Tuesday, May 04, 2010

In last-minute lawsuit, owner of easement in arena block seeks to preclude claim of vacant possession; his goal is money, not to stop arena

Peter Williams, who owned an industrial building-turned-home (occupied by his two adult children, and a third person) in the Atlantic Yards arena block, settled weeks ago with Forest City Ratner.

Now he's brought an unusual lawsuit claiming that the state made a "colossal mistake" in not pursuing eminent domain for the easement bordering and above the Spalding Building at Sixth Avenue and Pacific Street. He acquired the easement in 2001 and owned adjacent 38 Sixth Avenue.

This could stop the Empire State Development Corporation and Forest City Ratner from claiming they have achieved "vacant possession" of the arena block when current occupants leave by Saturday.

The easement prevents anything more than four stories from being built at the corner of Sixth Avenue and Pacific Street--presumably precluding an arena.

(Photo and set by Tracy Collins)

ESDC response and impact

The ESDC, in turn, asserts that the record of the easement is merely "a mechanism used for tax billing purposes,” rather than “a separate property lot."

Should the case proceed, it could slow vacant possession of the arena block, which was presumed after May 7, paving the way for consummation of Forest City Ratner's deal to sell Russian billionaire Mikhail Prokhorov 80% of the New Jersey Nets and 45% of the Atlantic Yards arena.

Though the lawsuit raises the spectre of requiring a whole new process under the Eminent Domain Procedure Law (EDPL), Williams, a former plaintiff in the Atlantic Yards eminent domain cases, has not displayed a particular ideological bent. Rather, he's publicly said he's in it for the money.

All about easements

Here's some legal background on easements. Easements can be taken via eminent domain, though presumably they must be identified.

In New York City's Determination & Findings for the expansion of the 7 train, five subsurface easements were approved for eminent domain. The ESDC's Determination & Findings for Atlantic Yards doesn't mention Williams's easement.

The charges

According to a press release, Peter Williams Enterprises (PWE) filed suit in state Supreme Court in Kings County seeking a declaration of its ownership of the easement, identified as Block 1127, Lot 7501. (Other documents are embedded below.)

While the condominium lots at 24 Sixth Avenue were condemned by the New York State Urban Development Corporation (UDC), or ESDC, Lot 7501 was ignored.

Unmentioned is that, in both the federal and state eminent domain lawsuits, Williams's property was described as both a house at 38 Sixth Avenue and "an easement preventing building outside the current zoning envelope of the abutting property, 24 Sixth Avenue."

Failure of notice?

According to the press release:
Indeed, the UDC did not identify Lot 7501 in either its Notice of Public Hearing, pursuant to Article 2 of the EDPL, dated July 24, 2006 (the “Notice”), or its Determination and Findings, pursuant to EDPL § 204, dated December 8, 2006 (the “Determination”). Both the Notice and the Determination identified the property subject to acquisition by condemnation by block and lot. Both listed Lots 1001-1021 as the only lots UDC sought to acquire located at 24 Sixth Avenue. Both expressly provided that the “street addresses are included for ease of reference only,” and that in the “event of any inconsistency between the street addresses and the tax blocks and lots, the block and lot information shall control.” Because Lot 7501 was never identified, it cannot be, and has not been, taken eminent domain.
Attorney Matthew Brinckerhoff, who represented plaintiffs in the eminent domain cases, represents Williams. "If defendants want to acquire title to Lot 7501, they must do so through legal means," he said.

"The UDC must follow the procedures set forth in the EDPL; it must hold a public hearing to consider condemnation of Lot 7501 and thereafter issue the predicate findings and determination," he said. "It cannot simply take that which it does not own."

ESDC response

The complaint says the ESDC has not been cooperative:
In recent days, defendants have made it clear that, notwithstanding UDC’s undeniable failure to condemn one of the property tax lots necessary to allow Forest City Ratner to build an arena for its professional basketball team, it intends to proceed as if it owns property in [sic] plainly does not.
PWE wrote to attorneys for the defendants, advising of the facts. According to the complaint:
In the letter, the UDC claimed that its EDPL Determination “adequately identified the parcel by its former lot number before the condominium conversion occurred, the present condominium lot numbers and the street address,” and that the “Lot 7501 designation for this property is merely a mechanism used for tax billing purposes,” and “is not a separate property lot.”
I asked the ESDC today for comment but haven't heard back.

Williams's legal goal

Williams seeks a judgment in court:
By its letter, defendant UDC made it clear that it will not recognize PWE’s property and will thus continue with its plans to build a professional basketball arena on that property.

On information and belief, the UDC will soon declare—falsely—that it has “vacant possession” of the project site for the arena, including Lot 7501, thus triggering a cascade of events pursuant to various agreements.
Williams's ultimate goal

What next? In an AY-related segment of the April 30 Brian Lehrer Show, at about 18:50, Williams called in.



He explained that, when he settled regarding the sale of his property adjacent to Freddy's Bar & Backroom, "they purchased just my building... I have ownership of an easement… That easement has its own tax block and lot number; it was not taken."

Lehrer asked, "So, are you going to use this little claim that you may have to the easement rights to try and leverage delay in the whole project?"

"I’m a capitalist pig," Williams responded candidly. "All I want is money."

"You just diminished your bargaining position," Lehrer riposted.

Perhaps. But it's likely that he and Forest City Ratner are looking through the same type of lens.

Eric McClure of NoLandGrab comments: What's a few million when you could be a hero to millions? Don't forget, Ratner had your son thrown in jail — for taking one of Ratner's spycams off your own building!
Complaint by Peter Williams in Easement Case related to Atlantic Yards

Public Hearing Notice, July 24, 2006 regarding Atlantic Yards

Recorded Indenture for easement owned by Peter Williams

1 comment:

  1. This is certainly an interesting case. Have a new blog post up giving more background on air rights in eminent domain proceedings.

    Been following your blog for awhile, thanks for the continued updates on the Atlantic Yards project.

    ReplyDelete