Skip to main content

Atlantic Yards: legal endgame in 2008?

Is Atlantic Yards on the rocks or steaming steadily and calmly ahead?

The answer is neither and, though it's surely a safer bet to back the big money (the developer and the city/state) behind the project, until final court decisions emerge regarding two cases challenging the project--cases in which oral arguments drew too little press attention--Atlantic Yards still faces a big question mark.

{See below for updates on the number of plaintiffs.]

Divergent predictions

City Council Member Letitia James went out on a limb (in the words of No Land Grab's Lumi Rolley) and offered the 2008 prediction, in Gotham Gazette, that "[t]he Atlantic Yards project will go down in flames." Develop Don't Destroy Brooklyn suggested that "Atlantic Yards Seems To Be Failing."

That certainly didn't impress Curbed, which Monday declared, in the category of Biggest Neighborhood Controversies of the Year:
3) Atlantic Yards. As buildings fall, the opposition battles on. We're talking about the Nets season, of course.

And Forest City Enterprises executive Bob O'Brien said in September that the developer (parent of Forest City Ratner) expected the lawsuits challenging the project to be cleared by the first half of Fiscal Year 2008, which would be July 31, 2008.

Indeed, despite challenges in the credit market and delays in the project, the developer and government agencies, proceeding with pre-construction demolition and infrastructure work, are acting as if the project, though delayed, is hardly troubled.

There is steady change in the project footprint, but for now we should remember that the facts on the ground are finite: pre-construction work is not actual construction.

The environmental lawsuit

Lawsuits that challenge the environmental review for such projects rarely succeed, and Kent Barwick of the Municipal Art Society explained his organization's unwillingness to join in the suit by saying that in-house lawyers thought success was unlikely.

Then again, state Supreme Court Justice Joan A. Madden at times seemed skeptical of defense arguments during the epic hearing in the case last May. And she's taken months longer than expected to rule.

Does that delay offer any hints of her decision? Not really--only that she's taking quite seriously a lengthy record, with some important contested issues.

No matter which side wins, the loser undoubtedly will appeal and, all things being equal, the defendant Empire State Development Corporation has an edge in state courts, given the history of such cases. That doesn't mean all things would be equal, however.

Assuming Madden rules within the next weeks, it's not unreasonable to expect an appeal to be resolved sometime within the year, but not necessarily by the end of July.

The eminent domain case

The federal eminent domain case was expected to have a bigger chance at stopping the project, but it was dismissed in June by U.S. District Judge Nicholas Garaufis. A three-judge appeals court panel heard the appeal in October and was skeptical toward the plaintiffs. So the defendants clearly have an edge.

Given that this is a dispute about law rather than a fact-finding enterprise, the record is a lot smaller than that faced by Madden. So a decision should come sooner rather than later.

If it's in favor of the plaintiffs, the defendants (state, city, developer, etc.), I speculate, would not risk the delay of a Supreme Court appeal but rather proceed with discovery and let the case move ahead with the hope that they still would prevail. Either way, the case almost certainly would not be resolved by the end of July.

Plaintiffs' dilemma

If, however, the court upholds Garaufis's decision, then the plaintiffs (13 originally, but the number may vary slightly) would be under the gun, and the group likely would split. Each member is undoubtedly motivated by varying degrees of principle, orneriness, and pragmatism.

[Updated: Despite a report in September that two plaintiffs had settled, they have not officially left the case, so the total for now is 14, given that one plaintiff was added. Lawyer Jennifer Levy states: "We represent six of the tenant-plaintiffs. Two have signed agreements – but we have not yet filed a Notice of Discontinuance with the Court. Two (and perhaps three) others are negotiating."

The cost of settlement with the rental tenants undoubtedly would be lower than with the plaintiffs who are owners. Of the 14 plaintiffs, six are rental tenants.]

Before any appeal to the U.S. Supreme Court, the ESDC might move toward condemnation or Forest City Ratner might make settlement offers to make the case go away. Some plaintiffs, as is typical in cases where the resolution is unclear, would be tempted to settle rather than face continued uncertainty.

That would leave the plaintiffs motivated most by principle and opposition to the project to consider the appeal, which would require significant fundraising by lawsuit organizer Develop Don't Destroy Brooklyn.

Then again, the appeal might attract funds from some ideological opponents of eminent domain, even though the case would not aim to overturn the Kelo vs. New London decision--hated by the right-wing and a lightning rod for reform among a wider ideological spectrum--but ask the court to give that decision additional teeth.

Supreme Court roulette

Any Supreme Court appeal would be a longshot; the court accepts only about two percent of the cases sent its way. The votes of four justices are required to hear a case, and almost certainly the four right-wing members of the court would be sympathetic to the plaintiffs.

But their decision to hear the case also would hinge on 1) whether they thought they could get Justice Anthony Kennedy, the swing vote, to join them on a case that seems to violate some of the indicia for legitimate use of eminent domain (e.g., a variety of development plans from the start) he set out in his Kelo concurrence and 2) whether they think the time is right to revisit eminent domain and/or what other eminent domain cases are also being appealed.

The state option

{Updated: A reader points out that the eminent domain plaintiffs also could file objections in state court under the Eminent Domain Procedure Law. The odds are long against the plaintiffs, but that could take up to a year to resolve.

Would a dismissal of the federal case lead the ESDC to simply proceed with condemnations, as a commenter below suggests is the most likely outcome? Perhaps, but only if the plaintiffs choose not to refile the case in state court.]

Timetable questions

So, as my speculation suggests, while it's possible that the lawsuits could be cleared in seven months, several scenarios challenge that.

Given the shifting construction estimates regarding the project by Forest City Ratner, which only recently acknowledged the Atlantic Yards arena wouldn't open in 2009, it's reasonable to be skeptical about the July 2008 prediction.

After all, Forest City Enterprises' Chuck Ratner last March acknowledged:
We are terrible, and we’ve been a developer for 50 years, on these big multi-use, public private urban developments, to be able to predict when it will go from idea to reality.


That's the best bet, for now.

Comments

  1. You fail to mention that the first move the defendants will make is to have the court vacate the temporary restraining order and proceed with condemnations...which is the most likely outcome. There is NOTHING to suggest that the defendants will have to wait for the Supreme Court to rule. This is particularly likely as the 13 dwindle. "Number will vary" is by the way a thoroughly dishonest and disingenuous way to describe the number of plaintiffs remaining. Why not state the reality: several have left and several others are negotiating. You are doing exactly what you accuse the Times of doing.

    ReplyDelete
  2. Brilliant and thoughtful analysis, as usual. Thank you Norman Oder and Happy New Year.

    William Harris, Boerum Hill

    ReplyDelete
  3. I've updated my post: While the state may push for condemnations as the most likely outcome if the appeals court upholds Judge Garaufis, the plaintiffs, if they refile the suit in state court, would stave off the condemndation process again.

    ReplyDelete

Post a Comment

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

Not quite the pattern: Greenland selling development sites, not completed condos

Real Estate Weekly, reporting on trends in Chinese investment in New York City, on 11/18/15 quoted Jim Costello, a senior vice president at research firm Real Capital Analytics:
“They’re typically building high-end condos, build it and sell it. Capital return is in a few years. That’s something that is ingrained in the companies that have been coming here because that’s how they’ve grown in the last 35 years. It’s always been a development game for them. So they’re just repeating their business model here,” he said. When I read that last November, I didn't think it necessarily applied to Atlantic Yards/Pacific Park, now 70% owned (outside of the Barclays Center and B2 modular apartment tower), by the Greenland Group, owned significantly by the Shanghai government.
A majority of the buildings will be rentals, some 100% market, some 100% affordable, and several--the last several built--are supposed to be 50% market/50% subsidized. (See tentative timetable below.)

Selling development …

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

"There is no alternative": DM Glen on de Blasio's affordable housing strategy

As I've written, Mayor Bill de Blasio sure knows how to steer and spin coverage of his affordable housing initiatives.

Indeed, his latest announcement, claiming significant progress, came with a pre-press release op-ed in the New York Daily News and then a friendly photo-op press conference with an understandably grateful--and very lucky--winner of an affordable housing lottery.

To me, though, the most significant quote came from Deputy Mayor Alicia Glen, who, as the Wall Street Journal reported:
said public housing had been “starved” of federal support for years now, leaving the city with fewer ways of creating affordable housing. “Are we relying too heavily on the private sector?” she said. “There is no alternative.” Though Glen was using what she surely sees as a common-sense phrase, it recalls the slogan of a politician with whom I doubt de Blasio identifies: former British Prime Minister Margaret Thatcher, a Conservative who believed in free markets.

It suggests the limits to …