Skip to main content

Court papers hint at heated eminent domain arguments in court tomorrow

According to the legal memoranda filed in the Atlantic Yards eminent domain case, the hearing tomorrow at 2 p.m. in Brooklyn federal court should be a lively one.

The defendants--city and state officials, the Empire State Development Corporation (ERSDC), and developer Forest City Ratner--are asking the court to dismiss the case, while the 13 plaintiffs--owners and tenants within the proposed project footprint--want the case to proceed so the court can order discovery, or the exchange of documents.

A work of fiction?

Forest City Ratner's most recent memorandum of law, filed 1/19/07, begins, "Plaintiffs' opposing memorandum is engagingly written, but that is true of many works of fiction."

The Empire State Development Corporation's (ESDC) memo charges, "What they seek, ultimately, is the judicial defeat of a public development project that has garnered the support of a wide range of elected officials." The ESDC calls the plaintiffs' allegations "conclusory, self-serving, hyperbolic and... gravely irresponsible."

The ESDC criticizes the plaintiffs' sequencing formulation--that "deference is warranted only where the legislature first concludes that developing a given area will benefit the public, then identifies the specific properties to be seized to advance that predetermined purpose, and then engages in a fair and open bidding process"--would "undermine" the state's legislative scheme, and should not be changed by the courts.

The defendants get the last word in the legal papers, but plaintiffs' attorney Matthew Brinckerhoff, asked to comment, countered, "Our legal analysis is fully consistent with the cases. All we did was suggest an analytical framework for organizing and examining the law in this area, i.e., a skeleton to hang the meat on."

State case

The ESDC also argues that the plaintiffs should not be allowed to add a state eminent domain law challenge to the federal case, saying that it would lead to a scenario in which the federal courts were flooded with claims from anyone threatened by a condemnation. The plaintiffs, allowed to respond 1/26/07 only regarding that narrow aspect, say in a memo that the defense ignores important precedent.

The ESDC argues that the case actually isn't ripe, since the scope of the project and the area to be condemned could change as a result of other court proceedings, "altered financial circumstances, or the mere passage of time." The ESDC notes that in other cases, such as Westway, only some properties were condemned before the project was stymied.

FCR's argument

Forest City Ratner lawyers argue that the plaintiffs rely on cases in which eminent domain apparently benefits only private parties, but reiterate that Atlantic Yards "contains the following essential components that have long been recognized as public uses": an arena, housing, transit improvements, open space, and the elimination of blight.

They cite a 1984 Supreme Court decision that says a court should not substitute its judgment "for a legislature's judgment as to what constitutes a public use." Whether the ESDC--a public authority created by a legislature--is truly a legislative agency may be argued in court.

Public review

FCR contends that the eminent domain findings "have been made here at the conclusion of a long public review process that included a public hearing before ESDC as well as numerous public meetings before other agencies, including the City Planning Commission."

(I'm not aware of other public meetings before agencies. The planning commission's meeting in September was highly scripted, and showed the commissioners generally uninformed.)

FCR argues that two Memoranda of Understanding signed 2/18/05, which the plaintiffs cite as the basis for asserting a predetermined outcome, don't constitute proof. For example, one MOU required approval by the ESDC and "review and acceptance" by the planning commission, and was nonbinding.

(While few doubted that ESDC and the planning commission would favor Atlantic Yards, it may not be easy to prove that. Then again, Mayor Mike Bloomberg, a year earlier, had said,
Then, we’ve got to find a find a ways--Bruce Ratner’s got to find a ways--to build this complex in Brooklyn.)

Kelo effects

Both the ESDC and FCR take aim at the plaintiffs' contention that the Supreme Court's 2005 Kelo eminent domain decision requires a heightened scrutiny of this case, arguing that, while Kelo concerned economic development, Atlantic Yards regards the removal of blight.

As for Justice Anthony Kennedy's concurrence, which set up some apparent standards for eminent domain takings, FCR lawyers contend they don't apply. Kennedy pointed to "the context of a comprehensive development plan;" FCR argues that "ESDC's exercise of eminent domain is part of a comprehensive development plan."

That's likely in dispute. While ESDC certainly held a hearing and issued findings, and an urban renewal area covering part of the footprint had existed for 40 years, there was no preexisting planning process or request for proposals for the project site itself.

Beneficiaries unknown?

Kennedy wrote that, in Kelo, "The identity of most of the private beneficiaries were unknown at the time the city formulated its plans." Brinckerhoff commented, "Every case where the courts have deferred to legislative judgments on eminent domain concerned a taking that was deemed necessary to accomplish a public purpose before the developer/beneficiary was known."

FCR lawyers argue, in a bit of a stretch, that Atlantic Yards would not simply be the transfer of property from private parties to another private party, pointing out that "major portions of the project will remain under public ownership," the city would own or lease space in one building for a school, and the publicly accessibly open space would be owned by a not-for-profit entity.

Unmentioned is that the developer would benefit from naming rights at the "publicly owned" arena. Also, according to the Final EIS, The proposed open space would be owned by a conservancy or other not-for-profit entity established by the project sponsors. In a footnote, FCR lawyers add that no one knows the identities of those renting or buying the apartments.

State response

The city and the state each seek to have city officials and former Gov. George Pataki dismissed from the case. The state's memo notes that Pataki left office before the properties had been taken, that he wasn't personally involved in the issue, and anyway, he should have immunity from the suit.

Lawyers for the state, in their 1/19/07 memo, deny the claim that Pataki "wholly controlled" the ESDC, noting that several cases point out that the ESDC and other public benefit corporations operate independently, despite the Governor's appointment process. (The 15-minute approval of the Atlantic Yards project probably wasn't a shining moment of independence.)

City claims

The city's 1/19/07 memo states, "Plaintiffs' conclusory allegations of conspiracy are simply not sufficient to preclude dismissal." The city argues that, because none of the city defendants are parties to the condemnation being undertaken by the ESDC, they shouldn't be liable.

In the memo, attorneys also argue that the city's $100 million capital commitment (now apparently $205 million) and its agreement to convey city streets to the state don't link the city to the condemnations. "The proposed condemnation of plaintiffs' property is only one small part of the Atlantic Yards project," the memo states.

That may be true, but it would be impossible to proceed with the initial phase--the arena block--without the property of some of the 13 plaintiffs. That's why there's so much at stake in this case.

Brinckerhoff commented, "The proposition we're asserting is very modest. The known facts give rise to a reasonable suspicion that a private purpose is drove this deal. All we're saying is that, given these unique facts, aren't we the people, we the residents and property owners in the footprint, entitled to scrutinize the decision-making process to make sure that it passes muster? We're just asking that our public officials be accountable." The defendants, of course, argue that the plaintiffs are going too much too far.

Comments

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…

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…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…

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…