Licensing a building on parkland
has been addressed by New York’s Court of Appeals last Thursday. If you ever
have a commercial client who is interested in building a restaurant or food
stand on public land, this is an important case to be familiar with.
In 2008, the New York City
Department of Parks and Recreation renovated Union Square Park with the
intention of building a restaurant on the pavilion in the northern part of the
park. When Chef Driven Market, LLC was given a license to run a restaurant on
the pavilion in 2012, the community rose in an uproar, claiming that such a
restaurant does not have a purpose in the historic park and hence violates the
“public trust doctrine.” The community groups exclaimed that a restaurant in
the park itself was unnecessary since there were many restaurants to choose
from in the nearby area. The pavilion could be used for better purposes, such
as dance classes or debate sessions.
However, New York’s
highest court has ruled in favor of the city’s Department of Parks and
Recreation, disagreeing with the community groups that the restaurant is in
violation of the public trust doctrine. The restaurant, with its reasonable
prices, outdoor seating available to the public, and charity events, would add
to the park’s appeal beauty, and safety and improve the community as a whole.
The community groups may have a different opinion as to what the pavilion
should be used for, but this does not mean that the restaurant itself is
illegal.
It is also important to note that
if the Department had leased, not licensed, the pavilion to Chef Driven Market,
LLC, then the restaurant would certainly be unlawful without approval from the
State. However, since Chef Driven Market, LLC holds a valid revocable license
to run a restaurant with ample oversight from the Department of Parks and Recreations,
there is no need to get the state’s approval at all. The difference between a
license and a lease is that the license gives the Department ultimate control
over the day-to-day activities of the restaurant, even the right to terminate
the agreement at will. A lease, on the other hand, would give Chef Driven
Market, LLC control over the restaurant and use of the property instead.
Brokers, keep in mind that a
brokerage license is required for leases, but NOT for licenses, pursuant to RPL 4401(1). If
you know anyone that would like to obtain a license to operate a building on
parkland, he or she does not necessarily need the help of a licensed real
estate broker to do so!
