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Besides major lawsuits, other expected litigation could delay arena construction

Besides pending major lawsuits over eminent domain and the Atlantic Yards environmental review, which may be resolved this year, other expected litigation may delay the start of arena construction, perhaps into 2010 or 2011. That means the best-case arena opening date could be 2012 (as I’ve already argued), or 2013, rather than the announced 2011.

That estimate comes from attorney George Locker, who represents tenants in two Atlantic Yards arena block footprint buildings. Without an assessment by the Empire State Development Corporation (ESDC) or independent authorities, I can’t be sure if the timetable estimate is solid, but it should certainly be part of the conversation.

Appeal coming

In September, a “smaller” lawsuit by Locker’s clients was dismissed by State Supreme Court Justice Jane Solomon, who rejected charges that the ESDC was violating a provision of state law that requires disposition of properties within a decade and that the ESDC should hold another hearing because the Atlantic Yards project has changed considerably.

Locker said an appeal must be perfected by July; he predicted oral argument in the mid-fall of 2009.

To gain control over the buildings, the ESDC would pursue “friendly condemnations;” Forest City owns the buildings but state law typically requires demolition of buildings with rent-stabilized leases to be approved by the New York State Division of Housing and Community Renewal (DHCR).

Should ESDC condemn the buildings after the pending eminent domain case is resolved but before his appeal can be heard, Locker said he will request a stay, arguing that the issues raised in his client's case should be heard first.

Back to the original argument

Should the ESDC get the go-ahead to pursue condemnation, Locker said he will also move to dismiss the effort on the grounds that the court's lack of jurisdiction, arguing that the FCR-owned properties "cannot lawfully be emptied by an end-run around the demolition procedures" of the DHCR.

ESDC attorneys have argued that state eminent domain law trumps the DHCR, and a judge has been sympathetic to that argument, though Locker's previous case raising the issue was dismissed on other grounds.

Given that Locker contends that a decision by the state’s highest court, the Court of Appeals, backed up his argument, “I believe that the Court of Appeals would want the last word,” he said.

If so, he estimated, the case could take four months in the vesting court (Supreme Court, in Brooklyn), eight months in the Appellate Division, and three to 12 months in the Court of Appeals.

Delays til 2011?

There are several variables at work, but if Locker’s right, it could take until 2011, to begin arena construction. And that's assuming no other issues hamper the project, such as the credit crunch.

Forest City Ratner has already announced plans to begin arena construction this year. As Locker's litigation go forward, look for the ESDC to try to resolve it in expedited fashion.

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