Eminent domain, round two: state and Forest City close-mouthed as condemnation process begins for properties near arena site

Three houses destined for condemnation; photo by AYR

The eminent domain hammer is on its way--again.

Still, Empire State Development (ESD), the state agency overseeing/shepherding Atlantic Yards, and developer Forest City Ratner are close-mouthed and not fully candid about the second--but not quite final--round of eminent domain.

The state recently has begun the condemnation process for three homes and three businesses across Sixth Avenue from the arena, between Dean Street in Atlantic Avenue.

Eminent domain has already been approved; the issue now is compensation and possession, so the first step is asking property owners to accept a visit by an appraiser, a prelude to an offer, which later can be litigated.

August 2004: Two buildings
on left have since been demolished

Why now?

The reason for condemnation, according to ESD, is to facilitate work at the railyard and also construction of the 272-foot B15 tower between Pacific and Dean streets east of Sixth Avenue.

But only the railyard work has a schedule.

 As for when the tower will be built--who knows? There are several already-cleared sites available for construction, on both the arena block and also the southeast block, now used for interim surface parking.

2006 plan

So I'd bet the properties are being taken because 1) Forest City Ratner's new joint venture partner, the Chinese government-owned Greenland Group, finally has the cash to pay the owners and 2) a larger cleared site is needed for staging to assist construction across the street, on the arena block.

After all, that 100-foot-wide piece of land was initially supposed to be used for interim surface parking and staging while four towers were built simultaneously with the arena--a plan that was later abandoned.

In other words, this piece of land was not needed to somehow "cure" blight anomalously located at one rectangle. It was to have a crucial role in construction.

Dicey issue remains

The argument that eminent domain is needed to build housing apparently wouldn't pass muster with the de Blasio administration, which (according to Capital NY's Dana Rubinstein) has ruled out using that tool going forward in its housing plan.

But eminent domain is already approved in this case. Still, however much de Blasio approves of Atlantic Yards--because he values affordable housing above all--it will still be touchy.

Moving school from B5 to B15

I expect de Blasio and Forest City to not only talk up affordable housing at the B15 site, but also the opportunity to build a public school, now planned for the B15 site.

Then again, that school was long said to be in B5, just east of Sixth Avenue over the railyard. But construction there would require an expensive deck, and that's years away, so they're moving it to b15.

In a Times article last month about East New York, Deputy Mayor Alicia Glen said, "“We’re not talking 30- or 40-story buildings in the middle of a neighborhood where everything else is two or three stories."

Slated for taking: lots 4, 87, 86, 85.
Others already acquired by Forest
City. Lots in brown deemed blighted

Now there certainly are large buildings across Atlantic Avenue from the Atlantic Yards site. But a 27-story tower on Dean Street would, in fact, be next to and across from four-story buildings.

New construction work

There's a lot of work coming.  The joint venture plans to build the West Portal to the railyard and install a new green roof on the arena, both of which will require workers, trucks, and lane closures near the arena.

Meanwhile, B2, the tower at Dean and Flatbush avenues, remains under construction. And before it's finished in late 2015, the developers plan to start B3, located at the southeast corner of the arena block. That's a lot of trucks. 

And, remember, for now the plan to build using modular construction--repeatedly claimed to reduce truck traffic, waste, and noise--has been put aside.

Dark building is lot 4 on Pacific Street/Sixth Avenue,
Adjacent is new residential construction

So that likely means more space is needed for staging.

Besides the three homes on Dean Street, the properties include a wholesale fabric business on Pacific Street, and, on Atlantic Avenue, a former museum exhibitions factory (and then potential rave location), and a storage company.

The sequence

Yes, the state got permission in 2006 to condemn the entire site, including "friendly condemnations" of Forest City Ratner-owned buildings, which negated rent-stabilized leases. 

But property owners and renters challenged eminent domain, finally reaching the state Court of Appeals, which rejected the challenge in 2009.

By then, however, cash-strapped Forest City had gotten ESD to revise the eminent domain plan, no longer condemning the entire 22-acre site in one action, thus saving the developer condemnation payments for properties where it had no intention to build. 

(Similarly, Forest City got the MTA to allow payments for the Vanderbilt Yard to be spread over 21 years, thus delaying construction of towers over the railyard.)

That left property owners in limbo, unable to rent to long-term tenants nor to effectuate plans to build on this presumably more-valuable land. (On the Pacific Street site next to Lot 4, a new building is going up.)

Now, however, things are moving quickly, though the property owners are understandably quiet themselves. They have no recourse to stop the process, just to challenge what may or may not be a low-ball condemnation offer. (The recent pattern shows significant variation in judicial awards.)

Public discussion

2010 Daily News photo, Block 1120, Lot 19 at left

At the Atlantic Yards Quality of Life Committee meeting last week, Forest City Ratner External Affairs chief Ashley Cotton made reference to lots 19 and 28 on Block 1120, two buildings which bump back from Atlantic Avenue into a zone dominated by the Vanderbilt Yard. 

(Adjacent lot 35, an empty lot further to the east abutting Carlton Avenue, was already taken by the state for Forest City, though the condemnation judge agreed to a much higher valuation than the state offered.)

"The state has commenced condemnation on the bump properties," Cotton said at the meeting. "Certainly our objective is to take down the bump."

I followed up, asking if it was to facilitate construction of the permanent railyard.

The two properties yesterday

"Well, to facilitate construction on the railyard site," she responded, apparently referencing work on the West Portal.

I said I'd heard that the condemnation process had began for the properties on Pacific and Dean streets, on Block 1118. "What's the project rationale for that?"

"That's eventually the site of"--Cotton turned quizzical--"B13?"

"B15," I clarified, referencing the tower planned for that site. I asked if it was the next building: "Why now?"

"Um, why now?" Cotton responded, not as enthusiastic as when, say, talking up the green roof. "I can't answer that question... We're here to talk about MPT [maintenance and protection of traffic, to accommodate railyard and roof construction]."

Querying ESD

I followed up with written questions for ESD.

Asked why the condemnations were happening now, the response was, "They are taking place now to let the project move forward, both for the LIRR Yard construction and a future residential development on Block 1128."

That doesn't quite answer the question about the timing.

I pointed out that one block--home to Modell's and P.C. Richard, southwest of the arena, known as Site 5-- was also subject to eminent domain.

(It's planned as the site of a 250-foot building, reduced from the originally planned 400 feet. Forest City Ratner already controls the Modell's property, but not the P.C. Richard site.)

The response: "Site 5 is not part of the current process, but it is expected to be part of a future condemnation."

What's next?

There's no way to fight condemnation; eminent domain has already been approved.

The question is compensation and timing of their departure. An offer is sometimes sweetened in order to get people to leave faster (see the example of Daniel Goldstein, 2010).

In this case, the state and Forest City may have another edge: the construction slated to occur around the site may prove annoying enough to push owners to settle and leave.