Friday, December 01, 2006

Ratner agrees to do more for footprint renters, but lawyers remain wary

Rent-regulated tenants remaining in the proposed Atlantic Yards footprint have recently learned of a somewhat better offer from Forest City Ratner (FCR), but lawyers for some tenants say the deal still isn't good enough.

Such lawyers have long warned that the tenants remain vulnerable, given the relocation agreements that Forest City Ratner (FCR) has offered. Those agreements said FCR would pay the difference between the tenants' current rent and that charged for a new apartment, and they'd be guaranteed a space in the Atlantic Yards project at their previous rent.

However, in some contracts, FCR agreed to pay the differential in rent for only three years, which would leave the tenants vulnerable, since the contract expire before the first Atlantic Yards residential building was finished. In August, FCR's Jim Stuckey said, "We will take care of them" but was unwilling to provide any proof.

Upping the pledge

The Final Environmental Impact Statement (FEIS) indicates that FCR has improved its offer. It states (p. 8):
The sponsors have also agreed to pay the difference, if any, in rent between the tenant's current rent and the rent for the comparable interim unit until such time as the tenant is relocated into a new unit in the proposed development. This agreement would terminate only if the project were abandoned or the tenant breached its obligations.

Does a breach include a gag order regarding opposition to the project? No longer, but the contents of such a breach remain under negotiation, according to Jennifer Levy of South Brooklyn Legal Services, who represents several tenants in the project footprint.

Lawyer wary

I asked Levy if the new contract changed advice given to clients. She responded, "I don't think it's possible to answer that in the abstract. It depends on each client's needs and priorities. It is also dependent on the client finding a suitable relocation apartment that is then approved by FCRC, which is, predictably, difficult."

Also, she said, the "abandonment of the project" clause makes tenants vulnerable, since they could lose their rights if Atlantic Yards gets canceled. Should that abandonment loophole be closed and the contract breach issues resolved, she said, "there is nothing inherently wrong with the relocation agreement" that she and colleagues would "feel compelled to counsel against signing it."

She added that, "other than the FEIS, there is no public document memorializing FCR's commitment and it is unclear what efforts, if any, have been made to ensure that any relocated tenants who may have signed the earlier form relocation agreement have a legally enforceable commitment from FCR to pay beyond three years.

Agreements for plaintiffs?

What about the six renters who are eminent domain plaintiffs? Levy responded, "They have not been offered relocation because, with the exception of David Sheets, they are in buildings not owned by Ratner. As I understand it, the relocation offers are only made to those who live in Ratner-owned buildings. This is not for any nefarious reason, it is because they have leases with third parties. David Sheets was also not offered relocation because he is involved in litigation with Ratner, in the State case as well as the eminent domain case, and they have said they will not engage in piecemeal negotiations with people in litigation with them."

ESDC response

Can the ESDC provide any documents that memorialize the new pledge? Spokeswoman Jessica Copen responded, "The FEIS accurately describes FCR's new commitment. You might want to contact them for further information and/or documents."

I tried both a lawyer representing Forest City Ratner and a p.r. representative, but didn't get a response.

Lawyer outraged

Attorney George Locker, who also represents several rent-regulated tenants living in Ratner-owned properties in the project footprint, and has stated he will file a lawsuit in state court, said that he had not been told beforehand of the change: "The first inkling was when I read the FEIS." (Maybe that's because he's announced plans to sue.)

He's not deterred from his plans. "The new relocation language does not comply with the relocation requirements of the Urban Development Corporation Act," he charged. "Moreover, without seeing the new relocation agreement (if indeed there is one), I note that under the new language, the project could be abandoned, for any number of reasons, leaving my clients with nothing."

He added, "Further, relocation back into the project should not be contingent on whether there has been a breach of obligation... Each of these two conditions places all of the risk on my clients, when they should be asked to assume no risks."

Locker repeated that he thinks state law bars ESDC from using eminent domain to "facilitate the demolition of a rent-stabilized building owned by Ratner." That will be tested in court.

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