Skip to main content

In decision by Gerges allowing condemnation, unwillingness to evaluate significance of changes in AY benefits

It may be that no court agrees to evaluate whether the changes in the benefits to the Atlantic Yards project are significant.

That's the import of Supreme Court Justice Abraham Gerges's decision (bottom) upholding condemnation for the Atlantic Yards project. Gerges claimed that the claims should have been filed by October--an analysis that attorney Matthew Brinckerhoff, representing those resisting condemnation, said was wrong, as described below.

And Gerges's decision portends a similar outcome in a parallel case still pending, aiming to compel the Empire State Development Corporation (ESDC) to issue new Determinations and Findings (D&F) as a precursor to the use of eminent domain.

That case is being considered by Manhattan Supreme Court Justice Marcy Friedman, who also heard an oral argument in January on a case challenging the ESDC's approval of the 2009 Modified General Project Plan (MGPP). A decision in the latter is expected soon.

FCR announces groundbreaking March 11

Forest City Ratner announced a March 11 groundbreaking and claimed the decision marked "the transition from the obstruction to the construction phase."

New D&F?

In Kings County Supreme Court before Gerges January 29, those resisting the condemnation of property argued that changes in the project after the ESDC's 2006 approval of the D&F were so significant that a new D&F was required.

Gerges was not unskeptical about such claims, suggesting they should be dealt with in other cases.

Matthew Brinckerhoff, the attorney for the property owners, pointed out in court that other courts considering AY-related cases had relied solely on the record as of December 2006. "The fact that they changed the project so much has to be considered by someone," he said.

Not Gerges.

(Here's coverage by the Times, Daily News, Post, Observer, the Record, the Brooklyn Daily Eagle, and Brooklyn Paper. Only the latter two touched on the core legal argument.)

Wrong court

Much of Gerges' decision regarded technical challenges to the condemnation, but on p. 35, he addressed the contention that the public use, benefit, or purposes changed materially from what was described in the 2006 D&F.

The ESDC countered that the issues were inappropriate for a condemnation proceeding, but, even if the modifications were subject to judicial review, the 2006 Modified General Project Plan (MGPP) and the 2009 MGPP are virtually identical, since they involve the same site, buildings, uses, a new railyard, a new subway entrance, etc.

What about the revised MTA deal that allows for a far longer time to acquire the site? The ESDC noted that a challenge to the deal had already been rejected in December. Gerges wrote:
Moreover, petitioner asserts that the MTA business arrangement has no relevance to the validity of the 2006 D&F because those findings relate to the public purposes of the Project, which have not changed. They also note FCRC's obligations to ESDC are dictated not by a transaction with the MTA, but by the 2009 MGPP and the implementing agreements between FCRC and ESDC. The essential terms of the Development Agreement obligated FCRC to construct the Project as described in the 2009 MGPP and to use commercially reasonable efforts to do so by 2019.
Gerges wrote that challenges to condemnation on grounds of bad faith and/or lack of public purposes should be raised--as they had been--in a challenging to the finding of eminent domain, rather than the condemnation action.

Changes are OK

Also, he agreed that the case known as Leichter, involving changes to the Times Square plan, disallowed challenges to a revised AY plan.

Gerges wrote:
It has already been determined that the petition adequately sets forth the public uses for which the subject property is needed. The court also finds, as argued by petitioner, that the public purpose to be served by the Project was not changed by the 2009 MGPP. Moreover, to the extent that the Project has changed, the above discussed holdings in Leichter and Toh Realty clearly establish that petitioner is not obligated to begin a de novo review proceeding... In this regard, it must also be noted that the numerous judicial challenges to the Project resulted in extensive delay, as was the case in Leichter. More significantly, it cannot be disputed that the economic conditions in which the Project was proposed in 2002 have changed drastically in that the world-wide economy is now in one of the worst downturns in history.
New case should've been filed?

While this case was filed in regard to Eminent Domain Procedure Law (EDPL) Section 204, Gerges wrote that a different case, relating to another section of the law, should've been filed by October--and before the Appellate Division--not a trial court judge in condemnation court. He wrote:
Further, to the extent that respondents' argument can be construed as challenging the public use, benefit or purpose of the Project, this challenge is time barred in that the claims were not interposed in an EDPL 207 proceeding commenced in the Appellate Division with 30 days of September 17, 2009, the date the 2009 MGPP was affirmed...
In other words, even though an appeal in the previously-filed state eminent domain case was pending before the Court of Appeals, a separate proceeding should have been filed before the Appellate Division, the intermediate court that is the first stop for challenges to eminent domain findings.

Brinckerhoff commented that Gerges's statement "is based on the faulty premise that we could file a brand new Section 207 challenge based on the Modified GPP even though there were no new Section 204 findings, which is the trigger for the 30-day challenge period, and even though our 207 challenge was still pending before the Court of Appeals, and even though we raised these issues in that proceeding. With all respect to Justice Gerges, his analysis is erroneous."

Public purposes still hold

He continued:
As an alternative grounds for dismissing this affirmative defense as being without merit, it must also be recognized that the Second Circuit dismissed respondents' constitutional challenges to the 2006 D&F, as premised upon the 2006 MGPPP, and that the Court of Appeals dismissed their challenge as predicated upon state law. Inasmuch as the public purposes to be served by the Project have not changed, the holdings of the Second Circuit and the Court of Appeals preclude another challenge of the public use, purpose or benefit of the Project pursuant to the doctrines of res judicata [a matter already judged] and/or collateral estoppel [an issue already judged].
Project guaranteed?

What about the pending financial commitments to build the arena and railyard, which contain a gap?

The ESDC pointed to the master closing documents, which, as Gerges summarized, "contain firm commitments that FCRC will promptly commence construction of the Arena and will complete such construction within agreed upon time periods, and will commence and complete construction of a new rail yard for the MTA... Petitioner also explains that construction documents and significant security for the completion of the new rail yard for the MTA were provided at the Master Closing."

Gerges wrote that there's no requirement for a condemnor to include any statements guaranteeing financing and/or completion of a proposed project in its vesting petition.

Not the role for courts

Moreover, he noted that other courts considering challenges to eminent domain for AY disregarded similar contentions. He pointed to a federal appellate court's decision noting that, whether AY will accomplish its objectives is not the question, but rather the constitution requires that the state "rationally could have believed that the [taking] would promote its objective" (emphasis in Supreme Court's Hawaii Housing Authority v. Midkiff eminent domain case).

And he pointed the decision by U.S. District Judge Nicholas Garaufis, who said that it wasn’t the court’s role to examine whether the project will achieve the objectives stated, citing language in the Kelo case that notes that such a requirement “would unquestionably impose a significant impediment to the successful consummation of many such plans.”

Concerns discounted

Those resisting the condemnation pointed to the Independent Budget Office's finding that the arena would be a net loss to the city. And they noted changes in favor of the developer, such as faster payments of city and state cash, the changed MTA deal, a smaller project, and a deal contingent upon housing subsidies?

Beyond that, they pointed out, the master closing documents, not revealed until January 2010, give the developer six years to build the arena, 12 years to build Phase 1, 15 years to start construction of the platform, and 25 years to finish the project.

But to Gerges, the issue was moot, since the question of public use had already been declared to be off-limits.

In other words, Brinckerhoff got a "no" to his statement that "[t]he fact that they changed the project so much has to be considered by someone."

Pace of benefits and blight removal

Gerges summarized the ESDC's argument in response to concerns that the MTA agreement could mean a 22-year timetable to pay for the railyard:
Petitioner further argues that respondents' claim that the MTA agreement could allow FCRC to delay completion of the Project does nothing to diminish the validity of the D&F regarding the Project's public uses, since the benefits of the Project will be realized as the Project proceeds, i.e., blighted conditions in the area will be eliminated step-by-step, as substandard buildings are taken down and Project-related improvements are constructed in their place. It also notes that the many significant benefits afforded by the Arena, the LIRR yard and subway entrance will be provided at the earliest stages of Project construction and all the Project benefits will come to fruition at the point of Project completion. Whatever the pace may be for the delivery of the many public benefits of the Project, the nature of those benefits remains the same. Similarly, respondents' allegation that the MTA Agreement may induce FCRC to abandon the portion of the Project over the rail yard does not undermine the 2006 D&F, since the 2009 MGPP, like the 2006 MGPP, calls for the completion of the Project in its entirety. Moreover, the first-phase properties sought in the instant proceeding are to be developed in accordance with the 2009 MGPP, thus eliminating the substandard and insanitary conditions on the first-phase properties and providing significant civic facilities, irrespective of any hypothetical risk that future phases of the Project might not be completed.
(Emphases added)

As noted, Gerges didn't attempt to measure the benefits, since the issue was moot.

But the ESDC's contentions, accepted by Gerges, deserve some pause.

Blighted conditions may not be eliminated as "substandard buildings" are demolished, since vacant lots still constitute blight, as does the railyard.

And can't the pace for the delivery of public benefits ultimately change their nature? In other words, affordable housing delivered over a decade is far different than housing delivered over 30 years. Ditto for tax revenues.

Gerges Decision on Atlantic Yards condemnation 3-1-10


  1. We have arrived at a point where the following has been made clear:

    1. No court will review the actual plan for AYP.

    2. The state will sacrifice the public interest big time to benefit a private developer, and it is not held accountable.

    3. Eminent domain in NYS is lawless, ordinary citizens and condemnees are powerless, the courts have no interest.

    4. Most elected officials are not worth the trouble of moving a lever for.

    5. Dan Goldstein and company waged a heroic and inspiring battle against this corrupt process, for which we owe him thanks


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 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 …