State Supreme Court Justice Arthur F. Engorond recently ruled that a housing project in the Seaport District of Manhattan was not able to proceed due to a conflict of interest. The project was a planned development of what is now a “historic” parking lot into a 26 story building with 270 units, 70 of which would be reserved for as affordable housing for low income tenants. The judge ruled that the permit that was granted by the Seaport Coalition, the group entitled with the preservation of the neighborhood, was not valid because of a million dollar pledge from developer Howard Hughes Corporation to the struggling Seaport Museum.
This ruling will likely be appealed and any ruling about “quid pro quo” benefits from developers will be unique to the situation but there is a potentially impactful precedent that is being set. If developers get scared of the possible overturning of permits by local judges they could be less likely to support local causes in a way that most neighborhood councils like to see. The country has finally started to act on its need for more housing, particularly affordable housing, but getting projects approved will require local approval in most cities. Developers are often happy to work with local groups in return for their favor in getting plans approved but they might now be scared away from any direct donation in case it could leave them liable for a similar ruling.