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Grace: Escrow Fees are Unconstitutional and Unfair

This letter was written in it's entirety by former Yorktown attorney and candidate for Yorktown Supervisor, Michael Grace.

Susan Siegel’s explanation of developer escrow fees “Why We Have Them, and Are They Fair” exposes why even at the local level our elected official’s visceral political ideology is of critical importance.   Supervisor Siegel justifies the escrow fees as providing a savings to the town and that the town doesn’t hear developers complaining about those open checkbooks.

On both accounts Supervisor Siegel is wrong.  First, whether the developers don’t care is not the issue.  Every property owner in the town should care.  It is not the amount of the fees alone which is the issue.  At stake are the terms upon which each Yorktowner has access to its local government to press and/or vindicate their fundamental, constitutionally protected right to use their property in accordance with law.  Our Constitution requires equal protection under the law and bars the arbitrary and discriminate application of law.  Fixed and strict standards of review assure against unconstitutional, unreasonable, arbitrary and discriminatory application of the law.   A fee system whereby the approving authority can rack up fees in its unfettered, untrammeled discretion based upon what it thinks is desirable or convenient without regard to the degree of oppression and discouragement to the applicant in the exercise of his right to put his property to use is offensive to our Constitution and it makes little difference whether the developer before you and whose approval is at your mercy is heard to complain.  A developer may not wish to complain and ruffle the feathers of those holding his building certificate or certificate of occupancy as hostage against the payment of fees!  This however does not make the town's fee law constitutional.

Furthermore the escrow fee law is fertile ground for all sorts of bad behavior.  If the board doesn’t like you or your application it can create all sorts of specious issues for which you now must pay their hand picked consultant without limitation.  Unfettered the board could effectively bankrupt your ability to obtain a rightful approval.  On the other hand should you find personal favor with the board, the board in its unfettered discretion could discount your incurred fees having the town absorb the billed balance.

Supervisor Siegel also blithely overlooks the very real problem with feeding a favored firm or consultant with unlimited business at non-negotiated rates at the expense of an applicant.  This is particularly offensive when it comes to legal fees (the loophole closed by Supervisor Siegel) as the rules in regard to an engagement of an attorney are strictly circumscribed by New York State=s Disciplinary Rules, and where there is no privy of contract, i.e. a properly drafted retainer agreement, a lawyer cannot charge for fees.  The town’s law compels payment of attorney fees incurred at the whim of the town on the third party applicant to the town=s handpicked attorney!

As for the fees already collected Supervisor Siegel fails to mention the nine thousand dollar legal fee charged to the Winery to apply for a special use permit, where the legal issue was simply this: if the applicant meets the requirements of the special use permit the permit must issue.  A nine thousand dollar legal bill for that advice was excessive and can only be explained by the fact that the Winery=s owner remained in the Town’s disfavor.  Likewise Supervisor Siegel neglects to mention the more then 35,000.00 dollars paid by the Croton Overlook applicant for legal review of the Environmental Impact Statement.

As to savings to the town same are illusory as the fee law is illegal.  As such it exposes the town to major liability in regards to the divestiture of legal fees already collected, or incurred fees which under a proper protest may not be collectable, and the liability of payment of attorney fees and expenses available to those who have successfully vindicated their constitutional rights.

In closing I was Town Attorney for many years and at a time when there actually was economic activity in the town.  The way the town kept their legal fees in check without violating its citizens’ constitutional rights was engaging on staff competent legal counsel familiar with land use and constitutional law.

Are the fees fair?  No, they are illegal and unconstitutional and it makes little difference that the town has gotten away with charging them. The illusory fiscal savings is not justification to the trampling of your constituency=s constitutional rights.   Thanks Supervisor Siegel for letting us know where you stand on this issue.

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