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Penn Central Transportation Co. v. New York City

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Citation. 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d 631, 1978 U.S. 39.

Brief Fact Summary. Penn Central’s property was designated as a landmark under New York law and therefore subject to city preservation restrictions. As a result, Penn Central was prohibited from building two structures on top of its building. Penn Central sued alleging that the restrictions constituted a “taking” within the meaning of the Fifth Amendment to the United States Constitution.

Synopsis of Rule of Law. A city may, as part of a comprehensive program to preserve historical landmarks, place restrictions on the development of individual historical landmarks without effecting a “taking” requiring the payment of “just compensation” within the meaning of the Fifth Amendment to the United States Constitution.


Facts. Acting pursuant to The New York City Landmarks Preservation Law, the Landmark Preservation Committee (“Committee”) designated certain structures as landmark sites. The Grand Central Terminal, owned by Penn Central Transportation Co. (“Appellants”), was designated as such a site. Designation as a landmark cite meant that a structure was burdened with certain strictures concerning a property owner’s use of the site. Appellants requested permission from the commission to build two 50-plus story office buildings above the Grand Central Terminal. The Commission denied this request citing the adverse effect the buildings would cause on the view of the Terminal. Thereupon, Appellants sued, claiming that the regulation depriving it of the gainful use of its “air rights” above the Terminal, thus, constituting a taking.

Issue. Did the restrictions imposed by New York City’s law upon Appellants’ exploitation of the Terminal site effect a taking of Appellants’ property for public use within the meaning of the Fifth Amendment?
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