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

Revisiting the 2006 Response to Comments: was private property taken for private gain, or public benefit?

Over several posts in an occasional series, I'll revisit various Response to Comments documents in separate environmental review or project approval processes, pointing out, with the asset of hindsight, unwise or unfounded assessments by either commenters or the Empire State Development Corporation (now called Empire State Development), the state authority overseeing and shepherding the project.

I previously wrote about the lack of institutionalized oversight and the wobbliness of project promises.


Project opponents and those facing displacement criticized a developer-initiated process:
ESDC has never solicited proposals from other developers. The project was initiated by [Forest City] Ratner and Ratner presented the project to ESDC. It was beyond a doubt that Ratner would be the primary beneficiary before the plans for the project were formulated or a substantial commitment of public funds was made. (468; representatives of several potential eminent domain plaintiffs)
This project did not originate from any government or ESDC inspired exercise to identify an area that is blighted, or that needed an arena for professional sports. This proposal germinated as a goal of FCR who envisioned the massive mixed-use development with an arena. FCR knew the plan far exceeded what would otherwise be permitted or even conceived of by New York City under existing laws and thus sought out the State to use its powers to override local wishes, procedures, and laws to effectuate its goals. This is a classic instance of using the constitutional power of a taking for a public purpose as a subterfuge for one private party taking another’s property for its own gain. (58; Develop Don't Destroy Brooklyn)
(emphases added)

The response:
Although Forest City initiated consideration of the proposed project, it was independently reviewed by ESDC, and ESDC determined that the economic, fiscal and other benefits justified proceeding with the public review processes. Many large land use projects are presented to ESDC in a similar fashion.
My comment: These comments were clearly aimed at establishing an argument in the future eminent domain challenge, on the notion that a developer-driven project would fall afoul of Justice Anthony Kennedy's (non-binding) concurrence.

Kennedy wrote:
A court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit, though with the presumption that the government’s actions were reasonable and intended to serve a public purpose. Here, the trial court conducted a careful and extensive inquiry into “whether, in fact, the development plan is of primary benefit to … the developer [i.e., Corcoran Jennison], and private businesses which may eventually locate in the plan area [e.g., Pfizer], and in that regard, only of incidental benefit to the city.” The trial court considered testimony from government officials and corporate officers; documentary evidence of communications between these parties; respondents’ awareness of New London’s depressed economic condition and evidence corroborating the validity of this concern; the substantial commitment of public funds by the State to the development project before most of the private beneficiaries were known; evidence that respondents reviewed a variety of development plans and chose a private developer from a group of applicants rather than picking out a particular transferee beforehand; and the fact that the other private beneficiaries of the project are still unknown because the office space proposed to be built has not yet been rented.
Not only was there no evidentiary hearing for the courts to later consider, Kennedy's dicta described a situation much not parallel to Atlantic Yards, given that public funds in New York would be committed after the main private beneficiary was known, and no evidence that ESDC chose Forest City from a group of applicants.

Purported benefits trumped process

Still, that had no sway with the courts, which focused on the notion that the benefits would not be incidental.

As I wrote in February 2008, the federal appellate court waved away the appellants’ argument that, unlike in Kelo, Atlantic Yards was proposed by the developer rather than the result of a response to an RFP. It stated: "However, here, New York long ago decided by statute not to restrict the ESDC’s mandate to those 'projects in which it is the prime mover.'"

That’s true, I noted, but the court didn't address Kennedy’s observation that Kelo was OK because “the substantial commitment of public funds by the State to the development project before most of the private beneficiaries were known” and “evidence that respondents reviewed a variety of development plans and chose a private developer from a group of applicants rather than picking out a particular transferee beforehand.”

What about the promises of ?economic, fiscal, and other benefits"? Given that the “objective basis” of the public use was not in doubt, the court said it shouldn't second-guess the state, even if the project may not achieve its intended goals, as long as ESDC rationally could have believed that eminent domain would lead to those goals.

That "rational basis" is a fairly low bar. And, as it turns out, Forest City, though significantly advantaged in the process, didn't benefit the way it though; it lost money. And ESDC's rational belief in public benefits might have been tested and vetted a lot more.

But others, including Nets owner Mikhail Prokhorov, certainly achieved significant private gain, thanks, indirectly, to all that government action. 

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