X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-Debate surrounding Brooklyn’s long-delayed Atlantic Yards project continues as a group of residents and business owners–who last week saw their challenge to the Empire State Development Corp.’s use of eminent domain dismissed by a state Appeals Court–vow to press on to the higher New York State Court of Appeals. Meanwhile, ESDC–the state’s quasi-governmental agency that partnered with FCRC to develop the 22 acres near downtown Brooklyn–defends the rationale behind public “support” of the project, telling GlobeSt.com that Atlantic Yards “will result in the revitalization of an underutilized and blighted area.”

Regardless, beyond a widely reported statement expressing Forest City Ratner Cos. CEO chair Bruce Ratner’s “thrilled” reaction to the court dismissal, when asked about the very timely issues of financing and star architects, an FCRC spokeswoman tells GlobeSt.com the company has “no other comment” at this time. However, in April, a spokeswoman did tell Globest.com that FCRC hopes to see the Barclay’s Center Coliseum portion of the project open by 2011.

According to the ESDC, the agency will “own the arena” where the Nets plan to play basketball in Brooklyn. “However, pursuant to various lease agreements, all operational obligations will be borne by an FCRC affiliate,” says the ESDC spokeswoman.

But not giving up just yet, Matthew Brinckerhoff, the lead attorney representing the residents and owners in the court, case tells Globest.com that if the Court of Appeals agrees to hear the case, “we’re going to be litigating this for the next year and a half.” The three issues he’s arguing are whether the state constitution provides greater protection to individual property rights than the US Constitution; whether the project violates article 18, section 6 of the state’s constitution restricting use of eminent domain and use of state funds to low income housing; and finally, whether the public benefits outweigh the private benefits Ratner will accrue.

Of the ESDC’s assessment of the public vs. private benefits, Brinckerhoff says nobody knows for certain which benefit outweighs the other, and that the ESDC has never made a record of it public. Still, speaking to critics who see his clients as spoilers who are simply more opposed to Ratner’s potential largesse than the project itself, he says “we don’t have a problem with a private person benefiting from the taking of property. But if the benefits to that private person outweigh the public benefit, that’s when it violates the constitution.”

Disputing doubts of a public benefit, ESDC’s spokeswoman cites the additional housing that includes not less than 2,250 affordable units, an upgraded Vanderbilt Yards, a professional NBA franchise in Brooklyn, significant construction and permanent full-time jobs as well as substantial tax revenues for both the city and state. ESDC says “the project will receive $100 million in aid from the state, which was earmarked by the Legislature.” She adds, “It is not expected that the state will provide any further assistance other than what is set forth in the general project plan.”

Back in 2006, what was then known as the New York State Urban Development Corp.–today’s ESDC–adopted a modified GPP. That plan says that “additional fundings shall be made taking into account monies expended by FCRC, provided that (1) at no time will (i) the costs reimbursed to FCRC by the city and state, in the aggregate, exceed 50% of the total costs incurred and paid by FCRC, and (ii) the amounts funded by the state exceed the amounts funded by the city, and (2) such additional fundings shall be made upon other terms and conditions to be agreed upon by the parties.” The document also says that on a present-day (2006) basis, a completed Atlantic Yards will generate $652.3 million of city tax revenue and $745 million of state tax revenues in its first 30 years of operation.

On May 16, the New York Times reported that over the last six months, Ratner has sought additional subsidies beyond the $300 million in cash and tens of millions in tax breaks already approved for the project. The article discusses the increasingly common difficulties that developers face in achieving financing in the current economy.

While FCRC did not respond to questions regarding its ability to finance Atlantic Yards, ESDC’s spokeswoman says the agency “believes financing is viable at this point in timeESDC regularly meets with FCRC and its various financial advisors to discuss financing issues. Obviously, FCRC is counting on accessing financial markets at the time of closing.” Of the arena’s final design, size and scope, the ESDC spokeswoman says “clearly the design of the arena will impact costs and have an affect on financing requirements.”

In response to GlobeSt.com’s question as to whether FCRC would use the original Frank Gehry design for the arena or perhaps another architect altogether, ESDC says GlobeSt.com that was a question best answered by FCRC. Told that FCRC had not provided an answer, the ESDC spokeswoman says “regardless of Gehry’s involvement, ESDC’s design guidelines must be met.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.