Penn Central Transportation Co. v. New York City

In 1965, New York City (defendant) enacted the Landmarks Preservation Law to enable the city to designate certain buildings and neighborhoods as historical landmarks. Penn Central Transportation Co. (Penn Central) (plaintiff) owned Grand Central Terminal in New York City, which was designated as a historical landmark under the law. In 1968, to increase its income, Penn Central leased the airspace above Grand Central Terminal for 50 years to UGP Properties, Inc. Penn Central expected the lease to provide it with millions of dollars of additional income every year. Penn Central and UGP then submitted two proposals for building designs to the New York City Commission (commission) and applied for permission to construct an office building above Grand Central Terminal. After lengthy hearings, the commission denied this request on the grounds that Grand Central Terminal was a historical landmark. Penn Central brought suit in the New York Supreme Court against New York City alleging that the commission’s application of the Landmarks Preservation Law, which denied its rights to build an office building above Grand Central Terminal and receive revenue from the building, constituted a taking of the company’s property without just compensation as required by the Fifth and Fourteenth Amendments. The New York Supreme Court granted an injunction to Penn Central but did not provide damages. The state court of appeals reversed, holding that the Landmarks Preservation Law furthered an important public purpose. Penn Central appealed to the United States Supreme Court.