The NYC Environmental Control Board determined that Petitioner violated the City Administrative Code and the Zoning Resolution by using the premises primarily as a transient hotel. Petitioner brought an Article 78 proceeding to challenge the determination, which was transferred to the Appellate Division.

Reviewing the ECB determination, the Appellate Division stated the finding was supported by substantial evidence, "including the inspector's unrefuted testimony that he entered 90% of the rooms, spoke to guests concerning the length of their stays, and observed that at least 60% of the premises was being used as a transient hotel. This conclusion was supported by... rooms with three piece bathrooms with toilet seats, towels placed on towel racks, coffee makers, mini-bars… housekeeping service, and a notice warning guests that staying past check-out time would cause them to be charged for an extra day." Finally, Petitioner did not establish that the transient hotel was a lawful non-conforming use existing at the time the relevant statutory provision was enacted and continued thereafter uninterrupted except for a period of up to two years. The Appellate Division accordingly upheld the ECB’s determination and dismissed the petition.

The case was In re Grand Imperial, LLC v City of New York, 115 A.D.3d 436 (App. Div. 2014).