Developers filed a preliminary site plan with the Planning Board of the Town of Bedford to build a car wash and detail facility. Most of the subject property was zoned as “RB,” or roadside business; while a rear portion was residentially zoned. The developers intended to use this residential portion as a driveway and parking lot. Due to concerns about the expected traffic flow from the proposed project, the Planning Board took lead agency status for a review pursuant to the State Environmental Quality Review Act (“SEQRA”).  Following a series of reports by traffic consultants and several public meetings, the Board issued a negative declaration.

Developers then applied to the Town of Bedford Zoning Board of Appeals (“ ZBA”) for use and area variances and a special permit, and following several public meetings, the ZBA granted the application. Regarding the use variance, the ZBA found the applicants could not realize a reasonable return without the variance and that the hardship had not been self-created. Petitioner DeFeo commenced a proceeding under CPLR Article 78 seeking to annul the Planning Board's negative declaration and ensuing use and area variances and special permit.

At trial, the lower court upheld the SEQRA determination, but found that the ZBA's determination to grant the use variance was not supported by a rational basis, and annulled the determination. In light of this decision, the lower court also annulled the ZBA's determination granting the area variances and special permit and the site plan approval by the Planning Board as academic.

On appeal, the Appellate Division Second Department affirmed, noting that:

To qualify for a use variance premised upon unnecessary hardship there must be a showing that (1) the property cannot yield a reasonable return if used only for permitted purposes as currently zoned, (2) the hardship resulted from unique characteristics of the property, (3) the proposed use would not alter the character of the neighborhood, and (4) the alleged hardship was not self-created

Here, the developers submitted evidence that the residential portion of the property could not be used for a residence, or for any other permitted use, due to the topography, lack of support for a septic system, and narrowness of the residential portion. The developers also submitted an appraisal stating if the use variance were not granted, the development potential of the RB-zoned portion of the property would be reduced for the subject carwash project by 27%, for retail purposes by 35%, and for office space purposes by 53%.  However, the developers did not submit any actual financial information: including, but not limited to, the property’s: (1) original purchase price, (2) present price, (3) expenses and carrying costs, (4) taxes, and (5) the amount of any mortgages or other encumbrances on the property. The developers also failed to address the income presently being realized, or any estimate of what a reasonable return on the property, in whole or part, would be.

Finally, the Court noted that entitlement to a use variance is not established merely by proof that the proposed use would be more profitable than a use not requiring the variance. The developers are entitled to a reasonable return, not the most profitable return. For the foregoing reasons, the Court affirmed the lower court’s decision.

The case was Defeo v Zoning Bd. of Appeals of Town of Bedford, 2016 WL 1125992 (App. Div. 2d Dept. March 23, 2016).