Atlantic Yards eminent domain oral argument at New York Court of Appeals
The New York State Court Appeals heard oral arguments today in Goldstein v. New York State Urban Development Corporation, the eminent domain controversy in which a handful of property owners have tenaciously battled New Jersey Nets owner Bruce Ratner’s attempt to acquire their property to develop the Atlantic Yards.
A centerpiece of the petitioners' argument was an attempt to convince the court that the term public use, as used in the New York State Constitution, should be limited to its original intent. This would necessitate overturning a long line of case law which has significantly broadened the concept of public use. The justices, questioning petitioners' lawyer Matthew Brinkerhoff, appeared to reject this argument; it is unlikely they will narrow the definition of public use in the opinion that results from this case.
There was a strong argument put forth by the respondents' attorney Phillip Karmel that the action in the state court presently before the court of appeals was not filed within the 30 day limitation contained in the statute, New York State’s Eminent Domain Procedure Law (EDPL). The petitioners rely on a six-month grace period to support their application that the action was timely filed. The petitioners initially pursued their remedies in the Federal Courts without success. They subsequently filed an action in the state court relying on the six month grace period to meet the procedural requirements of the statute. Respondents argue that this does not comport with the procedure set forth in the EDPL. The danger in this procedural argument is that, if the respondents position is adopted by the court, the case could be dismissed without addressing the underlying merits or substantive issues. We have seen appellate courts avoid controversial decisions by utilizing procedural devices to bypass the real issues at the heart of the case.
There was substantial discussion during oral argument about whether the entire project area was “blighted.” Everyone concedes the rail yards, which are a significant portion of the project area, are blighted: in fact, the rail yards were part of an urban renewal area blighted in 1968. Questions to Mr. Karmel from the justices focused instead on the southerly 3 blocks of the project area and whether in fact these properties were blighted. Justice Smith suggested that considering these properties blighted was a device used by the ESCD to expand the project . “Have you gerrymandered this area to fit what the developer wanted?” he asked. This is a troubling issue for respondents and may result in a remand for further fact finding.
The justices seemed troubled over the possibility that public subsidies were made for market-rate housing, which as Chief Justice Lippman pointed out, appears to constitute the majority of the project. Article 18 section 6 permits public subsidies for low and moderate income housing:
No loan, or subsidy shall be made by the state to aid any project unless such project is in conformity with a plan or undertaking for the clearance, replanning and reconstruction or rehabilitation of a substandard and unsanitary area or areas and for recreational and other facilities incidental or appurtenant thereto. The legislature may provide additional conditions to the making of such loans or subsidies consistent with the purposes of this article. The occupancy of any such project shall be restricted to persons of low income as defined by law and preference shall be given to persons who live or shall have lived in such area or areas.
Mr. Karmel insisted that all of the $100M in state support of this project was for infrastructure for the arena site, and not for the market-rate housing. “Market-rate housing – this is the largest component, right?” the judge asked.
Karmel ducked the question by answering, “By acreage, I’m not sure.” Certainly 5000 market-rate units, which comprise the majority of units in this project, is significant; and this, not the arena for the Nets, is the clear objective of real estate developer Bruce Ratner.
Another issue that may result in a remand is the rebuttal argument made by petitioners’ attorney Matthew Brinckerhoff that there was no analysis of the balance between public and private benefit to the developer as required by New York law.
The hopes of the property owners rest with a court willing to make a ruling that restricts the use of eminent domain and sets forth precise guidelines that must be followed when private property is taken for a public use. Some might say, as Justice Lippman suggested during oral argument, “What is the role of the Legislature in all of this?” And the answer is that, in an ideal world, the Legislature should be the catalyst for eminent domain reform. But we have seen that legislators are too tied to developers to ever pass meaningful reform. So the courts have become the last, best hope for the property owner.
Click here to view the video of the October 14 NY Court of Appeals oral argument in Goldstein v. New York Urban Development Corp.