by the Department of Homeless Services, licensed by the State of New York, but it again is for homeless individuals who fit certain criteria, in this case, substance abuse criteria -THE COURT: It is an alcohol and substance

abuse crisis center -- that's what I recall from the

VINCENT PALOMBO - OFFICIAL COURT REPORTER

7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 papers -MR. CONNOLLY: That's my understanding. PROCEEDINGS

And there is also, in terms of certain folks who have mental illness or -- are not under -sufficiently treated for medication or what have you, I believe that program can serve those folks as well, where they go into the reception center, whereas the more -- the folks that were being treated or the treatment is taking are in the regular two hundred bed facility. All three of these are run by the same staff, run by the same organization. All the programs

dovetail together, in fact, according to BRC, that's what this is all about, it's created an integrated vertical campus, it is one facility and so in addition -- and also beyond this, your Honor -- I don't think we spent too much time discussing this, but there are other programs in the facility that are not residential. So there is 328 bed capacity, but also there are intake centers and day treatment facilities as well, but all of it -- again, part of the value of the program according to BRC is that it's all integrated and everybody gets the benefits of all the services. THE COURT: Are there certain cost savings or

VINCENT PALOMBO - OFFICIAL COURT REPORTER

8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS efficiency concerns that they're all getting benefits of the same program? MR. CONNOLLY: I don't know, but I would

assume there's efficiencies of scale -- but the problem is, your Honor -- I see what you're getting at, getting me to the point quickly -- is that there is a law in New York City that says you cannot have a facility serving more than two hundred homeless people. THE COURT: That's under the administrative

code, 312 -- 21 dash 312. MR. CONNOLLY: Yes, and the reason for that

is the legislative history is very clear, this City has a long history notwithstanding its enormous obligations to provide for its neediest citizens has a history of warehousing homeless in facilities that are too large, that create both an unsafe environment for the residents, but equally important provide an unsafe environment for the community. and genesis behind that law, question about that. And that is the purpose and there's really no

It's two hundred bed limit census

on -- when you look at the legislative history -- on a particular facility. And so the impact designed to be protected against by that statute would be -- would have no effect if it was funded by different sources, no effect

VINCENT PALOMBO - OFFICIAL COURT REPORTER

9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS if it was -- if they tried to bifurcate it with walls what have you. It's one facility, one census and in

this case is 328 beds. And I think what is telling here, your Honor, is in an effort to try to deal with this infirmity in the situation, they cite this exception. And there is

an exception that was put into the law upon the closing of Camp LaGuardia in 1998. decade goes by -THE COURT: That exception permits a facility And -- I'm sorry 2000 -- a

with four hundred or less beds -MR. CONNOLLY: Allows the City two

opportunities to create facilities up to four hundred, because the capacity that was lost in Camp LaGuardia is Camp LaGuardia has a consensus of 1,700. And so the City -- both the City and BRC say, even if you ultimately rule that we do violate the Administrative Code, Section 312 because it's too many beds, it's still okay, your Honor, because -- it's still okay, your Honor, because we have this exception. The problem with that is that when you invoke the Camp LaGuardia exception, you are essentially acknowledging that this facility subject to ULURP as is articulated specifically in the statute, the Administrative Code statute.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS When you step back, it make sense because the City is saying, okay, we're trying to be practical, trying to live in the real world -- and so are we, trying to live in the real world, so you're taking a huge hit in capacity with the closure of Camp LaGuardia, so we are going to give you a couple of opportunities, a safety valve, but when we do we want to make certain these types of mega facilities, i.e. in excess of two hundred, all the protections, all the rules, all the regulations are strictly adhered to before you go ahead and do that. So it's not just like a free pass and one of the obligations if you're going to invoke that is ULURP. And of course ULURP, the key to the Uniform Land Usury Review Process, ULURP, is that it provides for levels of community input, and let's just taking a quick step back, your Honor. What this is about,

obviously, is about having an opportunity to have the community's voice heard, to have the impact of this type of facility evaluated as it is supposed to be evaluated. The various regulatory schemes, whether

they be the fair share review, the environmental reviews of the State or of the City, or of ULURP, the Uniform Land Review Process, all of this is designed to

VINCENT PALOMBO - OFFICIAL COURT REPORTER

11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS give the community a voice so that the decisions that are ultimately made by the City of New York are as informed as they possibly can be. It the quintessential part of the process where we try to balance having eight-and-a-half million people live together. There is no question that the City has an obligation to provide for its neediest citizens. It is

a legal obligation under the consent decree and there's a moral obligation. We get that.

But the community also has rights and the key to all of this, what makes us all coexist with eight-and-a-half million of us in the City is that these rights are evaluated. voice than the other group. No one group gets a louder If we didn't have it that

way, we would have chaos, obviously. And so these reviews aren't just, you know, boxes that need to be checked on a form before you can move forward with construction and to that point, if I can just highlight two quick -- or three quick things -- before I get to ULURP -- because we all agree that CEQR, which is the City version, and SEQRA, State and fair share have to be done, right, and then ULURP is the little more complicated one and if the Court desires, we will go into that in more detail.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 question. PROCEEDINGS But just with respect to the State and City environmental reviews, if I can for one second read: With respect to compliance to SEQRA, it is noted that SEQRA incorporates, quote, the consideration of environmental factors into the existing planning, review and decision-making processes of state and local government at the earliest possible time -- quote from the statute -- the purpose of SEQRA is to promote efforts which will prevent or limit damage to the environment and enhance human and community resources, community character is specifically protected by SEQRA -- and again, I'm quoting the statute -- at the earliest possible point. The City version of that say law says: Expressly requires, quote, full compliance with its provisions as a prerequisite to undertaking any proposed action that may have a significant effect on the environment. And the same -What is the proposed action here?

THE COURT:

Is the proposed action the contract with Bowery residents? I'm assuming your argument is that the

action here is the renovation, or construction that is going on in the in relation to the building itself? MR. CONNOLLY: I think that's a fair

The proposed action that we're talking about

VINCENT PALOMBO - OFFICIAL COURT REPORTER

13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS is both the construction and the occupancy. the relief we've asked for -THE COURT: It's not the contract, it's the So what --

construction and the occupancy -MR. CONNOLLY: Well, we've also pled in the

course of these papers that the failure to register the contract -- and that's another technical issue, which I think is fully briefed and unless you want to hear more about it, I don't need to go into it. THE COURT: briefed, counsel. MR. CONNOLLY: Yes, I think that's right. No, the registration is fully

And look, I think the important issues here -- I'm trying to stay as practical and in the real world as possible and keep us focused -THE COURT: Is your argument that the

compliance with the city and state environmental laws is meaningless if it's done at the end stage of the project as opposed to -- prior to the commencement of the construction or -- construction, let me put occupancy aside. MR. CONNOLLY: absolutely, yes. THE COURT: occupancy -Now, you said construction or And the answer to that is

VINCENT PALOMBO - OFFICIAL COURT REPORTER

14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 facility. PROCEEDINGS MR. CONNOLLY: Or occupancy, absolutely, yes.

If we -- if sit a fate accompli -- that's the effort here. The effort is to make this sort of a done deal,

to adjust the status quo such that it is a done deal and as you try to voice your concern or try to get input into the decision-making process as the laws rules of the City of New York mandate, you are now arguing against a done deal. And you are also putting

the petitioner, are you putting the City and putting the Court in a position of having to make a decision which is different now. Right now there's nobody being housed in this Right now this facility doesn't exist. The

time to be having these discussions, the time for the City of New York to be engaging in these reviews is prior to spending City money on this facility, is prior to occupying this facility, is prior to basically making all the decisions. conclusion forgone. Obviously now the City -THE COURT: So if they haven't occupied the Because it makes the

facility, that would be acceptable in your viewpoint to conduct these reviews? I think that's the City's argument at this point and Bowery Residents that these reviews are being

VINCENT PALOMBO - OFFICIAL COURT REPORTER

15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS conducted at this point. MR. CONNOLLY: I think, no. Well, again,

practically speaking, I believe that we already have a serious problem but this has not happened yet. And the

City has indicated in public statements in the past a long time ago they were doing these reviews, they weren't done. When we were all before you in oral

argument in November, they were going to be done by the end of the year they told the Court. The Court sort of

questioned that, is it really going to be by the end of the year. They're still not done. They're still

telling you today you will see from the papers submitted they are four to six weeks away which happens to coincide nicely with the planned occupancy of this facility and so I am troubled by that. Having said that, if the Court is asking, trying to be practical and live in the real world, which we all have to do, if the Court is saying would an injunction against the occupancy of this facility while these reviews are going forward and until such time as they comply with all the statutes, that is not obviously something that I would object to. I recognize -THE COURT: It's not quite the way I phrased

VINCENT PALOMBO - OFFICIAL COURT REPORTER

16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 again? MR. CONNOLLY: 100000 square feet. It's 12 stories. it, counsel. MR. CONNOLLY: THE COURT: I know. PROCEEDINGS

I understand why you might want

to phrase it that way -MR. CONNOLLY: I'm saying the harm is being Last Saturday 25th They were

done every minute of every day.

Street shut down while cranes were going in. working feverishly on changing permanently the character of this building. THE COURT:

That's the interior of the

building, as I understand it. MR. CONNOLLY: THE COURT: Yes --

I understand it is a gut

renovation and it appears to be a gut renovation, but it's my understanding it's the interior of the building. MR. CONNOLLY: You are 100 percent correct,

it is a gut renovation, it is being converted into a homeless shelter and so it's -THE COURT: How many stories is the building

And the -- as you probably recall,

I'll just say it, the idea is that all, I think, except the top two floors will be homeless programs and health

VINCENT PALOMBO - OFFICIAL COURT REPORTER

17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS care programs and the upper two floors will be offices for -- executive offices for BRC. And so the -- I apologize if I didn't really answer your question, but my point is that the harm that is being done -- and this is what the case law -we get good guidance on this from Connor versus Cuomo, Senior, and Stop BHOD versus the City of New York. Those cases stand -- found the Court in almost identical, conceptually identical -- Connors is, in fact, a homeless case; and Stop BHOD is the Brooklyn House of Detention, and the circumstances are different, but in both places the Court said, look, I'm balancing the equities, in reviewing the situation, it is the fact that the law requires a community voice in this process. That has been taken away by moving forward without the benefit of the community. done. That damage is

And there comes a point in time -- this comes

out of the Stop BHOD case, I may be citing Farrar versus Dinkins -- but there comes a point in time where if the reviews haven't been done, they ought to have been done and now it's irreparable harm and both cases are contexts where the courts issued preliminary injunctions either from construction and -- or from -THE COURT: BHOD involved a construction --

VINCENT PALOMBO - OFFICIAL COURT REPORTER

18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 facility. Here there's no expansion, it's internal renovation. MR. CONNOLLY: Again, your Honor, you are I think -enlarging -MR. CONNOLLY: THE COURT: Expansion. PROCEEDINGS

-- expansion of the present

correct, but I'm not sure that's the point.

I know it is a distinction that BRC makes, but the point is -- we're talking about a radical new never before used purpose for this, right? THE COURT: And so --

Is that what you are -- is your

argument that this is going to change the character of the community because of the nature of the use of the building? MR. CONNOLLY: Yes, I think -- and this is

the kind of thing that will be reviewed in an environmental -- if they really do it -- in an environmental review. Again, the character of the

community, the impact on the resources of the community. These are all things that are legitimately

before the agency reviewing on a environmental level fair share. Think about this, in fair share, the whole point of this is we take a community and before we

VINCENT PALOMBO - OFFICIAL COURT REPORTER

19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS impose upon that community another social service program which draws resources in ex -- to a degree greater than the average citizen, before we do that, we're supposed to do in New York City this analysis. How burdened is this particular community so that we spread it out. This goes back to this trying to have

some kind of order in a City of so many needs and so many rights and varying, competing interests. Eight-and-a-half million people. So we have this regulatory scheme and it has to be adhered to and when it's not adhered to, that's when the community has no place else to go other than to you, to the courts, and that's where we are. The horse is out of the barn but it's not off the property yet. And that's how I view it. I view it

as there's still an opportunity to bring this back in, do the reviews, get a fair and honest assessment of what is the impact in this community, allow the community's voice to be heard in an orderly, informed way and then the decisions will be made as they're made. Now, this is focusing on SEQRA and CEQR and fair share, where we all agree -- there's one little piece of it that is not contentious is that we all agree those reviews need to be done.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 chart. PROCEEDINGS ULURP, on the other hand, is another story and I think it's worth spending a few moments, your Honor, allowing me just to focus the reasons why I believe -THE COURT: One moment.

(There is a pause in the proceedings.) THE COURT: Go ahead. So with the Court's indulgence

MR. CONNOLLY:

I just will spend a couple of minutes about ULURP, unless you want to stick with the environmental -THE COURT: No. Go ahead.

I have the City charter here. MR. CONNOLLY:

Good old section 197.

So the City charter calls for Uniform Land Use Review Process under certain circumstances and I would say this project, your Honor, falls -THE COURT: What does the Land Use Review

procedure entail, practically speaking? MR. CONNOLLY: Practically speaking? That's

a great question because I have a chart here to answer that question. And what the chart screams out -THE COURT: The only thing is I can't see the

Did you submit it in your papers? MR. CONNOLLY: It's not in our papers, your

VINCENT PALOMBO - OFFICIAL COURT REPORTER

21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Honor. PROCEEDINGS I've got copies. THE COURT: Will you show counsel.

Do you object -MR. CONNOLLY: MR. MASTRO: MR. KING: It's off the City's website. I have no objection, your Honor. No objection, your Honor. Do you mind if I pass that up.

MR. CONNOLLY: (Handed) MR. CONNOLLY:

I apologize for the font.

But

I'll tell you what -- in short, your Honor, what the process calls out for is community involvement. an opportunity for elected officials to weigh in. It is It

starts with the City Planning Commission; then it goes to community boards, which are -- which represent the citizens at the very, very local level; it then has borough president review, which has its own constituencies; then you have an opportunity for the City Planning Commission again, and if it's passing all these processes, and then on to the City council, again, getting community benefit through elected officials. The point of ULURP is exactly what I was discussing before, which is to say to create some kind of order under land use projects. And so especially

when we're going to change in significant ways the

VINCENT PALOMBO - OFFICIAL COURT REPORTER

22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS character of a neighborhood, the character of the use and occupancy of a particular building, and so -- it's not just there because it's onerous or it takes time or what have you, it's there for important, legitimate reasons and the question is why you work in this case. And I submit to your Honor basically three provisions of ULURP that we can focus on, and I will be very, very brief in this regard. You have your chart in front of you, so I'll give you the exact cite, Section 197 C A 11 talks about the acquisition of land by the City by lease. issue number one. That's

The question is -- if BRC and the

City will tell you it doesn't apply under these circumstances, your Honor, because this is a lease between a private group, BRC, and a private landlord, Daniel Shavolian. But the reality is that the way that the courts have decided what constitutes whether or not it is in fact a City lease is -- and quoting from the Farrar versus Dinkins decision -- whether the City's interest will so predominate the use of the land to the exclusion of the owner that effect on the community will be the same as if the City had taken title to the land. And so in that respect, I just want to go

VINCENT PALOMBO - OFFICIAL COURT REPORTER

23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS through with you your Honor a couple of examples of how much control the City of New York will have over this -THE COURT: I think your argument as to

control is that the Bowery residents will operate it in accordance with DHS policies and procedures, that their monitors will have access with the clients' consent to the facility; DHS, the only referral system and they must accept their referrals and that they must be filled to 95 percent capacity and I think those were some of the arguments in your brief. MR. CONNOLLY: the rent -THE COURT: The rent. You indicate that DHS And in addition, for example,

will be paying all of the rent. MR. CONNOLLY: THE COURT: 100 percent of rent --

What is that based on? It's in the contract, your At 7.2,

MR. CONNOLLY:

Honor, between the City of New York and DHS. it's also -THE COURT: over the term. MR. CONNOLLY:

7.2 million annually and 76.1

Over the term -- but almost as

important to that is there's also a provision that says DHS acknowledges, quoting, the lease for the shelter provides for annual increases in rent payments over the

VINCENT PALOMBO - OFFICIAL COURT REPORTER

24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS term of the lease and DHS represents that the yearly budgets for the operation of the shelter shall include sufficient moneys to pay for the annual lease payments and the yearly increases in rent. of the contract. And so you named the critical points, but it goes a little bit deeper than that. BRC must consult That's Article 10 E

with and receive written approval from DHS before initiating any structural change, including renovations and room reconfigurations, divisions or change in use. BRC must provide home -- I'm sorry, must -- the services you mentioned that they have to provide access for audit and approval -- BRC may not make any changes in any major program component or changes in the level of paid or unpaid staff without DHS's prior written approval. It goes so deep, your Honor, that DHS must even approve not only the shelter directors but also the shelter's maintenance superintendent for the building. The City -- in other words, the City of New

York has complete control over this and there's -- BRC has no termination rights, that's another factor in the contract. And so go back to the language for just a moment of Farrar versus Dinkins where it says that the

VINCENT PALOMBO - OFFICIAL COURT REPORTER

25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS City's interest will so predominate the use of the land to the exclusion of the owner, that effect on the community will be the same as if the City had taken title of the land itself. This is the example, quite frankly -quintessential example of what's being discussed in Farrar versus Dinkins. This is a City facility, funded

the rent 100 percent, the programs as best we understand it at least 80 percent, more than 50, 80 percent of the programs are funded by the City of New York. And so as a result we believe that this is

subject to the Uniform Land Use Review Process on that prong. Second -- there's three. Second, involves this Camp LaGuardia issue. Both the City and BRC in their papers have indicated that if you don't accept their idea of segregating the programs, if you say yes that breaches the census, they're ready to hit you with Camp LaGuardia the exception. Fortunately -- or unfortunately that exception mandates a ULURP review under section -21-315 of the Administrative Code. That's in -- so in

effect -- and I don't like lawyers who do this, so I'm not going to say that they're conceding that it's

VINCENT PALOMBO - OFFICIAL COURT REPORTER

26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS ULURP, but if you're going to take that road -- and look, it's hard enough to fight City Hall, and the people working for City Hall, but you can't keep changing the bar, so it either is or isn't. They

either are asserting the Camp LaGuardia exception, in which case they are putting this facility into the purview of ULURP, or they're not and they're violating Section 312 of the Administrative Code. And so one way

or the other -- but you can't have it both ways and since they both assert it in their papers, the argument to the contrary, I will for purposes of the argument take the position they have now tripped this facility into a ULURP review. And then finally, the final provision of ULURP is -- involves if it is part of a housing plan or program, and the record is replete, your Honor, with examples of, and statements made by the deputy commissioner of the of Homeless Services that this

program is part of the City's plan, in fact, in arguing the irreparable harm, they are telling your Honor that if you were to stop this from moving forward, the harm that you would visit upon the City's plan and the City's ability to meet its burdens under Callahan or under -- its obligations pursuant to law that houses the homeless -- and in each of these three ways this

VINCENT PALOMBO - OFFICIAL COURT REPORTER

27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 time. PROCEEDINGS proposed project cries out for a ULURP review. The fact that there hasn't been one and we are -- I know your Honor in her order back in January had said there's a couple of questions you want the City, New York City, to answer, one of which is, you know, when is the construction going to be done. And

so let's assume the answer to that question is in the next couple of weeks. We are this deep into the

project and they haven't begun the ULURP process. There's no question that that also constitutes irreparable harm. You couple the failure to do ULURP, the failure to CEQR, the failure to do SEQRA, the failure to do fair share, the fact that the defense to all that is -- except for ULURP -- the defense for all that is: Your Honor, we're doing it. It's all these other issues. But we've been hearing that for a very long Bear in mind, just contextually, this whole It's moot. It's not ripe.

project began between BRC and the City of New York back in October of 2009. There were significant

communication, e-mail communication between the City and BRC in November of 2009, in December of 2009. We

are now in February of 11, and none of these reviews have been done.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 applies. PROCEEDINGS Now ULURP they're saying they don't think it In my view they're wrong. As a result,

uniform in all of this has been the community has been denied. Decent people just like us have been denied And they've been denied their voice based

their voice.

upon the City and BRC ignoring its own regulatory scheme, and thereby silencing us with the hope that by the time you really can get in front of someone who can decide this, it's going to be too late and the balance of equities will be asking this Court to, yes, the voice of the citizens matters, but I've got 328 soles sitting in the building and we've seen decisions -- I'm sure the Court has read decisions as well where it puts the Court in an impossible position. This would never

have come to light if it hadn't been for the Wall Street Journal writing an article about this in March of -- or May of 2010. The first public hearing of this in any way was hosted by Community Board Four. by BRC. Mr. Rosenblatt, the executive director of BRC, says -- admits that he was surprised by the fact that the Wall Street Journal published this article. It was an accident. None of these reviews would have Not by DHS. Not

been undertaken and as we sit here now in February --

VINCENT PALOMBO - OFFICIAL COURT REPORTER

29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 THE COURT: PROCEEDINGS Well, someone notified the I forgot who, it was

community board of the contract. stated in the papers. notified -MR. CONNOLLY: February of 2010, DHS -THE COURT: Services -MR. MASTRO:

Bowery residents -- who

I can clarify that.

In

Department of Homeless

That's several weeks before the

Wall Street Journal article. MR. CONNOLLY: The Wall Street Journal

article was in May, four months later. MR. MASTRO: THE COURT: given the hour -MR. CONNOLLY: I know it's late and I do want Four months later. All right, Counsel, do you --

to talk about -- if the Court wants to hear about the issues regarding irreparable harm and balancing the equities, but we can do that if the Court is willing to later. THE COURT: I think you covered that in your

papers and you cite various cases. MR. CONNOLLY: MR. KING: Thank you, your Honor,

Christopher King for the municipal

respondents, Corporation Counsel's office.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS Your Honor, I will try to be brief. When petitioner's counsel -- first of all, he's right when he says there's no dispute about CEQR and fair share. We are doing it, we are on track to complete those reviews in the next four to six weeks. THE COURT: Can you tell me this, Mr. King,

one of the arguments petitioner makes is the fact that there been no reviews, either CEQR, SEQRA, fair share or ULURP if needed prior to the construction and at this point prior to the -- well, let me rephrase that, prior to the construction and prior to entering into the contract. MR. KING: Well, construction -- as we

explained is being done -- and as-of-right buildings permit. There is no obligation to perform any review of an as-of-right buildings permit, under the zoning resolution or any other law in the City. So as far as in terms of the construction, there's simply no review requirement so there's no harm. With respect -THE COURT: There's no, is no review

required -- isn't it purpose of the statute as

VINCENT PALOMBO - OFFICIAL COURT REPORTER

31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Honor. PROCEEDINGS petitioners have said is to permit community involvement into some of the decision-making -MR. KING: THE COURT: Absolutely. And isn't the fact that

construction is ongoing and there is a contract in place, even if it hasn't been registered, that there's a contract between the City and Bowery residents regarding the operation of the facility and the nature of the facility itself is, what, 328 beds -MR. KING: THE COURT: Your Honor, the question --- with a variety of programs, so

isn't it the type of facility that under the statutes are meant to have community input or involvement -MR. KING: Absolutely.

THE COURT: -- in the decision-making process-MR. KING: Absolutely, your Honor,

absolutely, absolutely. THE COURT: Their argument is the

construction is going forward now, the contract is in place. MR. KING: The contract is not in place, your

And petitioner's counsel stands up in court and

says the contract is signed, he is not correct. He may have been told that by somebody at the Department of Housing Services, Homeless Services, it

VINCENT PALOMBO - OFFICIAL COURT REPORTER

32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 is not correct. PROCEEDINGS There is no final contract. This is

not a fait accompli, in fact, the contract might be adjusted or changed based on a fair share review, the fair share review that we are currently performing or based on CEQR -THE COURT: Is it the landlord who has taken

all the risks in this project -MR. KING: THE COURT: Absolutely. -- if this contract is not

approved then all the landlord will be left with a building that's been renovated to comply with the terms of this contract and if after reviews, the programs cannot be housed in these facilities, then the landlord has lost whatever investment the landlord may have had in terms of renovation, is that it? MR. KING: Right. That's entirely possible.

We hope that wouldn't happen but it's possible -- I think BRC explained that they are at risk at this time. THE COURT: MR. KING: THE COURT: MR. MASTRO: your Honor. BRC or the landlord? BRC. BRC is funding -Yes. The risk is BRC's risk,

We are the ones funding all the

renovations to enter into a 33 year lease. THE COURT: Are you expecting any

VINCENT PALOMBO - OFFICIAL COURT REPORTER

33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 sorry. PROCEEDINGS reimbursement from the City for the renovation? MR. MASTRO: Your Honor, no, only in the

sense that we are hoping that the contract goes through and therefore that will involve some longer term use of the facility pursuant to a City contract, but we don't have a guarantee of that, your Honor. We're the ones

assuming that risk, and I have to add that even the contract the City is contemplating is much shorter than the entire duration of this lease. It is a ten year Ours

contract with two potential five year renewals. is a 33 year contract. THE COURT: with the -MR. MASTRO: With the landlord.

So this is a classic case --

You will have a 33 year contract

So this is a

classic case of one private party, a not-for-profit, entering into a lease with another party a landlord -THE COURT: MR. MASTRO: I am ready. MR. KING: is BRC's risk here. In terms of there's been no public input here, in terms of that, Mr. Connolly mentions -THE COURT: MR. KING: Has there been public input? There's been a hearing by the I think Mr. Mastro agrees that it Counsel, you will have your turn. Thank you, your Honor. I'm

VINCENT PALOMBO - OFFICIAL COURT REPORTER

34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 be one. what -MR. KING: A garbage transfer station would A school. Mayor's office -THE COURT: MR. KING: There's -- excuse me? There has already been a hearing PROCEEDINGS

by the Mayor's office of contracts, a public hearing on the record at which Mr. Connolly testified. THE COURT: MR. KING: It is --

Is that the November hearing? I think the November hearing, yes.

There will be a consultation process as soon as we finish the fair share review with the local community board and there will also be notice, at a minimum, of the CEQR review when it is complete. THE COURT: Now, the fair share review, what

does that entail, procedurally? MR. KING: It -- as Mr. Connolly said I think

by and large correctly it looks at the distribution of community facilities in a neighborhood -THE COURT: in this -MR. KING: THE COURT: All types of community facilities. Can you give me an example of What type of community facilities

A police station. MR. CONNOLLY: MR. KING:

Methadone --

Any kind of City facility which

VINCENT PALOMBO - OFFICIAL COURT REPORTER

35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Services? MR. KING: THE COURT: Yes, ma'am. And then they conduct such a PROCEEDINGS would arguably constitute a City facility has to be looked at. And the City considers whether there are

disparities in neighborhoods, and analyzes whether the proposal will create or worsen disparities in a neighborhood. THE COURT: MR. KING: Who conducts that review. In this case, it's the Department

of Homeless Services. THE COURT: So the Department of Homeless

review based upon data that's available -MR. KING: THE COURT: MR. KING: Yes. What is the next step? Then they reach out to the

community board and there's either a meeting or an opportunity to comment. THE COURT: community -MR. KING: borough president. THE COURT: MR. KING: Are those separate? It's basically the same process. The community board and the Sorry, they reach out to the

It's basically called an article eight letter that

VINCENT PALOMBO - OFFICIAL COURT REPORTER

36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS needs to go to the community board and to the affected borough president. And then after the consultation process is concluded, the agency makes a decision, either to go forward as originally proposed, to make a change, to make an adjustment, not to go forward -THE COURT: Are there public hearings held in

connection with that public review? MR. KING: There is no public hearing It's called

requirement in fair share, per se.

consultation, that's what the law says. THE COURT: So Department of Homeless

Services would make a determination? MR. KING: Yes, your Honor.

And that process will go forward. THE COURT: this situation? Now, what would be reviewed in

Because there seems to be some issue

here as to who is running what part of the facility -MR. KING: THE COURT: an incorrect word. MR. KING: For the purposes of fair share In this situation -I shouldn't say running, that's

review, it would be the two hundred bed homeless facility. THE COURT: Just the two hundred bed

VINCENT PALOMBO - OFFICIAL COURT REPORTER

37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Honor. homeless. MR. KING: THE COURT: MR. KING: Yes, your Honor. What about the other 96 bed -They're not City facilities, your PROCEEDINGS

They're actually funded by -- they're actually

funded in part, some money from City Health, most of the money from State Health. The actual money comes

from the State and is passed through City Health, under the law the funding is passed through City Health, they call a local government agency. approval -THE COURT: According to the papers -- whose They have no

papers -- I think this is the City's papers, New York State, the Office of Alcohol and Substance Abuse Services, under their auspices there will be the 32 bed detox program. MR. KING: THE COURT: MR. KING: THE COURT: MR. KING: Yes, your Honor. That's under New York State -That's a State program, your Honor. That's a State program -The City has involvement in that

program through some funding and through an advisory role in relocating the facility. But the facility And as I

cannot be relocated without State approval. think --

VINCENT PALOMBO - OFFICIAL COURT REPORTER

38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 THE COURT: PROCEEDINGS And then the reception, what's

been called the reception, it's either 96 or 77 beds -MR. KING: That's BRC's, your Honor. And BRC

runs that program, it's independent of DHS and City health. THE COURT: Now, is the City going to be

paying the rent for the entire building? MR. KING: No, your Honor, no. We are paying

rent for the two hundred bed homeless shelter. THE COURT: bed detox program? MR. KING: As I say, the funding in that is a It's by and large State Who is paying the rent for the 32

little more complicated.

funding and it's passed through City Health, State regulations, all governed by the State Office of Mental Health Regulations and the OASAS regulations. Those are not City facilities, under any reading of fair share. THE COURT: And who would be paying the rent

for the 77 or what is it, 98 reception -MR. KING: I don't know, your Honor. What I

can tell you is that we will be -- DHS, the City, will be paying rent for the homeless shelter, two hundred -THE COURT: available? What about the services that are

VINCENT PALOMBO - OFFICIAL COURT REPORTER

39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 contract. So to answer your question, your Honor, what would be reviewed under fair share would be the two hundred bed homeless facility. You know, this idea that we somehow concede that if we go over the two hundred bed limit and avail ourselves of the Camp LaGuardia exception, that we have -THE COURT: I read your papers. I know you stood up. MR. KING: PROCEEDINGS I'm not sure exactly how the But

funding works and how it relates to the rent. that -THE COURT:

I see two other attorneys have

I ask you to both be seated. MR. KING: That is not part of the DHS

don't concede that, you say if, if, if, if -MR. KING: And your Honor, the statute says:

If applicable, you will review a larger facility under applicable CEQR, ULURP and/or fair share. It's astounding to me that petitioner's counsel stands here in court and reads a law and doesn't mention the word applicable. And somehow turns

that into an admission that if we go over two hundred beds, per se, ULURP is required. that. The law does not say

VINCENT PALOMBO - OFFICIAL COURT REPORTER

40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS As I said, the ULURP review and fair share review is ongoing. In terms of whether the trigger for ULURP, as Mr. Connolly argues, that DHS's agreement amounts to a lease at the end of the day. As the Farrar -- the First Department made clear, your Honor, the law in this department is that you have to surrender possession and control of the premises in the same way that you would if you took title to the property. The City is not a party to the lease, okay. Yes, we have a say in how our rental payments and other payments are spent at this facility. To lend millions

of dollars to a not-for-profit and not put provisions in an agreement to make sure our money, the City's money, the people's money, is properly spent and spent according to DHS standards, standards by the way, that are also mandated by courts and for instance, the Callahan litigation. So the fact that we have a role in how the money is spent does not mean that we are the lessee. We are not on the lease, your Honor. Let's say, for example, that we stopped paying the City, and the agreement with DHS runs out, or BRC stops paying the landlord, the landlord doesn't

VINCENT PALOMBO - OFFICIAL COURT REPORTER

41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS have any rights against the City. lease. We're not on the

It's not a lease with the City. And as numerous courts have made clear, your

Honor, that this type of funding agreement from a City agency for the purposes of providing homeless services, funding the agreement itself is not a lease. And it's

Luccia Plaza and Farrar and Davis V Dinkins, all those cases, it's plainly not a lease. Mr. Connolly also argues that this facility is being built pursuant to a housing plan. That

provision of ULURP says a housing plan under Housing Law. This is not a housing plan under Housing Law. In fact, it's not housing at all. emergency shelter. It's temporary

It is not housing under any stretch

of that provision of ULURP. I would also just like to touch a little bit on the harm here. You know -Can I just ask you this in terms You are saying -- it is your

THE COURT:

of the number of beds.

position that all the beds should be looked at separately because there's only two hundred beds for the City shelter and there's another 32 beds that are part of a State program, although part of the funding is from the City, and then there's the additional --

VINCENT PALOMBO - OFFICIAL COURT REPORTER

42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS additional beds run by Bowery residents -MR. KING: THE COURT: Correct. -that it's permissible to have

a facility with over two hundred beds as long as the funding is not from the same -- from the City -MR. KING: I'm saying. I'm saying the Ad Code says it's permissible to have a facility over two hundred beds, any shelter that's over two hundred bed census, if we have not yet replaced Camp LaGuardia. THE COURT: MR. KING: THE COURT: MR. KING: Period. No, your Honor, that's not what

Any shelter? I'm sorry, your Honor. Any shelter? To the extent the Court is

inclined to consider BRC's reception beds as shelter bets, and the detox beds also as shelter beds, we still don't get over the four hundred limit. And petitioner's counsel admits that we can avail ourselves of that exemption. They just don't

want to it happen, they would rather have them somewhere else. The contention that going over two

hundred beds, per se, requires a ULURP review is just not correct. says. It does not -- that's not what the law

VINCENT PALOMBO - OFFICIAL COURT REPORTER

43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS In terms of harm, your Honor, you know, there's been a lot of talk about the lack of process being, per se, harm here. And Mr. Connolly talks about If you

Stop BHOD, that's the seminal case, not BHOD.

go back and read that case carefully, your Honor, why the injunction was issued there was because we were proposing -- doubling the size, doubling the capacity of a jail. What other -- there was another claim IN that case, too, that we could not reopen a jail that had been closed for about four or five years. And the

petitioners in that case made the same arguments, that they were being deprived of reviews because we were reopening the facility, and the Court there denied the preliminary injunction and allowed us to reopen the facility at its current capacity. Mr. Connolly cites Connor V Cuomo. That case

was actually a case that was not under the ULURP provisions that he cited in his papers. It was

actually under an eminent domain procedure law provision and it involved a case in which the State had actually condemned the property, had taken it already. And I will also note in that case Connor V Cuomo also involved a completely new facility. THE COURT: It involved, excuse me?

VINCENT PALOMBO - OFFICIAL COURT REPORTER

44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 facility. So the idea that -- and your Honor, they may be harmed. The question for the Court, your Honor, is MR. KING: PROCEEDINGS Anew facility. A brand new

whether the harm now is permanent and irreparable and we submit it is not and they have failed to demonstrate. Mr. Connolly talks a lot about harm and not just about process, but he talks about -- and I just want to touch upon the standing issue there. Mr. Connolly talks about harm, and we don't think he's right when he says deprivation of a process, which the Court can impose is, per se, irreparable harm, but he also alludes to other harms. And the law is clear in this state, particularly since the Court of Appeals came down with a decision -- Save the Pine Bush, that it is not sufficient, as petitioner's counsel would have you believe, to say: We live nearby or we live next door, That is not the law in this

there we are harmed. state.

Mr. Connolly is correct when he says proximity can be an inference of harm. that score. He is right on

But, your Honor, the law is clear, you You cannot just say: We live

must allege harm.

nearby, therefor we are harmed.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS Some of the cases that he cites also, yes, proximity was deemed an inference of harm, but in all of those cases petitioners had alleged specific injury that was different in kind than the public at large. And -- Committee to Preserve Brighton Beach, two cases with the same caption, similar caption. petitioners in that case all alleged that they were either being deprived the use of a resource or that they would be negatively impact by a use, and explained what those impacts were. They couldn't use the park; The

there was noise; there were air quality impacts; there was traffic', there were all manner of allegations about injury there, your Honor. We have none of that here. For the first

time since this case has been filed I hear about impacts about safety and impacts to community character. There's none of that in petitioners'

papers, absolutely none. So I would just say briefly, petitioners still do not have standing unless -- until they can actually allege injury which they have not done. that's I think enough for now. MR. CONNOLLY: And

I'll turn it over to --

Your Honor, can I very briefly

on the money issue -- this is a question -THE COURT: Wait, let me hear Mr. Mastro.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS MR. CONNOLLY: It may help with his

discussion -- because it comes out of the mouth of his client. THE COURT: Excuse me? What I'm about to read comes

MR. CONNOLLY:

directly from his client -- written responses to questions by the community board who asked the same question you just asked -THE COURT: Yes. Which is how much and what

MR. CONNOLLY:

types of funding is the City of New York providing to BRC for the operation of this project and in what form? The answer from BRC. Quote: The City of New

York is providing and is anticipated to provide operating funding to BRC for the programs it operates at 127 West 25th Street including the following: Chemical Dependency Crisis Center received funding through a contract with the New York City Department of Health and Mental Hygiene; the reception center -which is the 96 beds -- the reception center receives funding through a contract with the New York City Department of Homeless Services; the two hundred bed shelter will receive funding through a contract with the New York City Department of Homeless Services; the outpatient Fred Cooper Substance Abuse Services Center The

VINCENT PALOMBO - OFFICIAL COURT REPORTER

47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS receives funding through a contract with the New York City Department of Health and Mental Hygiene. And the

home based case management program receives funding from the New York City Department of Health and Mental Hygiene and the New York City Human Resource Administrations Adult Protective Services Division. And with respect to the lease, according to the contract, the full value of that lease is 7.2 million dollars per year, and under the contract, the City of New York is going to pay that lease, in addition to rent increases of the life of that lease. THE COURT: Thank you.

I will hear you. MR. MASTRO: Your Honor, I'll start right at

that point, because the fact of the matter is that the contract itself that the City is now in the process of reviewing has not sought to register yet. no contract in place. So there is

It is a proposed contract that

is undergoing CEQR and fair share review. Under that contract, the City is only committed Department of Homeless Services, if it were to enter into the contract, to provide a minimum -- a maximum level of payment per year, an annual amount not to exceed 7.19 million for the operation of a two hundred bed homeless shelter facility and related

VINCENT PALOMBO - OFFICIAL COURT REPORTER

48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 services. That's all this contract is about. And your PROCEEDINGS

Honor, the fact of the matter is as this record shows before you, there are multiple programs that my client, BRC, my client, the real party interest here, a not-for-profit, which is trying to provide necessary Homeless Services, some at the City's request from the Department of Homeless Services, some at the request of the State and City departments of health, mental hygiene, substance abuse, alcohol abuse; some programs that BRC runs itself, like the reception center where it hopes that when it runs a reception center at this facility it may be able to reach agreement with the City's Department of Homeless Services, but as Mr. Nashak has sworn -- Deputy Commissioner has sworn in his declaration, there's no agreement on that and it is not part of the proposed contract at issue here. So there's no agreement to pay the rent, there is an agreement to -- in principle, that is now being reviewed that has not been consummated, has not been proposed to the City comptroller for registration, it may or may not be proposed based on those reviews, but it relates only to a two hundred bed homeless shelter facility and related services. THE COURT: What are the related services?

VINCENT PALOMBO - OFFICIAL COURT REPORTER

49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS MR. MASTRO: THE COURT: to be provided? MR. MASTRO: They're provided to the two Your Honor, there are -And for whom are those services

hundred -- related social services and otherwise to help them adjust and hopefully find a better place in life. THE COURT: What about the services regarding

the 32 bed detox practice -MR. MASTRO: Not paid for at all by the

City's Department of Social Services, not addressed in this contract at all -THE COURT: MR. MASTRO: Is it a separate program -A separate program with the

City's Department of Health and Mental Hygiene and there's also involvement in a role of the state authorities in this regard including relating to alcohol and substance abuse, both have a role in that program and that will be separate with the City's Department of Health and Mental Hygiene services. again, your Honor, the -THE COURT: So I think the City's position And

also is the 32 bed detox program is not part of a shelter -MR. MASTRO: It is not. The homeless shelter

VINCENT PALOMBO - OFFICIAL COURT REPORTER

50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS we're talking about here, the proposed contract is for a two hundred bed homeless shelter and related services facility. This is going to be a vertical campus where

a number of different programs are going to be run; one of them is the separate 32 bed detox center which is separately funded with involvement of both State and City health and mental health professionals. And your Honor, the reception center, again, uncontroverted sworn testimony, that is a BRC program that the Department of Homeless Services has sometimes funded in other locations. BRC is going to run a

reception center, literally, you have BRC personnel who go out and try to find homeless on the street who may need an immediate attention. That's what the reception

center is about, your Honor, and the fact of the matter that's something that BRC runs. It doesn't come

through Department of Homeless Services intake procedures to enter a shelter, that's why that reception center isn't a shelter and that's what Deputy Commissioner Nashak has so sworn. So it is a vertical campus involving different programs only one of which is a shelter program that is the subject of this specific proposed contract. Now let me be crystal clear.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS I've heard a lot of discussion about harm. There is zero harm here to anyone as this case presently exists. Couldn't possibly be.

I submit that there never will be any harm to anyone in that community, BRC runs the best programs in the City, that's why it is a not-for-profit and DHS has contracted with them in various capacities. But your Honor, remember where we were on the issue of the Buildings Department permit. It's all

internal construction, nothing, no occupants, no expansion of the site, all internal construction, where my client BRC not-for-profit is taking all the risk and has already spent millions. For them to have the

audacity to come here when it is law of the case that there is no irreparable harm from the internal construction going on there that my client is bearing all the burden on, and where my clients -- we should all remember -- has committed to your Honor that before anyone moves in there we're going to give you 30 days advance notice so that you could decide whether there is truly any harm there and there is zero irreparable harm here, and the case law is legion in this regard, particularly, in the area of homeless housing. Your Honor, I can cite case after case -Dogertown Home Owners Association, Second Department

VINCENT PALOMBO - OFFICIAL COURT REPORTER

52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS 235-AD 2d 538 page 539; Spring Guard Community Civic Association versus Homes for the Homeless, that's a trial court level case in Queens County, 135 Misc 2d 689, 698 and, of course, your Honor's own decision in this case that under these circumstances where all we're talking about is preparing a building, there's no irreparable harm. Now I want to comment -- please, your Honor, and I know the day is long, this case is so important to my client. They have three different areas where

they are claiming some kind of right too relief; they claim under ULURP, they claim under the Administrative Code and they claim CEQR and fair share. I want to start with that last one because the claims in their complaint were that the City had failed to do CEQR and fair share and that therefore they should be compelled to do that. They even wanted

the contract to be compelled to be registered because they haven't done -- well, then the City comes back and says, in fact, we are doing them, we're in the process of completing them. That means they have no claim left

on CEQR and fair share and I have to make one distinction because the law is crystal clear, the City didn't have to do fair share. That's what both the

Davis and the Farrar cases say, First Department and

VINCENT PALOMBO - OFFICIAL COURT REPORTER

53 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Second Department. PROCEEDINGS Davis V Dinkins 206 AD 2d 365 pages

366 and 68, Second Department and Farrar versus Dinkins, 218 AD 2d 89, 93 through 94, that's First Department, both of them said that unless there is something about this situation, that makes it ULURPable, the City didn't even have to do a fair share. And then I'm going to come to ULURP because they have two ULURP claims and let me explain what ULURP is. ULURP is a special local law incorporated

into our charter that I had a little experience from my days as deputy mayor. Your Honor, under ULURP, it has

to be very specifically related to the City being directly involved in some action. The first claim Mr. Connolly tries to raise here is that ULURP is implicated because this is an acquisition by the City of a lease. The second and only other ULURP basis he claims is that this is the City acting pursuant to a, quote, housing and urban renewal plan and project, end quote. I challenge Mr. Connolly when he gets up again to cite a single case to this Court where any New York case has ever held that a contract to provide Homeless Services with the City has ever been held by

VINCENT PALOMBO - OFFICIAL COURT REPORTER

54 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 lease. PROCEEDINGS any court anywhere in New York to be a ULURP lease or a ULURP housing and urban renewal plan. There is none.

If I may point out on the question of the This isn't a lease between the City and a

landlord. This is a not for profit that has itself taken all of the risk of a 33 year lease with a landlord, has spent millions to internally renovate a building for the hope that the City will register a contract that gives them only a ten year services contract to provide shelter for two hundred homeless individuals a night and related services. Your Honor, that's a service contract. is not a lease by the City. the City. And your Honor, again, I can cite you many cases, Mr. Connolly will be able to cite you none. Because this is a contract to provide services and if I may, briefly, there are cases completely on point. In the matter of Luccia Plaza versus City of New York 305 AD 2d 604, pages 605 and 606, Second Department, 2003. That was a City contract, DHS with That

ULURP requires a lease by

the Doe Fund, the Doe Fund to provide shelter beds. Same thing that we're talking about, they had to renovate a site to provide homeless shelter beds.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS City enters into a contract with Doe and the Court found unequivocally, quote, the contract between DHS and the Doe Fund is not subject to ULURP, as it is not a lease or functionally equivalent to a lease, but merely an agreement by which the Doe Fund will acquire, renovate and operate a transitional residence for homeless men. Same thing in Davis V Dinkins and Farrar V Dinkins, both of which involve the City contracting with transient hotels to provide beds. The transient

hotel providing those beds at those places, both the First Department and the Second Department said: Not a In

lease under ULURP, no ULURP obligations whatsoever. fact, there's never been a court that ever held that

there were ULURP obligations from the City contracting for another party to have provided shelter beds. Your Honor, second ULURP category, the only other one Mr. Connolly cites in his papers, the only one he argued today when there's a requirement because this is supposedly a City, quote, housing and urban renewal plan and project, end quote. Again, uniformly rejected by the courts. A

service contract, DHS enters into regarding homeless policy; West 97th Street and West 98th Street Block Association Volunteers of America Greater New York 190

VINCENT PALOMBO - OFFICIAL COURT REPORTER

56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS AD 2d 303, 309, First Department 1993, the referral of the homeless two and the provision of necessary services at one -- in this case SRO -- hardly constitutes the type of plan envisioned by the ULURP scheme. Since the disputed contracts do not involve

the use of real property nor contemplate any general housing strategy. Same thing with Neighborhood in the 90's versus City of New York, VSA, 24 Misc 3d, 1239, also 209 WESLAW 2579315, page 11, and, your Honor, also Community Planning Board Number Four versus Homes for the Homeless 158 Misc 2d, 184 pages 189 -- 88 to 89, it is a 1993 decision right here in this court. Your Honor, the point being that if their argument were correct, any time the City contracted to provide homeless shelter, somebody using the word plan, that would mean, oh, my goodness ULURP applies. the law. very much. I heard Mr. Connolly say -- and I'm glad to hear him say that the City not only has a legal obligation under Callahan but a moral one. They enter into these contracts with not-for-profits to provide the necessary services. They don't trigger ULURP at all. And that's the Not

In fact, the law is weighted the other way,

VINCENT PALOMBO - OFFICIAL COURT REPORTER

57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS uniform case law when the City enters into such contracts. itself. And now, your Honor, that brings me to Mr. Connolly's last argument which is his arguments about the Administrative Code, so I end where I began. Mr. Connolly says that the Administrative Code -- this is Section 21 dash 312, 2 A. I like to It's not leasing and doing the housing

actually quote -- he said it says you can't have more than two hundred beds. anyone place. That's not -- that's not -- at

That is not what it says.

What it says is, quote, no shelter for adults shall be operated with a census of more than two hundred persons, end quote. The only shelter at this facility as the deputy commissioner of Homeless Services has sworn under oath to which this contract that's been proposed goes is the two hundred bed homeless shelter and related services anticipated for this site. Not the

detox program, not a reception center that's run by BRC and BRC -THE COURT: MR. MASTRO: word for it. What is a reception center? Again, your Honor, don't take my

Let's hear from the deputy commissioner

of Homeless Services.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS The reception center is something that -BRC -- these are his words, paragraph 23: Uses these

Beds for street homeless clients who are served by its outreach teams, these beds are not, in fact, a shelter. DHS does not refer clients to the recognition bed program from its intake or assessment cites -- that's paragraph 23 of Mr. Nashak's affidavit sworn under oath. That's because a shelter is where DHS has had intake procedures, assessed and referred for some type of temporary or transient housing related services that's not what the reception house is. The reception

house is a BRC run program where at this point it has no commitments of City funding from DHS or anyone else, but in the past, DHS has recognized the value of such programs because it involves the people literally freezing on the street and BRC personnel going out and identifying a place to sleep for the night. Now, your Honor, I -THE COURT: MR. MASTRO: night, your Honor. THE COURT: Do they then have an opportunity Is it only for a single night? It's not only for a single

take advantage of the other services that will be provided --

VINCENT PALOMBO - OFFICIAL COURT REPORTER

59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 control? made. MR. MASTRO: Your Honor, there really isn't PROCEEDINGS MR. MASTRO: Your Honor, they do and

sometimes what comes out of that is they then go through a DHS intake and assessment procedure to get placed either there, in one of the two hundred beds in the homeless shelter system, or somewhere else in the homeless shelter system. The point being, your Honor, that this is a vertical campus, as we all agree, where multiple programs will be run, not only the three that Mr. Connolly likes to focus on that have beds associated with them, but several outpatient programs including the continuing day treatment program which is a state licensed and funded program for alcohol and substance abuse, and the Fred Cooper substance abuse services center also involving state and City, and BRC's administrative offices all now have been located at this facility. So it has to be understood -THE COURT: Who is going to have operational

That's one of the arguments petitioner has

any question as to who is going to operate and manage the shelter. BRC -- I like to use quotes, BRC, quote,

shall operate and manage the shelter, end quote,

VINCENT PALOMBO - OFFICIAL COURT REPORTER

60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Services. question. PROCEEDINGS Article 2, Section A, and supervise the shelter programs. That's Article 2, Section G. This is the

proposed contract attached to Mr. Nashak's affidavit, the deputy commissioner -THE COURT: Can they operate and manage it in

accordance with provisions promulgated by DHS. MR. MASTRO: Your Honor, you asked the right

Every Homeless Services program in the City

is monitored and has to operate under -- overall -under overarching oversites -THE COURT: MR. MASTRO: Guidelines. -- by the Department of Homeless I'm

That's what can Callahan stands for.

very proud what we at the Legal Aid Society -- did achieve in Callihan. It requires the Department of

Homeless Services to do that. For Mr. Connolly to suggest that the monitoring function that's what the contract calls monitoring, somehow converts it into a lease, that is a City lease is ludicrous. For Mr. Connolly to suggest that the City agreeing to pay a certain maximum amount or minimum amount per year for those services for the two hundred homeless shelter bed and service program amounts to paying the rent is ludicrous.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS Recognition in the lease that the rent may go up, so the City has to take into account how much it pays for the services. That is what a contract for But the lease

social services is all about.

obligations are ours and ours alone and Mr. Castro can attest to it. The fact of the matter is there is only one shelter facility here and the Ad Code says that you -no shelter will be more than two hundred persons there's only one shelter program being run here and it does not exceed the two hundred. But, your Honor, leaving that aside, I want this to be crystal clear, because the Department of Homeless Services has made it crystal clear and Mr. Connolly again has to distort the Administrative Code. I like to actually quote it. He says the fact that DHS has already indicated even if there were some issue about the two hundred beds, we're going to use our grandfathering exemption under Camp LaGuardia, but we can do up to two hundred -- two four hundred bed facilities in replacing of the old Camp LaGuardia, that's in the Ad Code, but it's not what Mr. Connolly said. Doesn't say when you

do that, suddenly you are in ULURP. And again ULURP involves a much more

VINCENT PALOMBO - OFFICIAL COURT REPORTER

62 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS extensive kind of public review process. Precisely

because it is the City leasing or buying land or the City directly doing things that involve acquisition and disposition. That is not what we're talking about here. We're talking about private not-for-profit that's on the hook for a long term lease and paying to renovate it and being in a position, therefore, to provide valuable social services by contract. Your Honor, what does the Administrative Code really say about the implication of that grandfathering clause? There's no dispute here that it says where

Camp LaGuardia shelter closed that it, quote, may be replaced with two shelters each with a maximum census of four hundred persons. But here's the key. It also

said Ad Code Section 21-315 B provides only that each new shelter replacing a grandfathered closed shelter, quote, shall comply with applicable statutes, laws, rules and regulations. Including and that would include ULURP. Those are the exact words. Shall comply with. If you

didn't have to do a ULURP in the first place, didn't have to do a ULURP for two hundred beds or four hundred beds because we are a private not-for-profit providing services by contract to the City, hopefully if this

VINCENT PALOMBO - OFFICIAL COURT REPORTER

63 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS ever gets registered. But it is our lease, our dime,

there's no ULURP here, there's no obligation here to do a ULURP because it's not a City lease. acquired lease. contract. There's no ULURP required and there's nothing about the Administrative Code that suddenly converts a project that involves no ULURP into a project that involves ULURP simply because of the Camp LaGuardia exception and it is Mr. Connolly dancing on the pin of a head to try and salvage a case that won't settle. Your Honor, I am going to end where I began which is the injunction standards here, preliminary injunction standards, they have to show likelihood of success. I think your Honor is in a position today to dismiss their case, except for the part that has been stayed. But your Honor, they haven't shown likelihood of success, they will not prevail on any of their claims. But just as importantly, the irreparable harm and balance of equities. Irreparable harm, the case Your Honor, so held They It's not a City

It's the City entering into a service

law, again, could not be clearer.

the last time, it's just as compelling here.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS weren't entitled to injunctive relief when it came to the permit issue, because there's no irreparable harm from internal construction and even if they could somehow argue that occupancy raised such a question, we're going to give you 30 days notice before there is occupancy, this will not be done until the spring -THE COURT: MR. MASTRO: When is occupancy expected? Your Honor, it's now going to

probably be later in the spring because there have been -THE COURT: MR. MASTRO: May, June -Your Honor, realistically, I It couldn't be

think we're talking about May or June.

earlier than April -- because as your Honor is aware there have been problems with the landlord who also has certain obligations to contribute to the renovations. The landlord has ceased to do that. So there is no

issues whether the landlord is in breach, so not-for-profit is assuming the entire burden of the renovation, so that made our burden tougher. We're months a way in any of the scenarios and I am going to give you 30 days notice for any scenario. in March. April. So if it's April, I'll be giving you notice If it's May, I'll be giving you notice in

We're going to give you the 30 days notice.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

65 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS There is no irreparable harm here -THE COURT: MR. MASTRO: balance of equities. For my client this would be a death now to not be able to complete this project when they have the obligations to this landlord. For the residents in the neighborhood, there is absolutely no harm whatsoever right now. So your Honor, we urge you to deny this preliminary injunction thank you. MR. CONNOLLY: 45 seconds. Your Honor, literally Thank you. The very last thing is just on

I'm very sensitive to the hour.

First of all, Mr. Mastro said he wanted to quote the Administrative code, he stopped short of the last paragraph which says: Including but not limited

to Section 197 C of the New York City Charter, which is ULURP. ULURP is actually called out in that -THE COURT: I think his argument is that it

wasn't required to begin with. MR. MASTRO: MR. CONNOLLY: Right. Wanted to make that clear.

Two quick points because the Court is focused on this issue of money, right? So I argued that the

entire lease is being paid for by the City of New York.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

66 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS The reason I argue the that, your Honor, is the contract, the same contract Mr. Mastro was citing in Article 10, Paragraph E it says, and I quote, the Department of Homeless Services represents that the yearly budgets for the operation of the shelter shall include sufficient monies to pay for the annual lease payments and the yearly increases in rent. That's where that comes from, from the agreement. THE COURT: Was it the annual lease payments

for the two hundred bed shelter, not necessarily annual lease payments for the entire building -MR. MASTRO: MR. CONNOLLY: that is what -MR. MASTRO: THE COURT: argument was -MR. MASTRO: Absolutely. The service That's what I'm -That's what I thought their Correct. It's a creative reading if

contract pays the least as much to cover that. MR. CONNOLLY: I can tell you, your Honor,

that when you look at the lease, the amount of money due on that lease dovetails with the numbers being articulated by -- in the 7.2 million and the 76 point whatever million. Those dovetail with the overall

VINCENT PALOMBO - OFFICIAL COURT REPORTER

67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS 100000-square foot lease agreement. for itself, the Court can review it. There's one other quick point -- and by the way, on the case law, I couldn't disagree more with what Mr. Mastro said these cases say. They don't say Look, it speaks

half of what he thinks they say or he's asserting that they say -- the Dogertown case doesn't stand for that representation. The Connor versus Cuomo case is

important and telling to the Court in the sense that what the court ultimately found was that the efforts to call this a condemnation by the State in this one dollar transfer to the City, they did not accept that. The Court basically said that's an effort of the City to circumvent the review process. That's the story.

That's the moral of Connor versus Cuomo. And finally, your Honor, again, Deputy Commissioner Nashak says it's not -- the reception center -- this is a critical point -- the reception center is not a shelter because it's not a shelter. That is what the papers say and that makes no sense. Here's what BRC says. BRC says: The

reception center provides temporary shelter and treatment to homeless men and women living with mental illness. I think the distinction that they're

VINCENT PALOMBO - OFFICIAL COURT REPORTER

68 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS attempting to make to your Honor between whether or not it is DHS funded or DOH funded, City DOH funded, is made out of cotton candy, it's not a distinction. as you will note from the caption of this case, we included all the City agencies in our petition for relief that are participating in this project. So I think it is of no moment, in fact, I think it is simply an effort to distract the Court -it is of no moment that one program is funded by another City agency or what have you, and it is clear based upon the -- I'm not making this up, it's in the record, you will have plenty of opportunity to read it, is -- it is 100 percent clear that BRC has said that the reception center was funded by the New York City Department of Homeless Services and will be at 127 West 25th Street will be funded by the Department of Homeless Services. I am reading from the testimony of the executive director of BRC. Now, we can -- the Court and petitioner can only go with what information we have. that says what it says. what it says. We have a lease And

We have a contract that says

We have got public statements that say

what they say and it's inconsistent with what is being argued now.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

69 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PROCEEDINGS So for all those reasons, your Honor -- I'm happy to talk about standing, your Honor, I don't want you to think that by not talking about it I'm conceding. THE COURT: Thank you. Thank you, your Honor.

MR. CONNOLLY: THE COURT: MR. KING: saying that DHS -THE COURT: MR. KING:

Do you have to respond? Your Honor, if Mr. Connolly is

Could you just stand. Sorry -- is funding any portion of That's news to me.

the reception center.

I'll point you to Commissioner Noshak's affidavit, paragraph -- paragraph 23, where he says BRC is indicating intention to shift 77 beds from its Lafayette Street facility and add 19 beds -- no final agreement between DHS has -- DHS and BRC has been reached with regard to those beds and they are not part of the contract for the two hundred shelter beds. Also, I'll just direct you to paragraph 21 which says: In addition, it is my understanding BRC

plans to operate several other programs on concluding -- on the cite including a New York State funded and Medicaid funded case management program for mental illness, a State OMH license continuing day treatment program, that's an outpatient program for

VINCENT PALOMBO - OFFICIAL COURT REPORTER

70 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 point? PROCEEDINGS outgoing ongoing mental health patient services that is funded both by Medicaid and City Department of Health and Mental Hygiene. And again, Medicaid and City Health funded substance abuse service center. an outpatient program. And then the chemical dependency crisis center that is funded through a combination of health and federal funds. Those are -- I think the import of that, your Honor, as I understand it, and I'm -- I hear Mr. Connolly saying about the number -- what he's saying about the numbers, what I understand, DHS contract concerns only the two hundred bed shelter. MR. CONNOLLY: Your Honor, I just direct your I believe that's also

attention to Exhibit 16 in the verified petition of petitioners, that goes through this litany from the mouth of DRC as to who is funding what and in that it says that the reception center is funded by -THE COURT: Yes, counsel.

What is the status of the reviews at this I think you mentioned it in the beginning,

Mr. King? MR. KING: They're ongoing, your Honor.

We're working on them.

VINCENT PALOMBO - OFFICIAL COURT REPORTER

71 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 status? MR. KING: Well, at this point the THE COURT: MR. KING: THE COURT: PROCEEDINGS That petition -There's a data gathering effort -Excuse me, the City has been

saying they're ongoing for months now. MR. KING: THE COURT: Yes. What are -- what is the specific

environmental review document is in draft and is still being work on by the consultant -THE COURT: MR. KING: Who is the consultant? The consultant is a firm by the

name of AE Com, and I don't have the specific information of what that stands for. But the

consultant is preparing an environmental assessment statement, which is -- as I said, still undergoing some data gathering, looking at land use data in study areas, zoning uses, air permitting, things like that. Still in the process of data gathering and analyzing data in accordance with the CEQR technical manual, fully in accordance with CEQR procedures. Fair share is also in draft. That may be

ready sooner than the CEQR review, but at this point it's still in draft being reviewed -THE COURT: Do you have any projected dates?

VINCENT PALOMBO - OFFICIAL COURT REPORTER

72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 VINCENT J. PALOMBO, RMR MR. KING: PROCEEDINGS Your Honor, at this point I can

say what we said in our papers, it's four to six weeks. THE COURT: MR. KING: THE COURT: For both? For both. Thank you, counsel. Thank you, your Honor. Thank you, your Honor. * *

MR. CONNOLLY: MR. MASTRO: *

CERTIFIED THE FOREGOING IS A TRUE AND ACCURATE TRANSCRIPTION OF THE PROCEEDINGS, THIS DATE.

VINCENT PALOMBO - OFFICIAL COURT REPORTER