Tuesday, October 13, 2009

DDDB, Straphangers Campaign, four elected officials sue MTA, FCR to annul renegotiated Vanderbilt Yard deal

Well, maybe the eminent domain case is not the only court challenge that could jeopardize the Atlantic Yards plan.

From a press release issued by Develop Don't Destroy Brooklyn:
The Metropolitan Transportation Authority (MTA) was sued today for the June 24th deal it made to sell its 8.5-acre Vanderbilt Rail Yard to developer Forest City Ratner for its proposed 22-acre Atlantic Yards plan in Prospect Heights, Brooklyn.

State Senator Velmanette Montgomery (18th District), Assemblymember Jim Brennan (44th District), Assemblymember Joan Millman (52nd District), NY City Councilmember Letitia James (35th District), NYPIRG/Straphangers Campaign and Develop Don’t Destroy Brooklyn filed the lawsuit. The case was filed in State Supreme Court in Manhattan.

...The suit seeks the annulment of the MTA’s deal to sell the rail yard to Forest City Ratner because it violated requirements of legislation meant to rein in the abuses of New York State’s public authorities. An annulment would disallow the transfer of the property, which the developer requires for its project, including its proposed basketball arena, until the MTA complied with the law.

The petitioners charge, specifically, that the cash-strapped transit authority violated the Public Authorities Accountability Act of 2005. Under that legislation, which former Governor George Pataki signed into law in 2006, the MTA was required to obtain an independent appraisal of the Vanderbilt Yard and seek out competitive offers for the property. The MTA failed to fulfill either of these legal requirements when its Board approved its new deal with Forest City Ratner on June 24th, 2009.


Not at junk bond interest rates

I'll have more on this later, but here's one tidbit from the legal petition:
In effect, MTA agreed to finance 80 percent of FCR’s purchase of the Yard at a generous 6.5 percent interest rate, while Forest City Enterprises had a junk bond rating.

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