Wednesday, May 20, 2009

The Weinstein case, a deceptive land ownership map, and some questions for the oversight hearing

(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.)

It's plain to see, not in black and white but in bright color. 

The Empire State Development Corporation, which has regularly taken Forest City Ratner's cue in presenting facts to the public (as in the Construction Updates provided by the developer), in the December 2006 Modified General Project Plan provided this map of property ownership in the AY footprint.
(Click to enlage)

The asterixes in the three properties owned by Henry Weinstein (see oval) indicate: FCRC has closed on an option to take by assignment the lessee's interests under the ground leases for these properties. However, the property owner has objected to such assignments.

More than an objection

It wasn't merely an objection; it was a bitter legal dispute. Weinstein had leased the properties to Shaya Boymelgreen, who operated his office in the building at 752 Pacific Street. 

At about the same time that Boymelgreen sold the Ward Bakery to Forest City Ratner, he also transferred the lease to Weinstein's properties to FCR--without getting approval from Weinstein. Both parties went to court, as I wrote in August 2006. 

Weinstein won a fundamental victory in March 2007; the  Boymelgreen leases were terminated. This month Weinstein saw that upheld--and more--in appeals court. 

Given that FCR leased the property immediately back to Boymelgreen, and agreed to fund litigation, the lease was clearly an effort to add Weinstein's properties--about 5% of footprint square footage--to the property it owned or controlled. 

Thus at one point the developer could say that only 10% of the footprint remained in private hands. Now it's about 14%.

New map

Last year I acquired a new map, dated August 2008. It was produced apparently by Forest City Ratner, but it's in the same style as the map used by the ESDC, so it may have been produced by or for the agency.

Rather than the blue-green indicating control by FCR, the map uses the color white to indicate that Weinstein's properties are not controlled by the developer.

The asterixes indicate:
FCRC acquired ground leases on these sites, but fee owner objected and sued to terminate ground leases. The Court declared lease assignments invalid and leases terminated. The decision is being appealed.


What's the default?

But the case was in court when the first map was issued. Rather than allowing the default description--Weinstein's properties in purple--be in Forest City Ratner's favor, shouldn't the portrayal have been more neutral? 

Such a more neutral map could have used the white background for Weinstein's properties, or even a different color. And the asterixes could have indicated the complication.

Similarly, asterixes should be appended to any of the properties that may be owned by the developer but not fully under its control. For example, on Block 1127, residential tenants remain in three buildings owned by the developer (Lots 21, 50, 46); those tenants are all plaintiffs in pending lawsuits. And Lot 43, Freddy's Bar & Backroom, is also a plaintiff.

So, do ESDC officials recognize, in retrospect, that they should have created a more honest map?

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