Atlantic Yards/Pacific Park Report

Apparently most of the press missed another doozy of an oral argument yesterday in federal court regarding the Atlantic Yards eminent domain case. U.S. District Judge Nicholas Garaufis considered some defense arguments skeptically, as he devoted more than three hours (including break) to the hearing. Also, though there were no additional briefs on the issue, Garaufis spent a significant amount of time hearing arguments about the substance of the case, as he considered the defense motion that the case should be dismissed because of a failure to state a valid claim. He also expressed some skepticism about the political process that led to project approval--though that may not have significant bearing on the plaintiffs' charges. (I'm out of town, and my secondhand and thus highly incomplete account is based on messages from or conversations with four courtroom observers, all project opponents. I hope to have a more thorough account when the hearing transcript becomes available. Ob...

Two published articles this week have inaccurately suggested that the KPMG audit the Empire State Development Corporation (ESDC) commissioned actually estimated Forest City Ratner's profit on the Atlantic Yards project. First, the New York Sun reported , in an article noting that the state never saw a full business plan for the project: Cash flow projections and interviews with executives were the basis for the report's conclusion that the developer would stand to make a total return on its investment of about 9.8% on the mixed-use portion of the project. Then the Brooklyn Paper followed up : The KPMG report projects that Ratner will walk away with a $400-million profit from his state-backed $4-billion Prospect Heights Xanadu. So how do we square this with New York magazine's estimate of $1 billion profit? We don't. IRR vs. profit As I reported in December, quoting affordable housing expert David A. Smith, internal rate of return (IRR) doesn't mean profit: IRR, Sm...

The Atlantic Yards eminent domain case gets another day in federal court Friday, as both the plaintiffs and the defendants will argue to U.S. District Judge Nicholas Garaufis that the report and recommendations made last month by U.S. Magistrate Judge Robert M. Levy were incorrect. Remember, Levy recommended that the case be dismissed and more properly filed in state court. However, he did so based on only one argument by the defense; he agreed with two other arguments by the plaintiffs, 13 property owners and tenants organized by Develop Don’t Destroy Brooklyn (DDDB), that the case should remain in federal court. Thus, while the DDDB plaintiffs are asking Garaufis to overturn Levy’s one argument for dismissal, the defendants—the city, the Empire State Development Corporation, and developer Forest City Ratner—are not only backing Levy’s dismissal argument, but contending that he was incorrect in not dismissing the case on other grounds. It’s not automatic that a federal judge will hol...

As the Atlantic Yards eminent domain case gets another day in court Friday , it’s worth taking another look at a few questionable statements made by defense lawyers during the 2/7/07 hearing. Would the project really bring public parks and public housing? Is the ESDC really independent? And was Forest City Ratner the only developer that might be interested in a "derelict stretch" near Brooklyn's busiest transit hub? [The quotes are from an official transcript, which nonetheless contains flaws in transcription.] AY: public parks, public housing? Lawyers for the Empire State Development Corporation (ESDC) have challenged the plaintiffs’ efforts to invoke the 2005 Kelo v. New London case, in which the Supreme Court indicated it would look askance on what seemed to be a sweetheart deal. Kelo, noted ESDC attorney Douglas Kraus, was about eminent domain for economic development, while Atlantic Yards, he noted, is about the removal of blight—not an element in Kelo . He added, “...

Is voting the rascals out sufficient redress for those who want courts to examine what they believe to be eminent domain abuse, as a lawyer representing the Empire State Development Corporation (ESDC) has suggested? Not at all, says David A. Smith, an affordable housing expert in Boston who supports the targeted use of eminent domain and has been watching Atlantic Yards from afar. (He wrote 3/15/07 that he has "no past, current, or contemplated engagement or professional interest in Atlantic Yards.") Insider deal? That issue came up during the 2/7/07 oral argument in the Atlantic Yards eminent domain hearing , when U.S. Magistrate Judge Robert M. Levy posed a hypothetical question to Douglas Kraus, representing the defendant Empire State Development Corporation (ESDC). Levy wondered that if a constitutional violation would occur in a case involving eminent domain that led to a clear public use--a result that historically justifies condemnations--but also benefited an inside...

Though it hasn't been announced yet in a press release, Forest City Ratner "in the near future" intends to demolish 475 Dean Street (Lot 48 on the map at right), according to a 3/15/07 notice sent to Community Board 6 by the developer. This demolition was not part of the developer's recent press release , nor has Forest City yet applied for a demolition permit . (For all the other demolitions announced to CB 6, permits are in process.) As I wrote last week , Lot 13 has been vacant for a while and lots 19, 20, 55, and 56 were made vacant after demolitions next year. Announced are demolitions of lots 10, 11, 12, 18, 22, 30, and 54--filling in the grey color in the map above. The largest plot, Lot 1, a gas station, is largely absent of structures. Plaintiffs occupy lots 21, 27, 50, 46, 43, and the square above 43. Now 475 Dean, which is set back from the street in the center of the photo at right, will add to the " urban room ." (The photo comes from a 7/25/06 ...

The battles over land use, including Atlantic Yards, have clearly pointed to the need for planning by the government and various stakeholders, beyond a process driven by real estate developers. Now, it seems, the city government has recognized that, and more. On 12/12/06, Mayor Mike Bloomberg announced a major sustainability initiative, titled PLANYC 2030 , offering ten goals for creating a sustainable city by 2030, by which the city's population is projected to increase from 8 million to 9 million people. The plan grew out of the mayor’s request that Deputy Mayor for Economic Development Dan Doctoroff draft a long-term land-use plan for the city, which morphed into an attempt to address "the full range of challenges to our city's physical environment," in Bloomberg’s words--issues like energy, water, and climate change. (The land-use plan was likely the unreleased 2006 study by Alex Garvin, which I mentioned yesterday.) A slick media campaign has involved outreach ...

Forest City Ratner’s much-criticized plans to demolish the Ward Bread Bakery , the issue of whether demolition can be truly green development, and the Atlantic Yards project in general represent Brooklyn embodiments of several issues raised at the Historic Districts Council (HDC) annual conference on 3/10/07. Author and urbanist Roberta Brandes Gratz led off an overview panel by citing the enormous changes since the 1970s, when local activists responded to the city’s decline by establishing pocket parks in abandoned lots, community groups harnessed sweat equity and government funds to rehabilitate buildings, and intrepid brownstoners invested in yet-to-be historic districts. “Anyone who doubts the enormous impact of historic preservation either wasn’t here or wasn’t paying attention,” Gratz declared. Now, however, commented City Council Member Tony Avella, “The very people who brought the city back are being priced out of their developments.” While that may not be true for owners who...

While the New York Times editorial page generally favors Atlantic Yards, it three times has argued that direct city and state subsidies were unnecessary, and that developer Bruce Ratner should pay his own way. Now the city subsidy has more than doubled, but the Times has passed on a timely opportunity to restate its stance. Consistent criticism In a 3/27/05 editorial headlined A Triple Play for New York Teams , the Times opined: A mixed-use development like this could be a shot in the arm for the local economy. The low- and moderate-income housing units would be a big plus, and the developer has agreed to pay fair market value for the railyards at the site. But the city and state are each supposed to contribute $100 million to build streets and sidewalks and prepare the site for development. That’s unnecessary: Mr. Ratner should pay his own way. [Emphases added] In an 11/27/05 editorial headlined A Matter of Scale in Brooklyn , the Times followed up: Mr. Ratner has always made it clear...

So who's responsible for Forest City Ratner's aggressive demolitions strategy, aiming to create "facts on the ground" well before the Atlantic Yards legal battles are settled? One key player is undoubtedly Jim Stuckey , a Forest City Ratner Executive VP and President of the Atlantic Yards Development Group. Last year I suggested that Stuckey was worth profiling and, though no one took me up on the suggestion (see 5. Who's Jim Stuckey? ), there's another place to look. (Photo from PBS Newshour .) The Times Square story Stuckey turns up as a character in Lynne Sagalyn's comprehensive 2001 analysis of Times Square redevelopment, Times Square Roulette: Remaking a City Icon . Stuckey then worked for the city, heading the Public Development Corporation (PDC), the forerunner of the New York City Economic Development Corporation. From that perch, curiously enough, he was serving a mayor who didn't want to be perceived as selling out to developers. (Does that a...

Maybe I'm obtuse about semantics, but I'm still not quite clear on whether the Department of Transportation's plan to make Sixth and Seventh avenues in Park Slope one-way, which generated huge opposition , is dead or merely put aside to be revisited at a later date. The Brooklyn Paper this week reported : “We’re listening to the community and not moving ahead with the proposal,” said Department of Transportation (DoT) spokeswoman Kay Sarlin, who had earlier promised that the agency would kill the controversial proposal if “the community” rejected it. I followed up and asked Sarlin: "Is that any different from following the CB6 transportation committee resolution , which requested that DOT not move forward 'at this time'? In other words, is the plan dead? Or just on hold for revision and discussion? Or?" Her response: "We're not moving ahead with the plan." More on the press I last week criticized the Courier-Life chain for not providing enou...

The first curious thing about yesterday’s announcement that Forest City Ratner would demolish the Ward Bread Bakery (right), a nearly century-old set of interconnected brick and terracotta-clad buildings beloved by preservationists, is: why now? The towers planned for the block between Pacific and Dean streets and Carlton and Vanderbilt avenues wouldn’t be built for seven or eight years at the earliest, and likely much longer. Phase 2 of the Atlantic Yards project, which would deliver all the promised open space, isn’t supposed to start until after 2010, and that block would come last. Moreover, the promised ten-year build-out could take 15 or 20 years . The developer says what’s needed are staging areas and a very large surface parking lot , first for construction workers. Neither need has been proven—note the Empire State Development Corporation’s defense of this notably not-so-transit-oriented development. Equally importantly, it seems that, even before legal challenges are ...