A New Year’s Revolution List (Starting 2009 Off Clean: Pull the Plug On Atlantic Yards)

It is time to pull the plug on Atlantic Yards, go back to the drawing board and get going with a better designed, fairer, clean-slate project that can proceed faster at less public expense and greater benefit. We’d soon be most of the way there by bidding out a version of the UNITY plan proposal to multiple developers. The proposed Atlantic Yards developer, Forest City Ratner, is clinging to a strangely formulated circumlocution that it is using to string along its investors: That FRC has an “entitlement” to decades of undefined development in the proposed Atlantic Yards footprint. Forest City Ratner’s “entitlement” is a just a made-up term. It stands for nothing legal and, at best, is a claim upon politicians not the public. (Honestly, what more does anyone thinks it means than, "We gave campaign contributions?")
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Governor Paterson, Mayor Bloomberg or even the City Council each have the independent ability to initiate the action of extracting Forest City Ratner from the picture. Let’s consider how they are going to do it.

Consider this a wiki-piece. We are throwing out ideas in the list below that consists of various thoughts about ways to terminate Ratner’s “entitlements.” We invite anyone to contribute additional ideas to the list. How good an idea does one need to send Ratner and his “entitlements” packing? It probably won’t take much to bid adieu to Forest City Ratner. Remember that even were Ratner to protest, the courts are going to be sympathetic to the government seeking to follow a good government course of action.

1. Entitlements? Where would they come from? There was no contract to begin with. There is no such thing as a legally enforceable "agreement to agree." A contract has to be reasonably specific from both ends about what is going to be done in order to be enforceable.

2. Next, the project is no longer what was approved. For instance, there should be no obligation to do a $950 million arena when what was approved was a $637.2 million arena.

3. It is easy to simply note that more approvals are needed and that they won't be forthcoming. An example: the Public Authorities Control Board approval taking the arena up to $950 million.

4. Housing subsidies should not be given unless there is a competitive bid for the parcels of project being financed. That knocks Ratner totally out of the box. The housing agencies have not contracted to give (non-bidding) Ratner subsidy and they shouldn’t.

5. Then there are the various breaches on Ratner's part.

6. It is also possible to throw Ratner out based on misrepresentations.

7. If all else fails, terminate and give Ratner damages. The courts will never allow him substantial damages. (Among other things, think back to the misrepresentations and no-bid aspects of his project.)

8. To get out of financing the arena, bond counsel can observe that they don't consider that proper legal opinions can be issued on the bonds. (It could be the current bond counsel or there might even be a reason to switch to bond counsel as a first step, given everything that has gone on with Yankee Stadium and a history of odd real estate assessments on these deals.)

9. Ratner’s so-called “entitlements” can be voided for public policy reasons.

10. Eminent domain could be used to wipe out whatever “rights” Ratner thinks he has.

11. Then there is the simple expedient of just settling the law suits- Why? Because the state knows that there is plenty in its files which would cause the litigation to be lost if it is divulged.

12. Because of various bait and switches, what was contracted for was never properly approved. There are therefore no valid “contracts” because they would all be ultra virus. An ultra vires defense can also be asserted to the extent that authorizing legislation has been exceeded.

13. Rescind city and state appropriations. Take advantage of the fact that this project is being done over the course of so many years that appropriations for it can always be recaptured because the City Council and/or the state legislature this year doesn’t have to spend what once upon a time a prior City Council and/or the state legislature decided it wanted to spend.

14. Have the city rezone the entire area for something more appropriate. Override ESDC’s zoning override. (And don’t re-override it back again.)

The above is not intended to be inclusive. Nor have we ordered ideas, putting the best first. Pretty much any one idea would suffice in itself though there is always the option of using ideas in combination. As we said, consider this a wiki-endeavor, so we are soliciting additions.

One place the ideas should be coming from is Empire State Development Corporation (ESDC). As has been reported, there was a meeting the beginning of this week where gathered legislators were presented with the status of the dreadful mess that ESDC and Forest City Ratner have made of things. (See: Wednesday, December 24, 2008, Details on AY housing point to 80/20 rentals, not condos, in a smaller Phase and Developer of Atlantic Yards project delays condo plan, by Jotham Sederstrom, Tuesday, December 23rd 2008.)

The way the meeting should have concluded is that ESDC Chairwoman Marisa Lago should have asked the Forest City Ratner people to leave the room and she should have thereupon addressed the assembled legislators to say, “Here are our favored options for terminating our relationship with Forest City Ratner.” If this did not happen, upon Marisa Lago’s initiative, the request for the Forest City Ratner representatives to leave the room should then have come from the legislators present. Our legislators should have then asked Ms. Lago to present the termination options.

If neither of the above happened, each of the legislators involved in the meeting should be contacting Ms. Lago in follow-up, asking for a detailing of the preferred termination options. All it takes to get moving is for people to decide that pulling the plug on Atlantic Yards is what we are going to do and for the government lawyers to get creative because this is the time we are going to do it.
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