Saturday, August 07, 2010

AY timetable is "complete, utter fantasy," says attorney in case challenging eminent domain findings; will case record include Development Agreement?

The Atlantic Yards Development Agreement "was intentionally withheld in bad faith."

"We now know [the ten-year project timetable] is complete, utter fantasy," declared petitioners' attorney Matthew Brinckerhoff .

Finally, in court yesterday, some serious charges were lodged about the essence of the Atlantic Yards project, part of the case challenging the Empire State Development Corporation's (ESDC) eminent domain Determination & Findings (D&F), based on the premise that the project had changed so much that the ESDC had to reassess its goals and value.

And previous court cases, limited to the record of Atlantic Yards as of 2006, were unable to examine the true nature of the project.

Whether Brinckerhoff's arguments get anywhere is another question.

The start of the case certainly wasn't auspicious. After all, the two Atlantic Yards cases were set for 9:30 am, but state Supreme Court Justice Abraham Gerges didn’t arrive until 10:10. Then the first case, involving the easement held (and still claimed) by Peter Williams Enterprises (PWE), got about 35 minutes.

(There were a handful of AY opponents in the room, as well as additional lawyers for the defense.)

Then, as Brinckerhoff (who's also led the Atlantic Yards eminent case) began his case, Gerges seemed ready to dismiss it completely. And when Brinckerhoff got up some steam, Gerges seemed distracted, periodically consulting a clerk, apparently about another case that was imminent.

But Brinckerhoff did get a chance to (partially) make his points, notably that the ESDC's ten-year timetable was undermined by the belated and dishonest release of the Development Agreement. And the case was continued until next Tuesday, August 10, at 10 am, for further argument.

Leading off

Brinckerhoff started at a disadvantage. After all, the arguments in this case mirror those in Gerges already rejected in March when facing a direct challenge from property owners to the condemnations.

“Can you tell me, briefly, what is different than in the original decision?” Gerges asked Brinckerhoff.

Brinckerhoff paused, slightly flummoxed. “Well, I think I will—I’m trying to figure out the most efficient way… The nature of the two proceedings are completely and utterly different.”

Gerges asked if his earlier ruling was dispositive.

"It could not and is not," said Brinckerhoff. “It is related, but it is a separate proceeding.”

If Gerges is concerned about collateral estoppel—the legal doctrine which binds parties to a previous ruling--that would only bind two of the three plaintiffs, two companies controlled by Henry Weinstein, Brinckerhoff noted. A house owned by the Gelin Group on Dean Street east of Sixth Avenue has not yet been condemned and was not part of the earlier case.

(Three original plaintiffs--property owners Daniel Goldstein and Peter Williams Enterprises, and leaseholder Freddy's Bar & Backroom--left the case as a consequence of settling their eminent domain claims.)

ESDC argument

ESDC attorney Philip Karmel got up.

“Is everything in the papers?” asked Gerges.

“I think the answer is yes,” responded Karmel, in his booming, somewhat grating voice. He referenced Gerges’s earlier decision and said the petitioners’ arguments in this case were the same as in the previous case.

“On pages 40 and 41, you found that the public purposes of this project have not changed, and that really is the essence of this case,” Karmel declared.

“It still has 17 buildings, with the same site plan in 2010,” he said. The General Project Plans from 2006 and 2009 “are virtually identical,” he suggested, with the major difference the change from a one-phase condemnation to a multi-phase procedure.

A case known as Leichter, Karmel said, is dispositive, as courts determined that a change to a multi-phase plan does not require a new Determination & Findings.

Atlantic Yards, he added, was approved as a Land Use Improvement Project, for blight removal, and a Civic Project, to create an arena and other facilities. “All those elements are still part of the project.”

Beyond that, Karmel pointed out, “On pages 54 to 56 of Your Honor’s opinion, you describe that a degree of uncertainty is not a basis to oppose condemnation. Their argument that there’s an issue of how quickly this project will be built—you’ve already decided that.”

The Development Agreement

"Anything else?" asked Gerges, clearly ready to move on to his next case, as he began to consult briefly with his clerk.

Brinckerhoff indicated there was. “I cross-motioned for leave to amend the petition,” he said, noting it was filed on January 19, as required to be within the statute of limitations.

One of the most important and material pieces of evidence is not in the petition," Brinckerhoff said, gathering steam, his tone and body language gaining more righteousness. "It was intentionally withheld in bad faith."

(The Development Agreement was not released until after oral argument in another case challenging the legitimacy of the ten-year buildout, though it was considered in June by state Supreme Court Justice Marcy Friedman as she heard a reargument of the case.)

"What was promised in 2006 as a project to be completed in ten years," Brinckerhoff said, "is at least a 25-year project. There is no guarantee that we will see anything more than a basketball arena and acres and acres of parking."

Well, the Development Agreement gives Forest City Ratner 25 years to build the entire project, but there are specific timetable-related penalties for each of the first three towers, the third of which must be started in ten years. And, as disputed in the case before Friedman, the ESDC says general penalties of $1000 to $10,000 per day can be invoked if the project is not built as promised.

The ESDC, declared Brinckerhoff, had consistently urged courts to consider only the record as of 2006, and the state Court of Appeals, in upholding eminent domain for Atlantic Yards last year, agreed to do so.

Gerges seemed distracted. "Can you start bringing the defendant [in the next case] in?" he asked his clerk.

The need for an amended petition

Brinckerhoff continued, trying to offer an example. If, after the issuance of the D&F, the ESDC announced the project--

"What are you requesting?" Gerges asked."Leave to amend my petition," Brinckerhoff responded.

"Why didn't you make that application in Manhattan?" Gerges asked, indicating the court where the case was first filed.

Brinckerhoff said he did, but the ESDC "decided they like the venue here better," and Friedman moved the case to Brooklyn without considering the request for an amendment.

"We have not been heard on any of this," declared Brinckerhoff, clearly frustrated.

"All this is in your papers?" asked Gerges, a bit placatingly.

Some of it is," responded Brinckerhoff, explaining that he wanted to be able to add "highly negative" information.

"I beg the court's indulgence" to continue, he said.

"Is this in your papers?" Gerges asked again.

"Some is, much is not," responded Brinckerhoff.

"Go right ahead," Gerges said indulgently. "Say whatever you want."

The fundamental argument

If the ESDC had abandoned the project, Brinckerhoff said, everyone agrees that the agency would have to file a new D&F. "Our argument here is that is exactly what has happened."

The case was premised on the remediation and alleviation of blight over a ten-year project buildout. "We now know that's complete, utter fantasy," he said.

"No court has allowed us to present the evidence," he said, gesturing energetically with his left hand. At the minimum, he said, the ESDC should be required to answer the petition.

The agency, he said, "will have to admit" that the original plan was based on an expanded and modernized railyard, not a smaller one.

It was based on a city contribution of $100 million, but $105 million was added later. (The exact amount remains in dispute.)

"They claimed there were going to create a total of 2250 units of affordable housing," he said, but it had not been known that those units are dependent on full subsidies. (The ESDC has said that was always implied.)

"Multiple courts have deferred to the agency," Brinckerhoff said, "and said this project barely passes muster." Those were the opinions, in the main, of judges who dissented or concurred, though Friedman essentially said so in her decision regarding the ten-year timetable.

The the 2006 ESDC findings, he said, were not so robust they could not be undermined.

Next step

How much longer would the argument go, asked Gerges, clearly ready for his next case.

Brinckerhoff said he'd need another 45 minutes, as if promising a stemwinder attack on the case.

The parties will be back in court at 10 am on Tuesday, August 10.

2 comments:

  1. Is it too much to expect Gerges to pay attention?

    The law notwithstanding, it's obvious that the whole deal with the build-out is completely crooked.

    So maybe if Gerges pays attention, he might actually hear something that does controvert the law.

    ReplyDelete
  2. If he pays attention he would have to rule against the powers that be, and he doesn't want to do that.

    ReplyDelete