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May 1, 2008

Delays in $4 Billion Brooklyn Development Are Challenged in Tenants’ Lawsuit

The NY Times
By Andy Newman

The ever-lengthening timeline for completing the $4 billion Atlantic Yards project near Downtown Brooklyn is not just bad news for those who hoped to see the project’s basketball arena, office towers and apartment blocks completed quickly.

It is also, according to a lawsuit filed Wednesday, illegal.

The suit challenges an agreement between the project’s state sponsor, the Empire State Development Corporation, and the developer, Forest City Ratner, that gives Forest City at least 12 years to complete just the first phase of the project and an unspecified amount of time after that to build the second, final phase.

The agreement, the suit says, violates a provision in the state’s eminent-domain law, under which the state agency intends to seize private buildings on Forest City’s behalf. The law says a seized property must be offered back to its prior holder if it is not “materially improved” in 10 years.

Here's a curious bit of color commentary (especially for a news reporter):

But Mr. Ratner’s recently conceded difficulties — he has indefinitely delayed the project’s signature skyscraper, known as Miss Brooklyn — have energized his opponents, in a particularly bitter, told-you-so way.


NoLandGrab: Just because we told you so, doesn't mean we're bitter, but, naturally, those who take developer Bruce Ratner at his word (repeatedly) might be embarassed, or even defensive.

Atlantic Yards Report, ESDC’s long leash on Phase 1 provokes lawsuit from tenants

The willingness of the Empire State Development Corporation (ESDC) to give developer Forest City Ratner 12+ years to build Phase 1 of Atlantic Yards has provoked a lawsuit charging that the agency is violating a provision of the Eminent Domain Procedure Law that requires disposition of properties within a decade.

It also argues that, given the expected delay in the promised public benefits, ESDC must hold another public hearing.
[T]he suit contends, “New York Eminent Domain Procedure Law (“EDPL”), Article 4 section 406, requires a condemnor to materially improve property within 10 years from acquisition. After ten years, the condemnee has the right to reacquire the materially unimproved property."

So if FCR has more than a decade to build Phase 1 and can sell the property, that violates state law, Locker contends, though he acknowledged there’s no case law on the issue. “This is a case of first impression, based on a clear reading of the statute,” he acknowledged.

Associated Press, via NY Newsday, New lawsuit against Atlantic Yards focuses on its timeline

When "government bodies take votes and appropriate hundreds of millions of dollars of taxpayer money, which is in short supply, based on the promise of affordable housing and jobs, and it's not going to be built in the statutory 10 years, it's really a fraud on the public," said the tenants' lawyer, George Locker.

The lawsuit asks the court to invalidate any parts of the agreement that allow more than 10 years for the project's construction.

An Empire State Development Corp. spokeswoman declined to comment on the lawsuit. Forest City Ratner said more than $42 million in work is nearly done, and more than half the structures on the sprawling property have been torn down.

NoLandGrab: Forest City Ratner failed to add that $50 million has already been disbursed from the City to the developer. In light of that fact, we sincerely hope that the developer has done some sort of work already.

Posted by lumi at May 1, 2008 5:45 AM