Wednesday, April 13, 2016

Daily News: longtime homeowner offered only $1.5 million after losing Dean Street house; state claims "fair market" appraisal, developer silent

Here's the craziest part of the in-depth Daily News article, No Place Like Home: Atlantic Yards project has Jerry Campbell fighting for his place in Brooklyn, about a longtime property owner who has been trying to get fair compensation for the four-story house long in his family:
An ESD [Empire State Development] spokesman says the $1.5 million the agency offered Campbell “represents fair market value” based on a 2014 appraisal. The tower that will be built on the site of Campbell’s home will include a middle school, and the spokesman says the project will also bring badly needed housing and jobs to Brooklyn.
The fact that developer Greenland Forest City Partners is building a 27-story market-rate rental tower--with a school--on a plot that includes Campbell's former property suggests that the property is worth far more than $1.5 million. The article states:
Campbell says the offer is the same he received a decade earlier when the Brooklyn real estate market was just beginning to heat up. He thinks the home is worth twice as much and he’s angry that some displaced homeowners, including [longtime Developer Destroy Brooklyn spokesman Daniel] Goldstein, received more than market value while he’s been offered a fraction of his home’s worth.
One key difference is that Forest City Ratner needed Goldstein (who didn't collect that sum, given legal fees, taxes, moving costs, etc.) out on a tight schedule so they could effect the sale of the Brooklyn Nets to Mikhail Prokhorov. Others got a premium for timing.

Fair compensation?

The state changed the locks and removed family posessions
But it's ridiculous to think that $1.5 million could leave Campbell whole, to buy a replacement house in the neighborhood where his grandfather set down deep roots.

As I wrote last May, after the state unceremoniously changed the locks on the house and removed Campbell's possessions, a letter from ESD attorneys Berger & Webb in the court file set out a conundrum.

"Whenever feasible, replacement housing alternatives will be provided in the project neighborhood," the lawyers wrote. "However, to the extent market forces fail to provide affordable alternatives in the Project neighborhood, ESD will provide listings of alternatives in other similar or better areas."

As I wrote, it was odd that "market forces" were blamed for failing to provide a condemnee with comparable property. First, the market is being bypassed via eminent domain and the state's override of zoning, which allow Greenland Forest City to build a tower far larger than Campbell or any other property owner could do on their own.

Secondly, shouldn't "market forces"--assuming the house is valued comparably with others in the neighborhood--yield a payment sufficient to purchase a similar house?

I suspect a judge will value Campbell's home at well more than $1.5 million, though the time and cost of litigation will have an impact. Most of the "comparable properties" Campbell was offered for a potential swap were not in Prospect Heights but neighborhoods farther from the core, with lower real-estate prices, like Bedford-Stuyvesant and Crown Heights.

The only townhouse for sale currently in Prospect Heights, according to StreetEasy, is $2.4 million, but "Priced significantly under market due to SRO status." In other words, the new owner has to pay to get the tenants out. (Here's a list, by date, of more recent sales.)

The developer is (strategically) silent

Notably, "Ashley Cotton, the Forest City Ratner executive who serves as a spokeswoman for Greenland Forest City Partners... declined to comment on Campbell’s case due to the pending litigation."

Perhaps she declined to comment because, as described in Michael O'Keeffe's article, life on Dean Street "became unbearable" from arena construction, including noise and rats, forcing Campbell's wife and son to move.

Or, perhaps, she learned the lesson from a particularly callous quote she gave to the New York Times in February 2015, “We know our neighbors, we’re sympathetic to whatever experience they’re having, but this is really another enormous milestone on the path of Pacific Park.”

As Campbell told me last year, "Do note, in all the years we have lived here we have never met the lady."

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