Court ruling makes it easier for cities to take property for redevelopment
New York is legally permitted to seize property to make way for developer Bruce Ratner’s Atlantic Yards project in Brooklyn, New York, which includes a basketball arena and apartments, the state’s high court ruled.
In a decision that may make it easier for New York cities to take private property for redevelopment, the Court of Appeals in Albany on Tuesday upheld a lower court ruling against property owners who sued to stop the state from taking their homes and businesses.
Developer Forest City Ratner Cos plans a US$5 billion project at the site including an arena for the New Jersey Nets basketball team, as well as residential and commercial towers.
The Empire State Development Corp, the state agency behind the development, told the court last month that eminent domain, the government’s right to take private property for public need, was legal because the site was ‘blighted’. Lawyers for the property owners, who formed a group called Develop Don’t Destroy Brooklyn, said that the distinction was an excuse to seize their homes for Mr Ratner’s benefit.
‘This is a terrible day for anyone who owns or rents properties in New York,’ said Daniel Goldstein, a spokesman for Develop Don’t Destroy. ‘The fight against Atlantic Yards is far from over. There are four outstanding lawsuits against the project and there’s still further action we’re considering on this particular case.’
The group called upon governor David Paterson to execute a ‘binding legal contract’ to assure that all the intended affordable housing is built and that the project is completed in 10 years.
The 22 acre development would be built partly over the Metropolitan Transportation Authority’s (MTA) Long Island Rail Road storage yard near Flatbush and Atlantic avenues in downtown Brooklyn. It was planned to include about 6,400 units of market-rate and affordable housing, according to Mr Ratner’s website, plus 336,000 square feet of offices, 247,000 sq ft of retail space and a 180-room hotel.
‘This project represents a significant public benefit for the people of Brooklyn,’ Mr Ratner said in a statement. ‘Today, however, this project is even more important given the need for jobs and economic development.’
Development is already underway at the site, said Mr Ratner’s spokesman, Joe DePlasco. Clearing for the arena has begun and a new rail yard was turned over to the MTA yesterday, he said.
The projected cost of the project is now close to US$5 billion, according to Mr DePlasco, up from a previous estimate of US$4 billion.
New York Court of Appeals Chief Judge Jonathan Lippman wrote in one of two majority opinions that ‘it may be that the bar has now been set too low – that what will now pass as ‘blight’ shouldn’t be permitted to constitute a predicate for the invasion of property rights and the razing of homes and businesses. Any such limitation, Mr Lippman concluded though, ‘is a matter for the legislature, not the courts’.
The lone dissenter, Judge Robert Smith, wrote that ‘the bad news is that the majority is much too deferential to the self-serving determination by Empire State Development Corporation that petitioners live in a ‘blighted’ area, and are accordingly subject to having their homes seized and turned over to a private developer’.
In June, the MTA voted to defer Mr Ratner’s US$100 million payment for rights to the Brooklyn rail yard, requiring him instead to pay US$20 million upfront and the rest over 22 years. The delay was a response to the recession and the credit crisis, agency officials said at the time.
Mr Ratner has said that he intends to begin construction of the Nets new home, to be called Barclays Center, this year. Barclays plc bought naming rights.
‘We can now move forward with development which will accomplish its goals of eliminating blight, and bringing transportation improvements, an arena, open space, affordable housing and thousands of jobs,’ Warner Johnston, spokesman for the Empire State Development Corp, said in an e-mailed statement.
Andrew Brent, a spokesman for New York City mayor Michael Bloomberg, and Morgan Hook, a spokesman for New York governor David Paterson, did not immediately return calls seeking comment.
The mayor is majority owner of Bloomberg LP, parent of Bloomberg News.
Source: Business Times, 26 Nov 2009