Skip to main content

Fallout from the Weinstein case: questions of condemnation timing and valuation; will Site 5 really be taken?

(This is one in an irregular series of articles about issues that a State Senate committee might address when it holds a hearing on Atlantic Yards.)

When on May 8 I wrote about the case upholding Henry Weinstein's right to three properties on Block 1129 in the AY footprint (see oval in map), I noted that the Empire State Development Corporation's (ESDC) Modified General Project Plan (GPP) states:
All of the properties within the Project Site would be acquired by ESDC... at the outset of Project implementation.

So that suggests that, whatever the dispute over Weinstein's ownership and the value of the lease to Shaya Boymelgreen (which Boymelgreen, according to the courts, improperly transferred to Forest City Ratner), the ESDC will just condemn Weinstein's property, along with the rest of the 22-acre AY footprint, once the eminent domain appeal is dismissed. 

(The properties in white, or with asterixes, would be condemnations of the unwilling, while most of the rest would be "friendly condemnations" of properties owned by Forest City Ratner;  a few of the buildings contain rent-stabilized tenants whose leases would be extinguished by eminent domain, and thus do not consider the action "friendly.")

Some caveats

But maybe there won't be blanket condemnation after all. Two asterixes should be added to that GPP statement.

Eminent domain attorney Michael Rikon, who has long represented condemnees, told me that, whatever the language in the GPP, the ESDC can acquire property in phases, given that Atlantic Yards was planned in two phases. So much for reading documents literally.

Also, there may be a revision of the Modified GPP, as noted, which could, among other things, change the schedule for the project--it would have to, given that AY was supposed to be completed by 2016--as well as other aspects, such as the acquisition schedule.

Site 5 spared?

So, what might the ESDC leave for a later phase of condemnation? I have to think they won't touch Site 5, the one piece of land below Flatbush Avenue, now home to Modell's and P.C. Richard, and bounded by Pacific Street and Flatbush, Atlantic, and Fourth avenues.

Yes, the ESDC claims the site is blighted, given that the low-slung big box stores fulfill only a fraction of the site's development potential. However, given that Forest City Ratner announced it plans just one residential building--and the City Funding Agreement allows a much smaller Phase 1--it doesn't make sense to demolish existing businesses and leave the site fallow for years.

Parking needed

What about property east of Sixth Avenue, planned for Phase 2? Remember that Block 1129, the southeast block containing Weinstein's property and the site of the Ward Bakery, is needed for interim surface parking and staging.

So Weinstein's property would likely be targeted.

What about the properties on the center block, Block 1120, adjacent to the railyard? There are no plans to build any housing there for a long time, though previous maps suggest parking would be needed. I suspect that those properties wouldn't be taken until closer to the time the arena opened.

What about three houses and an industrial building still extant in the 100-foot lot on Block 1128, just east of Sixth Avenue? Those buildings were supposed to be needed for construction staging for the arena. If the ESDC delays taking them, it might be symbolism, a wariness about taking people's houses.

Questions for the hearing

So it's worth asking about the ESDC's plans at the public hearing: would the whole site be condemned at once? What are the plans for Site 5?

It's also worth asking whether, given that the project likely will take much longer than projected, Forest City Ratner plans any interim open space, as once suggested in plans by landscape architect Laurie Olin.

Valuation questions

I suggested May 8 that, while the appellate court ruling couldn't stop the ESDC from taking Weinstein's property, it could make it more costly, since Weinstein has contended that Boymelgreen’s deal with Ratner diminished the value of his property.

Rikon, who does not represent Weinstein but has met with him in the past, told me that when property is condemned and appraised, the appraiser then can ignore all leases. "That doesn't mean you ignore existing leases, if they're good fair market leases," Rikon said.

The goal is to look at comparable leases, but it may not be easy to find such comparable leases. That suggests to me that Weinstein still gained an advantage in the valuation phase should condemnation occur. 

But Rikon suggests that the more important impact of the lease was in suggesting that Forest City Ratner controlled the property, not in setting its value. And that's another question for the oversight hearing.

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…

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…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…

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…