Thursday, December 03, 2009

Appellate Division overturns ESDC's use of eminent domain for Columbia expansion; how different is it from AY?

From the plurality majority opinion in the Appellate Division's 3-2 overturning of the Empire State Development Corporation's (ESDC) planned use of eminent domain for the Columbia University expansion:
It is recognized that Kelo, as described below, did not concern an area characterized as "blighted." However, the blight designation in the instant case is mere sophistry. It was utilized by ESDC years after the scheme was hatched to justify the employment of eminent domain but this project has always primarily concerned a massive capital project for Columbia. Indeed, it is nothing more than economic redevelopment wearing a different face.
So too did the Atlantic Yards petitioners argue that blight was a pretext because it wasn't mentioned as a justification for the project for more than a year after it was announced--an issue ignored by the majority in the Court of Appeals decision last week.

Underutilization

Wrote Justice James Catterson (who also filed a fiery concurrence in the case challenging the AY environmental review):
The most egregious conclusion offered in support of the finding of blight is that of underutilization. AKRF and Earth Tech allege the existence of blight from, inter alia, the degree of utilization, or percentage of maximum permitted floor area ratio ("FAR") to which lots are built. The theoretical justification for using the degree of utilization of development rights as an indicator of blight is the inference that it reflects owners' inability to make profitable use of full development rights due to lack of demand. Lack of demand can only be determined in relation to the FAR when combined with the zoning for the area in question. Manhattanville, for the relevant period, was zoned to allow maximum FAR of two, leaving owners essentially with a choice between a one or two-story structure. No rationale was presented by the respondents for the wholly arbitrary standard of counting any lot built to 60% or less of maximum FAR as constituting a blighted condition.
This is the exact same ratio used in the Atlantic Yards Blight Study.

Here was my coverage of the oral argument, where plaintiffs' attorney Norman Siegel seemed to have gained ground.

All eminent domain cases start in the Appellate Division. The two combined cases are known as In re Parminder Kaur, et al., vs. New York State Urban Development Corporation and In re Tuck-It-Away, Inc., vs. New York State Urban Development Corporation. Tuck-It-Away is owned by Nick Sprayregen.

Appeal coming, ESDC response

The decision, given its divided nature and the Court of Appeals decision last week in the AY case, will be appealed.

The ESDC issued a statement:
ESDC believes the decision of the Appellate Division, First Department in the matter of the Columbia University Manhattanville Campus to be wrong and inconsistent with established law, as consistently articulated by the New York State Court of Appeals, most recently with respect to ESDC's Atlantic Yards project. ESDC intends to appeal this decision.
The dissent

Justice Peter Tom's dissent drew on two cases involving AY, the first involving the environmental review, the second involving the eminent domain case:
Petitioners present merely "a difference of opinion" with the conclusions to be drawn from this evidence, in which event the courts are bound to defer to the agency (Matter of Develop Don't Destroy (Brooklyn) v Urban Dev. Corp.).

As the Court of Appeals recently stated:
"It is quite possible to differ with ESDC's findings that the blocks in question are affected by numerous conditions indicative of blight, but any such difference would not, on this record, in which the bases for the agency findings have been extensively documented photographically and otherwise on a lot-by-lot basis, amount to more than another reasonable view of the matter; such a difference could not, consonant with what we have recognized to be the structural limitations upon our review of what is essentially a legislative prerogative, furnish a ground to afford petitioners relief" (Goldstein v New York State Urban Dev. Corp.)
Catterson chose not to address these Atlantic Yards cases, an issue that surely will be raised in the ESDC's appeal.

An AY comparison


From the majority opinion:
In support, the petitioners note that AKRF, the consultant for this Project, as well as the Atlantic Yards project, used different standards for determining blight. For example, the petitioners noted that in the Atlantic Yards study, AKRF considered buildings that are at least 50% vacant to exhibit blight, whereas in this Project AKRF considered a vacancy rate of 25% or more to be substandard. We agree with the petitioners' contentions and find that the statute is unconstitutional as applied.

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