Skip to main content

Lawsuit filed by 13 rent-stabilized tenants; success would break new legal ground

Following the Empire State Development Corporation’s (ESDC) approval today of the Atlantic Yards project, tenants in two buildings owned by Forest City Ratner filed suit today in state court challenging the ESDC's use of eminent domain to demolish their buildings and override their rights as rent-stabilized tenants. The lawsuit had long been anticipated.

The lawsuit contends that a landlord that refuses to renew rent-stabilized leases and extinguish the tenants’ rights via demolition must obtain permission from the New York State Division of Housing and Community Renewal (DHCR).

Tenants of one of the buildings, 624 Pacific Street (at left in picture), were rudely awakened in June by some startling demolitions next door. The other building is 473 Dean Street. Both would be the subject of "friendly condemnations"--actions welcomed by Forest City Ratner as owner, but not by their tenants.

New legal ground

ESDC, an executive agency, cannot override DHCR’s legislative mandate, argues attorney George Locker. Still, he acknowledged that the claim raises an untested issue and would break new legal ground: “There is no reported case that I could find where the developer seeking state use of eminent domain to enable demolition was also the landlord of rent-stabilized tenants.”

Locker said that, in the past, eminent domain has been used to wipe out the leases of rent-stabilized tenants who were not tenants of buildings owned by the project developer. But he also pointed to another case, which did not involve eminent domain, “that states unequivocally that in demolition cases, DHCR was given ‘exclusive and original jurisdiction’ from the legislature.”

Private roads

In another novel claim, Locker argues that, under the New York State Constitution, a jury is required to determine the necessity of using eminent domain to seize property in order to build a private road, and the amount of compensation to be paid. (A jury has not been empaneled.)

The lawsuit cites 16 miles of private roads in the project—based on estimates from a transportation expert he consulted—mainly involving underground parking facilities.

The issue has never been tested in court, Locker said. “But the state constitutional provision requiring a jury to determine the necessity of using eminent domain to build a private road is clear, and it seems to me that this litigation will have to go up to the Court of Appeals,” he said, noting that, while some “relatively recent cases discuss juries and private roads, the issues were different” than with Atlantic Yards.

Developer misled city?

The lawsuit argues, as Locker has done before, that in a May 26, 2005 Power Point presentation to the New York City Council, the developer "falsely represented to the members of the City Council that FCRC-owned property within the Project Site would not be subject to condemnation."

The lawsuit points to other statements about "friendly condemnations" made by ESDC Chairman Charles Gargano, noting the condemnation is not considered "friendly" by the tenants.


Could the suit be dropped in exchange for appropriate settlement, I asked Locker. “I am guided by my clients, who are being run over by a steamroller,” he responded. “If they are appropriately compensated, so they can permanently relocate to a comparable Brooklyn neighborhood, far from Atlantic Yards, and without threat of eviction, that is their preference.”

(He's criticized the current relocation agreements as placing the risks inappropriately on the tenants rather than the developer.)

Another case challenging the use of eminent domain, filed in federal court by property owners, a commercial tenant, and residential renters, is also pending.


Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…