Thank you very much, Pat. The case I want to describe to you this morning requires that I ask you to listen carefully because it is a situation that has developed over approximately three decades of legal changes and it is a classic example of what happens when we suffer from over regulation, overlapping regulations, and outright misappropriation of authority.
In 1997 the United States Court of Appeals in a case entitled Kim vs. The City of New York made a statement concerning the property rights of all citizens of the state, and I am just going to use a brief quote to give you an idea of what we are talking about.
"The corpus juris comprises constitutional law, statutory law, and common law. To the extent that each of these sources established defining rules of property law, each plays a role in defining the rights and restrictions contained in a property owner's title; therefore, in identifying the background rules of state property law that inhere in an owner's title, a court should look to the law in force, whatever its source, whenever the owner acquired the property."
Now the property in this case is a beautiful resort located on Lake George. It is owned by John and Kathy Salvador, who are today in the audience. Once upon a time in February 1973, they purchased this property with full intent and purpose of running it as a resort, running it both as a lodge and as a marina. Since that time they have run into a maze of legal regulatory problems, and my attempt is going to be to summarize these problems to give you an idea of what can happen.
To back up a little further, earlier back before they purchased the property the State of New York declared Lake George to be a unique natural resource. I don't think there is a person in this room who has seen the lake who would deny that it is beautiful. But when the State defines something as a unique natural resource, that gives them in their minds at least the carte blanche to regulate this to the nth degree. And to meet these regulations, the Salvadors are faced with at least six separate jurisdictions.
The first and foremost, of course, is the Town of Queensbury where the property is situated. The Town of Queensbury has chosen since the property was purchased to rezone the property from an existing marina that existed there for years before the Salvadors purchased it to rural residential, therefore making the Salvador's operation what is known as a prior nonconforming use. This translates into lay terms as something existing that would no longer be permitted on the property.
Now as you recall from my quote from the Court of AppealsI am trying to avoid being too technical herethe property rights that the Salvadors have in that parcel were in theory established absolutely as of the date of the purchase. The zoning, all the regulations that they were subject to at the date of their purchaseand no more, in theoryare the property rights they have today.
In actuality, however, I am about to, in as brief of time as possible, describe to you what a maze of regulations they face, and I can assure you they hold every permit for every activity that is conducted on that property. All are legitimate and they meet all codes and standards. When I say codes, I am referring to everything from local zoning to environmental protection codes, etc., for part of the marina operation includes the pumping of gas and the EPA standards for this. They are going through renovations now to meet new standards which again is one of the pitfalls here. They have permits for including, the sale of boats, repair of boats, etc. Every permit that is applicable in any way, shape, or form to their property they have applied for and have obtained.
Now, the first regulatory level that they face is the Town of Queensbury. Since they have been rezoned, the use to which their property can be put without getting a variance or special use permit is that of "rural residential." Now that is defined uniquely in that zoning code to be a hunting and fishing cabin of approximately 300 square feet. In an effort to establish that even a permitted use will not be allowed, John and Kathy commissioned a plan to put a cabin meeting the specs, all the specs that are required in local code, on their property.
Now, their property again is unique in that 99.8 percent of the property under the waters of Lake George is owned by the state of New York. However, several acres of the property John and Kathy own exist under the flood waters of Lake George.
Most of you are probably unaware that Lake George's level was raised some time around the turn of the century by a depth of approximately 1 ½ to 2 ½ feet, thereby making John and Kathy's land partially submerged due to flooding. They own the property in fee to the property line that runs across Dunham's Bay in Lake George. John filed the proper documents in proper form with the Town of Queensbury to build a cabin on their flooded land. The Town of Queensbury treated it almost as if it were a joke. His application met the specs, met all requirements, but it was denied. In other words, he clearly established, and this was upheld by the New York State courts up through the Appellate Division Third Department, that he was attempting to use his property for a permitted use.
However, the courts held otherwise, upholding the Town. Everyone, you know, was surprised by a cabin in the lake, so to speak, but that is what is permitted under the current use. The zoning bears no reflection of actual use. It bears a reflection of what the town fathers had determined would give them the greatest degree of control.
Moving on to other aspects that John has dealt with over the years, John also has to meet the standards of the Lake George park commission. Now this is an entity that was founded first to govern a recreational zone in the 1960s. It has evolved over time and through statutory change and, what is most outrageous, through its own interpretation of its powers. We have recently filed a federal lawsuit last December which I will describe briefly in a moment, but in some of the responding papers to that lawsuit one of the defendants who is the counsel to the Lake George park commission stated that the Lake George park commission not only has the authority that is delegated to it by the state legislature it also has implied authority. However, normally one of the hallmarks of a jurisprudence has always been that any statute that grants authority in the form of police power to another quasi-government entity will be narrowly construed. In other words, if you have several powers enumerated, those are the powers that that group has. It doesn't have five powers enumerated and another five that they say they have. Well this is one of the key principles where we are in federal litigation over, but that admission is going to be used quite effectively against the Lake George park commission. Because despite the fact that the state legislature has defined the lake as a unique resource, there is nothing about the Salvador's operation that interferes with that resource, damages the environment, or any of these things. Those are the premises on which at least in theory such a regulatory authority can act.
In 1988 John obtained from the then-regulating authority, which was the Department of Environmental Conservation, a permit to operate a marina on Lake George. He set forth certain parameters in that permit. Later those powers were partially transferred to the Lake George park commission who took several years to enact regulations designed to govern marine operations. They created two classes of marinas, Class A and Class B. They also established dock fees. As to where that money is going is another question that is in a lawsuit because of the legislative follow up. The fund to which the funds are supposed to be dedicated may or may not exist. It is something we are attempting to legally establish. They may not have been acting legally in any funding source for the last 15 years. But again this is a technical legal question.
In the process, John has run into the situation where he had filed an application for a new marina permit as all marinas on Lake George were required to do so. However, he discovered early on in this process that the park commission for reasons known best unto them have decided to treat his application differently instead of being referred to a subcommittee for an informal review process. Again, this entire process is made up as they go along. They have after-the-fact enacted procedures and policies to cover themselves as to how they have been treating John and Kathy Salvador's application and everyone else's but the Salvadors' was not referred to this committee. They dealt with the commission as a whole.
Over 18 months and through several applications what occurred was that activities that had been conducted at John's site over the years were being eliminated. They claim that unless we can prove that as of 1988 that the activities were in existence then, they weren't grandfathered in, which had been the stated intent of the regulations they were putting in place, that prior existing uses would be allowed.
Now, as anyone knows who is in business today that is related to tourism or something else, the more amenities that you have, the more marketable your services are. All John and Kathy have been asking for is to be allowed to continue to perform the services that had historically been done at their facilities. However, the park commission takes your application, they will then redraft your application telling you in their interpretation what you are entitled to do. In other words, they are applying initially vague standards creating the rulesit is not a review process. They are dictating to the applicant. There is no other permit that I have seen so egregious in this fashion. You get back what they call a draft permit instead of a new application. We have gone through over 18 months of negotiations in an effort to resolve these issues. The Salvadors do not get answers.
Finally we had to withdraw the permit when it became clear the commission was going to issue a permit under which we had very little impact or information about, so we withdrew the application. Now they have claimed and they brought a suit in retaliation for the federal suit in state court seeking fines of $500 a day against John and Kathy Salvador for operating under what is a legally valid permit. Those permits were never revoked by statute or operation of law. The permits that were issued by the Department of Environmental Conservation are still in existence and are still valid. But they claim, since the Salvadors at this moment do not have the new permit even though they have gone through the application procedure over a lengthy period of time, they claim that they are operating basically illegally.
They also cite some alleged violations. The thing that they have done with this is they have never cited the person. Normally you receive a violation ticket or if you are violating some kind of zoning code, you receive a notice for appearance. You will be given an opportunity to present your case instead of being convicted and then fined. In this case you have the quasi-public agency declaring that they are in violation without any affirmative findings, a clear violation of the most elementary due process.
Now in effect, also, what they are facing is they have a local zoning; they have a lake that was once regulated by the Army Corps of Engineers (part of the Corps of Engineers' jurisdiction has been removed by statute but they remain involved over this); and they have the Adirondack Park Agency, who has defined their property as a "deep water marsh," which in and of itself would take an hour to explain, I think. I do not have time to go into all aspects of these jurisdictions. You've also got the State Health Department, and you've got the Department of Environmental Conservation. All these layers render it impossible for the Salvadors to further develop their property. If they see fit to change an aspect of their property, it is usually a minimum of a three layer process, some of which are coordinated and some of which are not. I don't have time to explain how you get a permit to put electrical cable on the lake, but that involves applying to OGS (New York State Office of General Services) which then fans out to about five other agencies for input including the Lake George park commission.
In summary, what you have is a regulatory maze. It is a maze that is designed to control the people who are subject to it, to control their business, to control what they can do, and it is our premise that it is done largely without clear legislative authority. It is also done in a discriminatory manner because these individuals who have chosen to exercise their rights have been singled out for unfair treatment. They are attempting to teach the Salvadors a lesson that you don't fight city hall. Well we can, we will, and we will prevail.