This is a proceeding challenging certain long term leases of underwater lands granted by the Town of Oyster Bay. Plaintiffs argue that the underwater leases are invalid under the State Environmental Quality Review Act and the Town's own regulations.A hearing was conducted before the undersigned on July 16 and 17, 2013.

Although the exact boundary is subject to dispute, the Town of Oyster Bay holds title to a tract of underwater land located within the Oyster Bay/Cold Spring Harbor Complex (See generally, Nance v Oyster Bay, 23 AD2d 9 [2d Dept 1965]). The Harbor is a well known shellfish producing area and contains hard clam populations that support both commercial and recreational shell fisheries. Since at least 1937, the Town has leased a significant portion of this land to respondent Frank M Flower & Son, Inc. Flower presently holds several underwater leases issued by the Town. The leases were renewed for a 30 year term on September 13, 1994 and cover approximately 32 % of the Town owned land. There is no dispute that the lands leased to Flower have been certified, and are subject to state, and consistent local regulation, pursuant to Article 13 of the State Environmental Conservation Law (New York v Southampton, 99 AD2d 804 [2d Dept 1984]).

Pursuant to § 196-23 of the Town's Shellfish and Marine Life Ordinance, the Town may lease underwater lands owned by the Town and grant the lessee the exclusive right to harvest shellfish on the demised property. The term of such leases may not exceed 30 years. The letting of underwater lands owned by the Town shall be at public [*2]auction and to the highest qualified bidder pursuant to § 103 of the General Municipal Law. However, underwater land shall not be leased where there is "an indicated presence of shellfish in sufficient quantity and quality...as to support significant hand raking and/or tonging and harvesting." Thus, as a condition precedent to the granting of a lease, the Town must make a finding that there is not a sufficient quantity or quality of shellfish to permit manual harvesting. The Town ordinance was adopted September 14, 1993 and parallels State Environmental Conservation Law § 13-0301(1)(b) which dates back to 1972.

NORTH OYSTER BAY BAYMEN'S ASSOCIATION INC., et alIndex no. 009210/11

Plaintiff North Oyster Bay Baymen's Association, Inc. is a trade association of diggers of hard clams in the waters around the Town of Oyster Bay. Plaintiffs William Fetzer, Craig Oddo, William Painter, Frederick Menges, and James Schultz are hard clam diggers and possess permits issued by the Town as well as by the State Department of Environmental Conservation.

Plaintiffs commenced a similar action seeking to void Flowers' leases in 1991 (North Oyster Bay Bayman's Ass'n v Oyster Bay, Index No. 10957/91). That action was discontinued on November 18, 1994 pursuant to a stipulation of settlement dated May 8, 1992. The stipulation required the Town to prepare a new map of leased shellfish land, showing an accurate depiction of the shoreline and straightened exterior lines.

This action was commenced on June 22, 2011. In the first cause of action in the amended complaint, plaintiffs seek a judgment declaring void any underwater leases that cannot be defined by reference to an accurate map and declaring the land covered by those leases "town land underwater."

In the second cause of action, plaintiff seeks a preliminary and permanent injunction prohibiting defendant Flower from employing any scrapes, suction dredges or other mechanical devices for the taking of shellfish pending compliance with the State Environmental Quality Review Act and the issuance of a permit by the Army Corp of Engineers.

In the third cause of action, plaintiffs seek a declaration that the underwater leases held by Flower are void due to material indefiniteness and mutual mistake. In the fourth cause of action, plaintiffs seek a declaratory judgment that the underwater lands belong to the State of New York In the fifth cause of action, plaintiffs seek specific performance of the May 8, 1992 stipulation of settlement, including the preparation of an accurate [*3]survey of the underwater lands. In the sixth cause of action, plaintiffs seek a declaration that certain underwater leases assigned to Flower by Pine Island Oyster Farm, Inc. are null and void. In the seventh cause of action, plaintiffs seek specific performance of the Town and Flower's "management obligations" under the May 8, 1992 stipulation of settlement. In the eighth cause of action, plaintiffs seek an award of damages against defendant Flower pursuant to § 340(5) of the General Business Law. In the ninth and tenth causes of action, plaintiffs seek a permanent injunction restraining Flower from taking shellfish from underwater land. In the eleventh cause of action, plaintiffs seek a judgment pursuant to CPLR Article 78 compelling the Town to produce records requested pursuant to Article 6 of the public officers law.

By order dated July 2, 2013, the court, pursuant to CPLR 103(c), converted the action into an Article 78 proceeding. In the order, the court dismissed all claims as to defendant State of New York for failure to state a cause of action, except for the claim with respect to the boundary dispute, which was dismissed without prejudice on the ground of another action pending, Murphy v Town of Oyster Bay, Index No 624/12.

Additionally, the court dismissed petitioners' sixth cause of action, for a judgment declaring void the underwater leases assigned to Flower by Pine Island Oyster Farm, Inc, for lack of standing (Save the Pine Bush, Inc. v Common Council, 13 NY3d 297 [2009]). Finally, the court dismissed the third, fourth,

NORTH OYSTER BAY BAYMEN'S ASSOCIATION INC., et alIndex no. 009210/11

fifth, and seventh causes of action, which sought relief on grounds not available in an Article 78 proceeding.

However, the court denied respondents' motion to dismiss as to the first, second, eighth, ninth, and tenth, and eleventh causes of action to the extent those claims are based upon the Town's regulations. The court then proceeded to conduct a hearing as to whether, based upon conditions within four months of June 22, 2011, the Town's finding that there was not a sufficient presence of shellfish to support significant hand raking or tonging was arbitrary.

The most recent clam density survey for the Oyster Bay/Cold Spring Harbor Complex was prepared for the Town of Oyster Bay Department of Environmental Resources on January 11, 2012. The survey was prepared by an engineering firm, Cashin Associates. The field portion of the survey was performed subsequent to the commencement of this proceeding, in October-November 2011. The survey includes all [*4]certified and uncertifiled Town of Oyster Bay underwater lands in the harbor, except those portions of the certified lands leased to Flower.

Sampling was performed with a barge mounted clamshell dredge, which obtained a sample of bottom sediments, including shellfish, and deposited it on a grid for sorting and recovery of shellfish. The clams found at each station were measured for size, as were other shellfish and shellfish predators obtained in each sample. A total of 120 grabs were taken at 60 different locations throughout the harbor system, including certified and uncertified shellfish areas. As noted, no samples were taken from Flower's land.

Based upon the survey, clam density and distribution was calculated for different areas as well as the overall harbor, excluding the leased grounds. In addition to the hard shell clam, other macrobenthic species were identified and recorded. The harbor-wide density of clams was found to be 10.29 clams per square meter, including both seed and full grown clams. The density of 10.29 shows an increase in clam abundance since a previous survey which was performed in 2007. The increase in density is largely attributable to a substantial increase in clam abundance in area 3, Central Harbor, particularly in the seed and littleneck categories. Area 3 was estimated to have the largest stock of clams, approximately 63.27 million clams, approximately 1/3 of which are in the seed size category. The density of clams in uncertified waters was found to be 28 clams per square meter, indicating a substantial increase since 2007. The density of clams in uncertified waters was greatest at two stations, station 39 in Cold Spring Harbor South with a density of 92.7 clams per square meter and station 21 in Central Harbor with a density of 105 clams/sqm. The highest density in certified lands was found at Central Harbor station 27 with a density of 93.3 clams/ sqm and Cold Spring Harbor station 48, with a density of 51.7 clams/sqm. The clam density survey prepared in January 2012 was the first clam density survey prepared for the Town since 1994 (T 8; Petitioner's post hearing brief at 2).

Agreements by which the public powers of a municipality are surrendered without express permission of the legislature are beyond the powers of the municipality and are void (Atlantic Beach Property Owners' Ass'n v Hempstead, 3 NY2d 434 [1957]). The demarcation between governmental or proprietary interests in property owned by government or its subdivisions has become indistinct (Monroe v Rochester, 72 NY2d 338, 342 [1988]). Nevertheless, while the right to extract clams from the Town's

NORTH OYSTER BAY BAYMEN'S ASSOCIATION INC., et alIndex no. 009210/11

waters may be proprietary, the power to monitor the presence of shellfish in the Bay is clearly a non-delegable governmental function.

Under the Town's own regulations, an underwater lease shall not be granted where there is "an indicated presence of shellfish in sufficient quantity and quality...as to support significant hand raking and/or tonging and harvesting." Presumably, there were insufficient shellfish to permit hand raking or

tonging in 1994, when the renewal leases were executed. Nevertheless, because marine and environmental conditions change, during the lease term there may come a time when there are sufficient shellfish to permit hand raking or tonging. Thus, the Town of Oyster Bay could not, consistent with its obligations as a town, issue a long term lease of underwater lands, without reserving the right to cancel the lease should clam density increase to permit hand raking or tonging.

In view of the significant increase in clam density in the surrounding area, the Town's failure to conduct a clam density survey on land leased to Flower renders the Town's continuation of the long term lease to Flower arbitrary. Accordingly, the 30 year lease extension issued to Flower in September 1994 is vacated.The matter is remanded to the Town of Oyster Bay for the conducting of a clam density survey upon land leased to Flower, and findings by the Town as to whether there is an indicated presence of shellfish upon such land in sufficient quantity and quality to support significant hand raking or tonging.

The parties may settle a judgment on notice, providing for a 30 day stay of the provision vacating the leases issued to respondent Flower.

DatedSeptember 18, 2013J.S.C. [*5]