Court affirms dismissal of Atlantic Yards challenge

ESDC’s determination upheld that three blocks outside urban renewal area were blighted. In 2003, Forest City Ratner proposed to redevelop a 22-acre site in Prospect Heights, Brooklyn. The site included portions of the Atlantic Terminal Urban Renewal Area and portions of three privately-owned blocks outside the renewal area. After Ratner’s proposal was accepted, the Empire State Development Corporation designated itself as lead agency for the project under state environmental law. ESDC prepared an environmental impact statement and a blight study, and later approved the findings in both documents, including the finding that portions of the three privately-owned blocks were blighted. A coalition of local business owners and residents challenged ESDC’s blight finding in the non-renewal area and the sufficiency of the environmental impact statement. Supreme Court Judge Joan A. Madden rejected the challenge, and the decision was appealed. 5 CityLand 16 (Feb. 15, 2008).

On appeal, the coalition argued, among other things, that ESDC arbtrarily selected build years that distorted the project’s potential environmental impacts. The coalition also argued that ESDC’s failure to consider the positive real estate trends in the non-renewal area led it to unreasonably conclude that the proposed project was uniquely capable of alleviating blight in the non-renewal area. The coalition further claimed that ESDC’s finding of blight for the non-renewal area was unsubstantiated.

The First Department rejected these arguments, ruling that ESDC rationally relied upon the general contractor’s construction schedules and on an independent contractor when selecting the build years. The court also ruled that ESDC adequately considered alternative scenarios and acted rationally in preferring Ratner’s proposal, noting that the project would provide significantly more affordable housing than under the alternate scenarios.

The court also rejected the claim that ESDC’s finding of blight in the non-renewal area was unsubstantiated. It held that ESDC, acting as a governmental agency of the state, was entitled to deference, and that agency findings of blight have been found deficient only when “utterly unsupported.” The court found that the agency’s lot-by-lot blight study in both the renewal and non-renewal area was extensively documented, and that it was clear that ESDC’s finding of blight, based on the study, was rational.

Develop Don’t Destroy Brooklyn, Inc. v. Urban Development Corporation d/b/a Empire State Development Corp., 2009 N.Y. Slip Op. 01395 (1st Dept. Feb. 26, 2009).

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