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ESDC asks appellate court to deny full study of 25-year Atlantic Yards impacts (and alternatives); some judges skeptical, others wonder what harm it would do

It was a somewhat uphill battle yesterday for the Empire State Development Corporation (ESDC) and developer Forest City Ratner (FCR), asking a state appellate court panel to overturn a lower court’s order that the agency study the impact of a 25-year Atlantic Yards buildout, solicit public comment, and conduct a public hearing.

A couple of the five judges were clearly skeptical of the state, with one citing the ESDC's "obstinate adherence" to the long-professed ten-year buildout.

Others, taking in the objections from the defendants, questioned whether a Supplemental Environmental Impact Statement (SEIS)--which would analyze those extended impacts and even consider alternatives to Phase 2, since as revising the project to diminish impacts or welcoming new developers--would really cause any harm.

Then again, questions from the bench do not necessarily indicate how a court will rule after analyzing the legal papers.

Atlantic Yards was approved in 2006, with a ten-year buildout, then revised in 2009, as Forest City reopened settled deals with the ESDC (regarding the timing of condemnations) and the Metropolitan Transportation Authority (regarding the payment of railyard development rights and the configuration of a replacement railyard), in order to save money.

As part of the 2009 approval, as the defendants stressed, the state did analyze the impacts of 15-year buildout (in the 2009 Technical Memorandum). In response to a lower court ruling by Supreme Court Justice Marcy Friedman, the state produced a document (the 2010 Technical Analysis) arguing that a 25-year buildout would not create any impacts not previously disclosed.

But that document was inadequate, argued the lawyers for the petitioners, community coalitions led by Develop Don’t Destroy Brooklyn and BrooklynSpeaks.

At the heart of the 35-minute argument before the Appellate Division, First Department, in Manhattan was whether an intense buildout of the 17-building project over a decade would be worse than an extended, if less intense, buildout over 25 years. The state says yes, the petitioners say no.

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.

A decision is expected in about two months. An appeal is not automatic unless two of the five justices dissent.

(The Local, edited by ex-Brooklyn Paper editor Gersh Kuntzman, called it a "bombshell that "[t]he lawyers don’t know when Bruce Ratner’s Atlantic Yards project will be completed — if it will be completed at all." I think everyone, from Bruce Ratner on down, has acknowledged continuing uncertainty about the project timetable.)

SEIS happening, but order unwelcome

While fighting the lower court's decision to order an SEIS, the ESDC has nonetheless begun conducting one, with a $1.7 million budget, as a spokeswoman explained last September, "to ensure that the impacts to the surrounding community are minimized to the maximum practicable extent."

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, there may be no need to hold the public hearings associated with it (though attorneys for the petitioners said yesterday that they would).

So why have the state and FCR appealed, especially since a SEIS conducted by the ubiquitous environmental consultant AKRF would likely return results the ESDC wants?

Maybe it's precedent, maybe it's pride; they don't want to let stand Justice Friedman's series of decisions questioning the agency's transparency and candor.

And they also fear additional litigation that would cause further delays.

In the room

In the handsome courtroom at Madison Avenue and 26th Street, with elegant chandeliers, marble walls, rich wood fixtures, and wall paintings illustrating such concepts as "Justice," several veteran Atlantic Yards combatants were in the audience, in their respective clusters.

Among those backing the defendants were ESDC officials Arana Hankin, Rachel Shatz, and Robin Stout, and Forest City executive Jane Marshall. Among those backing the petitioners were Daniel Goldstein and Candace Carponter of DDDB, and Jo Anne Simon and Danae Oratowski of BrooklynSpeaks.

Opening flurry, and a questionable claim

No sooner did ESDC lawyer Philip Karmel begin his argument than he was interrupted by Justice Rolando Acosta.

“Can you explain what is the reason for your client’s obstinate adherence to this ten-year plan when evidence on the ground is different?” asked Acosta, pointing to the 2009 agreement Forest City signed with the Metropolitan Transportation Authority, allowing for 22 years to pay for development rights over the Vanderbilt Yard, casting doubt on the likelihood the project would be done in a decade.

“Yes, Your Honor,” replied Karmel, forced to dial back his usually hard-charging style. “We were not obstinately insistent on that schedule. What we did in 2006 was recognize considerable uncertainty....”

Justice Helen Freedman interjected to point out that the original EIS covered ten years.

“The original EIS recognized uncertainty in the construction schedule but identified ten years as a reasonable worst-case scenario” for the environmental review, asserted Karmel.

That sounded like a novel theory, since the Executive Summary of the Final EIS is pretty clear:
All construction is expected to be completed over a 10-year period; the number of construction activities would vary over time, and are divided, for purposes of the analysis, into two phases.
“The original EIS said there was uncertainty in the construction schedule,” Karmel repeated a few moments later. “There continues to be uncertainty.”

Practical impacts

What would be the practical impacts of doing an SEIS, asked Freedman.

The issue, said Karmel is whether new information would be developed that would determine that an extended construction schedule would identify new impacts--and ESDC has already done so.

Justice David Friedman pointed out that there were much less diminished penalties for Phase 2:

“There are significant penalties,” maintained Karmel, though that’s doubtful.

The “hard look”

Karmel tried to steer the argument back to his essential point: the issue is not whether the project timetable may have changed, it’s “whether ESD took a ‘hard look” at impacts, as required by state law.

“What is your empirical evidence," asked the skeptical Acosta, "to conclude that a buildout over a longer period of time results in less intense impacts?”

Karmel explained that the worst impacts would concentrate impacts like construction noise and traffic over a decade--and that they’d be attenuated if the project took 25 years.

“That sounds like a logical argument, but I’m not an expert,” Acosta followed up. “Did you do any empirical analysis?”

Karmel again pointed out that the agency looked at the duration of several impacts--though his adversaries contend that was not done in a holistic, cumulative way.

Practical impact

Friedman asked if the project would be delayed if the court does not overturn the decision, as requested by the state and FCR.

Karmel said no.

What about doing an SEIS, asked his colleague Freedman. What would be the cost?

“Certainly in excess of $1 million,” Karmel said.

Would there be any other consequences, asked Acosta.

“It introduces a degree of uncertainty about the project,” responded Karmel.

“Wouldn't it depend on the result?” chimed in Justice Angela Mazzarelli, the presiding justice.

Karmel indicated that it likely would prompt additional litigation.

Freedman asked about the Technical Analysis the ESDC conducted in 2010, in response to the lower court’s order.

“It’s a very high-quality analysis,” Karmel said, noting it was about 100 pages.

How big was the Final EIS?

Some 2000 pages, said Karmel, but it covered much more ground.

FCR case

After Karmel’s eleven minutes, Forest City Ratner attorney Jeffrey Braun took the podium. Braun can be bombastic, but in this case he was modulated, apparently having taken the temperature of the bench.

The lower court’s decision, he argued, can’t be reconciled with a case called Wilder, “one of several appellate decisions that have shown great skepticism about efforts to reopen environmental reviews.”

There have been no material changes in the physical components of the project, Braun said. The petitioners used business changes to force reconsideration of environmental impacts, he added.

Acosta queried him: doesn’t he think the increased time to obtain MTA air rights changes anything?

“I really don’t, Your Honor,” Braun replied.

Back to impacts

Friedman returned to the question of the impact of an SEIS.

A required SEIS, he said, would be “a distraction, it’s very expensive. It creates a cloud: ‘what’s the back end of the project?’”

Friedman countered the project has already been uncertain.

“There’s always an element of uncertainty,” Braun allowed, noting that case law does not require certainty by the state, just a “hard look.”

Petitioners’ case

As BrooklynSpeaks attorney Al Butzel, a wiry veteran of the Westway wars, took the podium, Friedman followed up: did ESDC take that required “hard look”?

No, replied Butzel in his low voice, citing the failure to analyze “long-term cumulative impacts of a construction process.”

Butzel cited affidavits from experts--derided by the opposition--about the impact of delays surrounding other projects in New York and Boston.

If construction continues, asked Mazzarelli, what would be the benefit of an SEIS?

“We expect that ESDC, properly directed by this court, will act in good faith” and mitigate the impacts of the rest of the project, Butzel said.

Freedman again pressed for details. It could identify new mitigation, Butzel repeated, or could find ways to accelerate construction.

“You're claiming they didn’t take a ‘hard look,’” Friedman asked.

“I certainly am,” Butzel responded. “They stuck to the ten-year schedule because they had financing coming up. If they agreed to do an SEIS, that opportunity might well have been lost.”

His point, as argued in legal papers: the state wanted to make sure the project was approved in 2009 to ensure the arena’s eligibility for tax-exempt bonds. An SEIS would have taken too long.

DDDB case

“There was no ‘hard look,’” added Butzel's co-counsel Jeff Baker, projecting at another level beyond Butzel. “There was a charade created.”

In 2009, he said, “on its own, Forest City Ratner decided to make a major change” in the project.

“But it’s not material, I heard them argue, to the environmental consequences,” responded Acosta.

“It was material enough for them to go through” the Urban Development Corporation (UDC) Act and produce the Technical Memorandum, Baker said.

Justice Sheila Abdus-Salaam asked Baker to again identify impacts not addressed if an SEIS were not granted.

“It’s multiple,” Baker said. “It goes under the rubric of community character.” He cited issues like noise and dust.

He reminded the court that the project was justified as eliminating the blight caused by the Vanderbilt Yard, but it was instead prolonging it.

Freedman asked about the remedies.

“The heart of an EIS is an alternatives analysis,” said Baker. He noted that the state had chosen a single developer but had never considered the consequences if FCR doesn’t have the wherewithal to go forward.

“Maybe it should be divided up,” he said.

It hearkened back to a claim parent company Forest City Enterprises made in November 2008, counting Atlantic Yards as among "Active Large Scale Projects Where We Control the Pace."

“They can’t get the benefit of misrepresentation,” Baker said in closing, referring to the discrepancy between the Development Agreement and the ten-year timetable.

In rebuttal

Karmel got a few minutes for rebuttal, but as he began to cite the 2009 Technical Memorandum, Freedman interrupted him twice, suggesting at one point, “Maybe the project should be changed.”

“We made a discretionary decision” that no more study was necessary, Karmel maintained.

“We already have taken a 'hard look' at neighborhood character,” he insisted.

Doesn’t a switch from ten to 25 years, asked Mazzarelli, have an impact on such things as neighborhood investment, whether people decide to buy or sell next to a project.

Karmel said the agency had proceeded thoroughly: “The type of issue that is being presented is not amenable to further analysis."

Acosta suggested that the 2006 FEIS and the 2010 Technical Analysis were “worlds apart.”

Karmel, a bit exasperated, replied, “We are not required to do an SEIS-level analysis to determine whether to prepare an SEIS.”

He acknowledged that impacts would be significant, but said the state agency had decided that a project of greater duration and less intensity would not be the worst case.

“That discretionary decision,” he declared in closing, “is entitled to deference by this court.”

Comments afterward

While the ESDC and FCR lawyers gathered across the street before dispersing, Butzel and Baker answered a few questions from reporters on the steps of the courthouse. (Video by Jonathan Barkey)

If they're obligated to do a Supplemental Environmental Impact Statement, Butzel said, they'd have to examine modular construction. "You'd probably see a very significant Supplemental EIS." (His statement that $4 million had been appropriated was in error.)

Baker noted that there was no opportunity for public comment on the 2010 Technical Analysis, while there would be such comments in the case of a SEIS.

Is the Wilder case different? Butzel said yes, as "people weren't arguing about the length of the construction... We have a much stronger argument: the elongation of construction itself has very significant impacts."

If the state does an SEIS, said Baker, and change Phase 2, then that should invalidate the parts of the Development Agreement regarding Phase 2.

FCR can't rely on the Development Agreement, he said, "because that agreement was premised on a n illegal analysis that predated it." Will there be a fight about that? "I'm sure there will be."

Are there time pressures to getting the SEIS done? No, said Baker, because the Development Agreement doesn't impost such pressure on Phase 2.

"Their time pressures, which they're having trouble meeting, is their deadlines under Phase 1," he said. "Are they going to get all the infrastructure in place before the arena opens in September? It doesn't look like it, or they're only doing it by increasing the impacts on people. Are they going to get the buildings built that they have to, by the various dates."

Forest City has until the middle of next year to get the first tower started.