At Supreme Atlantic Yards Hearing, Questions of Process

Right out of the gate, justices had a few questions for the lawyers petitioning the State Supreme Court's Appellate Division in a hearing Monday morning to block eminent domain for Forest City Ratner's Atlantic Yards development in Brooklyn.

"Can we really determine that in this framework?" interjected Justice Randall Eng, just barely after Jennifer Levy, an attorney representing a plaintiffs' group of businesses and individuals, mentioned the state's condemnation of the area in question.

"This is not an argument about the act of condemning," she replied. Instead, this part of the legal offensive against Bruce Ratner's project was more about process: The plaintiffs argue that the Empire State Development Corporation should have evaluated the private benefit to Forest City before handing over the land, and also that the $100 million in state funding requires any housing built as part of the plan to be reserved for low-income residents.

"What we're asking you to do is to link slum clearance to the provision of affordable housing as provided for in the New York State constitution," Ms. Levy told the justices.

In the 15-minute skirmish—the seventh of 16 hearings on the court's docket that morning, and easily the highlight—the petitioners and their ESDC respondents ran through their briefs as well as they could, interrupted frequently by questions from the bench.

ESDC attorney Charles Webb also didn't have much time to begin his argument before the panel's chair, Justice Robert Spolzino, asked him to respond directly to the petitioners on the question of whether ESDC should have dug deeper into the financial reward in store for Mr. Ratner (even if the project constitutes "public use," Ms. Levy and fellow plaintiffs' attorney Matthew Brinckerhoff used case law to argue, public benefit should be considered in relative terms).

"Did they [ESDC] address private benefit?" Justice Spolzino wanted to know.

"I don't believe they did, because there was no reason to," Mr. Webb answered.

"They don't have to?"

"They don't have to."

Mr. Brinckerhoff, in an impromptu press conference after the hearing, seemed most confident about the justices' response to the financial disclosure part of the case—they "recognized that there is nothing in the record" examining the private benefits that would accrue to Forest City Ratner.

"Nobody cared if Ratner was going to benefit to the tune of a trillion dollars or one billion," Mr. Brinkerhoff said. "This is something that his company has zealously guarded for years."

Still, observers and even some project opponents have viewed the appeal in state court as a long shot at best for the Develop Don't Destroy crowd, which first filed eminent domain litigation in late 2006.

But the Atlantic Yards opponents may win another victory: simply dragging out the process long enough to hamstring Forest City Ratner's ability to raise capital with federal tax-exempt bonds for his planned Nets basketball arena. The I.R.S. has said the bonds must be sold by the end of 2009.

If the landowners and tenants lose this appeal, said Mr. Brinckerhoff, they'll file another notice "as of right," which could potentially take another few months to be approved or denied by the state's highest court.

"We're very confident that the Court of Appeals is going to be the last word," he said.

Meanwhile, the newly Democrat-controlled State Senate plans to hold a hearing in late April on the project's financing; and a decision on the legal challenge to the state's environmental review and blight finding, argued in September, is still coming down the pike. Regardless of how that case goes, what might continued litigation mean for Mr. Ratner's plan?

"I don't think they can issue a bond in 2009," said a confident Daniel Goldstein, spokesman for Develop Don't Destroy Brooklyn.