Eminent Domain Suit Tossed

A federal judge last week dismissed a lawsuit filed to stop eminent domain proceedings begun by the Empire State Development Corp. to seize property in Brooklyn on behalf of developer Forest City Ratner. The corporation wants the property for the $4.2 billion Atlantic Yards project, a housing development that includes a basketball arena, hotel, and retail and office space. The plaintiffs, 13 residents and businesses in the footprint of the 22-acre site, plan to appeal the ruling by Judge Nicholas Garaufis to the U.S. Court of Appeals for the Second Circuit. The judge ruled that claims made by the plaintiffs that the project would not confer a public benefit were baseless. The project faces several more lawsuits, including a challenge to the way the environmental impact statement was prepared. The ESDC plans to sell $637.2 million of bonds backed by payments in lieu of taxes to finance the arena. Court documents obtained by the plaintiffs and posted on the Atlantic Yards Report blog show that Ratner anticipates using $1.4 billion of tax-exempt bonds to finance residential rental housing. The Bond Buyer reported in December that Ratner had filed declarations of intent with the New York City Housing Development Corp. totaling $2.17 billion of bonds for 4,500 unit of rental housing. Such declarations are preliminary and non-binding and the developer has to date filed at least 20 declarations for the 16 planned buildings. Ratner filed another declaration of intent with HDC in January for $100 million of bonds for a 25-32 story building containing 325 residential units and 11,000 square feet of retail space.