New York State Court of Appeals has dismissed a challenge to how the state used eminent domain for the $4.9 billion Atlantic Yards project.
In a 6-1 ruling Tuesday, the top court in New York said the Empire State Development Corp.'s finding that the area was blighted was enough to justify taking the land.
"The constitution accords government broad power to take and clear substandard and insanitary areas for redevelopment," Chief Judge Jonathan Lippman wrote for the majority. "In so doing, it commensurately deprives the judiciary of grounds to interfere with the exercise."
The 22-acre development project has been delayed for more than three years by a number of legal cases, the credit and real estate market’s collapse and the abundance of luxury housing.
A group of tenants and owners claim the seizure is unconstitutional. They argue that developer Bruce Ratner's proposed $4.9 billion, 22-acre Atlantic Yards project mainly enriches private interests, while the state constitution requires public use for taking land.
Next month Ratner will start selling tax exempt bonds to finance the 18,000-seat arena for the Nets basketball team at the corner of Atlantic and Flatbush Avenues near downtown Brooklyn.
If the construction on the project starts in the next few weeks, the development project will unique in a city where 530 construction projects have been slowed by lack of funding.
The completion of the project would be the most costly in the country and will be the home of the first major league team in Brooklyn since 1957, when the Dodgers moved to Los Angeles. There are also plans to build 16 high-rise buildings on the surrounding areas. Most of those buildings will be residential, potentially providing 6,430 housing units.
Even though the project has overcome this latest obstacle, three other lawsuits, the lack of funding and shaky real estate market still hinder the deal.
The attorney for homeowners and tenants who declined to sell after the project was announced in 2003 said the fight isn't over.
Matthew Brinckerhoff said his clients will oppose the ESDC when the urban development agency goes to court in Brooklyn in the second step of the process to take the properties.
"They have won round one, and we still have round two to go," Brinckerhoff said. "I think everybody believes that they need to do a number of things by the end of the year, and where exactly this fits into that process I'm not sure. But the fact that they haven't yet taken the properties can't be helping them."
Ratner said he will begin construction on the first residential tower about six months following the start of construction on the basketball venue, but the problem is that many new housing units are empty and could take many years before the demand for housing increases enough to rationalize constructing so many in one section of the city.
The basketball arena will be constructed on top of an 8.5-acre rail yard. Ratner has turned over a temporary yard just a little east of the original site to the Long Island Railroad. A combination of taxable and tax-free bonds to the fund the arena’s construction is expected to be approved Tuesday.