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Release: March 7,
State Court Rules Ratner Improperly Obtained Lease
For Properties in “Atlantic Yards” Footprint
Developer’s Claims of “Control” of Properties Misled ESDC, PACB;
Ruling Significantly Increases Costs of Project
BROOKLYN, NY— New York State Supreme Court Justice Ira B. Harkavy struck
a blow to Forest City Ratner (FCRC) on Tuesday when
he ruled for Prospect Heights property owner Henry Weinstein in a dispute
over control of properties owned by two of Mr. Weinstein’s corporations
in the footprint of FCRC’s proposed “Atlantic Yards” project. The ruling
terminates the leases, which real estate developer Shaya Boymelgreen improperly
assigned to FCRC, and permits Mr. Weinstein to regain full control of his
Justice Harkavy ruled that AY Carlton, an affiliate of FCRC, had improperly acquired the leases on the property owned by Mr. Weinstein at 752-766 Pacific Street and 535 Carlton Avenue from Mr. Boymelgreen. The leases had been transferred to AY Carlton without Mr. Weinstein’s approval, and for a purpose the demolition of the properties to which Mr. Weinstein did not consent, despite clauses in the leases that clearly forbid such actions.
Ignoring the fact that Mr. Weinstein had not consented to assignment of the leases and that he, in fact, still owned both properties, FCRC also misled the Empire State Development Corporation and the Public Authorities Control Board by claiming control of Mr. Weinstein’s properties, despite Mr. Weinstein’s rejection of the transfer and his repeated requests that FCRC refrain from making such a claim.
Mr. Weinstein, whose corporations are plaintiffs in the federal lawsuit contesting the use of eminent domain for the “Atlantic Yards” project, contends that FCRC attempted to take assignment of the leases in order to substantially diminish the value of his properties, thereby minimizing the amount they would have to pay him, if he agreed to sell, or through State condemnation procedures.
Even if the Court permits the State to proceed with its taking of property using eminent domain, which Mr. Weinstein strongly believes it will not, Justice Harkavy’s ruling will likely substantially increase FCRC’s costs for the proposed project. By acquiring Mr. Weinstein’s leases which run until 2048 FCRC likely hoped to claim that the properties had little value beyond the leases themselves. With full control restored to Mr. Weinstein, however, the cost of acquisition has likely increased ten-fold. In court filings, Mr. Weinstein said that FCRC never made him a firm offer for his properties, and that FCRC implied that if he did not sell, the ESDC would take the property through eminent domain.
“I’ve always believed in the rule of law,” Mr. Weinstein said after Justice Harkavy issued his decision. “I’m pleased that the truth prevailed today, and I am confident that my co-plaintiffs and I will win our challenge to Ratner’s unconstitutional use of the power of eminent domain. Justice Harkavy made it clear to Ratner that he is bound by the law like everyone else, and I trust that the federal court will hold him to the same standard.”
Click here to download a PDF of the Court's decision.
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