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September 29, 2008

Groundbreaking, 2008? Eminent domain case survives motion to dismiss; hearing no sooner than March

Atlantic Yards Report

The State of New York was denied a quick win by the courts and instead prolonged Forest City Ratner's timetable to clear the Atlantic Yards project of all legal encumberances:

The chances for anything more than a faux Atlantic Yards groundbreaking in 2008 have now plummeted, after an attempt by the Empire State Development Corporation (ESDC) to short-circuit the pending state eminent domain case has been denied by an appellate court. That means an oral argument would occur no sooner than March, with a decision some months after that.

The decision denying the ESDC's motion to dismiss, apparently on procedural grounds, doesn’t give the plaintiffs the edge in a long-shot case similar to the one that already failed in federal court, which was seen as more hospitable to such a challenge. But it does undermine the unrealistic timetable regularly promoted by developer Forest City Ratner and complicates the arena naming rights deal with Barclays Capital.

FCR has pledged multiple times that a groundbreaking would take place in November or December, notwithstanding the likelihood that pending legal cases and the unavailability so far of tax-exempt bonds would jeopardize the project.

FCR could still hold a groundbreaking on land it already owns, but it can’t raise funds to build the arena until the lawsuits are cleared. The pledge of a 2008 groundbreaking likely was keyed to the requirement that the $400 million Barclays deal requires arena financing to be closed by November--seemingly an impossibility now.

Norman Oder posted this analysis, followed by a thorough explanation of the court papers filed, on his blog.

Posted by lumi at September 29, 2008 5:26 AM