Monday, July 09, 2007

Errol Louis gloats about AY eminent domain case, but take another look

In a recent column, Errol Louis, in a characteristic mix of distemper and gloating, takes U.S. District Judge Nicholas Garaufis’s decision in the Atlantic Yards eminent domain case as an endorsement of his own analysis of the case, then expresses invective toward those who disagree, notably me.

The lead segment of Louis’s Commerce and Community column (not online) in the Bed-Stuy-based June 16 Our Time Press is headlined "All the News That’s Fit to Spin," which might describe some of Louis’s own work.

(Why didn’t I write about this earlier? Well, the print edition of Our Time Press wasn’t available when I checked two outlets, and his column was not put online; instead the Our Time Press web site skipped from June 1 to July 1. I didn't read Louis's column until last weekend. Big news about AY financials broke last Sunday and dominated the week.)

Louis writes:
As predicted in this column repeatedly, a federal judge has dismissed Goldstein v. Pataki, the junk lawsuit filed to try and delay the Atlantic Yards project. Back in October, I noted that “the lawsuit includes contentions that are flat-out falsehoods, such as: ‘the Project will not actually create more jobs; The Project will not generate a net economic benefit for the community or the city, or any gain will be de minimis; the Project will not materially increase available affordable housing,’ and ‘Brooklyn is not struggling to rebound from an economic depression.’”

Getting personal

Antidevelopment bloggers like Norm Oder, who fancies himself a media critic, ducked my published invitation to explain these wild claims. Instead, Oder posted meandering, misleading spins on oral arguments in the case, and encouraged a reporter from the Downtown Star, a neighborhood paper, to do the same. I cited some of the hilarious results in my journalism class at Long Island University last semester to show students how not to report on court proceedings.

Let’s take this from the bottom up. First, I didn’t encourage the Downtown Star reporter to post “spins;” all I did was encourage him to cover the hearing. As for “how not to report,” apparently Louis thinks the way to report is to not attend the hearing, since neither he nor other reporters showed up. (Louis apparently writes about events, such as the affordable housing information session last year, that he doesn’t bother to attend.)

And, it turns, out, my article based on the transcript of the March 30 hearing accurately predicted that Garaufis would uphold Magistrate Judge Robert M. Levy’s decision to deny certain procedural motions to dismiss the case and would overrule Levy’s decision to grant one procedural motion to dismiss the case.

As for the larger issue of whether the case should proceed on the merits, I wrote that the transcript suggested it was murky. Yes, Garaufis said it shouldn't, but that wasn't clearly predicted from his comments.

Public debate?

As for whether I “ducked” Louis's "published invitation," keep in mind that, a year ago, he refused to answer any direct questions from me. I could play the same game and publicly invite Louis to explain why he hasn't written about numerous questionable aspects of Atlantic Yards (like, say, the $300 million in subsidies even the mayor opposes).

But I won't. Instead, I’d be happy to debate him, in public, about our respective coverage of the Atlantic Yards project and the general media coverage of the project. Maybe we could do it in front of his class (and others).

But let’s look closely at Louis’s claimed falsehoods, as well as the judge’s assessment. By my account, only one of the claims is false; the others are matters of dispute, no matter what the judge concluded.

Jobs

‘the Project will not actually create more jobs;

Garaufis wrote: “[A]lthough Plaintiffs allege that Defendants’ claims about job creation are overstated, they do not suggest that the Project will fail to create jobs.”

Indeed, the judge didn't even acknowledge the "no jobs" claim, which was false. It was bad and inconsistent legal draftsmanship, since earlier in the legal complaint the plaintiffs charge that job claims are “grossly distorted and demonstrably untrue,” to which Garaufis was responding.

Why are the claims distorted? Because “15,000 construction jobs” means 1500 jobs a year over ten years, and the drastically reduced number of claimed office jobs actually means office space, and many of the jobs would not be new. Of course, any development would create construction jobs, and others; the associated question is whether it's part of a sweetheart deal.

Could a significant number of jobs be created without using eminent domain? Certainly. Is that kind of choice one judges typically evaluate? No. Should it be in this case? Possibly--see below.

Net economic benefit

The Project will not generate a net economic benefit for the community or the city, or any gain will be de minimis;

Garaufis wrote: “[A]lthough Plaintiffs allege that the net gain in tax revenues will be lower than Defendants have predicted, they do not allege that there will be no net gain.”

Actually, they leave that issue open, arguing: “Defendants’ calculation of the net economic benefit to the City and State rests upon a faulty premise: that the net benefit can be calculated without regard to the attendant public costs that the Project imposes. Once the costs are factored in, the net economic benefit is either negligible or non-existent.”

And, as we’ve seen recently with the “Atlantic Yards carve-out” in the state’s revision of the 421-a tax law, the developer is continuing to gain. Louis hasn’t bothered to write about that one; Daily News columnist Juan Gonzalez nailed it with a column headlined "Atlantic Yards gets a deal so sweet it's sick."

Does Louis think that his award-winning colleague, whose column took off from reporting from me and Matthew Schuerman of the New York Observer, is an "antidevelopment" "amateur," as Louis has smeared me? The Daily News editorial board, on which Louis sits, conspicuously ignored the issue in its criticism of 421-a.

And only via the lawsuit challenging the Atlantic Yards environmental review have we learned that the single largest share of project financing would come via scarce government-authorized bonds—and that Atlantic Yards would be competing in a too-limited pool.

Affordable housing

the Project will not materially increase available affordable housing,’

Atlantic Yards would contain 2250 subsidized units, with 900 for low-income tenants. Garaufis wrote:
“Plaintiffs allege that the Project might result in fewer units of affordable housing than Defendants predict and that “[v]iewed from the perspective of residents’ incomes, the affordable units proposed from the Project will not remotely offset the impact of the luxury housing” that the Project will provide… But Plaintiffs do not allege that the Project will fail to achieve a significant net increase in housing units in the area, and it is clear that it is intended to do so.”
(Emphasis added)

The issue isn’t net housing, it’s net affordable housing. It wasn’t the best draftsmanship on the part of the plaintiffs, but their final charge regarding affordable housing sets out the issue: “In addition to the risks facing tenants in the project’s footprint, the DEIS anticipates that approximately 3000 people are potentially at risk of involuntary displacement due to the Atlantic Yards project.”

In other words, there may be a decrease in affordable housing—not housing in general—due to displacement.

Economic depression

and ‘Brooklyn is not struggling to rebound from an economic depression.’”

As for whether Brooklyn is struggling to rebound from an economic depression, that language refers to the Supreme Court’s Kelo v. New London decision, in which the court justified the use of eminent domain in part because the project came out of a development plan aimed at revitalizing an economically distressed city.

In Brooklyn, the planning came after the fact, as a favored developer got an inside track on what Chuck Ratner, an executive with parent Forest City Enterprises, called “a great piece of real estate.” Such a valuable plot of land is not the sign of economic depression; rather, it should be the subject of a public process rather than be designated for one developer from the start.

The city has certainly learned that lesson, asking developers for RFPs (requests for proposals) for such projects as Willets Point and, in the PlaNYC 2030 sustainability report, suggesting serious public consultation when developing over railyards and highway cuts.

Louis triumphant

Louis continues:
The heart of the case has never made sense. Goldstein and the antiproject groups have contended in public for years that the project is too big and will blot out the sun, contribute to gridlock and overload local streets and subways. At the same time, the lawsuit argued that this supposedly gargantuan development would somehow spring into being without creating a single job in the process—I guess these towers are going to build themselves—and without providing any economic or housing benefits.

The "heart" mentioned here is only one issue: jobs.

Public benefit?

The question with Atlantic Yards, as with other economic development project, is whether the public gets any bang for its buck, and whether it's a sweetheart deal. Let’s recall Assemblyman Richard Brodsky’s exchange with Louis last September, after the columnist expressed support for development in his backyard without considering the public costs.

Brodsky countered: “Any stadium deal provides enormous—literally billions—with no ability to understand what we’ve done. So I call on Errol for a little more intellectual rigor. Because his response, which is interesting, is ‘We really need to get something going.’ OK, he’s right. What does that have to do with the creation of massive giveaways?… We get tough with poor people. We don’t get tough with rich people. Let’s find out how much we’re spending. It’s literally billions. Let’s find out who’s getting it. And let’s figure out what they’ve done with it.”

Louis later said, “I think where I live, in Kings County, if somebody wants to bring a billion-dollar deal there, with way too much paid per job, in my neighborhood, where there’s a lot of unemployment, personally, I would say, ‘You know what? I’ll take that.’”

Brodsky was unimpressed. “That is a prescription for a bigger disaster. ‘My pork is good. Your pork is bad.’ is not a principled response to the pissing away of billions of dollars.”

Has Louis shared that "hilarious" exchange with his students?

Sole purpose?

Louis continues:
Goldstein’s ridiculous argument—which his lawyers really should have talked him out of attempting—is that the “sole purpose” or primary goal behind the whole $4 billion project is to dump profits in the pocket of the developer, Forest City Ratner, with no benefits to anybody else. No one, not even an amateur blogger, should have reported on the case without noting the fantastic nature of these claims, the absolute lack of evidence to support them and the high probability they would lead to dismissal.

Here’s something Louis seems to have missed. Magistrate Judge Levy, in his 2/23/07 ruling, acknowledged that the plaintiffs’ complaint “raises serious and difficult questions regarding the exercise of eminent domain under emerging Supreme Court jurisprudence.”

In other words, he didn’t think the lawsuit was “junk” or the claims were fantastic; after all, he conducted a 2/7/07 hearing in which he tried to tease out the boundary between public purpose and private benefit.

Louis on Garaufis

Louis continues:
Here’s why. Fast-forward to this month, and there on page 57 of his decision, Judge Nicholas Garaufis cited the same sections I called attention to (and Oder ignored), and noted that Goldstein and his fellow plaintiffs “would ask this court or a jury to conclude that the public does not benefit from the taking of plaintiffs’ properties at all. That conclusion is baseless and may be rejected even at this early stage of the litigation.”

That unusually blunt language was the judge’s way of saying “get this garbage out of my courtroom.” And the case was dismissed with prejudice, meaning “don’t bring it back.”

My responses are above. I think it's clear Garaufis’s reading is not completely accurate, though I can’t say that will lead to a reversal on appeal.

Appeal possible?

Louis continues:
The new party line form the anti-development faction is that they might still win the case on appeal and stop the project. The reality, however, is that very, very few cases ever make it to the appeals level, and fewer still actually get overturned; the rule of thumb is that only 5% of federal decisions get reversed. Even if Goldstein makes it to the appeals level, the court won’t delve into any new factual findings or reopen the question of whether Atlantic Yards is a good idea. The higher court would be confined to the narrow question of whether Garaufis made a glaring legal error.

So expect more spin from Goldstein and the bloggers about how they might still halt Atlantic Yards. But keep in kind that such hopes are, in the words of the judge, baseless.

It may be that the appellate court denies the appeal. In doing so, they’ll have to grapple with some things Louis and Garaufis ignored. For one thing, as I pointed out, the judge misread the plaintiffs’ position on blight; they do not concede, as he wrote, that the majority of the project area is blighted.

Sweetheart deal?

More importantly, as I wrote, Garaufis did not seem to have grappled fully with the Supreme Court’s 2005 Kelo v. New London decision.

In Justice Anthony Kennedy's Kelo concurrence, Garaufis noted, the justice acknowledged that there may be eminent domain cases that demand stricter scrutiny, but that Kelo wasn’t that case because “(1) the Kelo taking 'occurred in the context of a comprehensive development plan meant to address a serious city-wide depression,' (2) 'the projected economic benefits of the project cannot be characterized as de minimis,' (3) '[t]he identity of most of the private beneficiaries [of the Kelo project] were unknown at the time the city formulated its plans,' and (4) '[t]he city complied with elaborate procedural requirements that facilitate review of the record and inquiry into the city’s purposes.'

Garaufis, in his ruling, described some elements of an apparent sweetheart deal. He noted that the MTA had before September 2003 said—according to the plaintiffs—that it had sold Forest City Ratner rights to the Vanderbilt Yard, then later retracted it. Also, he noted that, on 5/25/05, the MTA issued a request for proposals for the railyard. As plaintiffs have noted, that was some 18 months after the project was announced, a sign of favoritism.

Garaufis, however, didn’t examine whether that sequence “occurred in the context of a comprehensive development plan” or whether the private beneficiaries were unknown, as stated by Kennedy.

Those issues should be addressed by a court. As plaintiffs’ attorney Matthew Brinckerhoff said after the ruling, “Undisputed facts lead to an inference that this was driven for Ratner’s benefit. It’s undisputed that no other developer was considered to do this project, that the genesis was Forest City Ratner, that they identified my clients’ properties [for eminent domain], and that the government, broadly speaking, agreed to do exactly what [the developer] asked for. If those facts don’t give rise to a claim under the public use clause, it’s definitely a dead letter, for anybody.”

They deserve consideration.

Is voting the solution?

Remember, at the February oral argument ESDC attorney Douglas Kraus said of Brinckerhoff, “If his clients or if other members of the community think this was really a terrible project, they can express themselves in the next election when they vote for their City Council representatives, their State Senators, their State Assembly members, their Congresspersons, and their federal Senators."

In March, affordable housing analyst David Smith--who lives in Boston and is an interested but neutral observer--commented on Kraus’s statement, “[I]f the project is terrible, and the sole remedy is electoral relief, then there is no check in law to a development agency run amok.”

So maybe, as Magistrate Judge Levy suggested, the lawsuit isn't "junk."

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