Skip to main content

Eminent domain case gets serious consideration in court (but the press mostly passes)

Apparently most of the press missed another doozy of an oral argument yesterday in federal court regarding the Atlantic Yards eminent domain case. U.S. District Judge Nicholas Garaufis considered some defense arguments skeptically, as he devoted more than three hours (including break) to the hearing.

Also, though there were no additional briefs on the issue, Garaufis spent a significant amount of time hearing arguments about the substance of the case, as he considered the defense motion that the case should be dismissed because of a failure to state a valid claim. He also expressed some skepticism about the political process that led to project approval--though that may not have significant bearing on the plaintiffs' charges.

(I'm out of town, and my secondhand and thus highly incomplete account is based on messages from or conversations with four courtroom observers, all project opponents. I hope to have a more thorough account when the hearing transcript becomes available. Observers identified reporters present from the weekly Brooklyn Paper and Brooklyn Downtown Star and the New York Law Journal. They said a New York Post reporter stopped in, but there's no article in today's paper, nor in any other daily.)

It was significant, as I wrote Thursday, that Garaufis would hold a hearing rather than simply rely on briefs from the parties challenging the report and recommendations made by U.S. Magistrate Judge Robert M. Levy and also significant that Garaufis devoted as much time as he did--a point he himself made in court.

Ripeness & state court

While the defendants--the Empire State Development Corporation (ESDC), the city, and developer Forest City Ratner--had challenged Levy's recommendation that the case is ripe for review, Garaufis did not seem sympathetic. The plaintiffs--13 property owners and renters organized by Develop Don't Destroy Brooklyn--had pointed out that demolitions for the project have already begun, and Garaufis also cited those ongoing demolitions.

At one point during this phase, as ESDC lawyer Preeta Bansal argued that the case should be consolidated with a separate case in state court, Garaufis became angry, interrupting her for lecturing him about doctrine he already knew. This isn't a law school class, he told her.

Garaufis also did not entertain the ESDC's argument based on a case known as Younger, which states that federal courts should not interfere with ongoing state proceedings. Levy had said the defense's argument for dismissal wasn't sound.

About Burford

A good portion of the hearing concerned the plaintiffs' challenge to Levy's recommendation that the case be dismissed and sent to state court based on a case known as Burford, which requires federal courts to stand clear when they might disrupt “state efforts to establish a coherent policy with respect to a matter of substantial public concern."

Garaufis seemed willing to at least consider the plaintiffs' contention that, if the case remains in federal court, it would not ride roughshod over the eminent domain process in New York State. The defense has argued that, should the Atlantic Yards plaintiffs succeed, future plaintiffs would all go to federal court, which is more friendly to eminent domain challenges, and thus delay projects that relied in part on eminent domain.

Settlement and discovery

Garaufis seemed interested in easing the case to some kind of resolution. He raised the possibility of settlement, asking plaintiffs' attorney Matthew Brinckerhoff if there was any way an accommodation could be reached short of adjudication. Brinckerhoff said no, that it was an issue of constitutional rights.

The judge also raised the possibility of permitting discovery--the request for background documents--key leverage for plaintiffs in federal court but not permitted when eminent domain is reviewed in New York state court. (The review in the latter is limited to the established record.) Garaufis mused about permitting some kind of limited discovery and having the case moved to state court.

On the merits

As at the first hearing 2/7/07, a good portion of the discussion involved the merits of the case.--the plaintiffs' charge that Atlantic Yards arose from a sweetheart deal and the benefits are pretextual.

Brinckerhoff contended that the project arose from a deal between Mayor Mike Bloomberg and developer Bruce Ratner. ESDC attorney Douglas Kraus pointed out that there had been charges of favoritism in previous cases, such as the Times Square redevelopment, and they were irrelevant.

Brinckerhoff, who noted that there were 26 respondents to a Times Square RFP, again contended that the sequence violates the guidelines suggested in the Supreme Court's 2005 Kelo v. New London decision, where the city had identified the properties at issue before a developer had stepped forward. The ESDC says Kelo doesn't apply, because it was about economic development, not blight removal and other public purposes, as with Atlantic Yards. And Kraus again reminded the court, the act establishing the ESDC aims to maximize the participation of the private sector.

Kraus also pointed out that case law states that it's not up to the courts to second-guess the boundary of a project site that includes eminent domain. The plaintiffs, however, contend that the boundary was drawn by the developer, and that violates Kelo. The case law Kraus cited is pre-Kelo. Whether Kelo is controlling, however, is unclear.

Kraus also pointed to the open space, jobs, and housing arising from the project. The ESDC has said it's not the job of a judge to draw the line as to what public benefits are sufficient once the the approving agency has found such benefits. The plaintiffs say that a closer look suggests the benefits are much smaller than claimed.

Three men in a room

ESDC lawyer Bansal pointed out that Atlantic Yards had been approved by the government, including elected officials. (Actually the project in December was approved by the unelected board of the ESDC; two weeks later, it was approved by the three-member Public Authorities Control Board, or PACB.) Garaufis responded to Bansal by holding up three fingers, noting that three people made the decision.

Whether that influences the judge's ruling, however, remains unknown. Garaufis did not indicate when he might issue an opinion or whether he might hold additional hearings.

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.