Skip to main content

After Michigan vote, AY project wouldn't fly there

What if the Atlantic Yards project were proposed for Michigan? It would be much, much tougher to approve a project that, like AY, is predicated on the elimination of blight. On Tuesday, Michigan voters by a 4-1 margin endorsed a constitutional amendment tightening the use of eminent domain.

According to the summary by the Michigan League of Women Voters, the amendment will:
--Prohibit government from taking private property for transfer to another private individual or business for purposes of economic development or increasing tax revenue.
--Provide that if an individual's principal residence is taken by government for public use, the individual must be paid at least 125% of property's fair market value.
--Require government that takes a private property to demonstrate that the taking is for a public use; if taken to eliminate blight, require a higher standard of proof to demonstrate that the taking of that property is for a public use.

The nonpartisan Citizens Research Council (CRC) offered a mixed assessment in its preview, concluding:
This proposed amendment would end the uses of eminent domain that are seen as abusive by the advocates of property rights, but at the expense of making eminent domain harder to use for even legitimate uses. It would make eminent domain more expensive for the condemning governmental units, which ultimately translates to higher costs for taxpayers, or to foregone projects.

The amendment enshrines a decision by the Michigan Supreme Court that the transfer of condemned property to a private entity may be appropriate, as the CRC notes, if:
1. “public necessity of the extreme sort” requires collective action;
2. the property remains subject to public oversight after the transfer to the private entity; or
3. the property is selected because of “facts of independent public significance,” rather than the interests of the private entity receiving the property.


Clearly, #2 would not apply to Atlantic Yards, while the other two provisions would certainly be arguable. In other words, part of this measure--which critics say go too far--likely would stop projects like AY. (And AY, independently of the Michigan moves, may violate the Supreme Court's Kelo decision because, according to a lawsuit, there was no public planning process.)

Blight redefined

In Michigan, there's a higher burden of proof to show that the property proposed for condemnation is blighted, and a requirement that blight be considered on a parcel-by-parcel basis, rather than in a neighborhood. That would eliminate the acquisition of nonblighted parcels necessary for a project. Note that there are several buildings in the Atlantic Yards footprint that the state acknowledges aren't blighted.

The CRC states:
Like “art,” “blight” is a somewhat ambiguous, relative term. What may be considered blighted in a well-to-do community may be considered perfectly acceptable in less wealthy communities. This proposal would require that the governmental unit proposing condemnation provide clear and convincing evidence that the property is blighted and the application of eminent domain will serve a public use of eradicating blight.

The implications of blight eradication on a parcel-by parcel basis, as is proposed in the amendment, are very different. It has been legislatively recognized that “blight is observable at different stages of severity, and that moderate blight unremedied creates a strong probability that severe blight will follow.”… Michigan law authorizes governments to engage in area-wide blight eradication so that moderate blight can be stopped from becoming severe blight. Requiring governments to use condemnation on only the most severely blighted properties, for which they can prove by clear and convincing evidence that blight exists, may overly restrict government officials in their efforts to make their communities attractive places to live and work. This amendment would weaken government’s ability to address moderate blight before it becomes severe.


On NPR last month, Jerry Rosenfeld, president of the JR Group in Detroit, defended eminent domain in assembling parcels, but ultimately acknowledged that the definition of blight is problematic:
But we have huge areas of property that are vacant. Let's take an area that's defined as a blighted area. And there is someone who in the middle of the blighted area that is non-conforming and we have the opportunity of a development in that property to revitalize that particular area through blight and through condemnation.
Now we happen to have done this - as people are familiar with brand new stadiums, the Lions and the Tigers - just north of here was an area called Brush Park, and this was as scary, blighted, drug-infested area as you could find in the city of Detroit. Today, because they had the ability to condemn the property, to take the people out of there - and which they did, and some of the people stayed and they had the opportunity to stay in by the homes that are in there - and they went forward and they have a great development over there.


Bob Woodson, the founder and president of the National Center for Neighborhood Enterprise in Washington, DC, responded:
You see, Jerry assumes that everybody has the same definition of blight. A place where there are rats and roaches and trash and drugs and - but that is not the case. For instance, there are neighborhoods on colonial homes in Lakewood, Ohio, they were defined as blighted because the yards were too small and they lacked two-car attached garages. The city's redevelopment plans call for upscale condominiums and retail, and therefore they condemned these properties.

So when you use the word blight, it's an emotional term and the assumption is that it is defined singly.


Rosenfeld responded:
And, Bob, you're right. That is - it is an issue. I think there should be a much better definition of the term in blight and how it is used.

The search for a better definition is ongoing nationally--and slowly.

Editorials

The state's major newspapers were split. The liberal Detroit Free Press editorialized against the measure, calling it “well intentioned but a flawed and, really, unnecessary effort,” warning that the state already had more restrictive eminent domain laws than the U.S. Supreme Court’s 2005 Kelo decision, and that the failure to define "fair market value" could lead to endless litigation.

The more conservative Detroit News endorsed the proposal, acknowledging that it would “make it more expensive for government to take private property even for legitimate public uses,” but said “its use should be expensive and relatively rare.”

Comments

Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.