Monday, June 14, 2010

Will Development Agreement get its day in court? Unlikely, as Justice Friedman moves case back to condemnation judge who already dismissed issue

It looks like the belatedly-released Atlantic Yards Development Agreement--which signals significantly relaxed deadlines for the project--won't get its day in court, after all.

In a brief, five-page decision in the case known as Peter Williams Enterprises, et al., vs. New York State Urban Development Corporation (aka Empire State Development Corporation, or ESDC), state Supreme Court Justice Marcy Friedman essentially rejected a challenge by property owners that the Atlantic Yards project has changed so much that the ESDC should be forced to issue a new Determination & Findings to proceed with eminent domain.

Friedman did not formally reject the case, because she didn't examine the Development Agreement or get to the merits.

Instead, she moved it from New York County (Manhattan) to Kings County, as the ESDC had requested. In Kings County, Justice Abraham Gerges, who handles condemnations, already rejected similar arguments when rejecting a direct challenge from property owners to the condemnations.

The decision was dated May 26 and filed June 1, but I only learned about it last week. I asked the attorney for the petitioners, Matthew Brinckerhoff, for a comment, but didn't get one.

Development Agreement still at issue in separate case

Friedman is still considering a request by two groups of petitioners--organized by Develop Don't Destroy Brooklyn and BrooklynSpeaks--to consider the Development Agreement in revisiting her March 10 ruling that the ESDC's ten-year timeframe for Atlantic Yards was reasonable.

In her ruling, Friedman disagreed that a Supplemental Environmental Impact Statement to reflect the burden of a 25-year project on communities was necessary. Nor would she annul the 2009 Modified General Project Plan, or MGPP.

But she refused to let the Development Agreement--released in January a week after oral argument--to be added to the case, known as Develop Don't Destroy (Brooklyn), et al., vs. Empire State Development Corporation and Forest City Ratner Companies.

She's still considering the request for reargument, but such motions, like appeals, are generally more of a long shot than new cases, as was the Williams case.

Development Agreement bypassed

The difference between the Williams case Friedman moved to Brooklyn and the case Gerges already decided is that the Development Agreement, which points clearly to a much longer buildout than the official ten-year timetable, had barely emerged at the time of the oral argument in January before Gerges, and was not formally added to the case.

The petitioners in the Williams case have cited the Development Agreement in legal papers, but wanted to add it to the record. Friedman never got to that issue.

In legal papers before Friedman in the Williams case, ESDC attorney Philip Karmel stated that petitioners' attorney Brinckerhoff "made each of the arguments he is now presenting" before Gerges but they were rejected as meritless.

That's not quite so, because Gerges didn't evaluate the Development Agreement, part of the master closing documents that give the developer six years to build the arena, 12 years to build Phase 1, 15 years to start construction of the platform, and 25 years to finish the project.

(The project was approved for the second time in September 2009; the Development Agreement was signed in late December but not publicly released for a month.)

Gerges considered the issue moot, since the question of public use had already been declared to be off-limits and cited the ESDC's argument:
Whatever the pace may be for the delivery of the many public benefits of the Project, the nature of those benefits remains the same.
Location of petitioners

While the six original petitioners in the case sought venue in New York County, based on the location of the ESDC's principal office, rules of civil procedure, Friedman wrote, provide that "venue shall be placed in the county where real property is located where 'the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property.'"

Though Friedman indicated that five of the six petitioners were located in Kings County, it's a little more ambiguous, as three of them (as she failed to note) had left the case. They had done so as part of the process of reaching eminent domain settlements. So they were no longer part of the case when Friedman held a brief oral argument on May 18.

Those who settled were Williams, condo owner Daniel Goldstein, and Freddy's Bar & Backroom. The remaining petitioners are two entities owned by Henry Weinstein, a longtime owner of property near the corner of Carlton Avenue and Pacific Street, and The Gelin Group, occupants of a house on Dean Street east of Sixth Avenue.

Title to the Weinstein properties already has been transferred to the ESDC, though a settlement regarding their value is pending, and Weinstein won't give up occupancy until June 30. The Dean Street house is subject to eminent domain in a later phase.

Judicial reasoning

Friedman wrote:
The instant proceeding should accordingly be transferred to Kings County based on settled venue rules and in order to avoid duplicate or inconsistent judicial determinations. Contrary to petitioners' contention, transfer is not barred on the ground that one of the six petitioners, Gelin, was not a party to the Kings County proceeding. Assuming arguendo that Gelin has standing to maintain this proceeding--a matter in dispute--the venue procedures provide not for severance of the parties or claims, but for the court to set venue in the county proper to at least one (or here, five of the six) of the parties.
...They are represented by the same counsel in the two proceedings and, as discussed above, raise the same arguments that they raised in the Kings County proceeding. This conduct suggests forum shopping which cannot be countenanced by the court.

Brinckerhoff had argued that, at the least, The Gelin Group had the right to be heard in the court of its choosing.

Friedman Decision Williams Case

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