Town of Grand Island sued over warehouse law

Developer donates Long Road land to Seneca Nation

By Karen Carr Keefe

Senior Contributing Writer

Grand Island land that was once earmarked for an Amazon distribution center is now in the hands of the Seneca Nation, and the town is facing a lawsuit alleging its warehouse law violates the property rights of the land’s donor, Acquest Development.

The town’s Local Law No. 2, which was OK’d this August, limits the size of buildings allowed in commercial zones to 350,000 square feet, and it rules out distribution centers altogether.

Acquest originally planned a 1.65-million-square-foot distribution center on the 207-acre site west of the Thruway between Long and Bedell roads, at 2780 Long Road.

The land currently has multiple zoning designations, with the eastern 141 acres closest to I-190 currently zoned for industrial uses and the western 66 acres currently zoned for residential.

The named plaintiff is Grand Island Commerce Center Joint Venture. On its behalf, attorneys Rupp Pfalzgraf LLC has brought this action to recover what it deems “just compensation for the Town of Grand Island’s unconstitutional destruction of Plaintiff’s long-approved industrial development and the Town’s retention and use of a multimillion-dollar sanitary sewer infrastructure that Plaintiff was required to design, fund and construct.”

Acquest attorney Jonathan Cantil said the lawsuit seeks monetary compensation that could reach more than $40 million for what Acquest alleges is the town’s deliberate attempt to rezone the land to stop its development, despite approving previous Acquest plans between 1991 and 2013.

The plaintiff’s contention is that the town’s new zoning law deprived Acquest of the right to develop the parcel and, consequently, generate revenue. In concert with that, the lawsuit seeks compensation for the cost to prepare the land for commercial use and to comply with state environmental regulations and review, among other expenses.

In the lawsuit, Acquest claims the town’s warehouse law was aimed at one target only: Acquest’s own plan to develop the Long Road parcel.

Grand Island Town Attorney Daniel Spitzer, partner with HodgsonRuss, commented on the lawsuit.

“The town intends to vigorously defend the lawsuit,” he said. “The developer has owned the property in the town for some 35 years and has never even applied for a building permit. The town is not a guarantor of any developer’s right. There was no contract guaranteeing a certain right to develop. In fact, such a contract would be illegal under New York state law, and we don’t believe that the town is responsible when he loses his tenant to a more competitive developer from another community. The fact is, that he has not answered the questions of our professionals to allow the environmental review to be completed, and we’re not going to short-circuit an important process for him.”

Town Supervisor Peter Marston, who was the lone dissenting vote on Local Law 2, on Monday talked about how that law came to be.

“The town has long been arguing with the fact of how big is too big and how do we control this, and things of this nature. So, my perspective is probably a lot different than the rest of the board’s,” he said. “I really don’t want to speak for them. But we are concerned about overdeveloping and creating a situation where any business or an entity or a property has excessive impact to the surrounding community. That was probably the premise for why the Town Board worked on this, and by majority, adopted it.”

Land transfer

On Saturday, the Seneca Nation announced William and Michael Huntress, owners of Acquest Development, are transferring title of the 207 acres of land to the Nation for $1.

Michael Huntress was quoted in a press release as saying, “We are happy to have donated this land to the Seneca Nation, the rightful owners of Grand Island. We believe it is the right thing to do.”

Seneca Nation President J. Conrad Seneca thanked the Acquest’s owners “for generously helping us create a path for new growth for our Nation,” in that same press release.

Marston said that, as to the effect of the Seneca Nation owning the land, “It’s way, way too early to tell. We have not had any conversations with them. We don’t know their intentions or what they would like to do. … When they’re ready, they’ll tell us what they’re interested in, and we’ll work from there.”

Council member Jose Garcia said of the Seneca Nation gaining the parcel, “They’re another landowner that I look forward to meeting with and working with, and hopefully they decide to develop something that’s wonderful for our community.”

Spitzer said, “As to the Senecas, we have not heard from them. We welcome them to our community, and we look forward to working with them.”

While Seneca looks at what he terms “potential economic development opportunities,” that would best meet the long-term needs of the Nation, the prior owners seek a remedy for what they consider a lost opportunity due to town actions.

Seeking compensation

Among other town actions for which compensation is sought is requiring Acquest to design, build and pay for a sewer district that it ultimately couldn’t have used unless it had been allowed to develop the land, Cantil said.

Acquest completed the sewer district at its expense, and it was accepted by the town in 2020. Two other facilities now use the sewer district: Holiday Inn Express and Islechem.

The lawsuit states, “By 2025, the plaintiff’s sewer infrastructure already served neighboring properties, including a hotel and an industrial facility with a cumulative total square footage of approximately 160,900 square feet. Therefore, the ‘business campus’ provision aggregates those properties with the plaintiff’s parcel, thereby reducing plaintiff’s permissible building area to roughly 189,100 square feet and further depriving the plaintiff of practically all economically viable use of its property.”

Cantil filed the complaint Dec. 18 in U.S. District Court challenging zoning law on Grand Island that the lawsuit claimed had been “deliberately engineered to block a single property” – the Acquest parcel.

“You can’t change the law midstream and erase somebody’s property rights. The town rewrote the rules, stopped one property, and that’s unconstitutional,” said Cantil, a partner in Rupp Pfalzgraf's Buffalo office.

In its summary, the lawsuit claims the Town of Grand Island engaged in “misuse of zoning and environmental regulatory powers to defeat a project it had long encouraged and repeatedly approved.”

Cantil added that, in November 2020, Acquest submitted a proposal to reduce the square footage of its planned distribution center from 1.65 million square feet to 1.33 million square feet. The lawsuit cites the new plan involved “significantly smaller environmental impact than previously approved site plans,” yet, it says, Acquest had to undertake the expense of another SEQRA review.

History

The warehouse issue has been a hot one since 2020. That’s when Amazon walked away from its proposal to build a 3.8-million-square-foot warehouse on Grand Island, amid resident criticism over potential traffic jams, environmental impact and perceived threats to the Island’s quality of life.

Once Acquest Development of Amherst proposed a 1.1-million-square-foot facility at the same site, the issue heated up again.

At Town Board meetings, residents have pushed back against mega-warehouses in general and that one in particular. The town has walked a tightrope since 2023, trying to set restrictions that would be fair to both developers and residents.

Erie County came out against the previous version of Grand Island’s proposed zoning changes on March 7, 2024.

Unlike residents who said the proposed zoning restrictions didn’t go far enough, the county said the town had gone too far by reducing the allowable maximum square footage.

In doing so, Grand Island risks losing out on attracting and keeping businesses that bring jobs and tax revenue, the county said.

A five-story, 3.1 million-square-foot Amazon distribution center is nearing completion at 8995 Lockport Road in the Town of Niagara. It is expected to bring 1,000 jobs to Niagara County.