A New York state appeals court denied a request by Project Orange Associates to seize Syracuse University’s steam plant and pipes Friday, saying the proposed eminent domain action would benefit only Project Orange and not the public.

In a unanimous decision, the court said the underlying basis of Project Orange’s request was its “outdated business model.” The proposed condemnation was the latest in a series of attempts to free Project Orange from a contract with SU, according to the ruling, and “a merely incidental public benefit coupled with a dominant private purpose” is not grounds for state condemnation.

SU is currently operating the steam plant, which provides steam to the university, Crouse Hospital, the State University of New York College of Environmental Science and Forestry, Syracuse VA Medical Center and Upstate Medical University. Operations cost $6.1 million this year and are expected to rise by $3.1 million for the 2011 fiscal year.

Project Orange ran SU’s steam operation on Taylor Street from 1990 until last fall, when the parties split ways amid increasingly contentious litigation. Project Orange filed a lawsuit against SU in November 2008 based on allegations of price gouging and secret cooperation with other companies, and SU countersued shortly thereafter. SU now claims Project Orange broke its lease, forfeiting the cogeneration plant it owns on university property.

In April, Project Orange asked the state to condemn SU’s steam plant and the pipelines connecting it to campus.

“The decision of the Appellate Division in the condemnation case reflects what the university has said in all aspects of the litigation: POA’s claims are an attempt to evade POA’s obligations under its agreements with the university,” SU spokesman Kevin Morrow said in an e-mail.

Project Orange President Adam Victor declined to comment on the court’s decision, saying he had not yet reviewed it.

The two main lawsuits Project Orange and SU filed against each other are still pending in state Supreme Court. They could go to trial this spring if a judge does not dismiss them.

 

Published on March 22, 2010 at 12:00 pm