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PropertyLand use and takings

Penn Central Transportation Co. v. New York City

Supreme Court of the United States · Decided June 26, 1978 · Core case

Full citation

Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978).

VerifiedQuotes, pinpoints and citation checked word for word against the opinion; facts checked against the opinion before publication. October 20, 2026.

Penn Central Transportation Co.

railroad and terminal ownerappellant

New York City

cityappellee

The parties: Penn Central Transportation Co. v. New York City.

Brief

Facts

New York City adopted its Landmarks Preservation Law in 1965 under a New York State enabling act. An 11-member Landmarks Preservation Commission designates landmarks and historic districts after a hearing; the Board of Estimate may modify or disapprove a designation, and judicial review is available. Once a building is designated, the owner must keep its exterior in good repair, and the Commission must approve in advance any exterior alteration or exterior improvement on the landmark site. The owner may seek a certificate of no exterior effect or a certificate of appropriateness, including one for insufficient return. City zoning rules also let landmark owners transfer unused development rights to certain other parcels. Grand Central Terminal, owned by Penn Central, opened in 1913 and was designated a landmark on August 2, 1967; the Board of Estimate confirmed the designation on September 21, 1967. Penn Central opposed the designation but did not seek judicial review. In January 1968 Penn Central contracted with UGP Properties, which was to build an office building above the Terminal and pay at least $3 million annually after construction. Two plans were submitted: a 55-story tower cantilevered above the facade, and a 53-story building that required tearing down part of the Terminal. The Commission denied both a certificate of no exterior effect and, after four days of hearings with over 80 witnesses, a certificate of appropriateness. The owners sought judicial review of neither denial and submitted no other plans.

Issue

Do the restrictions that New York City's Landmarks Preservation Law places on the development of Grand Central Terminal take the owners' property for public use without just compensation, in violation of the Fifth and Fourteenth Amendments?

Holding

On this record, applying the Landmarks Preservation Law to Grand Central Terminal did not effect a taking. The restrictions were substantially related to the promotion of the general welfare, did not interfere with the Terminal's present uses, permitted a reasonable return on Penn Central's investment, and left valuable transferable development rights that mitigated the burden.

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