Skip to main content

Would the Court of Appeals permit reargument of the Atlantic Yards case, given the Columbia appeal? It's a long shot, and we should know soon

The unusual, long shot effort to get the state Court of Appeals to reopen the Atlantic Yards eminent domain case it dismissed in November could see a result as early as today, when the Court of Appeals resumes issuing decisions. Or it could linger for weeks or months.

Should the court agree to reargument of the appeal, or to simply hold it in abeyance until the not dissimilar Columbia University case is resolved, that could stay the pending decision by state Supreme Court Justice Abraham Gerges on an unusual challenge to the actual condemnation.

But if the court dismisses the motion, that would remove one of the few potential roadblocks--all long shots--to transfer of title should Gerges rule in favor of the Empire State Development Corporation (ESDC).

Forest City Ratner is proceeding--mostly--as if none of these cases poses a threat; it has signed contracts for arena construction and has continued utility work and demolition, but has not announced an official groundbreaking.

The Columbia opening

Let's recap. The AY case, known as Goldstein v. ESDC, was dismissed 6-1 in late November, with the majority opinion stating that it was the role of the Legislature, not the courts, to narrow the definition of blight and the dissenting judge saying the court was much too deferential to the ESDC.

Nine days later, a lower court, the Appellate Division, blocked the ESDC's use of eminent domain in the Columbia University expansion, in a case known as Kaur v. ESDC. While the ruling was 3-2, the two-judge plurality opinion slammed the ESDC for its use of consultant AKRF, its reliance on underutilization as an indicia of blight, and its indulgence toward a private developer.

While the fact pattern in the Columbia case is different from the AY case, the issues of underutilization and deference to the agency are similar. Then again, Judge James Catterson's plurality opinion ignored any reference to the judge-decided AY case, a glaring omission leaving open the option for a complete reversal.

But the Court of Appeals had already ruled against the ESDC in another Columbia case--regarding the agency's unwillingness to hand over documents requested via the Freedom fo Information Law--and may be disposed to looking carefully at its actions.

Courts, as institutions, are generally reluctant to admit that they just made mistakes, so the petitioners in the AY case have an uphill climb.

The schedule in the Columbia appeal requires final briefs to be filed May 10, which suggests an oral argument in June.

The motion to reargue

According to the motion to reargue, filed by owners and renters in the AY footprint:
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,” 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.

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,” Kaur, – 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.
The motion essentially asks the court to be convinced that the Columbia case places the AY case in a new light:
Appellants’ request is a modest one. Appellants simply urge the Court to hold this motion in abeyance until it hears and decides Kaur. Otherwise, it is possible that the Court could conclude that the ESDC’s conduct in Kaur, whether viewed in isolation or in conjunction with its conduct in this case, presents the “case in which [the Court] might intervene to prevent an urban redevelopment condemnation on public use grounds,” Goldstein – which affirming Kaur necessarily would require the Court to do – but lack the ability to readily apply any such reconsideration to this case. Given Kaur’s conclusion that the tipping point has been reached, and given this Court’s obligation to review that conclusion open-mindedly, fundamental fairness requires that the Court preserve its ability to provide Appellants with redress by holding this motion in abeyance until Kaur is decided.
Nearly identical records?

The motion refers to "the nearly identical records compiled by the ESDC":
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.

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.” Kaur. AKRF’s findings were largely premised on underutilization, which Justice Catterson characterized as a “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.
While the fundamental process of letting the developer draw the map is indeed similar, it's a stretch to say the findings were largely premised on "underutilization," and the ESDC's reply motion challenges that claim, given the designation of the Atlantic Terminal Urban Renewal Area, or ATURA, and the presence of deteriorated buildings on the non-ATURA blocks.

(More precisely, it might be said that underutilization is a significant factor in the "takings area" outside ATURA.)

In response

The ESDC's motion in opposition calls the effort to reopen the case "utterly without merit" and "nothing other than a transparent effort to further delay" the project:
Instead, they assert that the two-judge plurality opinion of an inferior appellate court in a different matter, based on a different record concerning properties in Manhattan, calls this Court's decision into question. There is no logical basis for Apellants' contentions. Inferior courts are required to follow the decisions of this Court, not the other way around.
Other paths

The motion suggests that the Court of Appeals could review the Columbia case without getting to the issues raised in the AY motion:
This Court may not even reach the blight issue in Kaur... this Court (like the two dissenting justices in Kaur) may determine that ESDC's authority to construct facilities for "educational.. purposes"... provides a separate, independent and constitutionally sufficient justificaiton for the use of eminent domain in that case.
The impact of the Columbia case

The motion argues that the two cases aren't linked:
Second, the Goldstein decision did not make new law on the subject of "blight."... Whatever facts can be gleaned from the record in Kaur are of no relevance here, because the ... this Court has already held that the record before ESDC in this case provided a rational basis for ESDC's determination that the Atlantic Yards project site is a substandard and insanitary area.

If the court reaches the blight issue, the ESDC says, it may decided that the record provided a rational basis for a blight finding under the same standard, or not, but neither would be inconsistent with the decision in Goldstein.
The ESDC also says that, other than the Kaur decision, the plaintiffs can't find a legal authority for their contention that there's something untoward in the ESDC's relationship with a private developer.

But this, of course, is what the AY plaintiffs are suggesting: the Columbia case is a tipping point for judicial review of the role of the ESDC in finding blight.

An opening from the Columbia case?

I spoke with Matthew Brinckerhoff, attorney for the AY plaintiffs, who, while acknowledging that the Court of Appeals could simply reverse the Columbia decision, offered a scenario backing up the motion for reargument in the AY case.

"They’re not going to reverse themselves on their general view of the law, that they owe substantial deference to ESDC. The question is not a purely legal one," he said. "Their willingness to pay that deference—is it in any way shaken, or undermined, by the nature of the opinion in the Columbia case? It’s a very strongly worded opinion: you can’t deny that there are at least two judges that feel very strongly that the ESDC and AKRF are completely off the map here."

So, he said, if the Court of Appeals comes to the same view, "that at this time, with this agency and this particular consultant, that something has gone horribly wrong... there are scenarios where they can intervene."

What next?

Should the Court of Appeals grant the motion, it would stay the condemnation. Should the court dismiss the motion, it would bring the condemnation that much closer.

I also asked Brinckerhoff about potential scenarios regarding the case before Gerges. If Gerges agrees to transfer title to the ESDC, the petitioners would consider an appeal, he said, though it would not automatically stay the condemnation.

A request for a stay--not necessarily granted--would have to come from Gerges himself, the Appellate Division, Justice Marcy Friedman (who's considering another case challenging the ESDC's approval of the project), or the judge assigned to the separate case which makes the arguments filed before Gerges: that the condemnation is premised on a 2006 finding of benefits that's no longer valid.

Not until a transfer of title, I suspect, would Forest City Ratner announce an official groundbreaking.

Comments

Popular posts from this blog

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…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

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…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.