The Atlantic Yards project in Brooklyn suffered another setback last week after a state appellate court refused to dismiss a lawsuit challenging the use of eminent domain to obtain land for the project.

Developer Forest City Ratner Cos. wants to build 15 high-rise apartment buildings and an office tower and use more than $637 million of bonds backed by payments in lieu of taxes to construct an 18,000-seat basketball arena that the National Basketball Association’s Nets will use as home court. FCR had intended to break ground in December, but now oral arguments won’t be heard until March.

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