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Atlantic Yards Condemnation Litigation Continues

Last year we reported on the case of Goldstein v Pataki, 516 F3d 50 [2008] involving the proposed condemnation of property in Brooklyn, New York in order to build the so called Atlantic Yards Project which includes a huge residential and commercial development along with an arena for the New Jersey Nets. This week the Appellate Division, First Department (In re Develop Don’t Destroy (Brooklyn) v. Urban Development Corporation) again addressed claims by property owners alleging that the State Environmental Quality Review Act (SEQRA) had not been adequately followed and that the project does not involve an appropriate public project within the meaning of the various governing statutes including the Eminent Domain Procedures Law.

In dismissing the claims the court made far reaching findings which are best recited in the court’s own words. The first claim was that the financial participation of the Empire State development Corporation (ESDC) in the project had not been properly analyzed as part of the SEQRA review findings and therefore had not been subjected to appropriate environmental scrutiny. The court disagreed that the ESDC’s financial participation was an area for environmental inquiry holding: “[a]ccordingly, where the decision, although discretionary, is governed by criteria unrelated to the environmental concerns addressed in an EIS, environmental findings based on the EIS are unnecessary as it would be pointless to mandate reliance on an EIS in the interest of informed decision-making in circumstances where the EIS is by hypothesis irrelevant to and cannot inform the decision to be made”

The Plaintiffs then argued that the lead agency failed to take a “hard look” under SEQRA at the threat of a terrorist incident, particularly with respect to the arena. The Court disagreed finding that although there may be exceptions in the case of storage of particularly dangerous materials: “SEQRA contains no provision expressly requiring an EIS to address the risk of terrorism and, indeed, it would not appear that terrorism may ordinarily be viewed as an “environmental impact of [a] proposed action” (ECL 8-0109[2][b] [emphasis added]) within the statute’s purview.”

Next the Plaintiffs claimed that the lead agency did not properly determine the build year for various aspects of the project, which they claim resulted in an inadequate review of the proposal. Yet again the court disagreed noting: “the ultimate accuracy of the estimates is neither within our competence to judge nor dispositive of the issue properly before us, which is simply whether the lead agency’s selection of build dates based on its independent review of the extensive construction scheduling data obtained from the project contractor may be deemed irrational or arbitrary and capricious”

The final SEQRA claim was that the lead agency did not adequately consider alternatives and specifically failed to take into account prevailing real estate trends. In perhaps its most devastating conclusion with respect to the Plaintiffs’ SEQRA claims the court held: “[t]o be sure, as the EIS discloses, there were more adverse impacts associated with the proposed project than with its less ambitious alternatives, but, on balance, there is no tenable argument that that lead agency’s preference for the FCRC project, arrived at after an evidently conscientious weighing of alternatives, was not rationally and sufficiently based on the project’s distinctive constellation of otherwise unattainable benefits. Certainly, the lead agency did not in this case exceed the “considerable latitude” afforded it under SEQRA to evaluate environmental effects and choose among alternatives (Jackson, 67 NY2d at 417).”

The Plaintiffs also raised issues relating to the determination of blight for purposes of condemnation, arguing in part that the properties in question were not actually blighted. In rejecting this argument the court stated: “reinforced by a standard of review that may with great understatement be described as lenient: ‘When [the agencies to which the initial blight determination has been committed] have made their finding, not corruptly or irrationally or baselessly, there is nothing for the courts to do about it, unless every act and decision of other departments of government is subject to revision by the courts” (Kaskel v Impellitteri, 306 NY 73, 78 [1953], cert denied 347 US 934 [1954])’…. Plaintiff does not dispute with defendants as to the condition of these properties or of the whole area. He is simply opposing his opinion and his judgment to that of public officials, on a matter which must necessarily be one of opinion or judgment, that is, as to whether a specified area is so substandard or insanitary, or both, as to justify clearance and redevelopment under the law.”

Finally, the court concluded: “The issue posed is not which of the parties has more persuasively characterized the area in question, but whether there was any basis at all for the exercise by the agency of the legislatively conferred power to make a blight finding, and plainly there was.”