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Lawsuit Says Landlord Breached Lease By Failing To Secure Municipal Approvals And Building Permits
Chipotle Mexican Grill has accused the owners of Orangeburg Commons of breaching its lease by failing to deliver the approvals necessary for the construction and operation of its fast food restaurant on an outparcel on Route 303 and Stevens Way in Orangeburg, according to a lawsuit filed in Rockland County Supreme Court last week.
The complaint charges that FB Orangetown Retail Three LLC and RD Management LLC (owners and managers of Orangeburg Commons) had entered into a 15-year commercial lease agreement in July 2023 for 2,435 square feet of a two-tenant building that included a drive-thru service lane and window, and a patio for Chipotle.
The lease required the landlord to secure necessary approvals from the Town of Orangetown by Jan. of 2024, specifically, zoning, special use permits, final site plan approvals, and variances, licenses, and building permits. The lease allowed several extensions of that deadline, provided the landlord was working diligently to secure the approvals. However, according to Chipotle, the landlord failed to deliver those approvals and in Nov. 2024, Chipotle sent notice terminating the lease and demanding reimbursement of $20,000 in expenses, the maximum amount it could claim under the lease for expenses incurred in procuring the lease and drafting architectural plans.
In 2023, when Chipotle expressed interest in locating at Orangeburg Commons, the mixed-use development operated under a Special Permit that did not allow for a fast food restaurant on the site. The Special Permit allowed two hotels, a food market, a bank, and a “traditional” restaurant — no fast food, no drive-thrus.
In a submission to the Orangetown Town Board in April 2023, the owners said it had been ten years since the site was developed and despite diligent efforts to find a bank and restaurant tenant, the two pads in the parking lot remained vacant.
RD Management petitioned the town board for a zoning text amendment to allow Chipotle to occupy a portion of one of the vacant pads in the shopping center. According to the owner’s submission at the time, “Chipotle has expressed a serious commitment to establishing and operating one of its restaurants on the property.”
In June 2023, after holding a public hearing, and reviewing potential environmental impacts under SEQRA (the State Environmental Quality Review Act), the town board granted RD Management’s petition for a zoning text amendment and adopted a Local Law amending the zoning code to allow fast-food restaurants in mixed-use developments by Special Permit, securing the zoning changes that were required under the lease.
Amended site plans were submitted to the Orangetown Planning Board in Sept. 2023 and reviewed by the Rockland County Department of Planning.
In Nov. 2024, Chipotle’s termination letter offered the owners of Orangeburg Commons an opportunity to avoid the lease termination by providing proof within 20 days that necessary approvals were secured. The letter said Chipotle spent $36,400 on architectural fees.
Chipotle is claiming that the failure to deliver the approvals was unjustified and is seeking $20,000 in expenses, plus other damages, costs and attorney’s fees. The suit does not detail which specific approvals the landlord failed to secure.
According to its website, RD Management owns and operates a portfolio of 150+ assets throughout the United States and Puerto Rico, with properties spanning the mixed-use, retail, office, residential, hospitality, self-storage, senior/student housing, industrial, and government sectors.
Chipotle has a Rockland County location in Rockland Plaza in Nanuet.
Rockland County Makes Third Attempt To Secure Swimply’s Records
Rockland County made a third stab at securing records from Swimply, a national online matchmaker listing hourly rentals of swimming pools in backyards. Swimply has dozens of listing in Rockland County advertising pools available from $60 to about $125 per hour.
Swimply does not disclose the specific location of the rental until a booking is made and paid for online.
Many of the locations are in towns and villages that have outlawed short-term rentals, including rentals of swimming pools. Many of the hourly rentals are disruptive to the neighbors. Loud music, and large parties are a regular feature of the day rentals.
Rockland County’s health department says the rental of backyard pools as a commercial venture also may be a violation of public health codes. In July 2022, Rockland County began to investigate pool renting practices and whether these practices violated sanitary health codes.
To aid their investigation, the county and its health department in Aug. 2022 issued a subpoena to Swimply, Inc., a Delaware corporation whose principals live in Brooklyn and Long Island. The county was seeking four years of data on Rockland County property owners, renters, or occupants who’d rented or sought to rent their pools and backyards on Swimply’s online platform. The county sought names, addresses, pool locations, and records of rental transactions from June of 2018 to the present.
The court petition said: “The Deputy Commissioner is required under the provisions of Section 309 of the NYS Public Health Law to enforce, within the Rockland County Health District, the provisions of the NYS Public Health Law, the NY Sanitary Code and the RC Sanitary Code.”
Two prior efforts to secure records of Swimply’s customer database have been dismissed by Rockland County courts for errors related to improper service of process and failure to secure jurisdiction over the entities that actually run the pool-listing sites.
When served the subpoena in Aug. 2022 by Rockland County, Swimply refused to comply, saying the county exceeded its statutory authority in seeking Swimply’s records, and that the subpoena was a “flagrant attempt to disrupt Swimply’s business and harass its users.” It said in court papers, “Swimply has become a target of a fishing expedition by the County to obtain every document ever created about any homeowners in Rockland County that have ever rented their pool on the Swimply platform or who have even just thought about renting their pool on the platform… so that it can then issue (illegal and unenforceable) violations to individual homeowners for thousands of dollars, effectively shuttering Swimply’s business.”
In Oct. 2023, more than a year after the subpoena was served, Supreme Court Justice Christie D’Alessio dismissed the case and refused to enforce the subpoena, saying the County had not complied with a Court rule requiring parties to make a good faith effort to resolve the matter outside of court before seeking relief from the court. The case was dismissed without prejudice, meaning that the County could refile it. In Feb. 2024, the county issued a new subpoena for the same documents, and sought to resolve the issue without court intervention.
The County continued to pursue Swimply in a second case filed in Rockland County Supreme Court in December of 2024. That case was dismissed by Justice Larry Schwartz in May for the failure to secure personal jurisdiction over the company and failure to perfect service of process.
This month, the County made a third effort, serving a new subpoena for Swimply’s records and filing a new case, with an affidavit from its process server detailing the efforts made to secure proper service and cure any defect in its previous filings.
