State court decision acknowledges misrepresentations by ESDC may have enabled construction of Barclays Center to proceed

In a decision issued yesterday, New York State Supreme Court Justice Marcy Friedman confirmed what many observers of the Atlantic Yards project have long suspected: if the Empire State Development Corporation (ESDC) had fully disclosed the terms of its 2009 agreement with Forest City Ratner Companies (FCRC), the Barclays Center arena might not have been built. Justice Friedman’s decision granted a motion filed by BrooklynSpeaks sponsors for recovery of legal fees from a 2009 suit challenging ESDC’s approval of changes to the Atlantic Yards plan. Those changes allowed FCRC to extend the construction of the residential portion of the project—including the majority of its promised affordable housing—from ten to twenty-five years.

In legal papers filed in response to BrooklynSpeaks’ 2009 suit, ESDC had suggested its agreement with FCRC included provisions to ensure the completion of Atlantic Yards on its original ten-year schedule. However, ESDC delayed releasing the text of the agreement to the Court prior to arguments being heard in the case. Yesterday, Justice Friedman wrote, “Had the ESDC disclosed the terms of the Development Agreement that were being negotiated when the petitions were initially heard, or brought the Agreement to the court’s attention promptly after it was executed, construction would not have been as advanced on the arena at the time of the court’s determination requiring an SEIS, and the balance of the equities may have favored a stay pending preparation of the SEIS.” If such a stay had been issued after initial arguments, FCRC’s access to $500 million in bond financing for arena construction would have been in jeopardy.

Civic leaders and advocates renewed calls for better government oversight of Atlantic Yards. “It’s outrageous that after more than two years, ESDC has yet to comply with a court order for a supplemental environmental impact statement,” said Ellen Fishman, chair of the Prospect Heights Neighborhood Council. “Justice Friedman again confirmed the need for just such a study of alternatives that can deliver housing without the need for extended construction.”

“Atlantic Yards delays are costing local families their chance to live in an apartment they can afford,” said Michelle de la Uz, executive director of the Fifth Avenue Committee. “Yesterday’s decision is another reminder that ESDC has long held the veil shrouding Atlantic Yards from accountability to the public, and that must change.”

Elected officials noted the recent announcement by FCRC of its intention to sell a majority of its interest in the residential portion of the Atlantic Yards project. “The massive delays in producing affordable housing are intolerable,” said Assemblyman Jim Brennan, chair of the Assembly Committee on Corporations, Authorities and Commissions. “I call on ESDC and Forest City Ratner to accelerate the schedule to bring the affordable housing units to completion as soon as possible.”

Said Assemblyman Walter Mosley, whose 57th District includes nearly all of the Atlantic Yards site, “Yesterday’s decision by the Court puts a greater burden on ESDC to demonstrate transparency in its future dealings on this project, into which the public has already directly invested hundreds of millions of dollars.”

“The Court has acknowledged what many of my constituents have known all along—that an agency of the State of New York has failed, and continues to fail, to represent their interests in favor of those of a powerful corporate developer,” said Councilmember Letitia James, who represents the neighborhoods of Fort Greene, Prospect Heights, Clinton Hill and Crown Heights. “ESDC needs to bring fundamental change to the oversight of this project to ensure public benefits get delivered before private profit.”