Skip to main content

The “other” Atlantic Yards legal cases return to court

While many Atlantic Yards watchers are anticipating the October 9 oral argument in the appeal of the dismissal of the federal eminent domain lawsuit and expecting a decision soon in the state case challenging the project environmental review, two other cases, both involving 13 renters in two buildings, are moving toward arguments in court.

One of the cases, which challenges the Empire State Development Corporation’s (ESDC) relocation offer, in fact is the only case formally blocking the agency from moving to condemn properties. “At minimum, they can’t do anything to my clients until the case is over,” said George Locker, attorney for the plaintiffs, at 624 Pacific Street and 473 Dean Street.

The state has promised to provide the services of a real estate broker, moving assistance, and a $5000 payment—but that, Locker argues, will hardly guarantee similarly affordable housing. (Of the 13 plaintiffs, 12 have rent-stabilized leases, and many pay rents that are $500-$600.)

That case, which was not heard in a trial court but will be argued directly in an appellate court, will be heard by the Appellate Division, Second Department, 45 Monroe Place, Brooklyn, on [corrected] October 5 at 10 a.m.

(Must the ESDC also wait until the eminent domain case is resolved to move forward with condemnation of properties involved in that case? Technically, no, I believe, but it’s likely the state will be cautious and wait until resolution.)

The other case involves an appeal of a lower court decision declaring residential rental tenants to be condemnees, with an ownership interest in their lease. Justice Walter Tolub in May dismissed the case, saying that the case belonged instead in the appellate court, where challenges to eminent domain determinations are supposed to be heard, but without the advantages of a trial. That appeal will be heard in the First Department, 27 Madison Avenue, Manhattan, after 2 pm on September 26.

Legal twists

Both cases involve some interesting legal issues. For example, Tolub relied on a string of cases that showed the commercial tenants threatened with condemnation had an ownership interest via their leases; no case has evaluated the situation of residential tenants. Locker maintains that, if the appellate court upholds Tolub’s decision, the state will be expanding the rights of residential renters.

Regarding the relocation offer, which involves a plan but not a promise to find tenants alternative accommodation, the ESDC has the seemingly slam-dunk argument that the court in 2001 already upheld an identical relocation offer. Locker cautions that the plaintiffs in the case represented themselves, without a lawyer, and that the decision serves as a poor precedent.

Relocation: method or results?

In the relocation case, the ESDC says that the challenge to the state’s determination and findings, under the Eminent Domain Procedure Law, is a challenge to the entire project, not merely the two buildings.

Pointing out in a legal brief that the state in 2001 upheld “an identical relocation plan,” the ESDC’s lawyers state, “It simply confounds belief that Petitioners could have failed to discover this case.”

The question posed to the court, the ESDC says, is whether the state has the statutory authority to pursue condemnation, where it has made a finding “that there is a feasible method” for relocation.

There is no legal requirement that ESDC “must actually provide comparable housing at that time to those who in the future may be displaced,” the agency says, pointing out that the housing market, as well as the circumstances of the tenants, can change rapidly.

And, says the ESDC, if the state’s relocation consultant does not provide comparable housing, the tenants can then go to court and contest the condemnation.

Locker’s response notes that the ESDC itself has not offered petitioners relocation into the project at hand, as state law states is one option. Nor has Forest City Ratner’s relocation offer to tenants—which apparently excludes those suing it—part of the record.

The developer has offered to pay the differential rent—the difference between current rent and the rent of current apartments—for other former footprint residents, though the offer expires if Atlantic Yards isn’t built and the tenants are not relocated into the project. “Most [of the plaintiffs] have never been offered anything,” Locker said. “A few were offered something years ago.”

He argues that the ESDC has not studied “the private rental housing market into which respondent plans for a real estate broker to refer the petitioners” and that no facts in the record “show whether comparable and affordable rental housing existed in the project area, or other areas no less desirable, in 2005 or 2006, or would likely exist in 2007.”

He also points out that Forest City Ratner told City Council in May 2005 that the need for condemnation was “substantially reduced” because the developer owned most of the units on the project site, thus ignoring the need for “friendly condemnations” that would extinguish the leases of tenants with rent-stabilized leases in buildings it owns.

Feasible method

The law establishing the Urban Development Corporation, now aka ESDC, requires "that there is a feasible method for the relocation of families and individuals displaced from the project area into decent, safe and sanitary dwellings, which are or will be provided in the project area or in other areas not generally less desirable in regard to public utilities and public and commercial facilities, at rents or prices within the financial means of such families or individuals, and reasonably accessible to their places of employment. Insofar as is feasible, the corporation shall offer housing accommodations to such families and individuals in residential projects of the corporation. The corporation may render to … families or other persons displaced from the project area, such assistance as it may deem necessary to enable them to relocate.(h) in the case of all projects, the corporation shall state the basis for its findings."

Does a method require “a description of its relocation plan” or simply a method? Locker’s legal brief argues that "the UDC Act requires ESDC to find that there is a feasible method for the relocation of families, not that there will be a feasible method."
(Emphases here and below in original)

He continues, arguing, "ESDC may have found that it had a relocation method—use of a real estate broker, a $5000 payment, and a moving van - but this is not a factual basis for finding that these elements are capable or likely to provide petitioners with the specific components of the relocation benefits outlined in 10(g)."

And why didn’t ESDC compile a record on tenant relocation? Because it did not believe any tenants would remain, Locker contends.

“Numbers of my clients appear to have modest incomes and very low rent,” Locker said. “It appears that that kind of rental housing doesn’t exist any more.” Actually, if Atlantic Yards gets built, there would be 900 low-income units (over ten or 20 years or however long the project takes), with perhaps 225 of them studios; they would currently cost under $600 a month for single people who meet the income eligibility.

It’s possible, Locker acknowledged, that some of the tenants he represents may have low rent but less modest incomes. The ESDC response notes that it’s required to find accommodation that is affordable, but not necessarily at the same low rent guaranteed by the rent-stabilized lease.

Who’s an owner?

In case appealing Tolub’s decision, the ESDC notes that state law defines a condemnee as “the holder of any right, title, interest, lien, charge or encumbrance in real property subject to an acquisition or proposed acquisition.”

The ESDC adds that the fact that Locker filed the relocation challenge is “an indisputable acknowledgement by plaintiffs-appellants that they are condemnees.” Locker’s reply brief says no, that “[n]owhere do appellants ‘acknowledge’ they are condemnees.”

Locker cites another case in which the courts have “clearly held that under the EDPL, a Rent Stabilized, month-to-month residential rental tenant has no compensable property interest in his/her lease.” Those cases, however, do not deal with the issue of condemnation.

So the appellate court will have decide which line of cases—those involving commercial tenants facing condemnation, relied on by the ESDC and the lower court, or those cited by Locker—is more apt.

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…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…

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…