Brooklyn's Eminent Domain: Henry & Daniel v. Goliath

“My property is not for sale….There is a much bigger issue at stake: The rule of law has to prevail. The whole reason the United States was formed was to get away from the divine right of kings.” – Henry Weinstein, Atlantic Yards property owner. No Land Grab (March 10, 2007)

Property owners fighting Forest City Ratner’s massive Atlantic Yards project achieved a small but significant victory  when N.Y. Supreme Court Justice Ira Harkavy ruled that Forest City Ratner had illegally acquired the tenant’s interest in a 1-acre property owned by Henry Weinstein. The judge terminated FCR’s lease on the two properties, a six-story office building, and adjacent parking lot along Pacific Street. Control reverts to the owner, the judge ruled. NY Times, "Atlantic Yards Loses Lease to Part of Site" (March 8, 2007).

Apparently, Forest City Ratner had taken the assignment of the tenant’s interest in a 6-story office building without first obtaining Mr. Weinstein’s written consent, as required by the lease:

The leases in question here clearly and unambiguously required tenants to “first” obtain the written consent of the landlords before any assignment of the leases. Notwithstanding that provision, the tenants chose to execute the assignments to AY Carlton, even though they had not received the written consent of the landlords. Indeed, the tenants chose to execute the assignments less than two weeks after sending their letter requests, before they received any response form the landlords, without trying to contact the landlords. The tenants’ assignment was clearly not permitted by the leases.

This decision creates a hole in the 22-acre donut which Forest City has represented it controls. The tenant, Mr. Boymelgreen, and his lawyer vowed to appeal. Assuming the court decision stands, Mr. Weinstein’s opposition to the project and the proposed taking will move forward with a clear delineation that he is the owner and the party in interest that Forest City  and the Empire State Development Corporation must deal with. See the opinion in 752 Pacific LLC, et ano v. Pacific Carleton Development Corporations, et ano.

Mr. Boymelgreen thinks that Mr. Weinstein will use the court victory to leverage more money from Forest City. This may happen, or Mr. Weinstein may prove to be one of the true believers who will fight the right to take to the end. Weinstein is one of 13 tenants and property owners that are suing Ratner and state officials over the wrongful use of eminent domain to clear land and turn it over to Ratner.

Meanwhile, a related case pending in the Federal District Court will,in all likelihood, be referred back to the State Courts since Magistrate Robert Levy noted, “Eminent domain is traditionally a matter of local concern.” This is perceived as a setback for the plaintiffs in Daniel Goldstein v George Pataki since state courts generally have been tougher on property owners and coalitions contesting the right to condemn property for a project.

The case is not dismissed; however, discovery is limited in state court proceedings and the plaintiffs are alleging cronyism and impermissible favoritism by the MTA in its decision to sell the Atlantic Yards to Forest City Ratner. “The complaint raises serious and difficult questions regarding the exercise of eminent domain under emerging Supreme Court jurisprudence,” Levy said.

The plaintiffs' lawyers are considering several options: whether to submit additional legal papers to Federal District Court Judge Nicholas Garaufis (who may or not agree with magistrate Levy’s recommendation), or to refile their action in the N.Y. Supreme Court. This is  "David v. Goliath" litigation, since all of the NY State political power -- former Governor George Pataki, Mayor Bloomberg, ESDC and MTA -- are lined up on the side of the developer. See N.Y. Times, “A Developing Story” (February 24, 2007).  Someone has to take a harder look at the “impermissible favoritism” that is reflected in the record so far.

Written By:Carola Von Hoffmannstahl-Solomonoff On March 12, 2007 11:01 AM

So Mr. Boymelgreen thinks Mr. Weinstein "will use the court victory to leverage more money from Forest City"? Wow. That would be so much worse than Forest City using eminent domain and an illegal arrangement with Mr. Weinstein's tenants to leverage a cheap sale.

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