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Key Legal Considerations for Leasing Municipal Property for Renewable Energy Projects in NYS

  • Writer: Mindy L. Zoghlin
    Mindy L. Zoghlin
  • May 22
  • 2 min read
solar and wind project

As municipalities in New York State explore opportunities to lease public land for renewable energy projects, such as solar or wind developments, there are several critical legal considerations to keep in mind. These projects can offer significant environmental and economic benefits, but they also require municipalities to navigate a complex regulatory landscape to avoid legal pitfalls.


SEQRA Compliance: Avoiding Segmentation

Before entering into a lease agreement with a private developer, the municipality must comply with the New York State Environmental Quality Review Act (SEQRA). SEQRA mandates a comprehensive environmental review to assess potential environmental impacts and mitigate adverse effects.


One key concern under SEQRA is segmentation, which occurs when a project is improperly divided into smaller parts to avoid a full environmental review. For example, if the lease agreement is evaluated separately from a larger development plan, the municipality risks missing potentially significant environmental impacts that could arise from the project as a whole. Conducting a thorough SEQRA review upfront helps municipalities identify and address potential environmental concerns, ensuring a more robust and legally defensible decision-making process.


Declaring the Property as Surplus

Under New York State law, a municipality cannot convey an interest in real property — including leasing public property to a private developer —unless it first determines that the land is no longer needed for public use. This is typically accomplished through a formal resolution by the municipal board. The resolution must clearly state that the property is surplus to municipal needs and is being considered for lease to a private party for renewable energy development.


Compliance with Town Law § 64(2)

In addition to SEQRA and the surplus property declaration, towns in New York State must comply with Section 64(2) of the Town Law, which governs the leasing of town-owned property. This section requires that any lease of town property be subject to a permissive referendum. This means that, after the town board passes a resolution approving the lease, the public has a period of time to petition for a referendum to approve or disapprove the lease agreement.


Failing to adhere to this requirement can result in legal challenges and delays, potentially jeopardizing the project. Properly structuring the lease and ensuring full compliance with the permissive referendum process is crucial to the success of a renewable energy development on municipal land.


Why You Need Experienced Legal Counsel

Navigating the regulatory framework for leasing municipal property to private developers for renewable energy purposes is complex. From SEQRA compliance to declaring property as surplus and adhering to the requirements of Town Law § 64(2), each step involves legal risks that can potentially delay or derail a project. A knowledgeable attorney can assist with drafting resolutions, conducting SEQRA reviews, and ensuring that all procedural requirements are met, positioning the project for success.


If your municipality is considering leasing property for renewable energy development, we are here to help you navigate the legal complexities and maximize the benefits of sustainable development. Please contact Mindy L. Zoghlin at 585-258-2871 or mzoghlin@underbergkessler.com or Jacob H. Zoghlin at 585-258-2834 or jzoghlin@underbergkessler.com.

 

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