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Some on appellate court skeptical of ESDC in AY relocation case

While on September 26, a state appellate court appeared unsympathetic to a challenge to the state’s demolition plans posed by rent-regulated tenants of two buildings in the Atlantic Yards footprint, this morning some on another appellate court seemed more sympathetic to the same 13 plaintiffs as they challenged the state’s plan to find them new housing.

The state has promised to provide, at minimum, the services of a real estate broker, moving assistance, and a $5000 payment—but that, attorney George Locker argued, will hardly guarantee similarly affordable housing. (Of the 13 plaintiffs at 624 Pacific Street and 473 Dean Street, 12 have rent-stabilized leases, and many pay rents that are $500-$600. The case is known as Matter of Anderson v. New York State Urban Development Corp.)

“Isn’t it reasonable to assume there is some comparable housing” in Brooklyn, asked Justice Robert Spolzino, who was the most skeptical among the four-judge panel of the Appellate Division, Second Department, during the oral argument, which lasted less than 20 minutes.

Locker said it wasn’t. He said state law directs the Empire State Development Corporation (ESDC) to offer those displaced accommodation into the project, but has not made any offer to his clients. (Actually, state law says the ESDC should do so if "feasible.")

What's documented

Indeed, one issue raised in court was whether a reference to an offer in an ESDC document was sufficient proof of that offer. The Final Environmental Impact Statement (FEIS) indicates that developer Forest City Ratner has “agreed to pay the difference, if any, in rent between the tenant's current rent and the rent for the comparable interim unit until such time as the tenant is relocated into a new unit in the proposed development.”

However, that hasn’t been offered to Locker’s clients and it would expire—meaning the loss of a precious rent-stabilized lease—if the project were abandoned or the tenant breached obligations in the deal.

A previous case, known as Fisher, upheld a similar relocation plan, and Justice Thomas Dickerson asked Locker why it shouldn’t stand. Locker said the underlying facts of the case differed, and the case, which the plaintiffs argued without a lawyer, was not fully briefed.

The statute, Locker said, says “provide housing,” and “they’ve put the burden on the site tenants to find housing that doesn’t exist.” With a plan of referrals, he said, “you have to know something about the market. It’s an illusory plan. Illusory plans are unlawful plans.”

What the law says

The law establishing the Urban Development Corporation (scroll down to Urban Development Corporation Act 174/68), now known as the ESDC, requires "that there is a feasible method for the relocation of families and individuals displaced from the project area into decent, safe and sanitary dwellings, which are or will be provided in the project area or in other areas not generally less desirable in regard to public utilities and public and commercial facilities, at rents or prices within the financial means of such families or individuals, and reasonably accessible to their places of employment. Insofar as is feasible, the corporation shall offer housing accommodations to such families and individuals in residential projects of the corporation. The corporation may render to … families or other persons displaced from the project area, such assistance as it may deem necessary to enable them to relocate.”

Defense case

ESDC attorney Charles Webb confidently said Fisher is on point, but then ran into some tough questions. “What are you doing for these tenants?” asked Dickerson.

Webb detailed the package.

“How can your plan be feasible if you don’t know what there is available?” asked Spolzino, who was appointed by former Gov. George Pataki, an Atlantic Yards backer.

Webb said the issue is what housing is available at the time the tenants are required to move, and that has happened yet.

Spolzino was skeptical, pointing out that the Atlantic Yards environmental review makes assumptions about the future. He asked why the state didn’t look at the availability of alternative housing.

The statute, Webb said, doesn’t require it.

Justice Fred Santucci asked whether offers to reside in the project had been made.

“To most of the people,” Webb responded, though it was unclear whether he meant the plaintiffs or simply most of those living in the footprint who have already relocated or are expected to do so. (Locker said afterward that “we have received no relocation offers as represented.")

Relocation agreement?

Spolzino asked where it was in the record. Webb said an agreement was described in the Atlantic Yards General Project Plan, though that didn’t indicate the document itself was included.

The General Project Plan states:
All existing residential occupants within the Project Site, who are legally occupying a residential dwelling unit, shall be provided with relocation assistance to find decent, safe and sanitary dwellings, in the project area or in other areas not generally less desirable, at rents or prices within the financial means of the displaced person(s).

It also references the Community Benefits Agreement, which offers those in residence at least one year “the right to return and to rent a comparable unit within the Project Site at a comparable rate to what they are currently paying.”

“I couldn’t find it, frankly, in the record,” Spolzino continued. “Is there a signed agreement with the developer and ESDC?”

Webb said yes.

Spolzino asked where it was.

Webb indicated that it’s in the record.

“With all due respect, I don’t have time to go through the record,” Spolzino continued.

Webb conferred with co-counsel Philip Karmel, also representing the ESDC. “I’ll have to furnish it to the court later,” Webb said.

Challenge now, or later?

Webb recovered a bit, repeating a point made in the briefs: when it comes to condemnation, a judge at that time can evaluate whether the ESDC is complying with the law.

Spolzino wasn’t sure. He said the law doesn’t give the ESDC the authority to proceed uniless it has in place a “feasible plan” for relocation: “The argument is, in the absence of a study, no plan can be feasible. You rely in part on the existence of an agreement with the developer, but we can’t find that agreement in the record.”

Karmel said that various documents in the record do describe the agreement.

Spolzino still wasn’t sure. If the developer doesn’t fulfill the plan as promised, do the tenants, he asked, have legal recourse?

A lawsuit could be brought against the ESDC, Karmel said.

“Not against the developer?” Spolzino asked.

“Correct,” Karmel replied.

What's feasible?

“If they have no recourse against the developer, how can we consider the developer’s offer as helping establish a feasible plan?” Spolzino asked.

“I don’t think it’s illusory,” Karmel replied. “It needs to be implemented in accordance with the documents.”

Santucci asked if there was an obligation to relocate all the tenants or just assist them.

“The obligation is a 'feasible' plan,” Karmel said, citing Fisher. “There’s millions of apartments in New York City. If these people don’t have a place to move, the condemnation judge is not going to kick them out of their apartments.” It’s premature, he said, to ask for more specifics.

Spolzino said he wasn’t talking about a specific apartment. “It’s that you had to do some study.”

"There’s thousands of housing units in Brooklyn,” said Karmel, noting that “the project sponsor has agreed to pay the difference in rent.”

And that was it; Locker tried to make one more point but was waved off.

Afterward, the lawyers and officials representing the ESDC and Forest City Ratner looked glum, even though one particularly skeptical judge, Spolzino, does not necessarily represent the whole panel.

Locker was more optimistic. As for the specific agreement to pay the difference in rent, referenced by Karmel, he said, “It’s not in the record. I’ve never seen it.”

Project logjam?

This case is the only one formally blocking the ESDC from moving to condemn properties, even though it’s likely the agency wouldn’t proceed against plaintiffs in the pending federal eminent domain case (oral argument Tuesday) until it’s resolved.

Indeed, the ESDC says that Locker’s challenge to the state’s determination and findings, under the Eminent Domain Procedure Law, is a challenge to the entire project, not merely the two buildings.


  1. The one thing every lawyer knows is that Judge questioning generally is not a good predictor as to what the decision will be. The fact that they had some compassion for the tenants is a good thing because it helps their mindset but generally unfortunately when they decide, it doesn't translate to the decision.

    Sid Meyer

  2. Can someone explain to me this. If Bertha Lewis and Acorn is so interested in "affordable' housing, why then didn't they come publicly to the defense of these tenants. Yes, this is a rhetorical question. But I would like to hear from others.


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