Wednesday, March 28, 2007

Public park, indy ESDC, "derelict stretch"? Looking back at the eminent domain argument

As the Atlantic Yards eminent domain case gets another day in court Friday, it’s worth taking another look at a few questionable statements made by defense lawyers during the 2/7/07 hearing.

Would the project really bring public parks and public housing? Is the ESDC really independent? And was Forest City Ratner the only developer that might be interested in a "derelict stretch" near Brooklyn's busiest transit hub?

[The quotes are from an official transcript, which nonetheless contains flaws in transcription.]

AY: public parks, public housing?

Lawyers for the Empire State Development Corporation (ESDC) have challenged the plaintiffs’ efforts to invoke the 2005 Kelo v. New London case, in which the Supreme Court indicated it would look askance on what seemed to be a sweetheart deal. Kelo, noted ESDC attorney Douglas Kraus, was about eminent domain for economic development, while Atlantic Yards, he noted, is about the removal of blight—not an element in Kelo.

He added, “And neither were any of the other indisputably proper public purposes that were served by the Atlantic Yards project in this case, such as the construction of hundreds of millions of dollars worth of infrastructure improvements, the creation of public parks and recreational facilities, and the construction of public housing.”

Kraus, however, overstated the case. The subsidized housing within Atlantic Yards would not be part of the city’s public housing system, nor would the publicly-accessible open space be part of the city park system.

ESDC board independent?

Also at issue is whether the ESDC is an independent agency or an arm of the Governor’s office, especially given that former Governor George Pataki’s chief fund-raiser, Charles Gargano, was named to head the agency. Moreover, as I wrote in December, large donors to Pataki were named to the ESDC board.

According to state courts and the Second Circuit, declared Assistant Attorney General Peter Sistrom during the hearing, the ESDC “is not the state. It is independent of the state, and one of the reasons it is independent of the state is because it is not controlled by the Governor, even though he appoints some, not all, of its members. And even though some, not all, of the members serve at his pleasure, the courts have repeatedly held it is not the state. The whole purpose of it is to create independently [sic] of the state.”

Perhaps, but an information sheet from the State Comptroller’s Office indicates that all the members who served when the board voted on the Atlantic Yards project were gubernatorial appointees. (Click on Staff and scroll down.)

FCR attorney on “derelict” Brooklyn

Was Forest City Ratner taking a big risk by proposing this project? Yes, according to FCR attorney Jeffrey Braun--even though the Prospect Heights neighborhood was on a steady upswing, as noted in New York Times Real Estate section coverage.

“I don’t think the fact that, you know, Forest City Ratner allegedly initiated this has any relevance,” he said. “I mean, frankly, this is not the crossroads of the world, Times Square, where many developers would like to have an opportunity to build. I mean, this an extremely derelict stretch—no, we’re talking about the Vanderbilt Yards—which is an open trench that’s what we’re talking about.”
[Note: I previously reported the term “completely derelict” .]

However, Forest City Enterprises CEO Chuck Ratner three weeks ago called the Atlantic Yards site “a great piece of real estate.” Many developers might indeed covet such a site, or just the Metropolitan Transportation Authority's Vanderbilt Yard.

A private developer's plan

Braun continued, “We’re talking about a private developer allegedly, who came up with a plan for remediating and eliminating this scar on Brooklyn and that’s what happened here and I don’t think that the Court ought to be establishing or recognizing a rule that’s invented by plaintiff’s counsel that would discourage a developer and penalize a developer for coming to the public agencies with a good idea and here that was of a long process and the plan was approved by a public, a public officers, not by Forest City Ratner.”

Whether it's a constitutional violation is up to the court, but it's doubtful that other railyards--extremely valuable pieces of land, given the city's shortage of available land for construction--will be treated in the same way.

After all, urban planner Alexander Garvin, author of the definitive text The American City : What Works, What Doesn't, has recommended that the process for developing a platform for development over Sunnyside Yards in Queens requires a feasibility study with input from "engineers, traffic analysts, site planners, and real estate entrepreneurs.”

Tomorrow, I'll preview the arguments in the hearing Friday.

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