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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

Atlantic Yards Court Fight Focuses on Blight

Yesterday's oral argument on the appeal of the lawsuit challenging the environmental review and approval of the Atlantic Yards project focused entirely on the underlying issue at the foundation of the project—NY State's determination that the project site chosen by developer Bruce Ratner was "blighted."

The Empire State Development Corporation (ESDC) was required to show that the site was “blighted” in order to approve the project.

DDDB and its 25 community group co-plaintiffs have maintained all along that the project site is not blighted. Much to the contrary, the site was on an economic upswing until ESDC and developer Forest City Ratner came along, and therefore the court should overturn the ESDC’s blight finding because it was an arbitrary and capricious determination, and irrational.

(For a decidedly more humorous and impressionistic write-up, please see Gumby Fresh's "Pink Face Does Not Equal Sweeny.")

Norman Oder published a detailed account of the dramatic 30 minute argument on his Atlantic Yards Report. The account is excerpted at length below:
In appeal of case challenging AY environmental review, some justices skeptical of state’s blight claim
Was it déjà vu? As with the May 2007 oral argument in the state lawsuit challenging the Atlantic Yards environmental review, the plaintiffs in the appeal yesterday exited optimistically, with a sense that the court—in this case, at least two of five appellate judges—was sympathetic toward their argument. Again, representatives of developer Forest City Ratner and the Empire State Development Corporation (ESDC), along with their clutch of attorneys, exited looking none too cheery.

Notably, when a judge skeptical of the blight claim asked whether environmental consultant AKRF had ever not found blight when asked to look for it, the ESDC attorney sidestepped the question.

Then again, state Supreme Court Justice Joan Madden, when it came time to rule last January, came out squarely on the side of the defendants, so the questions in court hardly predict a final ruling. Still, even a 3-2 decision upholding Madden means an automatic appeal to the Court of Appeals, the state’s highest court, potentially stringing out the case even longer.

Blight the focus

While the lawsuit covers an enormous area of ground, including the definition of a “civic project,” whether a ten-year project buildout was realistic, and whether the ESDC properly studied terrorism, among other issues, the final round of appeal papers focused mainly on blight.

Indeed, the argument yesterday--which lasted less than 20 minutes at the Appellate Division, First Department, located at Madison Avenue and 25th Street--centered exclusively on blight.

Jeff Baker, attorney for the 26 neighborhood and civic groups on longtime environmental counsel to Develop Don’t Destroy Brooklyn (et al.) v. Empire State Development Corporation (et al.), began by describing how the ESDC has “extraordinary powers” to override zoning, but Justice John Sweeny cut him off, saying that the panel understood the background.

“I think everyone agrees” that the three blocks—actually 2 1/3 blocks—below the railyard aren’t blighted, Sweeny said, indicating that the argument should address the scope of the blight claim. (He’s an appointee of former Gov. George Pataki.)

“I appreciate you” saying that, responded Baker, obviously not considering it his role to clarify that the ESDC did declare those blocks blighted.

Sweeny noted that condo conversions had been occurring on the blocks at issue. “Are we not bound by the fact they are entitled to consider the entire project area?”

Baker said he wanted to make an important but narrow distinction: that in a land use improvement project, under the law establishing the ESDC, the area has to be “substandard and insanitary.”

There were three recent condo conversions on the block “facing the supposed blighting influence,” he said, indicating the Atlantic Arts building on Pacific Street between Fifth and Sixth avenues, the Spalding Building at Pacific Street and Sixth Avenue, and the Newswalk condo on Pacific Street between Sixth and Carlton avenues. (The latter actually was excluded from the project footprint.)

(At right, the ESDC's blight map.)

What’s the test?

“Are you saying it’s dispositive,” asked the presiding justice, Jonathan Lippman, that the presence of the three condos takes the site out of consideration.

“It’s certainly indicative,” Baker responded.

“What’s the test?” queried Lippman, another Pataki appointee, who came up through the system with ties to both parties.

Sweeny pointed out that Madden’s decision agreed the site as a whole was substandard.

Baker said that state law required that a “substandard and insanitary” area has another test, that it “tends to impair redevelopment.”

(The official text: “the area in which the Project is to be located is a substandard or insanitary area, or is in danger of becoming a substandard or insanitary area and tends to impair or arrest the sound growth and development of the municipality.”)

Lippman asked if that was the case.

“The problem is: they never analyzed it,” Baker responded, gathering steam, hearkening back to an argument he made in court before Madden, an argument buttressed by the recent surfacing of a document (a Contract Scope for the Blight Study) that suggested that consultant AKRF planned to study market trends around the project site, but either did not do so or never revealed the details.

“You don’t think they considered those three?” Lippman asked.

“There was no substantive analysis,” Baker said, noting that the environmental review stated that, because the Vanderbilt Yards had a blighting influence, the project site can’t be limited to the railyard, since that would leave the southern blocks blighted.

ESDC response

ESDC attorney Philip Karmel (right) started aggressively, pointing to Baker’s statement that there was no mention of blighting conditions on the three blocks; he said that was “totally false,” noting that pages 311-483 of the record specify description of the lots.

(I’m not sure that’s a precise characterization of Baker’s remarks, but my notes are fuzzy.)

Lippman intervened. “What about [Baker’s] argument that you can’t possibly” find blight, given the three condo projects, he asked.

“There are 50 lots in those three blocks,” Karmel responded. The condo buildings account for two of those lots.

“So what,” Lippmann said dismissively.

It’s “a relatively small area,” Karmel responded.

Judicial skepticism

Justice James Catterson intervened skeptically, asking if it was possible to “measure where an area is blighted by mere reference to area?” What, he asked about issues like value or the sites’ characteristics?

Karmel said the decision was at the discretion of the agency.

“Has AKRF ever studied an area it didn’t find to be blighted?” Catterson asked, drawing muted titters from the audience. (He’s another Republican appointee of former Gov. George Pataki.)

Karmel didn’t answer the question directly, but said, “We are relying on cold hard facts.”

Catterson wasn’t buying it: “If there’s all of a sudden new development in a poor neighborhood, why would we characterize it as blighted?”

Karmel tried to point to the blight characteristics found in the study. Catterson, who wrote the majority opinion upholding a judge’s decision that found a conflict of interest in AKRF’s relationship to Columbia University, said that “Columbia has hired the same consultant” and found the “same blight.”

Timing and momentum

When, asked Gonzalez, were the two condos converted.

Fairly recently, Karmel allowed.

Gonzalez wondered whether it was reasonable to conclude that the development would continue.

“Your honor, it’s not reasonable,” Karmel insisted.

“Experience shows us, that’s the start of momentum,” mused Gonzalez, a resident of the Bronx. “In essence, the area is not being given a fair chance to demonstrate” how it’s improving.

The buildings, Karmel said in a not-particularly-helpful clarification, were “not new condos, just conversions” of old buildings. (They were new housing units; the buildings previously were industrial or warehouses.)

“It’s improving,” Gonzalez said.

Clarifying the issue

Lippman, trying to clarify Baker’s argument, suggested that the petitioners are charging that the ESDC’s analysis was arbitrary and lacked any analysis.

Baker easily followed up, saying the state had an obligation to look at market trends. “The reason you alleviate blight,” he said, is “because it’s infringing on the marketplace.”

Gonzalez asked if the ESDC took into account proposals for further development.

There’s no indication they evaluated it, Baker responded.

“Is it your view that the blight designation,” Lippmann asked, “becomes a self-fulfilling prophecy,” given that development stops?

Yes, Baker said; such comments had been made in the record.

With that, time ran out, and the post-mortems began.

Posted: 9.17.08
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