Wednesday, April 28, 2010

At panel on eminent domain, Siegel describes abuses, proposes reforms; defender of status quo ignores problems raised in Columbia and AY cases


For those of us who have seen civil rights attorney Norman Siegel, victorious so far in the effort to block eminent domain for the Columbia University expansion, speak on panels or testify before an oversight hearing, most of his critique yesterday on "The Use (or Misuse) of Eminent Domain in NYC" at New York Law School (video) was not unfamiliar.

Siegel made some compelling points about eminent domain abuses, but more intriguing was the respondent, land use use attorney Ross Moskowitz, who offered a full defense of the status quo, warning of abuses--notably, the potential for holdouts to distort the process--while ignoring the problems raised in both the Columbia and Atlantic Yards cases.

Siegel's case

Siegel first noted that the definition of blight--"substandard or insanitary"--is vague, inviting subjectivity, selective enforcement, and favoritism. The law should be clarified, he said, noting that the Supreme Court of Ohio, in the 2006 Norwood case, had found a similar statue void for vagueness.

"In the context of eminent domain, unfettered discretion enables takings that are motivated by favoritism," he said, noting that the condemning agency can pronounce any area blighted, while its "chief characteristic is attractiveness to the favored developer."

(As in, I might suggest, "a great piece of real estate," to quote Forest City Enterprises CEO Chuck Ratner.)

Underutilization

Siegel also took aim at the use of underutilization as a factor in blight. Sometimes it disregards the character of the community, he said, and it ignores the property owners right to determine best use of his property.

Moreover, there was no rational basis to choose 60% of Floor Area Ratio (FAR) as the threshold for underutilization for the Columbia expansion, as the City Planning Commission uses 50%. (For Atlantic Yards, the state also used 60%.)

Indeed, the 60% standard in an area zoned for an FAR of 2 effectively means that a single-story building is blighted, Siegel said.

Using that 60% figure meant that 39% of the Columbia expansion area was underutilized, but the use of a 40% figure--less than one story--only 20% would've been blighted.

Either New York should eliminate eminent domain based exclusively on underutilization, he said, or establish uniform rules.

Poor process

Also, as Siegel has said, the current process to challenge eminent domain in court is unfair and unconstitutional, given that New York is apparently the only state in the country that bypasses trial court, giving no right to discovery or cross-examination.

The Eminent Domain Procedure Law (EDPL), he said, "in my opinion, violates the condemns' right to due process."

Conflict of interest

Seigel added that government agencies such as the ESDC should be prohibited from retaining consultants who simultaneously work for the developers, he said, calling it "the quintessential conflict of interest."

(While environmental consultant AKRF worked simultaneously for Columbia and the ESDC, it worked consecutively for Forest City Ratner and the ESDC.)

The Columbia appeal and AY

Anticipating the June 1 argument in the Columbia case before the Court of Appeals, Siegel said he thought "our cases needs to be distinguished from the Atlantic Yards case."

(Note that the plurality opinion in the Columbia case ignored the Atlantic Yards decision recently issued by the Court of Appeals, while the dissent cited the latter decision.)

The Court of Appeals, he said, had recognized the possibility that a physical conditions might be such that it would be irrational and baseless to call it substandard and insanitary.

The issue was not about "a difference of opinion," he said, going on to argue that, even in the latter case, courts should not be so deferential but rather should be looking at the record to see whether there's substantial evidence to support the findings of government agencies.

Siegel noted that, in Manhattanville, as opposed to Brooklyn, there was no prior legal designation of an urban renewal area (Atlantic Terminal Urban Renewal Area, or ATURA), and no de facto blight conditions such as railyard.

(Of course, the railyard might actually be a very valuable property if put out for bid, and the plaintiffs in the eminent domain cases were from outside ATURA.)

Respondent Moskowitz, in an analysis of the cases, wrote similarly:
Perhaps the most significant difference is that in In re Parminder Kaur, the finding of blight was made after the selection of the private party receiving majority of the benefit of the condemnation, whereas in both Kelo and In the Matter of Daniel Goldstein, the finding that the area was blighted and in need of economic redevelopment was made before the private developer was selected.
It all depends on what you mean by "area," since a large minority of the Atlantic Yards footprint was never part of the ATURA and property owners and investors had no idea they were vulnerable to eminent domain.

Siegel added that, To the extent any conditions that were documents "that could be conceivably indicative of blight," we submit that such things as vacancy and poor building conditions, "these were maintained, exacerbated, or caused by Columbia, with ESDC's knowledge." For example, he said, empty buildings had "For Rent" signs but, when the phone number was called, the person answering the phone said the buildings weren't available.

He added that neither the ESDC nor Columbia have ever made any offer to his client Tuck It Away, nor have responded to company owner Nick Sprayregen's offers for a land swap.

And he noted that a concurring opinion in the Columbia case emphasized the issue of bad faith, given that the state had closed the record while his client's Freedom of Information Law (FOIL) requests were pending.

The respondent

Moskowitz allowed that misapplication of eminent domain was wrong.

"However, I would suggest, and I'm going to pause," he said. "I would suggest that this is an issue of economic development, thin ice and all, and political decisionmaking. Eminent domain may be a power that people love to hate, but it's also one that communities that are serious about planning are rightly reluctant to resist, and restrict."

Was Atlantic Yards an example of seriousness about planning?

"As a legal matter, the legislature says the government can only take private property for a public use, but more than a century of precedent interprets that requirement to mean a government may use eminent domain for a public purpose," Moskowitz continued. "Just as government took private property to promote private railroads a decade ago, it has done so in recent decades to promote commercial redevelopment, to revitalize urban areas such as the Inner Harbor in Baltimore and, closer to home here, 42nd Street and Times Square."

While many people have heard about the Kelo case, he said, eminent domain is infrequently used to take away people's homes but rather to acquire property that is vacant, rundown, or contaminated.

"They don't think about property owned by absentee landlords who won't invest in their property despite considerable efforts by local government to bring about code enforcement," he said. That pattern hardly applied with Atlantic Yards, given that the state punted when asked who was responsible for weeds at the railyards.

Holdouts and process

Generally, government should be required to buy property it wants in the open market, Moskowitz said, but sometimes a land owner may be in a position to exercise holdout power and thus block a project with demands.

"In order to avoid misuse, area-wide development projects under state laws that govern them, are subject to onerous, transparent, and lengthy processes that provide all the details of the project and invite public participation and extensive debate," he said. "In Kelo, the public was asked what they thought about the redevelopment project, as the project was debated, shaped, and decided for a period of nearly two years. Here in New York, under the State Environmental Quality Review Act [SEQRA], redevelopment projects generate foot-high environmental impact statements that include a hard look at their impact on a community, character, and neighborhood change, and contain lengthy chapters on the economic and environmental impacts of the project."

"Public hearings, ULURP proceedings in New York City, reviews of impact statements, open meetings laws, conflict of interest rules, and a host of other legal protections ensure that the public knows who is involved, how they were chosen, what the proposed benefits are, and who will suffer," he said. "By the time such projects are approved, the public process has mediated the claims of those whose properties are to be taken, and the public benefits of urban revitalization, jobs, housing, increased taxes, better services, and a more livable community."

That sounds good in theory, but he didn't take a look at practice. Of course, Atlantic Yards bypassed ULURP. And the public process was a show.

Warnings of danger in reforms

Moskowitz warned that limits on eminent domain would cause New York City great difficulty in carrying out area-wide development like 42nd Street.

He expressed concerns about provisions in pending legislation that local governments would have the power to approve or disapprove the eminent domain decision of the condemning authority. "[They] may lack the resources or the expertise to make such decisions," he said, leading to delay or inappropriate disapprovals.

Maybe, but the ESDC board's level of ignorance has already been established.

Moskowitz also said that the criteria for the finding of blight would be so stringent that it would block condemning authorities from utilizing their powers. Maybe, but he didn't propose an alternative to the vague status quo.

He also warned of a potential inherent conflict of interest in the role of a proposed eminent domain Ombudsman. Of course he said nothing about the conflict-of-interest claims regarding consultants like AKRF.

He suggested more study was necessary regarding the role of eminent domain before any reforms are enacted.

"The reality is the eminent domain has concrete, real benefits," he said.

Perhaps, but is it used "prudently and in the sunshine of public scrutiny," as he stated? He ignored some concrete evidence.

Siegel's response

Siegel later said he didn't oppose real public use, purpose, and benefit, but said he was against the use of pretext--"the reason why there's so much anger and distrust is that people believe that government.. is not being forthright with people." And he identified pretext with both the Columbia case and "even Atlantic Yards."

Pointing to the examples of Pfizer in New London and Poletown in Detroit, Siegel noted that promises of economic development are often overblown.

He said that there must be clearer standards regarding such representations, and "the courts need to be not unwilling to look at the record to determine whether the representations are accurate."

Otherwise, he said, developers come in with big promises that are never fulfilled.

He didn't say it, but remember the 10,000 office jobs promised in Brooklyn?

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