Supplemental environmental review of Atlantic Yards ordered

Atlantic Yards development site along Atlantic Avenue.

Court found ESDC’s environmental analysis insufficient due to change in Atlantic Yards project, but refused to halt project. In 2006, the Empire State Development Corporation approved the general project plan for Forest City Ratner Companies’ Atlantic Yards project in Brooklyn. The $4 billion project includes a sports arena and sixteen high-rise buildings. Ratner agreed to purchase air rights from the Metropolitan Transportation Authority at the beginning of the project in order to facilitate the development of six of the buildings. The project’s environmental review assumed a ten-year build-out for the project and a completion date of 2016.

In June 2009, Ratner and the MTA renegotiated the terms of their agreement to permit Ratner to acquire the air rights over a fifteen-year period extending to 2030. In September 2009, ESDC adopted the project’s modified general project plan, but continued to assume a ten-year build-out with an estimated project completion date of 2019. As such, ESDC concluded that no additional environmental review was required.

Two community groups, Develop Don’t Destroy Brooklyn and the Prospect Heights Neighborhood Development Council, filed a petition claiming that ESDC ignored the impacts of the renegotiated MTA agreement on the project’s time frame for construction and should have concluded that additional environmental review was warranted.

After the community groups filed their challenge, ESDC and Ratner in December 2009 signed a master development agreement to implement the modified general project plan that extended the project’s final phase to 25 years, or 2035.

Rather than submitting the master development agreement during oral arguments, ESDC relied on a one-page summary of the master development agreement and the modified general project plan to support its reasoning for continuing to use a ten-year build-out estimate. The one-page summary cited to the modified general project plan, which required Ratner to use commercially reasonable efforts to complete the project by 2019. Justice Marcy S. Friedman found that ESDC had a rational basis for relying on the ten-year build-out and rejected the challenge.

The community groups moved to reargue the case and requested that Justice Friedman accept the master development agreement into the record. Justice Friedman granted the request. On review of the agreement, Justice Friedman found that ESDC failed to meet its obligation to submit a complete and accurate record during the initial challenge. Justice Friedman ruled that the MTA agreement’s extension for acquiring air rights, and the development agreement’s 2035 completion date and less stringent enforcement measures raised a “substantial question” as to whether ESDC had a rational basis for using a ten-year build-out ending in 2019. She ordered ESDC to make additional findings on the impact of both agreements on the continued use of the ten-year build-out, and on whether additional environmental review was required or warranted. (See CityLand’s prior coverage here).

On remand, ESDC concluded that the agreements did not have a material effect on whether it was reasonable to use the ten-year build-out to assess the environmental impacts of the project. ESDC also concluded, based on environmental impact analysis documents, that a supplemental environmental impact statement was not warranted or required even if there were a delay in the ten-year build-out. ESDC further concluded that a delay would not result in any new significant adverse environmental impacts not previously identified and considered.

The community groups again challenged ESDC’s findings, arguing that the agreements significantly extended the time frame for the build-out of the final phase of the project. Given the extended time frame, the community groups argued that the ten-year build date was an impermissible basis for environmental analysis.

Justice Friedman agreed and again remanded the matter to ESDC for further environmental review, including preparing a supplemental environmental impact statement. The court ruled that ESDC’s continuing use of the ten-year build date lacked a rational basis because of the major change in deadlines reflected in both agreements, including the contemplated completion date of the final phase by 2035. Justice Friedman also ruled that ESDC had failed to take a “hard look” at the environmental impacts of the 2009 modified general project plan, and that ESDC must prepare a supplemental environmental impact statement addressing the potential delays in the final phase of construction. The court found that ESDC’s environmental impact analysis documents did not adequately assess the impacts of the extended delay, including impacts on traffic, air quality, noise, neighborhood character, open space, and socioeconomic conditions. Justice Friedman did not, however, order a stay of the project, ruling that the current construction phase had been adequately reviewed.

ESDC appealed the decision, but the First Department affirmed. The appellate court found that ESDC knew, when it approved the 2009 modified general project plan, that the economic downturn that necessitated the negotiation of new agreements would also prevent a ten-year build-out. And like the lower court, the appellate court found ESDC’s environmental analysis documents inadequate.

Develop Don’t Destroy (Brooklyn), Inc. v. Empire State Dev. Corp., 2012 N.Y. Slip Op. 02752 (1st Dep’t April 12, 2012) (Attorneys: Jeffrey S. Baker, Albert K. Butzel, for community groups; Philip E. Karmel, for ESDC; Jeffrey L. Braun, for Forest City Ratner).


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