Thursday, December 10, 2009

Plaintiffs in Atlantic Yards eminent domain lawsuit ask Court of Appeals to reopen case given appeal in similar Columbia case

In an unusual, long-shot effort to reopen a case seemingly closed, attorneys for the plaintiffs--nine residential and commercial property owners and tenants--in the Atlantic Yards eminent domain litigation are asking the Court of Appeals to take a second look.

Why? A lower court's ruling against the use of eminent domain case for the Columbia University expansion will force the Court of Appeals to revisit the Empire State Development Corporation's (ESDC) application of allegedly arbitrary blight standards.

"We do not bring this motion for reargument lightly," said attorney Matthew Brinckerhoff in a press release from Develop Don't Destroy Brooklyn, which has organized and funded the lawsuit. "But this is an extraordinary situation. It's not every day that a court rules that the ESDC has conspired with an influential private party to violate the constitutional right to property."

"Given the Columbia and Atlantic Yards rulings, no one knows whether their property is now vulnerable to the ESDC engaging in the same pattern," he said. "We need clarity concerning the ESDC's fraudulent abuse of the ‘blight' issue. The ESDC has been unmasked as a serial eminent domain abuser. We've reached a tipping point where that agency's actions regarding condemnation have lost all legitimacy."

In the Columbia case, writing for the majority, Justice James Catterson wrote, "The time has come to categorically reject eminent domain takings solely based on underutilization." (In the AY case, underutilization was a "blight characteristic" but not the sole justification concerning many properties.)

ESDC undeterred

The Post quoted ESDC spokeswoman Elizabeth Mitchell: "We have not yet seen the Atlantic Yards motion for reconsideration and therefore cannot comment upon it. We don’t comment on pending court matters, but ESDC is confident that we will move forward with development as planned and will accomplish the goals of this important project."

A shadow over the bond sale?

The court would not decide to take the Goldstein case within the next week, when tax-exempt bonds for the Atlantic Yards arena are expected to be sold.

So it's unclear whether the threat would deter bond buyers--the offering statement indicated that no legal action fundamentally threatens the project.

However, if the project were delayed, the bonds could be put in escrow for a year.

Potential results

1) The motion could simply be rejected.

2) It could be accepted, and the 3-2 decision in the Columbia case--known as Kaur--could be overturned, based on the decision in the Atlantic Yards case, which gave seemingly unlimited authority to the ESDC to decide on blight. (That's what Greg David of Crain's thinks.)

3) It could be accepted, and the Columbia case could be upheld, but on narrow grounds, such as bad faith--the ESDC's use of three separate blight studies--not available on the AY case. That would leave the ESDC to proceed with condemnation.

4) Or it could be accepted, and the Court of Appeals could uphold the Columbia case on broad grounds, declaring the blight standard to be vague and its application improper. That's what the Atlantic Yards plaintiffs are hoping for.

Details from the motion

The Motion To Reargue Appeal And/Or Hold Motion in Abeyance Pending Hearing and Determination of Related Appeal begins:
Appellants do not move to reargue lightly. We are aware that a majority of the members of this Court rejected Appellants’ arguments after due consideration. But it is truly “extraordinary and compelling,” 22 NYCRR § 500.24, that scarcely one week after this Court confirmed the plan of Respondent New York State Urban Development Corporation (the “ESDC”) to condemn Appellants’ homes and businesses based on the ESDC’s post hoc finding of “relatively mild conditions of urban blight,” Goldstein, the Appellate Division – confronted with a materially identical blight record compiled by the ESDC and the same trusted consultant, Allee, King, Rosen and Fleming, Inc. (“AKRF”) – rejected a strikingly similar condemnation determination.

Kaur will be appealed to this Court as of right... When this Court hears and decides Kaur, it necessarily will consider whether the facts in Kaur are distinguishable from the facts in this case. If the Court concludes that the facts are indistinguishable, the Court will have to decide whether the ESDC’s eagerness to find blight in Kaur through the very same procedure used in this case – one that the Appellate Division concluded was nothing short of “idiocy” and “sophistry,”... gives this Court pause with respect to the degree of judicial deference that the ESDC’s blight determinations warrant. Kaur presents compelling evidence that the ESDC’s willingness to play fast and loose with blight findings is a pattern, and not just an isolated occurrence.

...Given Kaur’s conclusion that the tipping point has been reached, and given this Court’s obligation to review that conclusion openmindedly, fundamental fairness requires that the Court preserve its ability to provide Appellants with redress by holding this motion in abeyance until Kaur is decided.
Similarities and contrasts

There are fundamental similarities between the two cases, notably the ESDC's use of the concept of underutilization: a building built to less than 60% of its development rights was considered blighted.

Moreover, as Brinckerhoff said, any criticism of the ESDC's use of vague standards also has to apply to its Atlantic Yards Blight Study. And in both cases the justification of blight removal was not raised until more than a year after the project was announced. (This latter issue was raised in the dissent in the AY case but ignored by the majority.)

Then again, as I wrote, there are also several differences in the fact pattern of the Columbia case, such as the multiple blight studies and the absence of any previous finding of blight in part of the site.

Focusing on similarities

In the motion, the AY plaintiffs focus on the similarities:
Insofar as the Court may find it helpful, while considering the appeal in Kaur, to affirmatively review the nearly identical records compiled by the ESDC in both cases, and/or for further briefing or argument, Appellants respectfully request that the Court grant reargument and direct that this appeal be reheard along with Kaur.

I. KAUR IS MATERIALLY INDISTINGUISHABLE FROM THIS CASE
Justice Catterson’s opinion in Kaur explains that the ESDC’s “blight designation” was “mere sophistry” created “by ESDC years after the scheme was hatched to justify the employment of eminent domain.”... Instead of addressing blight, the “project has always primarily concerned a massive capital project for Columbia” and “[i]ndeed, it is nothing more than economic redevelopment wearing a different face.” Precisely the same is true of the ESDC’s “blight” designation in this case. In Kaur, Columbia University selected the properties it desired for its expansion project. Years thereafter, the ESDC made post hoc “findings” that these properties were “substandard and insanitary” and approved the Columbia University Educational Mixed Use Development Land Use Improvement and Civic Project. In this case, Ratner selected the properties he coveted for building thousands of units of luxury housing and an arena for his professional basketball team. Years thereafter, the ESDC made post hoc “findings” that the targeted properties were “substandard and insanitary” and approved the Atlantic Yards Land Use Improvement and Civic Project.
Underutilization

The plaintiffs argue:
In Kaur, the ESDC hired AKRF to study Columbia’s preselected takings area, and AKRF found that the entire area was “substantially unsafe, unsanitary, substandard, and deteriorated.” AKRF’s findings were largely premised on underutilzation, which Justice Catterson characterized as “wholly arbitrary standard of counting any lot built to 60% or less of maximum FAR as constituting a blighted condition.” Here, the ESDC similarly hired AKRF to conduct a study of the preselected takings area, and AKRF found that the entire area was characterized by blighted conditions. Like its findings for Columbia, AKRF’s findings for Ratner were largely premised on “underutilization” based on the same 60% FAR benchmark.
I don't think they were largely premised on "utilization"--here's the Blight Study--but it was a significant (and highly questionable) factor. See Appendix B.

Another similarity?

The plaintiffs point out:
In Kaur, Columbia University had retained AKRF to consult about the project prior to AKRF being hired by ESDC. Here, Ratner similarly retained a leading environmental lawyer, David Paget, to consult on the Atlantic Yards project, after which the ESDC hired Mr. Paget to assist it in conducting the environmental review process.
Another issue

The plaintiffs also argue:
Reargument is also warranted in order to reconcile the stark conflict created by the Court’s inconsistent interpretations of the term “substandard and insanitary” as it appears in Sections 1 and 2 of Article XVIII of the New York Constitution (authorizing the use of eminent domain and the delegation of eminent domain power to public benefit corporations when used to rehabilitate “substandard and insanitary” areas) and Section 6 of Article XVIII (restricting occupancy to persons of law income when state loans or subsidies are used to rehabilitate a “substandard and insanitary” area).

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