A snag in Site 5: judge grants preliminary injunction stalling transfer; Forest City claims it delays "important public works project"

A state judge has thrown a wrench into the process in which Empire State Development would condemn property on Site 5, currently home to P.C. Richard and Modell's, for a giant tower, perhaps the largest in Brooklyn.

In return, Forest City Ratner, which signed a deal in 2006 to eventually take over the site, is fighting back, claiming the judge's action would "harm the public interest by delaying the completion of an important public works project."

Judge's order

It's hardly a "public works project," though the site would be condemned as part of a public private-partnership.

Dispute surfaces

As reported in January, P.C. Richard, which owns part of the site at the western end of the project footprint, has sued to block condemnation of the property, which is adjacent to a site owned by Forest City Ratner and occupied by Modell's. According to the suit filed by P.C. Richard parent A.J. Richard, a letter of intent (LOI) guarantees the electronics store would get comparable space in a new building at the project site. Forest City contends the LOI was nonbinding.

After a hearing on 2/18/16, Justice Martin Solomon granted the plaintiff's motion for a preliminary injunction, barring Forest City from taking any action, according to the defendant's summary:

 “(1) to convey or contract to convey any lease or other property interest in the Property . . . , (2) to impair [Forest City’s] ability to perform its [alleged obligations under the LOI], or (3) to deprive A.J. Richard of title or possession of the Property . . . .”

Fighting back

Because that would "impede Forest City’s ability to finalize plans for the development of the Property," Forest City has not only requested an expedited discovery schedule to resolve the case on the merits as quickly as possible, it has also appealed Solomon's decision to the Appellate Division of the Supreme Court of the State of New York, Second Department.

As noted in the document excerpted below, Forest City contends that Solomon disregarded "well-settled case law" because the LOI contemplated the preparation and negotiation of formal transaction documents, any harm to P.C. Richard can be compensated with money damages, and P.C. Richard's claim of irreparable harm is undermined  by "its 7-year delay in asserting its purported rights", and a balancing of the equities weighs against an the injunction, "which will impede Forest City's ability to finalize plans for the development... and harm the public interest by delaying the completion of an important public works project."

Forest City cites two other procedural reasons. Note that the site would be developed by Greenland Forest City Partners, but the joint venture is not part of the lawsuit as of now. Also note that the key documents in the case are under seal.

Document from Forest City indicating appeal