Skip to main content

Easement case gets day in court: does failure to transpose appraisal language to offer document make a difference?

After a late start in state Supreme Court yesterday morning in Brooklyn--the two Atlantic Yards cases were set for 9:30 am, but state Supreme Court Justice Abraham Gerges didn’t arrive until 10:10--the case involving the easement held (and still claimed) by Peter Williams Enterprises (PWE) was heard.

And while the arguments mostly reprised those in the legal papers--that PWE had given up any claim to the light and air above 24 Sixth Avenue (the Spalding Building) when it sold its own property, 38 Sixth Avenue--there was a small twist, suggesting there might be something to PWE's claim.

(Here's a report on the case challenging the eminent domain Determination & Findings.)

Defendants' case

The Empire State Development Corporation (ESDC) wants the case dismissed. ESDC attorney Charles Webb, ruddy and white-haired, began confidently in his gravelly voice. “Lot 7501 is nomenclature for a tax lot that doesn’t exist,” Webb said, noting that, as stated in the legal papers, the city uses such a designation all over.

Moreover, the ESDC acquired both 38 Sixth Avenue and 24 Sixth Avenue, the building to which the easement was associated. “That extinguished the easement,” Webb declared.

And PWE, he said, relinquished all claims. “This is just a fictitious opportunity to try to get more money,” Webb stated with disdain. (Williams has said he's motivated by money.)

Forest City Ratner attorney Jeffrey Braun, in diplomatic tones, added, “It was clear from the document it was intended to run with the land. Contrary to what the complaint tries to say, there’s just nothing out there.”

Plaintiff's case

PWE attorney Matthew Brinckerhoff, who had represented Williams and several others in the Atlantic Yards eminent domain cases, got up, undeterred. He noted that the legal right was described both as an easement and an indenture.

In the contract, PWE’s property was described as “the right to everything in the air above the [building] plane,” Brinckerhoff said. “That’s not how easements are described.”

Moreover, despite the claims in the papers, this was the only condo building in the Atlantic Yards footprint that had such a Lot 7501. “We have a legal and factual dispute that can’t be resolved on a motion to dismiss,” Brinckerhoff said.

The eminent domain declaration designed properties by block and lot, not the metes and bounds physical description, he noted; it also said that, in the case of any confusion, the blocks and lots would control. “There’s a big ambiguity and discrepancy here,” he said.

As for the ESDC’s argument that he didn’t answer all the charges in their motions, Brinckerhoff said they were inappropriate for the motion to dismiss.

Questions of details

The release of claims signed by PWE was limited to 38 Sixth Avenue, and the state appraisal similarly limited, Brinckerhoff said. He read the text of the release, in which PWE disavowed any claims arising from the deal for 38 Sixth Avenue.

Gerges interrupted: “It said all claims, including…

“All claims that could be brought in the condemnation proceeding,” Brinckerhoff responded. “It had never been condemned in the first place. It’s their mistake.”

Webb got up: “What he failed to read was including but not limited to. The release clearly takes care of all possible claims.

Two offers?

Also, Webb said, the ESDC made two separate offers to PWE; for the building and for the easement.

“Was that a written order?” asked Gerges.

Yes, responded Webb.

He paused for several moments, consulted a colleague, and offered a clarification. While the appraisal the ESDC ordered had two parts, “when he made the offer, we lumped them together,” he acknowledged.

Gerges asked Brinckerhoff if PWE had ordered its own appraisal.

No, Brinckerhoff, it never got that far. But it’s clear, he said, that the ESDC’s pre-vesting offer to PWE did not separate the two parts.

“That’s not what I heard,” Gerges said.

Brinckerhoff pointed to the distinction between the appraisal and the offer.

“You never exchanged it,” asked Gerges.

“We never got to that,” Webb acknowledged.

Last points

Brinckerhoff asked for the opportunity to make one more point.

“I never stop people from talking,” Gerges responded drily, with his Borscht Belt timing.

FCR attorney Braun, slightly slower on the trigger had also gotten up to speak, and remained standing for a bit as Brinckerhoff continued.

Brinckerhoff said that the compensation to PWE “was strictly limited to Mr. Williams’s building at 38 Sixth Avenue."

Braun this time had more of an edge in his voice. “The counsel for the plaintiffs,” he said, “urged the court to read the [original sale] document. I join that request. All it does is grant an easement of light and air.”

Gerges said he wanted to get the parties together to perhaps work something out. They’re due back in court on Thursday, August 12 at noon.


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…

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…

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…