Monday, March 12, 2007

Rent-stabilized tenants' case to be heard tomorrow

The “other” set of Atlantic Yards plaintiffs—13 rent-stabilized tenants challenging the condemnations of two buildings—will get their day in State Supreme Court Tuesday following an exchange of contentious legal memos between their lawyer, George Locker, and lawyers for the Empire State Development Corporation (ESDC).

The plaintiffs live in buildings on Dean and Pacific streets now owned by Atlantic Yards developer Forest City Ratner. Rather than apply for demolition via the New York State Division of Housing and Community Renewal (DHCR), as is generally required for buildings with rent-regulated tenants, in this case, the developer will convey the properties to the ESDC. Then the ESDC would exercise its powers of condemnation in a much faster process than had DHCR been involved.

The demolitions would be “friendly condemnations,” given that the owner doesn’t object, but the tenants don’t consider them friendly.

The court case now concerns a motion to dismiss, rather than a hearing on the merits. Thus, the bar for the plaintiffs—as with the plaintiffs in the eminent domain case filed in federal court—is relatively low. For example, for the purposes of the motion, the facts as alleged by the plaintiffs are considered true, even though they would be contested if the case goes to trial.

Two charges

Locker's case is based on two charges. First, the ESDC’s power of eminent domain isn’t absolute but rather trumped by DHCR. Second, the creation of “private roads”— for underground parking garages and access roads—requires a jury trial under the plain language of the New York State Constitution, enacted in 1846.

To that, ESDC lawyers Charles Webb and Kenneth Applebaum reply that Locker reads it wrong, that cases point to the primacy of eminent domain, and that the “private roads” contention, which has never been tested in court, is “a complete non sequitur.”

Jursidictional question

Even before that, however, the ESDC argues that the case should be heard in the Appellate Division, which is empowered to review cases regarding eminent domain, rather than the Supreme Court, which in New York State is actually the lowest-level court.

Locker responds that the Supreme Court always is supposed to hear challenges to an agency’s wrongful exercise of authority or jurisdiction. He argues that the tenants lack an ownership interest and thus don’t have standing to pursue such a case; the ESDC says that a lease represents such an ownership interest.

(They've also filed a separate suit in the Appellate Division challenging the relocation offer.)

Leases sign away rights?

The plaintiffs signed leases acknowledging the possibilityof eminent domain. One states that “this Lease shall end” when the government or agency takes title, while the other states, more broadly, “the Term, and Tenant’s rights shall end.”

Does that sabotage their case? Locker contends that those provisions are “intended only as a waiver of monetary claims for the value of a lease cancelled by the otherwise lawful exercise of eminent domain.”

Private roads?

The legal motions by the ESDC make the point that the agency has deemed the project as involving a “public purpose”—the elimination of blight, the creation of below-market housing, etc.—and the roads would “incidental or appurtenant” to the public purpose and would be “public in nature.”

Locker argues that’s not relevant; the plaintiffs aren’t claiming that ESDC’s use of eminent domain to create a private road isn’t a public purpose, just that the use of “eminent domain to create a private road requires a jury determination.”

Of course, if they’re not private roads, then the claim crumbles., but for the purposes of this motion, the claim is accepted as correct.

The ESDC says that the Constitutional reference to private roads more appropriately applies to cases in which a landlocked private party needs access to a public highway via a road over privately-owned land. If the plaintiffs’ argument is accepted, the ESDC argues, it “would have the absurd result" of requiring jury trials for "every major public project that uses eminent domain” and creates various roads and parking areas.

To that, Locker responds, “It is not ‘absurd’ to enforce the jury requirement. Every major public project does not contain 16 miles of private roads.”

The extent of the private roads would seem to be irrelevant, though; either there is or is not a jury requirement.

Limits on ESDC?

At issue is whether there are limits on the ESDC’s power of eminent domain. ESDC lawyers say the power is only limited by the state and federal constitutions. Locker points out that legislatures can limit such power.

Does the Eminent Domain Procedure Law (EDPL) trump DHCR? The ESDC argues that the law establishing the agency states that its provisions trump other state laws.

Public landlord, private landlord

However, regarding the role of DHCR, Locker cites a 1991 state case called Sohn v. Calderon; the ruling states, “It is clear beyond question that the Legislature intended disputes over a landlord’s right to demolish a regulated building to be adjudicated by the DHCR.”

The ESDC, however, argues that the Rent Stabilization Code is “notably silent on the issue of condemnation” and does not limit the ESDC’s powers. As for Sohn, the ESDC says it applies to a private landlord, not a public one.

Further, argue agency lawyers, even if the ESDC didn’t have jurisdiction to exercise condemnation powers over these buildings, the developer “simply could convey the properties…and the Rent Stabilization Code would cease to apply by its own terms.”

The plaintiffs' response, however, is that the ESDC would not be acquiring the buildings for the required purpose—state-owned or -managed housing—but rather to demolish them.

Which arguments have the most weight? Supreme Court Justice Walter B. Tolub will give us a clue on Tuesday.

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