http://www.nytimes.com/2009/11/25/ny...ards.html?_r=1
Ruling Lets Atlantic Yards Seize Land
The Atlantic Yards project in Brooklyn has been delayed for three years by a flurry of lawsuits,
the collapse of the credit and real estate markets and a glut of luxury housing.
By CHARLES V. BAGLI
November 24, 2009
After enduring three years of delays, several lawsuits and the collapse of the real estate market, the $4.9 billion Atlantic Yards project in Brooklyn took a major step forward on Tuesday when New York’s highest court ruled that the state can seize private property for the 22-acre development.
The Court of Appeals ruled 6 to 1 that the state could exercise eminent domain in claiming businesses, public property and private homes for economic development projects like Atlantic Yards. In doing so, the court backed the state’s assessment that the area in question — where some holdouts had refused to sell their property — fit the legal definition of being blighted.
The ruling also had broader implications — reaffirming New York’s use of eminent domain even as many state legislatures seek to curb government’s power to condemn private property.
The project’s opponents had argued that eminent domain on behalf of the private developer, Bruce C. Ratner, was improper and unconstitutional. They vowed to continue their battle, but there was no question that a cloud of uncertainty that has hung over Atlantic Yards for more than a year had lifted.
Mr. Ratner called the court’s ruling a “light-switch” kind of decision for the long-stalled project. “I look at this as the last major hurdle; now we can proceed as we’ve wanted to for the last three years,” he said on Tuesday. “The courts have made it clear that this project represents a significant public benefit for the people of Brooklyn and the entire city.”
Mr. Ratner plans to begin selling tax-free bonds next month to finance the development’s cornerstone project: an 18,000-seat basketball arena for the New Jersey Nets at Flatbush and Atlantic Avenues near downtown.
Construction work is already under way at portions of the site. The developer expects that it will take about 28 months to build the arena, enabling the Nets to move from East Rutherford, N.J., to Brooklyn around June 2012.
Those opposed to the project said the decision, while a setback, was hardly the end of the fight.
“The fight against the Atlantic Yards project is far from over,” said Daniel Goldstein, a spokesman for Develop Don’t Destroy Brooklyn, a community group that opposes the project. “The community has four outstanding lawsuits against the project and, meanwhile, the arena bond financing clock ticks louder and louder for Ratner. While this is a terrible day for tax-paying homeowners in New York, this is not the end of our fight to keep the government from stealing our homes and businesses.”
If construction begins in the coming weeks as expected, Atlantic Yards will stand out in a city where 530 construction projects are stalled, sitting lifeless and without adequate financing in virtually every neighborhood.
Atlantic Yards would transform a busy intersection of two thoroughfares dominated by a railroad cut where Long Island Rail Road trains are cleaned between rush periods. The billion-dollar arena would be the most expensive in the country and home to Brooklyn’s first major sports team since the Dodgers left after the 1957 baseball season. Plans also call for 16 high-rise towers on nearby blocks, mostly residential buildings with as many as 6,430 apartments.
The developer has said that he will start the first residential building six months after beginning the arena. But with so many new apartments sitting vacant, analysts say it could be many years before demand would justify building so many units in one neighborhood.
The arena would be built on an 8.5-acre railyard and on adjacent property, much of which Mr. Ratner has acquired.
Mr. Ratner is not expected to get possession of all the property until sometime next year. He and his underwriters, Goldman Sachs, plan to sell the bonds for the arena by mid-December. They must complete the bond sale by Dec. 31 to qualify for tax-free financing. Otherwise they would have to resort to conventional financing, which could be prohibitively expensive.
In the next few days, the developer is also hoping that the rating agencies will give his bonds an investment-grade rating and a lower interest rate. On Tuesday, a state-sponsored local development corporation authorized the sale of a combination of tax-exempt and taxable bonds.
“We anticipate having the ratings necessary to successfully market this transaction and fund the project by Tuesday,” said Greg Carey, a managing director of Goldman Sachs.
In the meantime, Mr. Ratner’s company, Forest City Ratner, completed construction of a $50 million temporary railyard, just to the east of the original one, and turned it over to the Long Island Rail Road on Monday. The company, which was the development partner for the Midtown headquarters for The New York Times Company, continues to do construction work on the railroad property while it awaits title to the rest of the 22-acre parcel.
Even in New York, where large-scale development is always a contentious affair, Atlantic Yards has been a long-running story of a tenacious developer and an equally implacable opposition. The development has been hobbled by a series of disputes ever since it gained state and city approvals in 2006.
Mr. Ratner bought the New Jersey Nets in 2004 for $300 million, not out of a love for basketball so much as a lever for a large real estate project. The developer promised great architecture with designs by Frank Gehry; lots of affordable housing for teachers, firefighters and construction workers; a larger and better railyard as a replacement; and for sports romantics, a professional basketball team.
But critics, led by Develop Don’t Destroy Brooklyn and some local elected officials, said the proposed towers would loom over the low-scale neighborhood and worsen traffic. Opponents resented that just as the area was improving, they were threatened with condemnation by a developer who got $305 million in subsidies from the state and the city, as well as tens of millions of dollars in tax breaks.
Since 2004, the project has lost some luster. Mr. Ratner scrapped Mr. Gehry’s designs for a glass-walled arena and 16 towers. He renegotiated his deal to buy the railroad land. Instead of paying $100 million at closing, he will make a $20 million down payment and pay the rest over time, while building a smaller permanent railyard than originally promised.
Now, he is selling a majority stake in the Nets to a Russian billionaire and basketball enthusiast, Mikhail D. Prokhorov.
The Nets, who are currently on a West Coast road trip, have started the season 0-13.
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http://netsarescorching.com/2009/11/...y-in-brooklyn/
For the Nets, A First Victory in Brooklyn
by Mark Ginocchio
Nov 25, 2009
Victories have been extremely hard to come by for the Nets this season. But after an assist from the New York State Court of Appeals yesterday, the Nets earned a victory that could go a long way towards changing the fortunes of the franchise.
Yesterday’s ruling by New York state’s highest court still does not make the Nets proposed move to Brooklyn a definite – financing for the project is still a necessity for this move to happen, and this ideally must be accomplished before the end of the year, all in a down economy.
But make no mistake. Though opponents of the Atlantic Yards Development and the Barclays Arena will continue to talk about the number of lawsuits they have filed and will continue to file, yesterday’s ruling in favor of the developer’s use of eminent domain to acquire the property they need in Brooklyn to build this project was a critical blow to the opposition. Opponents can try attacking the way state agencies like the Empire State Development Corporation or the Metropolitan Transportation Authority do business, but if Bruce Ratner is able to get the financing his need to qualify for tax exempt bonds, Brooklyn will finally become a reality for the Nets organization.
In our comments section yesterday, one of our readers, calling all toasters, wrote: “LeBron or no, this is the most important day for the Nets in the last 3 decades. They should have a permeant home, a larger fan base, a wealthy owner, and (for once) some sparkle.”
While there are still a good chunk of Nets fans who would rather the team stay in New Jersey, those who believe that it’s in the organization’s long-term interest to build their future in Brooklyn likely shared this level of enthusiasm. In a season that has already seen its lion-share of frustration, anger and disappointment, the state’s court ruling was the most silver of linings. Brooklyn brings new possibilities to the organization: a state-of-the-art arena that, even without the grandiosity of architect Frank Gehry, should still be impressive. There’s also the ability to promise current players and free agents an opportunity to shine in the world’s biggest media market, in that market’s hippest borough.
Then there’s the promise of Russian billionaire Mikhail Prokhorov. While there has been some buzz as of late that Prokhorov’s takeover of the team is not totally contingent on Brooklyn, having details of the move finalized by the end of the year, would certainly make the transition to new ownership a lot simpler. With Prokhorov, the Nets will have an owner who has a track record of spending to win – something the organization has sorely lacked during the Ratner era. While I agree with calling all toasters about the magnitude of yesterday’s decision, I think the organization’s most important day will ultimately be decided by NBA owners if and when they approve Prokhorov as the new Nets owner in the near future.
But until then, the focus remains on Brooklyn and the Atlantic Yards. As a resident of New York, it’s certainly disconcerting that there is legal precedent that a private developer can grab someone’s home for the sake of project that may, or may not “improve” the region. But from a basketball perspective, this ruling is as big as it gets. Now it’s up to Ratner and his team to push this project over the finish line – get the financing he needs so this organization can get out of the purgatorial state it has been for the past six years. The ball is now firmly in your court Ratner, and with the season sinking around you, it’s on you to finally deliver on your promises to bring the Nets to a better place.
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http://www.nydailynews.com/opinions/..._brooklyn.html
A Net gain for Brooklyn: High court did right by the city in Atlantic Yards lawsuit
Editorials
November 27th 2009
The state's highest court has given a crucial go-ahead to plans to build a pro basketball arena and a major housing development at one of Brooklyn's great crossroads. Good for the judges. Good for New York.
There is much to like in the Court of Appeals decision regarding the Atlantic Yards project, starting with new hopes that the Nets will have a home in the city for the 2011 season and that thousands of apartments will rise on land that has been fallow for more than four decades.
By a 6-to-1 vote, the court dealt a small band of opponents a 26th straight defeat in their legal war of attrition against a project that grew only more critical as a jobs producer with the economic downturn. Hats off to developer Bruce Ratner for persevering through six years worth of regulatory approvals and lawsuits.
It is to New York's shame that moving even the worthiest projects off the drawing boards is so difficult in a town that prides itself on getting big things done. All you need are some chanting pickets and a stack of summonses.
On the upside, the court rendered expeditious judgment, positioning Ratner to meet a year-end deadline for financing the start of construction and - even more important - established a wise standard for the use of eminent domain in New York State.
Lawyers for a handful of property owners - among the few who have not sold to Ratner at handsome prices - had asked the court for nothing less than a radical reinterpretation of the state Constitution. Many feared the panel would take an aggressively activist approach in keeping with a recent tendency to flex its judicial muscle.
Didn't happen. The panel declined to repudiate the U.S. Supreme Court's controversial Kelo decision, upholding the taking of a Connecticut home to make way for a now-abandoned commercial development.
Instead, the majority threaded a fine needle. It affirmed that New York may take property by eminent domain only for public use - except when an area has been deemed to be blighted. The court also established that it would not second-guess a blight finding that was reasonable.
The Atlantic Yards zone, at the intersection of Atlantic and Flatbush Aves., fit the blight definition well beyond reason.
With the small exception of a slice occupied by the complaining property owners, the tract has been a designated urban renewal area since 1968 and has stood vacant for all that time. Much of it is occupied by a below-grade cut for the Long Island Rail Road.
Now, if New York is lucky, Ratner will get to work on the arena, perhaps to be home court for Lebron James (we can dream), followed by 6,000 residential units - a third of them affordable - and 8 acres of open space. The public interest has been served.
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