Appeal from a judgment (denominated order) of the Supreme Court, Erie County (Joseph D. Mintz, J.), entered October 26, 2006 in a proceeding pursuant to CPLR article 78. The judgment dismissed the petition.

It is hereby ordered that the judgment so appealed from be and the same hereby is unanimously reversed on the law without costs and the matter is remitted to Supreme Court, Erie County, for further proceedings in accordance with the following memorandum: Petitioner commenced this CPLR article 78 proceeding seeking to annul the determination of the Town Board of respondent Town of Elma denying petitioner’s application for site plan approval and a preliminary business use permit and issuing a positive declaration pursuant to article 8 of the Environmental Conservation Law (State Environmental Quality Review Act). Respondents moved to dismiss the petition pursuant to CPLR 7804 for failure to state a cause of action, and Supreme Court sua sponte converted the motion to one for summary judgment and dismissed the petition upon determining that the action of the Town Board in denying petitioner’s application was not arbitrary or capricious.

*1338We note at the outset that the court erred in converting the motion to dismiss to one for summary judgment and dismissing the petition without providing adequate notice to the parties that it intended to do so (see CPLR 3211 [c]; Mihlovan v Grozavu, 72 NY2d 506 [1988]). Here, the Town Board denied petitioner’s application for site plan approval and a preliminary business use permit without providing any reasoning for the denial, and we note in addition that the Town of Elma Planning Board had approved the application. “ ‘Findings of fact which show the actual grounds of a decision are necessary for an intelligent judicial review of a quasi-judicial or administrative determination’ ” (Matter of Perrella v Suffolk County Classification & Salary Appeals Bd., 117 AD2d 603, 604 [1986]; see Matter of Paloma Homes, Inc. v Petrone, 10 AD3d 612 [2004]). We therefore reverse the judgment and remit the matter to Supreme Court for further proceedings consistent with our decision. Present—Gorski, J.R, Smith, Centra, Lunn and Peradotto, JJ.