Washington Law Review


Plaintiff was prevented by the New York City Landmarks Preservation Law from erecting a multi-story office building above Grand Central Railroad Terminal. Plaintiff was not compensated, but was allowed to transfer the Terminal's unused development rights to other sites. The trial court found this restriction unconstitutional unless "just compensation" was provided, and granted injunctive and declaratory relief. The New York Supreme Court, Appellate Division, reversed, finding that Penn Central, the plaintiff, had not been unconstitutionally deprived of its property. This decision was affirmed by the New York Court of Appeals. In a six to three decision, the United States Supreme Court affirmed. Held: Plaintiff's property was not taken unconstitutionally because the combined effect of the restrictions and the allowed transfer of unused development rights permitted the owner a reasonable beneficial use of its property. Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978).

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