Court hears appeal on Brooklyn arena

Updated: October 14, 2009, 6:08 PM ET
Associated Press

ALBANY, N.Y. -- Homeowners and businesses resisting the forced sales of their properties for a massive development in Brooklyn told New York's top court Wednesday that it's unconstitutional for a state agency to use eminent domain to get them out.

Developer Bruce Ratner's proposed $4.9 billion, 22-acre Atlantic Yards project mainly enriches private interests, while the state constitution requires public use for taking land, attorney Matthew Brinckerhoff told the Court of Appeals.

Ratner is the New Jersey Nets' principal owner. His proposed development includes office towers, apartments and a new Nets arena, a key element in his plan to sell majority team ownership to Russian entrepreneur Mikhail Prokhorov.

"Certainly anything that is owned by the government and opened for public use by law constitutes public use," Brinckerhoff said. But regardless whether the state keeps title to the new arena, its cheap 99-year leases back to the developer mean that it's not really publicly owned, he said.

Many property owners sold and left since the project was announced in 2003. Brinckerhoff represents nine owners and tenants who stayed.

He urged the court to conclude that economic development is not a sufficient basis by itself for taking property. If it were, the state could take any property and sell it to a developer for upgrades, he said.

Empire State Development Corp. attorney Philip Karmel countered the area in Brooklyn was found blighted as a whole, and this was a legitimate government use of eminent domain to take property for public purposes. Part of the site, including an old railyard, had been designated for urban renewal for decades, he said.

Judge Robert Smith said the railyard was the north end, but the south end was apparently in better shape. "Have you gerrymandered this area to fit what the developer wanted to build?" he asked.

Karmel said the detailed site study found one or more blight characteristics throughout.

Judges Eugene Pigott Jr. and Susan Read questioned Brinckehoff about whether his failed two-year attempt to win the case first in federal court didn't violate the deadlines set by New York lawmakers. Those deadlines were meant to expedite state judicial reviews of redevelopment projects.

Chief Judge Jonathan Lippman questioned Karmel about whether the project's $100 million state subsidy could be used for what's mostly market-rate housing, not housing for the poor.

The Court of Appeals is expected to rule next month. Lower courts have upheld the project.

Before Wednesday's hearing, about three dozen Brooklyn residents and supporters rallied outside the courthouse, saying it was a good neighborhood but that many people have been forced to leave.

The project, which has state and city backing, is supposed to create 6,430 housing units. About two-thirds of them would be rentals and half of those would be for low-, moderate- and middle-income families.

Ratner recently told The Associated Press he expected to sell almost $600 million in tax-exempt bonds by a Dec. 31 deadline. His Forest City Enterprises last month announced an agreement with Prokhorov's Onexim Group for $200 million investment in return for a minority share in the arena project and 80 percent share of the team.

That transaction isn't expected to close until early next year, Forest City spokesman J.B. Linton said Wednesday.

"The Russians are only coming if the project happens," said plaintiff Daniel Goldstein, who lives in a targeted condominium with his wife and baby.


Copyright 2009 by The Associated Press