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Kenford Co. v. County of Erie

537 N.E.2d 176 (1989)

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Kenford Co. v. County of Erie

New York Court of Appeals

537 N.E.2d 176 (1989)

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Facts

County of Erie (defendant) wished to finance and construct a sports stadium. Kenford Co. (Kenford) (plaintiff) had acquired options on land located in the county and proposed to sell the land to the county as a site for the stadium. The county declined the offer, but Kenford responded with a new offer that it would donate the land to the county if the county permitted Dome Stadium, Inc. (DSI) (plaintiff) to lease or manage the stadium. The county accepted the offer, and the parties entered into contract negotiations. Kenford exercised his option on the land. Kenford and the county executed a contract providing that Kenford would donate 178 acres of land to the county for construction of the stadium and necessary access roadways and that the county would begin construction within twelve months. The county also agreed to negotiate a forty-year lease with DSI for the operation of the facility in which the county would receive lease revenues of no less than $63.75 million from tax revenue from the operation of the site, rental payments, and increased property taxation revenue resulting from increased assessments on “the peripheral lands,” those owned or subsequently acquired by Kenford and located within the town in which the stadium was built over the course of the forty years. If a lease could not be agreed upon within three months, the county and DSI were to execute a twenty-year management agreement. The county solicited construction bids but were unable to obtain a bid for the amount that the county had appropriated for the project. The county adopted a resolution terminating the contract. Kenford and DSI brought a breach of contract action and sought specific performance or, alternatively, damages for the loss of appreciation value from the peripheral property. The trial court awarded damages and the county appealed.

Rule of Law

Issue

Holding and Reasoning (Mollen, J.)

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