Skip to main content

The denunciation of the ESDC's condemnation push that was never resolved, but surely influenced the Goldstein settlement

Why did Forest City Ratner settle with Daniel Goldstein last Wednesday for $3 million? The most obvious reasons were to save the alleged $6.7 million monthly cost of delay it alleged, and to pave the way for Russian billionaire Mikhail Prokhorov's purchase of the Nets, which was depending on vacant possession of the site.

Another reason--and a reason for Goldstein to settle--was that Kings County Supreme Court Justice Abraham Gerges pushed for a settlement. He didn't want to adjudicate the case, nor preside over an eviction that could easily have become a media event.

Given the Empire State Developmeny Corporation's initial and ridiculous lowball appraisal of his apartment, Goldstein had to calculate his vulnerability to pursuing the case and getting a check that was worth far less than a replacement apartment.

That said, it would have been of significant interest had the case continued, because, at least according to a response from Goldstein's attorney, the ESDC was way out of line.

Too fast

Wrote attorney Michael Rikon (disclosure):
The application by the condemnor brought by Writ of Assistance only a week after we appeared for condemnees, and only a month after Notice of Acquisition was served is unconscionable and unprecedented.

The application by condemnor marks a new low in eminent domain practice. It is violative of the statutory rights granted by the Eminent Domain Procedure Law and is based on pure vindictiveness and bad faith conduct. Further, it is not premised on accurate factual basis. Rather, what is submitted are affidavits containing generalizations which read more like public relations press releases than truthful statements or evidence to support the very drastic remedy of evicting a family from their home. The cost estimates provided by Forest City Ratner are wildly exaggerated. (See Atlantic Yards article by Norman Oder).
That was a citation to my post April 20 analyzing the ESDC's Order to Show Cause.

Accelerated timing

Remember, Gerges transferred title on March 1, upon which the ESDC asked everyone to leave by early April--and then filed papers seeking eviction by May 17. Wrote Rikon:
The agency (ESDC) is no stranger to the process. Normally fair and reasonable advance payments are made available within ninety or more days with interest. A condemnee is then accorded a reasonable period to find new premises and move out.
An accompanying affidavit by Goldstein detailed "a diligent effort to find a new home," including
visits to 48 dwellings since January 10, but the ESDC hadn't made it easy:
Not only is the search for a new home difficult, it is virtually impossible based on the bad faith offer made by ESDC which is lower than Goldstein paid for his home seven years ago. Further, any equivalent home that the family now lives in will cost at least twice as much as the alleged advance payment.

No writ should issue if the advance payment is on its face inadequate... Any application should be denied until there is a trial.
ESDC shortcuts

Goldstein pointed out:
The condemnor and the developer did not inform the court that the advance payment that has been authorized is $510,000. I have a three-bedroom, two bathroom, 1,295 square foot condominium in an architectural distinctive building with unobstructed south and west views. I paid more for my home seven years ago at the first offering. Obviously, this is a bad faith advance payment.

I have read the affidavit of Gary Curry of the Cornerstone Group. He states that he made twelve attempts to contact me regarding our relocation needs. I do not know what "an attempt to contact" means, but I never met with him. He never visited my home. His group only provided listings of five condos which we carefully examined. None were suitable or comparable. This is hardly effective relocation assistance.
Bad faith and vindictiveness

Rikon wrote:
There has never in my forty-one years of practice in this area of the law been a clearer example of bad faith and vindictiveness.

In her affidavit, sworn to on April 6, 2010, MaryAnne Gilmartin, Executive Vice President of Forest City Ratner, does little to hide the personal animus directed at Daniel Goldstein.
He noted that Gilmartin charged that Goldstein was delaying the demolition of 636 Pacific Street because it may take several months to perform the pre-demoliton work like an environmental assessment to determine whether asbestos or other hazardous materials are present:
I am not sure why Ms. Gilmartin swore to this under penalty of perjury. Forest City has controlled the building for over five years and has had environmental experts on its payroll for a longer period of time. it knows whether or not there is asbestos in the building. If if didn't, ESDC had statutory ability to conduct an environmental survey on the building before taking title. EDPL Sec. 404.
Strained argument

Rikon seemed on firm ground in the above argument, but strained in court and in the papers to argue that there should be a 90-day notice before condemnation, because there's federal money involved in the project.

There was no solid evidence of such funds, just evidence of federal lobbying, and potential federal grants for housing, as well as a community development grant to Forest City Enterprises, based in Brooklyn but with no clear evidence it was targeted for Atlantic Yards.

Demolition plans

Rikon said that it would take six months or longer to clear other buildings Forest City Ratner owns.

The developer stated it need to have the entire street closed to start digging, but there were no clear plans.

Affordable housing

While Gilmartin claimed that 2,250 affordable housing units were in jeopardy, Goldstein in his affidavit pointed out that "there are no available subsidies for the units now."

It would have been interesting, to say the least, to hear that argued fully in court. Rikon raised the issues in papers delivered that morning. The judge didn't provide the opportunity for much scrutiny.


  1. I don't oppose the use of eminent domain for public projects(like schools and roads-and sometimes other public amenities but for about 200 years, NY did without the use of eminent domain for private development and the world worked just fine. yes it took more time and there was sometimes a hold out on the block that was built around, but the right balance between public and private rights were maintained.
    Kelo upset that balance on a project that is NOT going to be built. Most states have passed laws that restrict the unbridled power of the government to take land for private development.
    Would anyone argue that for a rail yard for the subway eminent domain can't be used? But for a private shopping center, I doubt that people would want this particular government power to be used. An Arena is one thing that reasonable people can disagree.

    Lots of things can and should be done without the use of this governmental power.


Post a Comment

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…