The Appellate Division of the Supreme Court of the State of New York has ruled that a proposed business park development is exempt from a municipal development moratorium in the Town of New Windsor.
In Matter of Stewart Hill, LLC v. Town of New Windsor, decided March 11, 2026, the Second Department affirmed a lower court ruling that the town’s moratorium could not be applied to the plaintiffs’ site plan application.
The court found no rational basis for exempting subdivision applications that had completed environmental review under the State Environmental Quality Review Act (SEQRA) while excluding other applications that had completed the same review.
The decision leaves in place a judgment directing that the plaintiffs’ site plan application for a 120-acre business park containing offices and warehouse space must be treated as exempt from the moratorium imposed by Local Law No. 1 of 2020.
The Dispute in Brief
The dispute arose from a proposed commercial development project in the Town of New Windsor, New York.
According to the court’s opinion, the plaintiffs submitted a site plan application in November 2017 seeking approval to develop a business park on approximately 120 acres of vacant land.
The proposed development included offices and warehouse space.
The project proceeded through environmental review under SEQRA. In November 2019, the Town’s Planning Board adopted a negative declaration, determining that the project would not have a significant environmental impact requiring a full environmental impact statement.
Several months later, in February 2020, the Town Board enacted Local Law No. 1 of 2020, imposing a moratorium on development approvals within the municipality.
The law included certain exceptions, including an exception for subdivision applications that had already undergone SEQRA review and received a negative declaration or final environmental findings before the law was introduced.
The plaintiffs commenced a hybrid proceeding under CPLR Article 78 and an action for declaratory relief, arguing that the moratorium should not apply to their development proposal.
The Supreme Court of Orange County directed that the plaintiffs’ site plan application be treated as exempt from the moratorium. The Town of New Windsor appealed that determination.
What the Court Decided
The Appellate Division, Second Department, affirmed the lower court’s judgment insofar as appealed from, with costs.
The court agreed that the Supreme Court had properly directed that the plaintiffs’ site plan application is exempt from the development moratorium imposed by Local Law No. 1 of 2020.
The decision does not suggest that municipalities cannot impose development moratoria. Instead, the holding is narrower: the court concluded that this moratorium could not be applied to the plaintiffs’ application because of the structure of the law’s exemptions.
As a result, the plaintiffs prevailed on the central issue raised in the appeal.
The Court’s Reasoning
The court’s reasoning relied on established New York law governing municipal development moratoria. Municipalities frequently rely on zoning laws and planning controls to regulate development.
The opinion explains that municipalities may enact temporary moratoria on development as “valid stopgap or interim measures” while considering broader zoning or planning changes.
The court cited earlier decisions, including Cellular Tel. Co. v. Village of Tarrytown and Matter of Laurel Realty, LLC v. Planning Bd. of Town of Kent, which recognise the use of moratoria as planning tools under appropriate circumstances.
Those cases also clarify the limits on municipal authority. In Cellular Tel. Co. v. Village of Tarrytown, the Appellate Division stated that an exercise of police power interfering with property rights must be reasonable, necessary, and limited, and must address a legitimate planning concern rather than rely on unsupported assumptions.
In Laurel Realty, the court upheld a moratorium as a valid temporary measure where it was reasonably designed to halt development while a municipality reviewed its master plan and considered zoning updates.
Against that legal backdrop, the question in Stewart Hill was not whether municipalities can adopt moratoria. Rather, the issue was whether the structure of this particular moratorium satisfied those standards.
The law created an exception allowing subdivision applications that had already completed SEQRA review to proceed.
However, it did not provide the same exemption for other development applications, such as site plan applications, even if those applications had also completed SEQRA review.
The plaintiffs’ development proposal had already received a negative declaration under SEQRA in November 2019, prior to the adoption of the moratorium.
The court concluded there was no rational basis for exempting subdivision applications that had completed SEQRA review while denying the same treatment to other applications that had completed the same review process.
Because of this inconsistency, the Appellate Division held that the Supreme Court properly directed that the plaintiffs’ site plan application must be treated as exempt from the moratorium.
The court also noted that the parties raised additional arguments but found those contentions either without merit or unnecessary to address in light of its determination.
Key takeaways for business
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Development moratoria remain lawful planning tools. New York courts recognise that municipalities may temporarily pause development while reviewing zoning policies or planning frameworks.
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Exemption drafting carries legal risk. If a moratorium creates exceptions that treat similar applications differently without a rational basis, those distinctions may be challenged.
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Completed environmental review may influence litigation outcomes. Projects that have already undergone SEQRA review can become focal points in disputes over later regulatory changes.
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Land-use disputes often proceed through Article 78 proceedings. Developers and property owners frequently use this procedure to challenge municipal decisions or legislation affecting development rights.
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Local legislative drafting should align with planning objectives. Municipalities adopting development moratoria must ensure that any exemptions are logically tied to the stated purpose of the law.
What Happens Next
The Appellate Division affirmed the judgment of the Supreme Court, Orange County, insofar as appealed from, leaving the lower court’s ruling in place.
As a result, the plaintiffs’ site plan application remains exempt from the development moratorium imposed by Local Law No. 1 of 2020.
The opinion does not indicate that any further proceedings are expected.
Case Details
Court: Appellate Division of the Supreme Court of the State of New York, Second Department
Date: March 11, 2026
Case name: Matter of Stewart Hill, LLC v. Town of New Windsor
Docket number: Index No. 7769/20; Appellate Division No. 2021-04718
Area of law: Land-use and municipal law (administrative law)
Result: Judgment affirmed insofar as appealed; plaintiffs’ site plan application held exempt from the moratorium imposed by Local Law No. 1 of 2020.
People Also Ask
What is a development moratorium in land-use law?
A development moratorium is a temporary halt on certain development approvals imposed by a municipality. It is typically used while local governments review zoning policies or planning frameworks.
What did the court decide in Stewart Hill v. Town of New Windsor?
The court held that the plaintiffs’ site plan application was exempt from the town’s development moratorium because the law lacked a rational basis for treating subdivision applications differently from other applications that had completed SEQRA review.
What is a negative declaration under SEQRA?
A negative declaration under the State Environmental Quality Review Act means that a reviewing agency has determined that a project will not have a significant environmental impact. As a result, a full environmental impact statement is not required.
Can municipalities impose moratoria on development approvals?
Yes. Courts have recognised that municipalities may adopt temporary moratoria while considering zoning changes or planning policies. However, those measures must be reasonable and applied consistently.
What is an Article 78 proceeding in New York?
An Article 78 proceeding is a legal action used to challenge decisions made by government agencies or public bodies. Courts review whether the action was lawful, rational, and procedurally proper.