Skip to main content

After eight months, state judge dismisses challenge to AY environmental review

Yesterday, Atlantic Yards opponents suffered a significant setback as a lawsuit challenging the environmental review for the project was dismissed by a state judge. Such lawsuits regarding projects in New York State are always longshots, given the discretion courts give to the reviewing agency, but Atlantic Yards opponents were hopeful after Supreme Court Justice Joan Madden seemed skeptical in court last May of some defenses offered in the case known as Develop Don't Destroy Brooklyn vs. Empire State Development Corporation (ESDC).

Madden's delay in ruling--she initially estimated she'd take four to six weeks, then predicted September--also gave some reason for optimism, though the best conclusion was simply that she was dealing with a voluminous record. (The administrative record provided by the ESDC was 22,754 pages in 38 volumes, according to her decision.)

Yesterday, however, little more than one business day before the closing and reconstruction of the Carlton Avenue Bridge--clearly a "fact on the ground" difficult to reverse and one involving significant city resources--Madden dismissed all the claims filed by DDDB and 25 co-petitioners, some of them broad-based organizations, others block associations.

Developer Forest City Ratner issued a statement quoting Bruce Ratner: “After an exhaustive three-year review process, we are continuing to move full speed ahead on the project, and today’s decision is a significant step forward.” The defendants, along with the ESDC and FCR included the Metropolitan Transportation Authority (MTA) and the Public Authorities Control Board (PACB).

ESDC issued a statement: “For the fourth time, a court has affirmed the state’s actions in the Atlantic Yards project. We are very pleased with Justice Madden’s decision and look forward to construction of the arena, housing and other facets of this important, transformative development project.” Brooklyn Borough President Marty Markowitz also was pleased.

Appeal coming?

DDDB tried to put the best face on the decision, with spokesman Daniel Goldstein stating, "We are disappointed by the court’s ruling. Pending review of the decision we plan to appeal. But let’s be clear: Atlantic Yards cannot move forward while the thirteen plaintiffs—homeowners, business owners and tenants—are in federal court in a separate case challenging New York State’s unconstitutional use of eminent domain. We expect to prevail in that lawsuit, as well as on the appeal of today’s decision."

However, if it's rare to succeed on state lawsuits challenging environmental review, the same is true on appeal, despite potential flaws in the judge's decision, some mentioned below. The appeal of the federal eminent domain case was heard in October, with the three-judge panel often skeptical of the plaintiffs.

[Here's brief coverage from the Post and the Daily News, and somewhat more from the Times.]

Slight nods, and some punts

While in the decision, Madden at times acknowledged that, had the defendants complied with some of the plaintiffs' concerns, it might have been better public policy, she stressed that the role of the courts in reviewing such decisions was limited.

And in one instance, regarding the dubious claims of increased crime in the project footprint, she simply punted, stating that "since the incidence of crime is just one of the factors in determining blight... petitioners' arguments as to the accuracy of the crime statistics need not be addressed." In another instance, she didn't address the petitioners' argument that the ESDC didn't respond to extensive comments on the Blight Study.

Also, she exhibited some odd logic in concluding that because the site is blighted, this project is necessary to remove such conditions, given that a rezoning could also do the trick.

However, her decision was mostly unbending. "Judicial review of administrative proceedings, including an agency's compliance with SEQRA [State Environmental Quality Review Act, enacted in 1975] and the UDCA [Urban Development Corporation Act, which in 1968 established what is now called the ESDC], is limited to whether the determination was made in accordance with lawful procedure and whether, substantively, the determination 'was affected by an error of law or was arbitrary and capricious or an abuse of discretion,'" she wrote. "The court is not permitted to second-guess the agency."

While the petitioners argued that the MTA had not complied sufficiently with SEQRA and the PACB had not complied at all, Madden found that the MTA had compiled a record and that the PACB, which was limited to assessing the financial feasibility of the project, was not required to do more.

Public comment period

The petitioners argued that the ESDC should have left the comment period open beyond September 29, 2006 (extended from September 22) because the law requires that comments be received for 30 days after a public hearing--and that the two "community forums" (my reports on the first and second forum) held after the raucous 8/23/06 hearing on the Draft Environmental Impact Statement were essentially public hearings.

While the ESDC followed the same procedure regarding public comment--indeed, the hearing examiner enforced a three-minute time limit that was not enforced at the public hearing--the agency claimed that, because there was no formal presentation of information at the beginning of the session, there was a difference. (The formal presentation was largely ignored at the public hearing, as it happened.)

Madden called the petitioners' arguments "not persuasive," given that, had the ESDC not scheduled the optional community forums, the 30-day limit wouldn't have been challenged. (Then again, had the ESDC not scheduled the forums, the public hearing, at which many were turned away and some local officials--among them Shirley McRae of Community Board 2--said was managed unfairly, would've stood as the single opportunity for public comment on the DEIS.)

"[E]ven if no precedent exists for holding a community forum, nothing in the statute precludes the ESDC from giving the public additional time or opportunities to comment on a project, either in writing or in person," wrote Madden. "Here, the ESDC has essentially expanded the role of the written comment."

So the ESDC action was lawful, Madden concluded, then offered a small concession: "Notwithstanding this conclusion, the court fully appreciates petitioners' position that in view of [the] magnitude of the Atlantic Yards Project and the controversy it has engendered, additional public hearings and an extended public comment period would have increased public scrutiny and participation in the process."

Community Advisory Committee

A Community Advisory Committee (CAC), which Atlantic Yards Ombudsman Forrest Taylor indicated on Tuesday would be made more representative, is required of ESDC projects, but the petitioners argued that the CAC did not play a meaningful role, since three of the six members (from the city, ESDC, and Brooklyn Borough President's Office) were project supporters. (The other three came from Community Boards 2, 6, & 8.) Moreover, the committee didn't meet until 6/29/06 and could not have much impact, they said. And the three members from the CBs asked for more time.

The judge, however, pointed out that the statute "imposes no prescriptions as to the composition of the committee, or the time or stage in the planning process when the committee should be established."

Again, she offered a slight nod to concerns: "Thus, while it may have been preferable to have established the Community Advisory Committee at earlier stage in the process," the law was controlling.

A "Civic Project"?

One of the major points of contention at the hearing last May was whether Atlantic Yards would, in fact be a "civic project," defined as a "project or that portion of a multi-purpose project designed and intended for the purpose of providing facilities for educational, cultural, recreational, community, municipal, public service or other civic purposes.”

The petitioners argued that a for-profit sports arena wasn't a civic project. The defendants said the arena will "provide a venue for other entertainment and cultural events."

The question, though, was whether going to a basketball game is a "recreational" event. Madden said yes, offering the following rationale:
--in statutory interpretation, the starting point is the language itself
--when there's no statutory definition, go to the dictionary
--Webster's New World Dictionary of the American Language defines "recreation" as "refreshment in body or mind, as after work by some form of play, amusement or relaxation"
--her conclusion: "when sports fans attend a professional basketball game... they are engaged in a form of amusement."

That may be so, but when, say, schools offer "recreation," it is generally participatory rather than an exercise of fandom.

Maximizing private participation

"Moreover, the lease to and operation of the arena by a profit-making entity is consistent with the UDCA's overall purpose to maximize private participation," she wrote.

That begs for further discussion. As I wrote, the original notion of "maximize private participation," in the wake of urban riots, was to get the private sector to finally invest in the low- and middle-income subsidized housing.

Moreover, the maximization of private participation in this instance arguably gives the developer the arena for free. Yes, tax-free bonds will be issued to build the arena, but FCR will pay off those bonds via Payments in Lieu of Taxes (PILOTs) to the local development corporation set up to nominally own the arena. (See page 6 of the Memorandum of Understanding between developer, city, and state.) The PILOT will not exceed the real estate taxes were the site not publicly-owned and tax-exempt. (See “R-TIFC-PILOT”.)

Questions of blight

At issue was the designation of blight on the south side of Pacific Street and the north side of Dean Street, the blocks outside the Atlantic Terminal Urban Renewal Area (ATURA), designated as blighted some 40 years ago, light years ago in Brooklyn's real estate market.

"The Court of Appeals instructs that the term 'blight' is to be given a "liberal rather than a literal definition,'" Madden wrote. Citing a range of federal and state cases, she noted that, once a site is determined to be blighted, "unblighted parcels may be designated as part of an overall plan to improve a blighted area." (Unmentioned was whether there's any limit to piling on such nonblighted parcels; in New Jersey, a pending law would limit such parcels to 20 percent of the site.)

And are the buildings and houses on Dean and Pacific streets blighted? The ESDC said they are, citing structural problems, vacant buildings, and underutilization. Madden, however, made no attempt to judge whether the ESDC's standard--that a building failing to fulfill 60% of allowable development rights under current zoning is by definition blighted. (Planner and DDDB advisor Ron Shiffman has pointed out that such a rule would render vast swaths of Brownstone Brooklyn blighted.)

And what about the condo conversions that have begun in the neighborhood. The ESDC calls it "isolated redevelopment" and Madden agreed, calling it "insufficient to outweigh the ample evidence of blight conditions documented in the Blight Study." She didn't address evidence of even more new construction just adjacent to the footprint.

And was it ok for the ESDC to determine blight after Forest City Ratner drew the map it wanted for its project, rather than first define a blighted area to be redeveloped? Again, Madden offered a nod to petitioners' concerns: "While it may have been preferable from an urban planning point of view, for the ESDC to have designated the entire area of the Project as a 'land use improvement project' prior to Forest City's involvement, the legislature has pointedly left such choices for the agency, not the courts." (This issue is on appeal in the federal case.)


Madden further dismissed various charges that the ESDC had failed to comply with SEQRA. While the argument that the ESDC should have considered the threat of terrorism "raises genuine issues of public concern," the law does not require that level of detail, she wrote.

She noted that the "SEQRA regulations cite facilities with some degree of dangerousness such as an oil supertanker port, a gas storage facility or a hazardous waste facility, and explicitly exclude 'shopping malls, residential subdivisions, or office facilities.' The instant Project is more akin to the latter category of excluded facilities." That's hard to dispute, but the addition of an arena, and the history of a planned terrorist attack at the adjacent subway station--not mentioned in the decision--add a layer of concern. (Also, as NoLandGrab notes, streets were closed around the arena in Newark because of concerns over terrorism.)

Project completion date

The petitioners argued that it was bogus to assume that the project would be completed by 2016, and that that designation artificially limited analysis of the cumulative impact of development. Only one case has addressed this, Madden wrote, and the "build year" is a "nonstatutory baseline."

Moreover, she wrote, petitioners did not find mistakes in the construction schedule: "Assuming that construction would have begun as proposed at the end of 2006, the FEIS expected it to be completed over a 10-year period..." (Maybe the plaintiffs didn't point it out, but the construction schedule assumed that construction was to begin even before the December 2006 approval of the project--impossible.)

She called statements by Forest City Enterprises executive Chuck Ratner that the project might take 15 years, and project landscape architect Laurie Olin that it might take 20 years "vague and inconclusive."


"Petitioners objections to the ESDC's traffic findings are limited to two specific issues, namely that the FEIS did not consider the impacts on the Brooklyn Queens Expressway and the Brooklyn and Manhattan Bridges, and the FEIS disregarded public comments regarding peak traffic hours," Madden wrote. "Petitioners submit no competent proof from a traffic expert to support their objections. Rather, they rely solely on generalized comments to the DEIS, which are insufficient..."

I'm not sure why the petitioners did not include evidence from experts Brian Ketcham and Carolyn Konheim, who did submit comments on the DEIS and after the FEIS was issued.

Transit growth rate

And what of the state's claim that transit ridership was growing only by .5% a year? The petitioners, Madden wrote, rely on a comment to the DEIS about surveys that show a growth rate four to six times that, but they didn't submit the surveys.

Coney Island

"While the petitioners question the ESDC's finding that the proposed Project is more transit accessible, the record establishes that the ESDC considered the Coney Island transit options and had a rational basis for its determination that the availability of multiple subway and bus lines, as well as the LIRR, renders the Atlantic Yards site readily accessible to visitors traveling from a wide geographic area," Madden wrote.

No redevelopment without AY?

The petitioners argued that the ESDC, in evaluating the rival Extell bid for the Vanderbilt Yard and the "No-Action Alternative," relied on the "allegedly 'false assumption' that 'significant new development is considered unlikely given the blighting influence of the rail yard and the predominance of low-density manufacturing zoning on the project site," Madden wrote.

The petitioners cited new development in and around the footprint, but Madden noted that, "as previously determined herein, that fact alone is insufficient to outweigh the ample evidence of blight conditions documented in the Blight Study, which provided a rational basis for the ESDC's conclusion that continued new development on the project site was unlikely."

But that doesn't address the simple option of a change in zoning, which could easily spur new development, as it has done, for example, on the Greenpoint-Williamsburg waterfront, formerly zoned for manufacturing. Nor did she address charges that, unlike Extell, Forest City Ratner did not submit its 20-year profit-and-loss statement with its MTA bid.

Wind study

Should the state have issued a Supplemental EIS regarding the effects of wind, given that a wind study was referenced in the FEIS but not attached? Madden said no, noting that SEQRA states that "highly technical material should be summarized." (Emphasis added by judge)

Bear's Garden

Petitioners claimed that the ESDC didn't fully evaluate the impact of the project on the Brooklyn Bear's Garden at Pacific Street and Flatbush Avenue, in the wedge of land known as Site 5. Madden noted that the ESDC did assess the affects of construction impacts and shadows.

"Finally, even though the FEIS did not consider the impacts of traffic, crowds, glare, and nighttime lighting on the Bear's Garden, not every conceivable environmental impact need be addressed to satisfy the substantive requirements of SEQRA," she concluded.


  1. So should we reach the conclusion that ratner bought her out? Maybe with some small cottage in the Berkshires and perhaps in Miami? Seems most circumspect that this would take 8 months and then not even consider discussing the EIS... Most suspect I'd say.

  2. She didn't not discuss the EIS, but she was selective.


Post a Comment

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…

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…

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…