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In EIS case appeal, debate over blight and a mysterious market study

Key to the battle in the lawsuit over the Atlantic Yards environmental review, the subject of an oral argument in state appellate court tomorrow, is a document that surfaced only in mid-August, well after the lawsuit (or even the appeal) was filed by 26 neighborhood and civic groups. The document that suggests that the Empire State Development Corporation (ESDC), in its eagerness to determine blight on the Atlantic Yards footprint, ignored or omitted an investigation into market trends that was part of the initial Blight Study contract with environmental consultant AKRF.

The document, which I received via a Freedom of Information Law Request (seeking information on the issue of conflict-of-interest, not blight) shows that AKRF, in the Contract Scope for the Blight Study, was supposed to “analyze residential and commercial rents on the project site and within the study area and to analyze assessed value trends on the project site.”

No such analysis was conducted, even as claims by the plaintiffs—echoing many Atlantic Yards critics, and even some supporters—that the project footprint wasn’t blighted were dismissed as merely anecdotal.

The plaintiffs, who are appealing the dismissal of their case, want the Contract Scope to be included in the administrative record, while the ESDC and fellow defendant Forest City Ratner disagree. No decision has emerged before the hearing, but, should the judges favor the plaintiffs on this procedural issue, that would offer new support to the legal argument challenging blight.

Dueling arguments

The ESDC argues that there was no reason for the Contract Scope to be included in the Administrative Record, because it was not relied upon in the blight determination. Rather, the decisionmaking, the ESDC says, was based on the Blight Study, and other documents in the administrative record.

The ESDC also calls the document irrelevant, because the blight determination was based on the evaluation of the condemning authority and did not require any analysis of market forces might ameliorate such conditions.

To that, the appellants respond that ESDC has flip-flopped, given that the agency attacked Appellants’ argument that known real estate market conditions in and around the Project site warranted a market study of the area, contending that "Appellants present no competent evidence to support this claim, which is mere speculation.”

However, the appellants add, the Contract Scope “plainly establishes that ESDC actually engaged AKRF to analyze and compare rents, value and vacancy trends, and economic activity within the Project site and in the surrounding area.” That “strongly suggests that ESDC intentionally omitted such factors from the Blight Study.”

Should it have been included?

The ESDC also argues that, because the Contract Scope was not before the trial court, the inclusion of such evidence for the appeal is improper. Appellants “provide no adequate excuse for not having presented this document to the lower court,” the ESDC contends.

No excuse? In response, the appellants call that argument “particularly cynical and disingenuous,” given that the document was absent from the voluminous administrative record and was never disclosed in this case.

Blight details

The Blight Study evaluated each lot on the project site using six categories of blight characteristics: unsanitary and unsafe conditions; indications of structural damage; building code violations; vacancy status; underutilization; and environmental concerns. As the ESDC concluded, 70% percent of the lots on the project site, constituting 86% of the project site’s land area, exhibited one or more blight characteristics.

In legal papers, the ESDC points out that court give agencies a lot of discretion to determine that an area is “substandard or insanitary,” including areas characterized by “economic underdevelopment,” “diversity of land ownership making assemblage of property difficult,” “pollution,” “outmoded and deteriorated structures,” or “vacant land.” Also, as noted in litigation over the Atlantic Yards eminent domain case, unblighted parcels may be condemned as part of an overall plan, according to Supreme Court doctrine.

The appellants, argues the ESDC, concede that ATURA--the blocks in the Atlantic Terminal Urban Renewal Area--is blighted, but asks the court to second-guess ESDC’s decision to include the adjoining 2 1/3 blocks, including the north side of Dean Street and the south side of Pacific Street. Moreover, those blocks themselves are blighted, argues the ESDC.

The appellants, however, point to the absence of the market study:
Determining blight is more than simply compiling a catalogue of the physical attributes of an area… To… ignore such trends can have the absurd result that buildings currently vacant or in marginally substandard condition are deemed blighted despite imminent plans at redevelopment.


Examples in dispute

In several cases, the two sides joust about whether blight was correct determination. The ESDC says the site at the corner of Flatbush Avenue and Dean Street, for years a gas station, was blighted because of a history of gasoline spills and “a grossly underutilized lot.”

The appellants respond that the Blight Study notes that contamination is already being remediated, and that neither the ESDC nor blight study address why it would be appropriate to ignore the economic vitality of the existing use.

In another case, the ESDC cites numerous open Building Code violations in one building, while the appellants respond that they were primarily related to public assembly or unknown issues, and there’s no evidence that the structure is substantially compromised.

The ESDC says one building on Dean Street (the fifth from left) is blighted because it uses less than 40% of development potential. The appellants note that the adjoining lot contains a three-story building that is not blighted, “simply because it has one additional floor.”

The ESDC says the appellants cite no benchmark for an agency to use instead of 60% of allowable development rights. (No apparent benchmark has been used previously. “You have to have a cutoff somewhere," an ESDC lawyer said in court last year.)

On the southeastern block of the site, ESDC contends that two lots are blighted because of abandoned cars and miscellaneous debris, but FCR, says appellant, has owned these lots since 2004, “and it simply defies common sense for ESDC to designate them as blighted because the Project’s developer which owns the lots has failed to maintain them.”

The blighting rail yard?

The MTA’s Vanderbilt Yard is a blighting influence, according to the Blight Study. However, two recent condo conversions (Spalding, Atlantic Arts) are located on Block 1127 fronting on Pacific Street, “soundly refuting the claim,” according to the appellants.

“Moreover, ESDC has no explanation of why the Newswalk Building [at left in photo] was converted into luxury condominiums, despite its location on Block 1128 directly across Pacific Street from the rail yard,” the appellants claim. The Blight Study “ignores that Block 1128 fronts directly onto the supposedly insurmountable blighting influence of the Vanderbilt Rail Yards…”

Still, the ESDC asserts that the accuracy of the statement—that blighted conditions are related to proximity to open railyard—“is not diminished by the presence of these three buildings.”

(Note that the one footprint building in Block 1128 opposite the railyard also isn't blighted, according to the blight map at right.)

Arena a civic project

ESDC says appellants incorrectly claim the arena will be privately owned and operated, as a for-profit professional sports arena. The ESDC says it’s publicly owned, and it will host a number of events.

The ESDC says court should give deference to the agency's determination that it’s a civic project.. and that it does not forfeit its status as a result of being operated by FCR. The brief reminds us that the ESDC was created to encourage "maximum" private participation.

The appellants say public ownership is “merely a legal fiction,” given that it will be leased for $1 a year, with all profits and losses accruing to the developer, “including a breathtaking $400 million for the naming rights”… a blatant attempt to shoehorn a private arena into the coverage of the statute, in order to afford the developer as many public benefits and as much private profit as possible." That, says the appellants was not the purpose of the legislature when it said a civic project must be publicly owned or leased to an entity that has a civic purpose.

The appellants’ argument, that the Arena must serve a civic educational, cultural, or recreational purpose, was not raised previously, according to the ESDC and, even so, does not represent a plausible reading of the statute. Even if it does, says the state ESDC, “There are few more ‘civic’ recreational activities than the phenomenon of local fans attending a game to root for their team.”
(Emphasis added)

Build year 2016?

The ESDC says the 2016 build year in the Final Environmental Impact Statement was not arbitrary or capricious, arguing that the appellants offer no credible evidence to indicate that the schedule prepared by Turner Construction and carefully reviewed by ESDC and its consultants was faulty in any material way.

The appellants responds the ESDC wrongly insists on only considering construction scheduling without considering financing, market forces, and lawsuits: “The Turner Construction schedule may or may not be physically possible, but it is clearly unrealistic…”

The ESDC says a three-month start delay was blown out of proportion by defendants and that statements about delays by Forest City Enterprises’ Chuck Ratner and landscape architect Laurie Olin shouldn’t be taken seriously.

The appellants say Chuck Ratner’s “clarification” about delay--that he meant the project would take 15 years from conception, not to build--was “damage control,” noting that ESDC fails to mention that Ratner said, “We are terrible… to be able to predict when it will go from idea to reality.” While ESDC denigrates Olin as a layman, he’s also a professional, the appellants point out.

Terrorism

The ESDC says the lower court rationally rejected issue of a terrorist attack, and that FCR’s preparation of a security planning document was not an acknowledgment that environmental. impacts of a terrorist attack are reasonably related to the project.

The appellants respond that, when the risk of terrorism to projects subject to the the State Environmental Quality Review Act (SEQRA) is high enough to warrant substantial study and analysis, the associated environmental risks and mitigation measures should be addressed in the EIS.

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