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"Why should people get to see plans? This isn't a public project."
Bruce Ratner in Crain's Nov. 8, 2009

New Atlantic Yards Lawsuit Slams Empire State Development Corporation; Could Doom Project

For Immediate Release: October 19, 2009

20 Co-Petitioners Sue
Empire State Development Corp. and
Forest City Ratner For
Illegal Actions Taken in
Approval of Atlantic Yards Project

Lawsuits Pile Up Against the Besieged Project
As Community Lawsuit Seeks to
Annul Project's Approval on Multiple Legal Grounds

BROOKLYN, NY— The Empire State Development Corporation (ESDC) has clearly and illegally abandoned the statutorily mandated purpose—a plan to remove "blight"—of Forest City Ratner's (FCR) Atlantic Yards development plan in Prospect Heights, Brooklyn.

The ESDC has stated its intention to illegally contradict the project's governing document (the Modified General Project Plan or MGPP) with a separate "development agreement" that would make the proposed Atlantic Yards "affordable" housing component completely conditioned upon the availability of public subsidies. The MGPP requires no such conditions.

The ESDC has illegally concluded that a Supplemental Environmental Impact Statement (SEIS) is not required for Forest City Ratner's substantially and significantly changed Atlantic Yards development proposal.

These are the three overall claims made against the ESDC and Forest City Ratner in a lawsuit filed today by Develop Don't Destroy Brooklyn and 19 other community groups. The suit seeks to annul the ESDC's findings under New York State's environmental laws, and the legislation that created the ESDC.

Victory by the petitioners would doom the besieged development plan.

The lawsuit has broad community support with twenty co-petitioners representing all of the communities surrounding the project site, and beyond. Jeffrey S. Baker of Young, Sommer, Ward, Ritzenberg, Baker & Moore is the lead attorney.

"The ESDC cut corners in order to rush Ratner's project forward for an end-of-year IRS deadline. In so doing it has egregiously violated state laws governing environmental reviews and urban renewal," said lead attorney Jeffrey Baker. "ESDC willfully stuck its head in the sand regarding the new Ratner deal with the MTA. That new deal guarantees that the project, contrary to the legal requirement to remove alleged ‘blight,' will exacerbate the ‘blight' and make it permanent." 

"It has been clear for a long time that the ESDC has worked officiously to serve as Ratner's tool in government. It has once again taken numerous corner-cutting and illegal actions, which contrary to its goals, will doom the project," said DDDB legal chair Candace Carponter. "It is also a terrible shame that we have had to bring this lawsuit to expose the fact that ESDC has quietly made the ‘affordable' housing conditioned upon public subsidies, in contradiction with its approval document. Holding ESDC and Ratner accountable on the ‘affordable' housing is something that Ratner's partner ACORN should have been doing, but clearly hasn't been able to because it is financially in hock to the developer and contractually obliged to support his project."

With this new lawsuit there are now four pending lawsuits against the ESDC, Forest City Ratner, and the MTA, alleging various illegal actions taken in their six-year long pursuit of the Atlantic Yards development proposal.

The lawsuit was filed in New York State Supreme Court in Manhattan.

The legal briefs can be found here: http://www.dddb.net/MGPPsuit

More Details on the Legal Claims in DDDB et al. v. ESDC et al.

1. The ESDC Has Abandoned the Legally Mandated Purpose of the Project:

The ESDC has designated the entire non-arena portion of the project as a Land Use Improvement Project (LUIP) under the Urban Development Corporation Act (UDCA). But the ESDC's 2009 MGPP fails to meet, and thus violates, the requirements of the UDCA because it does not present a plan to alleviate the alleged blighting and blighted conditions at the project site, and therefore cannot be an LUIP.

The abandonment of such a plan, and thus the purpose of the project, is guaranteed by the terms of the new deal to sell the Vanderbilt Yards to Ratner, which the MTA approved this past June. That deal guarantees that the blight conditions will not be alleviated until well after 2030 or ever.

The reality is that, at a minimum, the project area will remain either undeveloped or in a long term construction phase stretching decades that will not alleviate blight but rather exacerbate it and make it a permanent condition. The ESDC has made an illegal determination under the UDCA and, therefore, has no authority to approve or oversee the project.

The development agreement that supposedly commits FCR to complete the project does not have a time limit and only requires it to build less than two-thirds of the residential units, leaving significant amount of the "blighted" area in its unattractive state.

Petitioners have always challenged ESDC's finding that the southern part of the project area is blighted. While those challenges are still pending before the New York State Court of Appeals, for the purpose of ESDC's current actions it is accepted that the ESDC's blight finding is the basis and purpose of ESDC's approval of the project. However, at this point ESDC has ignored the fact that the project will take decades, if ever, to complete and has no plan to assure that the blight will actually be eliminated. This demonstrates that the alleviation of blight was never the real intent of ESDC's approval, but was just a pretext to facilitate approvals for a favored, private developer's land grab.

Therefore, the September 17, 2009 ESDC resolution under the UDCA must be annulled.

2. The ESDC's Approval is Inconsistent on Conditions for Affordable Housing

The ESDC's Modified General Project Plan, approved on September 17, 2009, requires the construction of 2,250 "affordable housing" units within the project. This is an unconditional requirement in the MGPP. But the ESDC is apparently poised to approve a "development agreement" in contradiction with the MGPP, which states that construction of those "affordable" units are "subject to governmental authorities making …affordable housing subsidies" available to Forest City Ratner.

The ESDC Board's approval of the MGPP, which authorized its staff to enter into the "development agreement" to complete the project, is illegal as it includes a material term to avoid providing affordable housing, which is inconsistent with the MGPP.

Therefore, the September 17, 2009 ESDC resolution allowing agreements that contradict the MGPP must be annulled.

3. The ESDC Abused Its Discretion When it Failed to Issue a Supplemental Environmental Impact Statement (SEIS)

The ESDC irrationally and unreasonably maintained that the project would take ten years to construct by ignoring the fundamental changes brought about by the new MTA transaction and other clear, expert evidence that completion of the project would extend decades, if ever completed at all.

The new deal with the MTA constituted both a substantial change in the project and in circumstances, which raised new issues concerning both the timing and completion of the project.

By failing to even recognize the new MTA terms, the ESDC failed to identify the relevant issues and take the hard look necessary to make its determination that an SEIS was not necessary. Instead, the ESDC undertook an artificial environmental review under the State Environmental Quality Review Act (SEQRA) that was based upon a project completion in 2019 instead of 2030 or later.

ESDC never responded to the expert report by Kahr Real Estate Services that found the project not economically feasible and incapable of completion for at least 20 years. Instead, ESDC relied upon a report by KPMG, which unconvincingly said a 10-year time frame was "not unreasonable". Kahr Real Estate Services reviewed the recently released KPMG report and part of this lawsuit includes an affidavit from Kahr that sharply criticizes the KPMG report as fatally flawed and inadequate to support ESDC's findings.

ESDC failed to identify substantial changes in the project and take a hard look at the potential environmental impacts and determined, contrary to the requirements of SEQRA, that an SEIS was not necessary. This was an arbitrary and capricious decision, and an abuse of discretion.

Because of this, ESDC's September 17, 2009 determination that an SEIS was not necessary must be annulled.

The co-petitioners on this lawsuit are:

Develop Don't Destroy Brooklyn, Inc.
Council of Brooklyn Neighborhoods, Inc.
Atlantic Avenue Betterment Association, Inc..
Brooklyn Bears Gardens, Inc.
Brooklyn Vision Foundation, Inc.
Carlton Avenue Association, Inc.
Central Brooklyn Independent Democrats
Crown Heights North Association, Inc.
Dean Street Block Association, Inc. (4th to 5th Ave)
Democracy For New York City, Inc.
East Pacific Block Association, Inc.
Fort Greene Association, Inc.
Fort Greene Park Conservancy, Inc.
Friends and Residents of Greater Gowanus, Inc.
Park Slope Neighbors, Inc.
Prospect Heights Action Coalition
Prospect Place of Brooklyn Block Association, Inc.
Society for Clinton Hill, Inc.
South Oxford Street Block Association
South Portland Block Association, Inc.

Posted: 10.19.09
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Eminent Domain Case
Goldstein et al v. ESDC
[All case files]

November 24, 2009
Court of Appeals

[See ownership map]

EIS Lawsuit

DDDB et al v ESDC et al
Click for a summary of the lawsuit seeking to annul the review and approval the Atlantic Yards project.

Appeal briefs are here.

Appellate Divsion
Rules for ESDC
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