Monday, February 04, 2008

Whose "intricate schedule"? Opponents in environmental suit joust over delay

According to Forest City Ratner officials, the pending appeal of the dismissal of the lawsuit challenging the Atlantic Yards environmental review is delaying the planned completion of the arena.

The only problem is, last year they claimed that the "intricate schedule" of current work was aimed at completing the arena for the 2009-10 season. Even though no stay was granted last year on pre-construction demolition, they claim that an "intricate schedule" of work is aimed at completing the arena for some time in 2010.

But they don't explain why or whether any alteration in their own schedule has caused delays. Nor do they explain why exactly the lawsuit has to be cleared for bond financing to be arranged; a lawyer for the petitioners contends that such risk should be priced into the bonds. (Presumably, responses will emerge in the final round of legal papers.)

It's all part of legal jousting in which FCR officials have both opposed a stay--which hasn't been granted--and seek an expedited briefing schedule for the appeal so it can be heard by a state appellate court no later than May, rather than in the fall.

Meanwhile, a lawyer for the petitioners acknowledges that an onslaught of legal papers from the defendants last spring hindered their case, and argues that the petitioners need sufficient time to go through Justice Joan Madden's decision.

Intricate, redux

Consider the essentially identical statements issued last April by then-FCR executive Jim Stuckey and two weeks ago by his successor MaryAnne Gilmartin.

Stuckey stated:
The current work is proceeding in accordance with an intricate schedule that is intended to allow the new arena to be completed in time for the Nets to relocate there for the 2009-10 National Basketball Association season. FCRC’s construction schedule has been carefully drawn to allow the arena to be ready for the 2009-10 season by commencing work now on vacant properties that are owned by FCRC, the MTA and the City, with work on properties that are owned or occupied by other parties deferred until the pending judicial challenges to the Project have proceeded to a point where ESDC is in a position to actually use its powers of eminent domain to acquire title to and possession of those properties. Therefore, even a short delay in the ongoing work could jeopardize the arena’s availability for an entire season, and thus would expose the Nets to additional operating losses of about $35,000,000 a year.

(Emphases added)

In an affidavit filed 1/17/08, Gilmartin stated:
The current work is proceeding in accordance with an intricate schedule, detailed in Mr. Sanna's affidavit, that is intended to allow the new arena to be completed in time for the Nets to relocate there in 2010. FCRC's construction schedule has been carefully drawn to allow the arena to be ready in 2010 by commencing work now on vacant properties that are owned by FCRC, the MTA and the City of New York, with work on properties that are owned or occupied by other parties deferred until ESDC actually uses its powers of eminent domain to acquire title to and possession of those properties. Therefore, even a short delay in the ongoing work could jeopardize the arena's availability for both basketball games and community events, and thus would expose the Nets to millions of dollars in additional operating losses.

In a 1/31/08 affirmation, petitioners' attorney Jeffrey Baker contends that litigation has not stopped the developer from moving forward:
FCRC's own financial limitations and the inability to finalize agreements with ESDC and MTA have kept the project from proceeding with its intended schedule. If Appellants have any role in causing those delays, it is only due to exercising their fundamental constitutional rights to seek judicial review.


Petitioners' delay?

According to an affirmation from FCR attorney Jeffrey Braun, the petitioners are trying to string things out:
On January 18, 2008, as soon as the parties were advised by personnel in the office of this Court's clerk that Justice Mazzarelli had denied petitioners' emergency application for an interim stay, petitioners' counsel — who had been discussing an expedited briefing schedule for the appeal with respondents' counsel -- suddenly reversed course and announced that petitioners would wait the full ninth months that would be available in a normal case before perfecting their appeal and serving and filing their opening brief. It was obvious that, if this Court was not going to halt work at the project site, petitioners' intention — their Plan B — would be to prolong the pendency of this appeal for as long as possible in the hope that intervening events unrelated to litigation would interfere with FCRC's ability to implement the Atlantic Yards project.


Baker, however, responds that Braun's statement about the full nine months is completely false. No such statement was ever made. Nor is it the intent of Appellants to take that much time. Currently, it is anticipated that the appeal will be perfected approximately three to four months after the Notice of Appeal was filed on January 18, 2008.

Petitioners unprepared?

Baker acknowledges that the petitioners may have been overmatched by a tight schedule and opposing legal firepower:
Preparation of the brief on this appeal is no minor undertaking. It must also be recognized that Appellants had only a very limited time to prepare and present their arguments to the court below. Appellants commended this proceeding on April 4, 2007 by Order to Show Cause challenging the actions of Respondents and seeking to enjoin the demolition of buildings on the project site. After a hearing on the request for a Temporary Restraining
Order, Justice Madden set a very expedited schedule for briefing on both the motion for a preliminary injunction and the merits of the petition. Respondents served their answering papers on April 25, 2007 consisting of four briefs totaling over 200 pages, at least four affidavits with over 1000 pages of attached exhibits. In addition, Respondent ESDC provided its administrative record of nearly 25,000 pages and MTA produced its record of approximately 800 pages.

Faced with the onslaught of those papers, Appellants had only one week to file their reply papers and had oral argument before Justice Madden on the next day. Given that highly truncated time period to respond to the briefs and review the record, Appellants did not have an opportunity to present their arguments in as concise and persuasive manner as they would have desired.

Justice Madden took over 8 months to issue her deciison. While on its face the decision appears to be thorough, as set forth in my moving affirmation it is rife with errors of law and facts... Appellants have the right to comb through the record and present to the Court the clear evidence supporting their arguments.


Presumably the eight-month stretch during which Madden deliberated caused as much delay as anything, but there's not exactly a remedy that Forest City Ratner can request.

Financial turmoil

Also aired is a dispute over the meaning of the affidavit filed by FCR executive Andrew P. Silberfein, which led to a flurry of news last week.

Braun states:
The Silberfein affidavit shows that, in view of the turmoil that now is affecting the financial markets, the prolonged pendency of this appeal could have an adverse effect on the financing of the Atlantic Yards project, particularly the complex bond financing that is planned for the multi-purpose arena that is a key component of the project and the first building to be constructed.

Baker responds:
Mr. Silberfein does not say that the presence of the appeal or the pending Federal litigation will block financing, only that it presents a threat to the project. The precise nature of that threat is not stated other than lenders will be cautious about financing the project.

But that is how the bond markets and bond insurers work. They evaluate the risk of a project not being able to meet its obligations and price the risk accordingly...

If Respondents are so certain that Appeallants' claims are without merit, then presumably the lenders and bond insurers have considered their opinion and will be prepared to proceed with the financing...

In fact, a managing director of Goldman Sachs was recently quoted in the New York Times as saying... "We like the deal."...

To the general public FCRC claims that this project is "full steam ahead;" it is only to this court that FCRC claims it is having financial problems.


Arena--what year?

Stuckey in his affidavit last year criticized the petitioners for citing Forest City Enterprises executive Chuck Ratner's offhand acknowledgement that the arena would open in 2010, pointing instead to Ratner's strained clarification:
"When I was discussing the arena, I was referring to the arena block which includes the Barclays Center as well as four surrounding buildings, including the iconic Ms. Brooklyn. We expect the office and residential buildings to come on line beginning in 2010. We remain committed to our goal of opening the arena in time for the 2009-2010 NBA basketball season.”

That claim, of course, has fallen by the wayside, as the developer quietly and then more officially acknowledged that 2010 was the goal for the arena, even though the three-year bridge reconstruction schedule suggests January 2011 at best.

No comments:

Post a Comment