Skip to main content

Eminent domain valuation that accepted potential rezoning is upheld in appeals court

An important Atlantic Yards eminent domain valuation has just been validated by an appellate court. I wrote in May 2014 how a condemnation judge, in valuing and empty lot off Atlantic Avenue within the project footprint, denied the state's claim that there would have been no rezoning.

Kings County Supreme Court Justice Wayne Saitta agreed with the property owner's argument that the site, without the project, could have become a 12-story hotel, concluding, "Most probably, the entire M1-1 [one-story manufacturing] district in the Atlantic Yards footprint would have been upzoned."

Why is this important? Because Empire State Development Corporation (aka Empire State Development, or ESD), in the 2006 Atlantic Yards environmental review, claimed the project site would not "experience substantial change in the future without the proposed project... due to the existence of the open rail yard and the low-density industrial zoning regulations."

When the very reasonable possibility of a rezoning was raised, the state authority stonewalled, claiming, "While the City, if it desired, could rezone the project site, it has not."

The original case

730 Equity Corp. v New York State Urban Dev. Corp. involved an empty lot on Block 1120, Lot 35, at 730-740 Atlantic Avenue just west of Carlton Avenue. It juts into the below-grade Vanderbilt Yard.


Following that conclusion, Saitta rejected the state's claim that the property was barely worth $2 million as a gas station, and instead valued it at nearly $9.2 million, far less than the $20.6 million that the owner sought but still a major gain.

As I wrote, the developer, which pays for the land, likely still got a good deal, since the property will later be part of a plot for a 460-foot tower with 733,810 square feet, six larger in bulk than the hotel

The appeal

In a recently released appellate decision, judges unanimously rejected the appeal by ESD, the state authority overseeing/shepherding the project, including condemnation. (The state's lawyers were from Berger & Webb; the property owner's from Goldstein, Rikon, Rikon & Houghton.)

The decision notes more details about the valuation:
The court made certain adjustments to the claimant's appraisal, including the deduction of $2,792,576 in extraordinary costs related to a need to excavate and replace unsuitable soils and the costs of LIRR approvals and monitoring, on which ESDC had provided expert evidence. The Supreme Court determined that just compensation for the taking of the property was $9,186,000. Judgment was entered in favor of the claimant and against ESDC in the principal sum of $6,906,000, representing the valuation of the property less an advance payment of $2,280,000. 
While courts typically are limited to assessing the uses permitted by current zoning, the judges said, "when there is a reasonable probability of rezoning, some adjustment must be made to the value of the property to reflect that fact."

The trial court "properly determined" that reasonable probability of rezoning, the appellate judges wrote:
 Contrary to ESDC's contention, the court's failure to delineate the exact boundaries of a probable rezoning did not undermine its finding that the property would probably [*2]have been rezoned absent the project. The court's findings that many of the buildings in the immediate area had been converted to commercial and residential use, that New York City policy was to rezone underutilized industrial sites to allow for commercial or residential development, and that a zoning district with a FAR of 6 would be in scale to this portion of Atlantic Avenue were supported by the record.
The court properly distinguished the Atlantic Avenue corridor from lots on the more narrow Pacific Street, which are more functionally part of Prospect Heights than the subject property. 
The judges also rejected the claimant's effort to stop the trial court's "deduction of extraordinary costs to account for excavation and replacement of unsuitable soils, with related excavation protection, underpinning and pile foundation, and LIRR costs."

Comments

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…

No, security guards can't ban photos. Questions remain about visibility of ID/sticker system.

The bi-monthly Atlantic Yards/Pacific Park Community Update meeting June 14, held at 55 Hanson Place, addressed multiple issues, including delays in the project, a new detente with project neighbors,concerns about traffic congestion, upcoming sewer work and demolitions, and an explanation of how high winds caused debris to fly off the under-construction 38 Sixth Avenue building. I'll have more coverage.
Security issues came up several times at the meeting.
Wayne Bailey, a resident who regularly takes photos and videos (that I often use) of construction/operations issues that impact residents, asked representatives of Tishman Construction if the security guard at the sites they're building works for them.
After Tishman Senior VP Eric Reid said yes, Bailey asked why a guard told him not to shoot video of the site, even though he was on a public street.

"I will address it with principals for that security firm," Reid said.
Forest City Ratner executive Ashley Cotton, the …

Atlantic Yards/Pacific Park graphic: what's built/what might be coming + FAQ (post-dated pinned post)

This graphic, posted in January 2018, is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. Note the unbuilt B1 and the proposed shift in bulk to the unbuilt Site 5.

The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change. The project is already well behind that tentative timetable.

How many people are expected?

Atlantic Yards/Pacific Park has a projected 6,430 apartments housing 2.1 persons per unit (as per Chapter 4 of the 2006 Final Environmental Impact Statement), which would mean 13,503 new residents, with 1,890 among them in low-income affordable rentals, and 2,835 in moderate- and middle-income affordable rentals.

That leaves 8,778 people in market-rate rentals and condos, though let's call it 8,358 after subtracting 420 who may live in 200 promised below-market condos. So that's 5,145 in below-market units, though many of them won't be so cheap.

As …

The passing of David Sheets, Dean Street renter, former Freddy's bartender, eminent domain plaintiff, and singular personality

David Sheets, longtime Dean Street renter, Freddy's bartender, eminent domain plaintiff, and singular personality, died 1/17/18 in HCA Greenview Hospital in Bowling Green, KY. He was 56.

There are obituary notices in the Bowling Green Daily News and the Wichita Eagle, which state:
He was born in Wichita, KS where he attended public Schools and Wichita State University. He lived for many years in Brooklyn, NY, and was employed as a legal assistant. David's hobby was cartography and had an avid interest in Mass Transit Systems of the world. David was predeceased by his father, Kenneth E. Sheets. He is survived by his mother, Wilma Smith, step-brother, Billy Ray Smith and his wife, Jane all of Bowling Green; step-sister, Ellen Smith Alexander and her husband, Jerry of Bella Vista, AR; several cousins and step-nieces and step-nephews also survive. Memorial Services will be on Monday, January 22, 2018 at 1:00 pm with visitation from 10:00 am to 1:00 pm Monday at Johnson-Vaughn-Phe…

Some skepticism on Belmont hockey deal: lease value seems far below Aqueduct racino; unclear (but large?) cost for LIRR service

As I wrote for The Bridge 12/20/1, The Islanders Say Bye to Brooklyn, But Where Next?, the press conference announcing a new arena at Belmont Park for the New York Islanders was "long on pomp... but short on specifics."

Notably, a lease valued at $40 million "upfront to lease up to 43 acres over 49 years... seems like a good deal on rent for the state-controlled property." Also, the Long Island Rail Road will expand service to Belmont.

That indicates public support for an arena widely described as "privately financed," but how much? We don't know yet, but some more details--or at least questions--have emerged.

An Aqueduct comparable?

Well, we don't know what the other bid was, and there aren't exactly parcels that large offering direct comparables.

But consider: Genting New York LLC in September 2010 was granted a franchise to operate a video lottery terminal under a 30 year lease on 67 acres at Aqueduct Park (as noted by Gov. Andrew Cuomo).

As…

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 Matzav.com 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…