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December 12, 2009
Atlantic Yards Takes the Court
The Indypendent
By Steven Wishnia
This article begins with a review of the ruling by the New York State Court of Appeals on the eminent domain case brought against the Empire State Development Corporation, tool of developer Bruce Ratner.
Chief Judge Jonathan Lippman, writing the majority opinion, rejected both of those claims. “It is indisputable that the removal of urban blight is a proper, and, indeed, constitutionally sanctioned, predicate for the exercise of the power of eminent domain,” he held.
The suit also questioned the Empire State Development Corporation’s designation of the area as blighted, “substandard and insanitary” — a prerequisite for its redevelopment to be considered a public purpose.
Judge Lippman had somewhat more sympathy for that claim. “It may be that the bar has now been set too low — that what will now pass as ‘blight,’ as that expression has come to be understood and used by political appointees to public corporations relying upon studies paid for by developers, should not be permitted to constitute a predicate for the invasion of property rights and the razing of homes and businesses,” he wrote.
But ultimately, he concluded, economic underdevelopment and stagnation could legitimately qualify as “blight.” Whether that could justify the use of eminent domain, he ruled, “is a matter for the Legislature, not the courts.”
In dissent, Judge Robert S. Smith wrote that building offices and apartments for a private developer to rent was not a public purpose, and that “blight” meant a danger to public health and safety, not that “property may be condemned and turned over to a private developer every time a state agency thinks that doing so would improve the neighborhood.”
The article then mentions a contradictory eminent domain ruling as well as moves to begin selling bonds for the proposed Nets arena.
The eminent domain issue may still be unresolved. On Dec. 3, the state’s mid-level court, the Appellate Division in Manhattan, ruled that Columbia University could not use eminent domain to claim property in West Harlem for its Manhattanville development. The court said the neighborhood was wrongly defined as blighted.
Forest City Ratner still has to sell bonds to finance the project by end of the year in order to keep its tax exemption for them. On Dec. 1, the two major credit-rating services listed $500 million in tax-exempt bonds for the proposed arena as “investment grade” — but just barely. Moody’s Investor Services rated them as Baa3 and Standard and Poor’s as BBB -. Both ratings — the same given to bonds for the new Yankee Stadium and the Mets’ Citi Field — are the lowest a bond can get without being considered junk.
Posted by steve at December 12, 2009 6:25 AM