Is Forest City's plan needed to develop Atlantic Yards site? ESD says yes, but also dodges issue

Is Forest City Ratner's plan needed to develop the rest of the Atlantic Yards site, notably the Phase 2 property east of Sixth Avenue?

Yes, suggests Empire State Development (ESD), the state authority overseeing/shepherding Atlantic Yards, in the Final Supplemental Environmental Impact Statement (Final SEIS) approved 6/12/14. The Final SEIS was supposed to look at alternatives, as well, and ESD says no alternate plan would work.

But in the Response to Comments chapter of the Final SEIS, ESD dodges the issue. The comment:

The assumption that “none of the benefits related to Phase II would be achieved in the Future Without Phase II” is not supported. The benefits in question are for the most part affordable housing and open space. They are possible due to the opportunity for market rate development on a project site which has already been cleared and is in a desirable, gentrifying neighborhood of Brooklyn. Based upon the market analysis presented in the DSEIS, it appears more likely that there would be demand for the site if the current developer left the project. That likelihood is borne out by the fact that the site contained several recent market rate developments prior to project approval that were later acquired by Forest City Ratner and demolished to make way for Atlantic Yards. If demand is high and getting higher, the DSEIS should explain why is it reasonable to assume there will be no development on the Phase II site without this particular project. Conversely, with the understanding that the land comprising Phase II would be very likely to be developed in a future without Atlantic Yards, the delay of the Atlantic Yards project becomes more impactful. The DSEIS should, as we requested in our comments last year, study what would have been likely to be developed on the site based upon what we know now about the Brooklyn real estate market, and consider the land use and socioeconomic consequences of Forest City Ratner effectively warehousing the site. (BrooklynSpeaks)
[The DSEIS makes the] faulty assumption that existing blight would have remained for 25 years without the project, despite the rapid and escalating pace of economic and real estate development in the area. (Brooklyn Speaks)

(Emphases added)

The response:

With few exceptions, all of the lots on the Phase II project site are owned by ESD and the Metropolitan Transportation Authority (MTA) or the project sponsors. Most of this area cannot be redeveloped without concerted and coordinated efforts by ESD and MTA, and thus analogies to privately owned land that is being developed elsewhere pursuant to existing zoning are not applicable to the Phase II site. In addition, much of the Phase II site is zoned for low-density manufacturing use and would have to be rezoned by the City if residential uses (including affordable housing) were to be built in the absence of an ESD-sponsored project. Finally, much of the property is made up of a below-grade rail yard, requiring extensive infrastructure and support prior to development.
The SEIS analyzes the build-out of this area with the Phase II development (With Action Scenario) against a baseline of no development (the No Action or No Build Scenario) because this analytical approach provides a conservative baseline for identifying the impacts of a delay in Phase II construction, as required by the Court Order. The approach suggested by the commenter—assuming substantial construction activities in both the With Action Scenario and No Action Scenario—would result in the potential for fewer and less intense environmental impacts of Phase II construction, because the Phase II construction activities would be measured against a background condition that also includes substantial construction. The approach suggested by the commenter would also under-disclose the environmental impacts of Phase II operation, because the operation of Phase II would be measured against a background condition that includes substantial development on the Phase II site.
Contrary to the suggestion of the commenter, the SEIS does not make any assumptions about what would have happened to the site if ESD, MTA and the project sponsors had not begun their planning efforts for the project site approximately 10 years ago. Speculation as to this counter-factual scenario is not required to analyze the potential delay in Phase II construction under SEQRA.

Looking deeper

Well, Chapter 3B: Construction Zoning and Public Policy of the Draft SEIS and Chapter 3B of the Final SEIS say the same thing:

However, none of the benefits related to Phase II would be achieved in the No Build condition (i.e., the Future Without Phase II).

The No Build condition may be a construct for the purpose of the environmental review, but it strikes me as exactly the counter-factual scenario noted in the response.

And while it surely would be challenging to change the zoning, put state-owned property on the market, and acquire privately-owned land from the project sponsors, it's surely not impossible. After all, the state helped the sponsor, Forest City, acquire land in the first place.