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Showing posts from June, 2010

Is ten-year AY schedule reasonable? Judge puts ESDC on the defensive as Development Agreement is scrutinized in 75-minute reargument

In an unusual reargument of a case that was argued January 19 and decided March 10, a lawyer for the Empire State Development Corporation (ESDC) was put on the defensive yesterday, forced to acknowledge that there are far fewer penalties for delays in completing the Atlantic Yards project as a whole than those for the first phase, which includes the arena and three towers.

Will it make a difference? It’s hard to predict a yes, given that courts generally defer to agencies like the ESDC.

But the fact of the reargument itself--and the uncomfortable facts in the belatedly-released Atlantic Yards Development Agreement--suggest that, at the least, New York County Supreme Court Justice Marcy Friedman will chastise the agency, if not order a Supplemental Environmental Impact Statement (SEIS) or otherwise throw a wrench into the project.

After all, in her March 10 ruling Friedman criticized the ESDC’s “deplorable lack of transparency” and acknowledged that the ESDC’s use of a ten-year timefra…

Was there an "appeal" to the Appellate Division in the Columbia eminent domain case? The Court of Appeals gets it wrong

After watching the oral argument June 1 in the eminent domain case involving the Columbia University expansion, I suggested that Court of Appeals Chief Judge Jonathan Lippman was being either incredibly ignorant or faux-naive when he asked if there is "statutorily-provided discovery in this kind of situation."

The answer, of course, is no, and that's why the law favors condemnors more than in any other state.

Deference, and new law

The court's decision last week offered deference to the Empire State Development Corporation's (ESDC) blight findings.

Also, as attorneys at ESDC co-counsel Sive, Paget & Riesel admit, it created new law by "holding that 'civic projects' under the UDC [Urban Development Corporation] Act are not limited to public institutions, and may in fact include projects proposed by private educational institutions."

(What about trade schools and Shoot the Freak?)

Actual ignorance

It also included a line that was not faux-naive b…

Oral argument today in motion to reargue Atlantic Yards timetable case

I wrote on June 23 about the effort to get the belatedly-released Development Agreement to be considered as part of the record.

Here are the messages from Develop Don't Destroy Brooklyn and BrooklynSpeaks, both of which organized petitioners.

DDDB said: If, as the Court ruled, the ESDC's rationale was "only minimally" supported before, it would seem that that minimal support erodes entirely due to the facts subsequently revealed in the Atlantic Yards Development Agreement.BrooklynSpeaks said: Judge Friedman's decision to proceed with oral arguments on the sponsors' motion to reconsider represents an important opportunity to put before the court new information from the development agreement indicating the 2009 MGPP failed to address impacts of the Atlantic Yards project that ESDC knew were not only possible, but likely. Members of the community are encouraged to join us for the June 29 hearing.

Flashback: Kidd, Gehry, and more on the old Atlantic Yards homepage animation

This was the animation on the old Atlantic Yards web site, now defunct.

Can you guess how many Nets, project designers, and even buildings are no longer part of the scene?

Here's my list (but I may have missed a few):
Jason KiddRichard JeffersonVince CarterFrank GehryLaurie OlinNenad KristicBostjan NachbarMiss Brooklyn

In softball interview with hometown paper, Forest City Enterprises CEO Chuck Ratner stresses integrity, openness, and candor

The Cleveland Plain Dealer, hometown paper of Forest City Enterprises, today offers a Q&A headlined Charles Ratner, president and CEO of Forest City Enterprises Inc.: Talk With the Boss.

The relevant section for Atlantic Yards watchers, is this:The Question: What other key lessons have you learned? The Answer: Perhaps the lessons that I've learned are best described by the core values that we have worked to develop and celebrate at our company. First among those is integrity. I guess what I've learned, as much as anything, is what goes around comes around, as they say. It's extremely important to conduct yourself with a sense of your own integrity, and then make sure that there's organizational integrity, institutional integrity. The second is openness and candor. I think much of what we've seen recently, in the world both of public and private enterprise, is that that openness is often compromised. People are afraid to deliver bad news. There are always challe…

Greg David of Crain's: Deputy Mayor Dan Doctoroff "orchestrated" Atlantic Yards

Within a 25th anniversary retrospective headlined New York City: Then & Now: Whether in a real estate boom or fiscal bust, NYC revolves around Wall Street's siren song, Greg David of Crain's New York Business offers a section about former Deputy Mayor for Economic Development Dan Doctoroff, with a paragraph about Atlantic Yards:Even without the Olympics as a rationale, he made remarkable progress. At the end of 2006, he conceived of a way for the city to finance a subway-line extension to Hudson Yards on the West Side, where he envisioned a multibillion-dollar residential and commercial neighborhood. Behind the scenes, he orchestrated the approval of a massive mixed-used project at Atlantic Yards in Brooklyn, anchored by an arena for the New Jersey Nets basketball team.
Well, he helped orchestrate the approval--it's a state project, not a city one--and, more likely, orchestrated the package of city subsidies and the city's unswerving commitment to the project.

Note h…

Federal corruption investigation reportedly involves Senator Carl Kruger, whose attorney says he's "not a target"

Southern Brooklyn State Senator Carl Kruger, he of the big political war chest and questionable allegiances (e.g., the "Three Amigos" insurrection in Albany), has long carried Forest City Ratner's water on Atlantic Yards.

And while a reported federal corruption investigation of Kruger does not apparently touch on Atlantic Yards, it suggests some more dubious behavior on the part of the Senator--though parties involved say that's not so.

In an article yesterday headline Brooklyn Senator a Focus of Federal Corruption Inquiry, the Times reported: Federal investigators are examining whether Senator Carl Kruger, one of the State Legislature’s most powerful members, sought campaign contributions in exchange for political favors, according to court filings and people briefed on the case.

Mr. Kruger, a Democrat from Brooklyn who has amassed the Senate’s largest campaign account, declined to comment on the investigation.

But a Senate Democratic spokesman confirmed Friday that th…

Catching up on AY-related campaign contributions to Andrew Cuomo, and reasons to expect little reform when it comes to developers

As with Attorney General-turned-Governor Eliot Spitzer, it's unwise to expect Attorney General Andrew Cuomo, the gubernatorial front-runner, to enact fundamental reforms when it comes to developers.

The campaign finance system is just too entrenched.

And while Cuomo has said nothing about Atlantic Yards, and taken campaign contributions from those associated with the project, he--assuming he's elected--would have a significant role in overseeing the project via the Empire State Development Corporation (ESDC) and the proposed (and yet undesigned) governance entity.

His lengthy campaign platform does not discuss reform of the ESDC when it comes to projects like Atlantic Yards. Nor does it address reforms regarding eminent domain, even though New York is an outlier among states that have tightened their laws in the last five years.

Even without following the advice of libertarians like the Institute for Justice, Cuomo might conclude that cases like that regarding the expansion of Col…

City provides $32.5M cash for project infrastructure, claims total subsidy to Ratner is lower than previously stated; reasons for skepticism

Yesterday, the Empire State Development Corporation amended the State Funding Agreement for Atlantic Yards so it could pass along an additional $32.5 million in city funding to Forest City Ratner for project-related infrastructure.

From one perspective, it seems like a significant increase in city subsidies for Atlantic Yards, given that the Forest City Ratner will have directly received $171.5 million.

That's far more than the initial $100 million pledged in 2005.

City subsidy actually down?

However, representatives of the ESDC and New York City Economic Development Corporation (NYC EDC) both stated yesterday that the city's commitment to Atlantic Yards was well below the $205 million figure that has been reported for three years. (With $100 million from the state, that would be $305 million.)

I distrust that explanation, as I will explain below. After all, Forest City Ratner itself counted $205 million in city funds, as noted in the screenshot at right from the former Atlantic Y…

Court of Appeals, citing precedent in Atlantic Yards case, overturns lower court ruling blocking eminent domain for Columbia expansion

In less than four weeks after a contentious oral argument, the state Court of Appeals brought an unsurprising end to the Cinderella story that was the Columbia University eminent domain case, ruling unanimously--though with a very reluctant concurrence--that the courts should defer to the Empire State Development Corporation in its finding of blight.

As I reported after watching the oral argument in Kaur v. N.Y.S. Urban Development Corp., the judges--including Atlantic Yards dissenter Robert Smith--felt bound by their decision in the Atlantic Yards case last November, a decision that was glaringly ignored by the two-judge plurality who shortly afterward ruled against the ESDC in the Columbia case.

Wrote Smith: I concur in the result on constraint of Matter of Goldstein v New York State Urban Dev. Corp. The finding of "blight" in this case seems to me strained and pretextual, but it is no more so than the comparable finding in Goldstein. Accepting Goldstein as I must, I agree i…

Jeffries on Atlantic Yards governance bill: optimistic, but "significant negotiation" still required

I caught up today with Brooklyn Assemblyman Hakeem Jeffries, lead sponsor of the new version of the Atlantic Yards governance bill, to ask what's different this year, with the Empire State Development Corporation apparently on board.

"We have been working closely together over the last several months to convince the agency of the need to create a governance structure to improve transparency and accountability related to the project moving forward," he said. "In order for ESDC to create a subsidiary, we need to legislatively authorize that action, which is why Senator [Velmanette] Montgomery and I have introduced the bill."

Negotiations coming

Why is the ESDC more receptive? "I think agencies are generally more receptive when legislation is less proscriptive, as it relates to the manner in which they are expected to conduct themselves," he said. "The bill, as written, still requires significant negotiation between elected officials, community leaders…

Atlantic Yards governance bill, round two; new version aims to establish ESDC subsidiary to enhance accountability (& ESDC is supportive)

Update: Here's Jeffries' take, noting that more negotiation will be necessary.

A new bill establishing a different version of a governance entity to oversee Atlantic Yards and make it more accountable has been introduced in the state Assembly by Assemblyman Hakeem Jeffries. It's already passed the Corporations, Authorities and Commissions Committee.

(A companion bill has been introduced in the state Senate by Senator Velmanette Montgomery.)

It may mean a different fate than the bill that died last year.

Empire State Development Corporation (ESDC) spokesman Warner Johnston stated, "We are aware and have been working with Assemblyman Jeffries and other electeds on elements of this bill. We are extremely supportive of what this bill will mean for the future of the Atlantic Yards project. More details will be forthcoming at a later date."

I'm waiting to learn whether powerful Assembly Speaker Sheldon Silver has expressed any opinion on the bill.

The rationale and the …

In Philadelphia, naming rights for transit station near sports facilities is worth three times more (per year) than MTA/FCR deal for Brooklyn's hub

Here's some more evidence that Forest City Ratner (on behalf of Barclays) got a very nice deal from the Metropolitan Transportation Authority on naming rights for the Atlantic Avenue/Pacific Street station.

For a similar deal in Philadelphia, the local transit authority is about to get three times as much: $600,000 a year, vs. $200,000 a year.

(The deal must be approved tomorrow. Here's a tough editorial from the Philadelphia Daily News warning that "taking corporate money in this way leads to less, not more, public commitment to the so-called social contract.")

The deals aren't directly comparable. In Philadelphia, the AT&T Station deal with SEPTA lasts only five years, worth $3 million, while the deal with the MTA is $4 million over 20 years.

MTA opacity

How did the MTA set a price? The agency's then-CFO Gary Dellaverson had said, "We've never successfully completed a naming rights before.... I don't have a nifty little spreadsheet to show you…

Court of Appeals' Atlantic Yards decision gets singled out in IJ's post-Kelo report

The libertarian Institute for Justice has issued a report titled Five Years After Kelo: The Sweeping Backlash Against One of the Supreme Court’s Most-Despised Decisions.

And, not surprisingly, New York is singled out as not having made any reforms, with the November 2009 Atlantic Yards case, Goldstein vs. Empire State Development Corporation, singled out: There is one significant exception to this good news for property owners in state courts—New York. The Court of Appeals (New York’s highest court) seems stuck in the days when courts routinely ignored evidence of eminent domain abuse, refusing to give the facts any real scrutiny at all. This latest ruling from the court, which completely ignores the fundamental role of the courts in properly interpreting essential constitutional rights, tells the whole story:

It may be that the bar has now been set too low—that what will now pass as “blight,” as that expression has come to be understood and used by political appointees to public corpor…

At ESDC board meeting Thursday, another amendment to the funding agreements on the agenda

One item on the 22-item agenda for tomorrow's board meeting of the Empire State Development Corporation (ESDC) involves Atlantic Yards.

The agenda states:ATLANTIC YARDS LAND USE IMPROVEMENT AND CIVIC PROJECT
7. New York (Kings County) – Atlantic Yards Land Use Improvement and Civic Project – Authorization to Amend Funding Agreements; Authorization to Take Related Actions
What exactly that means is to be determined, but previous amendments--as noted last September--relaxed rules or timetables to ease Forest City Ratner's cash flow.

Details

Empire State Development
37th Floor Conference Room
633 Third Avenue
New York, New York 10017

The meeting will be webcast.

Due to 633 Third Avenue building procedures, those attending in New York City must RSVP by 5:00 pm. on Wednesday, June 23, 2010. Members of the public should call (212) 803-3794.

Public comment

According to ESDC rules, public comment is welcomed:To ensure maximum opportunity for participation, speakers representing themselves may spe…

Charter Revision Commission hearing Thursday on land use

The New York City Charter Revision Commission meets tomorrow night, June 24, to hear testimony on whether land use reform should be part of the charter revision on the ballot later this year.

It will begin at 6 pm at the Flushing Branch, Queens Borough Public Library, 41-17 Main Street, Flushing.

As with previous hearings, it will begin with expert testimony but later accept brief public testimony (with time limits). The hearing will be streamed and archived.

Many commentators have suggested that the commission--which, despite outreach, has been pretty much under the radar--stick to very simple proposals, such as term limits, given the complexity of such issues as land use.

Justice Friedman schedules motion for reargument in case challenging ten-year timeline; Development Agreement should get its day in court

The belatedly-released Atlantic Yards Development Agreement should get its day in court, after all. A hearing in the effort to reopen the case challenging the Modified General Project Plan--essentially the legitimacy of the ten-year timeline--will be held on Tuesday, June 29.

It will be held before state Supreme Court Justice Marcy Friedman at 60 Centre Street, Room 335, at 11 am.

Chance of success

Given general judicial deference to the Empire State Development Corporation (ESDC) and other agencies, it's a long shot to expect a ruling in favor of the petitioners, community groups organized by Develop Don't Destroy Brooklyn (DDDB) and BrooklynSpeaks.

However, the petitioners have some inconvenient facts to air in court regarding the dubiousness of the official ten-year project timeline.

If the case is successful, it could severely slow the project--at least the non-arena portion--by requiring new analyses of the project's environmental impact.

One case out, one in

Yes, Manhatt…