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December 17, 2009
Judge, deferring to MTA version of the case, dismisses lawsuit challenging revision of Vanderbilt Yard deal
Atlantic Yards Report
We already knew that private property in New York State is only "private" to the extent that somebody richer and more powerful than you doesn't have designs on it, but now it seems that it's okay for government bureaucrats to give the rich and powerful our public assets, too.
Norman Oder reports on yesterday's court decision.
State Supreme Court Justice Michael Stallman, in a ruling issued yesterday, dismissed the case. He wrote that not only did the plaintiffs--AY opponents Develop Don't Destroy Brooklyn, joined by four elected officials and the Straphangers Campaign--not have standing to challenge the alleged violation of the Public Authorities Accountability Act (PAAA), even with standing they couldn't make their case.
They charged that the PAAA, passed in 2005, requires an independent appraisal of the property and that a seller seek out competitive offers.
DDDB said it was considering an appeal and pointed to the MTA's willingness to leave $80 million on the table--money the agency asserts it will ultimately get--at a time of severe service cuts.
Stallman, in deferring to the MTA's version of the case, agreed that the limited response to the original 2005 RFP--only Extell responded along with Forest City Ratner--was due to "the unusual nature and scope of the project" rather than FCR's inside track.
Agreeing with the MTA
Stallman agreed with the MTA that the original plan and revised deal were essentially the same, subject to two modifications: the $100 million price would instead be $20 million down for the arena block, with the rest paid over 22 years, and the replacement railyard was value-engineered.
He also agreed that the process by which only two developers answered the RFP in 2005 was fair.
He left out the generous 6.5% interest rate granted Forest City Ratner and the extended time to operate a temporary railyard. He didn't comment on the rather surprising suggestion, by MTA CFO Garry Dellaverson, that FCR had the MTA over a barrel, rather than vice versa, given the developer's need to get the deal done in order to reap tax-exempt bonds by the end of the year.
Read on for more of Judge Stallman's rationalizations, including his ruling that the public has no standing to sue to stop the giving away of public assets.
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Additonal coverage...
The Brooklyn Blog [NY Post], Courts drop MTA Suit by Brooklyn arena opponents
A state judge today sided with the MTA in a lawsuit challenging a "sweetheart deal" it gave developer Bruce Ratner to bail out his controversial Atlantic Yards project that includes an NBA arena for Brooklyn.
The suit, filed by several lawmakers and other project opponents, sought to annul the Metropolitan Transportation Authority’s revised deal with Ratner in June that allows the developer to pay off $100 million he owes the agency over 22 years for the 8.5-acre Vanderbilt rail yard site in Prospect Heights and also shave off more than $100 million of the $345 million in transit improvements he had promised there.
It also alleged the cash-strapped agency violated the Public Authorities Accountability Act by failing to obtain an independent appraisal of the site or solicit competitive offers before agreeing to a new deal.
But Judge Michael Stallman in his decision wrote the petitioners didn’t prove the revised plan "gives the MTA less than the estimated market value" or that the MTA "did not attempt to obtain competitive offers."
Reason Hit & Run, Another Loss in the Atlantic Yards Fight
More bad news on the Atlantic Yards front. Today a New York court upheld the Metropolitan Transit Authority’s (MTA) controversial deal allowing Atlantic Yards developer Bruce Ratner to acquire a crucial 8-acre rail yard for just $20 million upfront and $80 million due over the next 22 years. Remember that the MTA first struck a deal with Ratner for the property back in 2005—but without first opening the land up to competitive bidding as state law requires.
Posted by eric at December 17, 2009 11:32 AM