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Appeals court argument Tuesday: should state have systematically examined impact of 25-year Atlantic Yards buildout? Is another public hearing needed?

In an argument tomorrow afternoon lasting no longer than 30 minutes, lawyers for the Empire State Development Corporation (ESDC) and developer Forest City Ratner will argue to a state appellate court that a trial judge overstepped her boundaries in ordering the agency to systematically examine the environmental impacts of a 25-year project and to reassess the second phase of Atlantic Yards.

In turn, lawyers for two community coalitions, led by Develop Don't Destroy Brooklyn and BrooklynSpeaks, will argue that the decision by Justice Marcy Friedman--which came after a skein of rulings--should be upheld, and a public hearing must be held. (Legal papers are here.)

The case will be heard during the 2 pm session Tuesday at the Appellate Division, First Department, at 27 Madison Avenue in Manhattan.  Given that this appeal argument is eighth on the calendar, it may not be heard until 3:30 or later, though those attending probably should get there by 3 pm.

The legal dispute does not affect the building of the arena, nor the towers around it, but does address plans for and impacts of Phase Two of the project: the eleven towers east of Sixth Avenue, including those to be built on a platform over the Vanderbilt Yard.

On a broader note, the case, addresses whether the state agency essentially cheated to ensure that Atlantic Yards would move forward--and whether judges, who generally defer to state agencies if they display a mere "rational" basis for their decisions, are willing to more aggressively protect the public interest.

How bad is extended construction?

One big question is whether it is worse for neighbors to experience extended, if intermittent, construction or, as the state contends, a more concentrated ten-year buildout.

DDDB and BrooklynSpeaks criticize the latter position:
The Appellants argue that the “intensity” of construction impacts at a particular point in time is a more appropriate measure of worst case impacts than the duration of the impacts. But there is nothing in the record to support this position or the asserted choice, which clearly was made only in response to the Petitioners drawing attention to the CEQR Technical Manual directives.
In the final round of legal papers, Forest City Ratner, however, says the courts should stay out of it:
ESDC’s determination as to what represented a  reasonable worst-case scenario is entitled to deference and “must be viewed in light of a ‘rule of reason.'"
The history

The case was initially argued 1/19/10 and decided 3/10/10 (a day before the arena groundbreaking). In that decision, Friedman criticized the ESDC’s “deplorable lack of transparency” and acknowledged that the ESDC’s use of a ten-year timeframe for the project buildout in the Modified General Project Plan (MGPP) was supported “only minimally.”

In that case, the main ammunition against the decade-long promise was an agreement with the MTA that allows 22 years to pay for Vanderbilt Yard development rights.

However, there was much more reason for skepticism. The Development Agreement, signed in late December 2009, was not released until January 25, after oral argument in the case.

Friedman did not allow it to be entered into the record for the case. It showed a clear contradiction with the professed time frame. So, both sets of petitioners asked Friedman to reopen the case, which she did, acknowledging a misapprehension--though not quite a mistake on her part--about the Development Agreement.

In November 2010, Friedman remanded the proceedings "to ESDC for findings on the impact of the Development Agreement and of the renegotiated MTA agreement on its continued use of a 10 year build-out for the Project, and on whether a Supplemental Environmental Impact Statement (SEIS) is required or warranted."

The ESDC responded by issuing findings that said no such SEIS was needed. Friedman, after hearing oral arguments on 3/15/11, issued her ruling 7/13/11.

The court ordered ESDC to prepare an SEIS “assessing the environmental impacts of delay in Phase II construction of the Project” and make “further findings on whether to approve the MGPP [Modified General Project Plan] for Phase II of the Project.”

Friedman wrote that the ESDC's Technical Analysis does not provide technical studies of the effects of "significantly prolonged construction" but "appears to take the position that it is a matter of common sense that less intense construction will result in lower impacts for conditions such as traffic, noise, and air quality. "

Last September, an appeal was announced. I wrote last month about the ESDC/FCR briefs and then about the DDDB/BrooklynSpeaks response.

SEIS is happening

While fighting Friedman's decision to order an SEIS, the ESDC is nonetheless conducting one, as a spokeswoman explained last September, "to ensure that the impacts to the surrounding community are minimized to the maximum practicable extent."

Or, perhaps, the agency is hedging its bets; if the appellate court does not overturn the lower court's decision, at least an SEIS will be in place.

And if the decision is overturned, then there will be no need to hold the public hearings associated with an SEIS or to reexamine the MGPP.

Was ESDC arbitrary and capricious?

The ESDC says there are two fundamental issues. Were the ESDC Directors were arbitrary and capricious in determining not to prepare an SEIS when they re-approved the project in September 2009 and, after Friedman ordered a Technical Analysis, in December 2010. Did the agency take the required “hard look” at new environmental impacts not previously disclosed?

The ESDC says no, arguing that the petitioners "do not address this bottomline question until the last eight pages of their 64-page brief, and even then they do not identify errors in ESDC’s environmental review."

Nor, says ESDC, "do Petitioners identify in concrete terms what new environmental analysis an SEIS for Phase II of the Project should include that is not already contained in the completed in 10 years."

I suspect the phrase in concrete terms will be in dispute.

The alleged cover-up

The ESDC asserts that the petitioners allege a “cover up” to “suppress” disclosure of the 25-year outside date for construction, but says the "conspiracy theory falls apart upon a review of the record."

The issue is murky. Yes, the 2009 Modified General Project Plan looked at a delayed schedule, but not a 25-year one, just a 15-year one.

And while Project Lease Abstracts that indicated 25-year terms for project parcels were included in documents placed before the ESDC board, there was also the claim that documents to be negotiated later--the Development Agreement--would require "commercially reasonable" efforts to get the project done in ten years. And the penalties are very gentle.

The “reasonable worst case”?

It was, according to ESDC also reasonable for ESDC to focus much of its attention on a 10-year build-out, since the FEIS, found that timetable to be the “reasonable worst case” for assessing those impacts.

ESDC slams the allegation that ESDC “never considered … whether the longer build-out would be the reasonable worst case for the purpose of assessing construction impacts,” noting it had concluded that concentrated construction activities would be most painful.

That goes to the question, as argued in the petitioners' brief, whether it was appropriate for ESDC to conclude that "intensity" of impacts is a better way to measure the worst case than the duration of those impacts.

Was the work enough?

The ESDC states that it covered its bases:
Thus, the asserted “eerie resemblance” between this case and the “Westway debacle” does not exist. The delayed build-out analyses in the 2009 Technical Memorandum and 2010 Technical Analysis, along with the multiple disclosures discussed above, make clear that there was no “cover up” of either the outside dates for Project completion or the potential for construction to extend beyond 10 years. Petitioners’ inflammatory accusations are little more than a recycling of their motion before the lower court for sanctions, which the court denied in a short-form Order entered July 14, 2011. They should not distract the Court from the real issue: whether ESDC’s environmental analysis – presented in the 2009 Technical Memorandum and 2010 Technical Analysis, and informed by the FEIS and the comprehensive mitigation measures previously imposed – provided a rational basis not to prepare an SEIS.
It adds:
Petitioners may disagree with ESDC’s conclusions regarding such impacts, but a difference in opinion is no basis for overturning ESDC’s determination that no SEIS is required. Nor is ESDC required to undertake its environmental analysis using Petitioners’ preferred methods, as the lead agency has “considerable latitude in evaluating environmental effects.”
What about the 2010 Technical Analysis?

The petitioners had said the 2010 Technical Analysis “could not cure the failure of the ESDC Board to have had such an evaluation before it at the time it approved the MGPP” in 2009. However, according to the ESDC, it "was a critical component of the enlarged record upon which the Directors made the December 2010 findings required by the Remand Order."

And if that determination is upheld, then any challenge to the ESDC's decisionmaking in 2009 is moot, because the agency had cured any potential defects by doing the study it was asked to do.

Can prolonged construction work?

The brief takes aim at affidavits filed by the petitioners' experts, academic Ron Shiffman and policy analyst James Goldstein:
Moreover, while Petitioners’ experts may suggest otherwise, many multi-building projects with prolonged construction periods – including Battery Park City and ESDC’s 42nd Street redevelopment project (the subject of Jackson and Wilder v. N.Y.S. Urb. Dev. Corp.) – have been resounding successes, even during the lengthy period in which they have been under construction. There is nothing in their affidavits to indicate that the projects they discuss were to be developed like the Project at issue here – on a parcel-by-parcel basis with each building separately financed and constructed and with a comprehensive construction mitigation program in place. Thus, they provide no reason to conclude that the experience in this case would resemble the situations they describe.
Then again, neither of the projects mentioned above were nestled adjacent to a residential neighborhood like Prospect Heights.

Response to specifics

ESDC says the petitioners' claims of issues neglected are insufficient to carry the case, since judicial review "requires application of the 'rule of reason,'" a study within limits.

One issue is whether the ESDC studied the long-term cumulative impacts "on the health of the surrounding neighborhood." The ESDC says it did so, under the heading of "neighborhood character," a synthesis of impacts, noting that "construction would have localized neighborhood character impacts in the immediate vicinity of the Project site, but that the adverse impacts would not affect the character of the larger surrounding neighborhoods."

The petitioners suggest there are broader elements, such as the willingness of residents to stay in the face of extended construction, or to make improvements or renovations. And they note there's no analysis that supports the conclusion, citing studies regarding the cumulative impacts of long-term construction on adjoining neighborhoods.

While petitioners said the state didn't look sufficiently at delays in open space, ESDC notes that it would "be made available to the public incrementally as Project buildings are constructed," and if there's a delay in construction, that means "the Project-generated incremental demand for open space resources will also be deferred."

However, the open space was also offered as a public amenity for the area at large.

As for the parking lot, the pedestrian and vehicular traffic  "would be less than that anticipated in the FEIS upon Project completion, because the surface parking lot on Block 1129 is limited to 1100 parking spaces, while the below-grade facility that will be in place upon Project completion will have 2070 parking spaces." The noise impacts were not studied, according to the petitioners, but "[t]he record establishes that stackers do not generate significant noise."

There will be traffic noise, ESDC admits, and now we know that Forest City is worried, too. What's unclear, however, is whether the noise mitigation--double-paned windows and air conditioners--is sufficient. People do want to go outside.

Beyond that, ESDC says, it did look at a delay in underground parking, and any concern about the impact of multiple events in one day affect Phase 1 of the project, the arena opening, not Phase 2.

FCR brief

FCR's lawyers state:
Petitioners have not refuted FCRC’s showing that the motion court’s determination improperly expands the scope of SEQRA by using the approval of minor changes to the Project to require a supplemental EIS that examines the impact of changes in economic conditions. Similarly, petitioners have not refuted the showing by both FCRC and ESDC that ESDC took the required “hard look” at the environmental impacts of the 2009 MGPP and made reasoned elaborations of its decision not to prepare a supplemental EIS – first, in the 2009 Technical Memorandum and then, after remand, in the 2010 Technical Analysis, which thoroughly considered the potential environmental impacts of an attenuated 25-year construction schedule for the Project, and thus cured the alleged deficiency in the 2009 Technical Memorandum. Significantly, petitioners’ opposition brief is devoid of any suggestion of what sorts of studies supposedly were omitted from the 2010 Technical Analysis...
FCR argues that the court erroneously required "the reexamination of a previously approved project on the basis of what are really global economic conditions."

As for expert affidavits about the impact of extended construction, from Shiffman and Goldstein, both "consist for the most part of anecdotal assertions about other projects that have no bearing on whether the environmental analysis of potential construction impacts for this Project was adequate."

Even if they have a point, say FCR attorneys, courts are not supposed to resolve disputes between experts.

Moreover, it's improper to criticize ESDC for having no indication that the 2010 Technical Analysis was prepared by experts, because it was prepared by the agency with the "preeminent" environmental consulting firm in the city, AKRF.

The Development Agreement

FCR says the Development Agreement should not be key:
The document did not exist when the 2009 MGPP was finally approved. Furthermore, it is unprecedented for a court to use business contracts completed after the conclusion of an environmental review to impeach the build-year that was used for the environmental review. Petitioners are unable to cite a single other case where this was done, but conclusorily assert that the failure to consider subsequently concluded business contracts “would sanction fraud and lack of disclosure.” This assertion is false. Business agreements governing a development project, such as agreements for construction financing, construction contracts and leases with major tenants, typically are not finalized – and cannot be finalized – until the parameters of the project have been fixed in a regulatory approval process that will include an environmental review if required by SEQRA... Here, moreover, petitioners nowhere address the significance of – and the motion court’s unwarranted denigration of – FCRC’s obligation under the Development Agreement to use “commercially reasonable efforts” to complete the Project by 2019.


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