| Matter of Develop Don't Destroy (Brooklyn) v Urban Dev.Corp. |
| 2009 NY Slip Op 01395 [59 AD3d 312] |
| February 26, 2009 |
| Appellate Division, First Department |
| In the Matter of Develop Don't Destroy (Brooklyn) et al.,Appellants, v Urban Development Corporation, Doing Business as Empire StateDevelopment Corporation, et al., Respondents. |
—[*1] Bryan Cave LLP, New York (Philip E. Karmel of counsel), for Urban DevelopmentCorporation, respondent. Kramer Levin Naftalis & Frankel LLP, New York (Jeffrey L. Braun of counsel), for ForestCity Ratner Companies, LLC, respondent. Carter Ledyard & Milburn LLP, New York (Stephen L. Kass of counsel), for MetropolitanTransportation Authority, respondent. Andrew M. Cuomo, Attorney General, New York (Peter Karanjia of counsel), for New YorkState Public Authorities Control Board, respondent.
Order and judgment (one paper), Supreme Court, New York County (Joan A. Madden, J.),entered January 17, 2008, inter alia, dismissing the action challenging various administrativefindings concerning the Atlantic Yards Arena Redevelopment Project, affirmed, without costs.
Respondent Forest City Ratner Companies (FCRC) has proposed to construct a vast andpurportedly transformational mixed-use development on a 22-acre swath of real estate inBrooklyn extending eastward from the junction of Atlantic and Flatbush Avenues. "AtlanticYards," as the project is called by reason of its planned situation atop of and in blocks adjacent tothe rail yards serving the Long Island Rail Road (LIRR) Atlantic Terminal, is to include 16 highrise structures and a sports arena. Six thousand, four hundred thirty housing units, more than athird of which will be "affordable," are to be accommodated in the project's towers along withhundreds of thousands of square feet of space dedicated to commercial purposes. Also to beincluded within the project footprint is an 18,000-seat arena, intended to serve, inter alia, as thenew home of the Nets, the National Basketball Association franchise now situated in NewJersey, which would, upon its move to the new arena, become Brooklyn's first major professionalsports team since the Dodgers left the borough for Los Angeles in 1957. The proposed arena'sdesign is by the [*2]eminent American architect, Frank Gehry,and the eight acres of open space to be situated amid the arena and the project's other structuresare to be laid out according to the plans of the highly regarded landscape architect, Laurie Olin.Other promised benefits of the project include improved access to the major transit hub alreadylocated at its site and construction of a new, covered LIRR rail yard.
The project has been shepherded through its preconstruction phases and otherwise promotedby respondent New York State Urban Development Corporation, doing business as the EmpireState Development Corporation (ESDC). In addition to acting as the "lead agency" in connectionwith the project's environmental review (see generally 6 NYCRR 617.2 [u]), the ESDChas obtained authorization from the State Legislature and respondent New York State PublicAuthorities Control Board (PACB) to finance a portion of the project through a bond issue. It hasalso made certain findings simultaneously placing the project within its purview and exemptingit from compliance with otherwise applicable city zoning and land use laws (seeMcKinney's Uncons Laws of NY § 6266 [3] [Urban Development Corporation Act(UDCA) § 16 (3), as added by L 1968, ch 174, § 1, as amended]), namely, that theproject qualifies as a "land use improvement project" pursuant to Unconsolidated Laws §6260 (c) and § 6253 (6) (c) (UDCA § 10 [c]; § 3 [6] [c]), based upon blight atits site, and that the project's proposed arena qualifies under Unconsolidated Laws § 6260(d) and § 6253 (6) (d) as a "civic project." Also, in collateral proceedings the ESDC hasexercised its condemnation power (see Uncons Laws § 6255 [7] [UDCA § 5(7)]) on the project's behalf (see Matterof Anderson v New York State Urban Dev. Corp., 45 AD3d 583 [2007], lv denied10 NY3d 710 [2008]) and has defended that exercise against constitutional challenge(see Goldstein v Pataki, 516 F3d 50 [2008], cert denied 554 US —, 128 SCt 2964 [2008]).
The project footprint extends over eight city blocks, the majority of which are now occupiedby subgrade rail yards lying within an area that has, since 1968, been designated the AtlanticTerminal Urban Renewal Area (ATURA). There is no dispute that this previously designatedarea is in fact blighted and that the proposed development, insofar as it affects this area, has beenproperly deemed a "land use improvement project." Adjoining the rail cut on its southern side,however, lie two full blocks and part of a third that are not within ATURA but are within theFCRC project footprint. These non-ATURA project blocks, although never previouslyearmarked for urban renewal, have, since the announcement of the project, been found blightedby the ESDC and thus proper for development under the ESDC's auspices, along with thecontiguous rail yard blocks, as a "land use improvement project."
While the principal focus of this appeal would appear to be upon the propriety of the ESDC'sUDCA findings that the non-ATURA project blocks are blighted and that the proposed arenaqualifies as a "civic project," petitioners in this hybrid CPLR article 78/declaratory judgmentaction have also raised numerous challenges to the adequacy of respondents' compliance with theState Environmental Quality Review Act (SEQRA), several of which survive for our review.Petitioners urge (1) that the PACB determination approving the ESDC's financial participation inthe project was improper in the absence of environmental findings by the PACB; (2) that theESDC's environmental review was deficient due to its failure to address the risk of a terroristattack upon the project; (3) that the "build years" used by the ESDC in its environmental impactstatement (EIS) were irrational and skewed the ensuing analysis of the project's environmentaleffects; and (4) that because the ESDC failed to study and give due consideration to real estatemarket trends in the non-ATURA project area, it could not have adequately discharged its [*3]statutory obligation to consider alternatives to the proposed projectnot involving that area's development as part of an urban renewal project. We address theseSEQRA claims first and then turn to the claims arising under the UDCA.
Ordinarily, under SEQRA an involved agency must, when exercising discretion to approvean action for which an EIS is required, make certain statutorily enumerated environmentalfindings based on the EIS (see ECL 8-0109 [8]; 6 NYCRR 617.11 [d]). Thisrequirement, however, is logically premised upon the relevance of the EIS to the decision theagency is called upon to make. Accordingly, where the decision, although discretionary, isgoverned by criteria unrelated to the environmental concerns addressed in an EIS, environmentalfindings based on the EIS are unnecessary as it would be pointless to mandate reliance on an EISin the interest of informed decision-making in circumstances where the EIS is by hypothesisirrelevant to and cannot inform the decision to be made (see Incorporated Vil. of Atl. Beach vGavalas, 81 NY2d 322, 326 [1993]). Here, the PACB's approval of the ESDC's financialparticipation in the project was governed by closely drawn statutory criteria specifically relevantto a distinct, statutorily prescribed inquiry, i.e., whether "there [were] commitments of fundssufficient to finance the acquisition and construction" of the project (Public Authorities Law§ 51 [3]). Plainly, this singular, discrete financial inquiry would not have been usefullyinformed by the EIS's account of the project's environmental effect and, accordingly, did nottrigger an obligation to make environmental findings pursuant to ECL 8-0109 (8).
Petitioners' remaining SEQRA claims allege substantive deficiencies in the project's EIS.However, our power to review the substantive adequacy of an EIS is extremely limited. It is bynow a familiar refrain that we may not disturb an agency determination as substantively flawedunless it is affected by an error of law, arbitrary and capricious, or constitutes an abuse ofdiscretion (see CPLR 7803 [3]; Akpan v Koch, 75 NY2d 561, 570 [1990];Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400, 416 [1986]), and,in the context of reviewing a lead agency's SEQRA determination, this generally expressedlimitation has been understood to confine judicial inquiry to a "review [of] the record todetermine whether the agency identified the relevant areas of environmental concern, took a hardlook at them, and made a reasoned elaboration of the basis for its determination" (id. at417 [internal quotation marks and citations omitted]). In assessing whether an agency has met itssubstantive SEQRA obligations, the appropriate judicial focus is not upon the agency's ultimatejudgments but upon the deliberative process by which they were reached, and the touchstone isreasonableness. "Not every conceivable environmental impact, mitigating measure or alternativemust be identified and addressed before a FEIS will satisfy the substantive requirements ofSEQRA. The degree of detail with which each factor must be discussed obviously will vary withthe circumstances and nature of the proposal" (Jackson, 67 NY2d at 417 [internalquotation marks and citations omitted]).
While the 3,500-page final EIS approved by the ESDC in connection with the proposedproject provides impressively detailed analyses of the project's anticipated environmentalimpacts in 16 separately identified areas, petitioners contend that it fails to identify and take a"hard look" at a relevant area of environmental concern because it does not address the risk of aterrorist incident at the project site. But SEQRA contains no provision expressly requiring anEIS to address the risk of terrorism and, indeed, it would not appear that terrorism may ordinarilybe viewed as an "environmental impact of [a] proposed action" (ECL 8-0109 [2] [b][emphasis added]) within the statute's purview. We do not, however, find it necessary todetermine [*4]whether consideration of the prospect of terrorismmay ever lie within the scope of the environmental review mandated by the statute, and leaveopen the possibility that there may be a case in which a proposed action will by its very naturepresent a significantly elevated risk of terrorism and consequent environmental detriment, i.e., acase in which the risk and its potential adverse environmental impacts may in a real sense be saidto stem from the action itself rather than an independent ambient source (see e.g. San LuisObispo Mothers for Peace v Nuclear Regulatory Commn., 449 F3d 1016 [2006], certdenied 549 US 1166 [2007]). For now, it suffices to observe that the project at issue does notpose extraordinary inherent risks; it does not involve the siting of a nuclear storage facility(id.), or a biological weapons laboratory (Tri-Valley Cares v Department ofEnergy, 203 Fed Appx 105, 107 [2006]), or any comparably risk-elevating action, but ratherthe creation of a venue dedicated to routine residential, commercial and recreational purposes(see 6 NYCRR 617.9 [b] [6]). These latter purposes, even when realized in the form of amajor urban development situated at a preexisting transit hub, do not so clearly increase the riskof terrorism, much less of terror-induced environmental harm, as to render the lead agency'sdetermination not to address terrorism as an environmental impact of the proposed actionunreasonable as a matter of law.
To be sure, tragic experience counsels that even venues designed to accommodate relativelybenign uses may become terrorist targets and that security must be a concern in the planning ofany public project, particularly one concentrating large numbers of people. We have recentlyaffirmed the obligation of landlords, under tort law, to take reasonable measures to secure theirpremises against actual reasonably foreseeable risks of terrorist predation (see Nash v Port Auth. of N.Y. & N.J.,51 AD3d 337 [2008]). At issue here, however, is not the extent of a landlord's common-lawsecurity obligation, but the scope of the lead agency's statutory planning obligation publicly toidentify the significant environmental impacts of a proposed action, and, ordinarily, terrorismdoes not fall under that latter rubric.
Turning now to the "build year" issue, it is petitioners' contention that the build years, i.e.,the time periods by which the phases of the project were predicted to be substantiallyoperational, were intentionally underestimated in the project EIS and that the EIS's disclosure ofthe project's environmental impacts was consequently fatally skewed. The record, however,discloses that in selecting the build years to be used in the EIS, the lead agency did not arbitrarilyselect a build year it found favorable but relied upon the detailed construction schedules of theproject's highly experienced general contractor and upon the opinions of its own consultants andan independent contractor. It is, of course, possible that the lengths of the projected build-outperiods (four years for the first phase of the project, including the arena, and 10 years for theremaining elements) were underestimated, but the ultimate accuracy of the estimates is neitherwithin our competence to judge nor dispositive of the issue properly before us, which is simplywhether the lead agency's selection of build dates based on its independent review of theextensive construction scheduling data obtained from the project contractor may be deemedirrational or arbitrary and capricious (see Akpan, 75 NY2d at 572-573), and it may not.The build dates having been rationally selected, there can be no viable legal claim that the EISwas vitiated simply by their use. Indeed, we have, in rejecting a similar challenge to an EIS, heldthat reliance on a particular build date, even if inaccurate, will not affect the validity of the basicdata utilized in an EIS (Matter of Committee to Preserve Brighton Beach & Manhattan Beachv Council of City of N.Y., 214 AD2d 335, 337 [1995], lv denied 87 NY2d 802[1995]).
Petitioners' final appellate claim of substantive inadequacy in the EIS focuses upon the [*5]EIS's consideration of alternatives to the proposed action.Petitioners do not contend that the lead agency wholly failed to discharge its statutory obligationto consider feasible alternatives to the FCRC project (see ECL 8-0109 [2] [d]), for theEIS in fact contains a separately headed, highly detailed 83-page section discussing variousalternatives, including one involving no action and another contemplating a lower density,arenaless development not encompassing the non-ATURA project blocks. Petitioners' contentionis rather that the lead agency did not take into account in the EIS prevailing real estate trends,particularly as they affected and had become manifest in the non-ATURA project area at thetime of the project's announcement, and thus could not have reasonably concluded that theproposed project was to be preferred to its alternatives for its purportedly unique capacity toalleviate blight in the non-ATURA blocks. This argument, however, necessarily supposes thatthe lead agency's judgment as to the relative desirability of the proposed project must haveturned upon the project's purported efficacy as a means of improving the non-ATURA blocks. Itis, however, clear from the EIS that the lead agency's rationale for preferring the proposedproject was not so singularly grounded. The proposed project, in distinction to the alternativespreferred by petitioners, included an architecturally distinguished arena that would house a majorprofessional sports franchise, an elaborate new subway entrance, a new and improved LIRR railyard, improved pedestrian and bicycle linkages connecting the project and the surroundingneighborhoods on the north-south axis, an on-site stormwater drainage system, and eight acres ofopen space landscaped by Laurie Olin. It also made provision for significantly more affordablehousing than would have been developed under alternative scenarios, and, by reason of its scaleand range of uses, promised economic and fiscal benefits exceeding those expected to begenerated under the other plans. To be sure, as the EIS discloses, there were more adverseimpacts associated with the proposed project than with its less ambitious alternatives, but, onbalance, there is no tenable argument that the lead agency's preference for the FCRC project,arrived at after an evidently conscientious weighing of alternatives, was not rationally andsufficiently based on the project's distinctive constellation of otherwise unattainable benefits.Certainly, the lead agency did not in this case exceed the "considerable latitude" afforded itunder SEQRA to evaluate environmental effects and choose among alternatives(Jackson, 67 NY2d at 417).
Petitioners also challenge the designation of the non-ATURA project area as a UDCA "landuse improvement project" on the ground that gentrification of the area had progressedappreciably due to market forces and would have run its course if permitted to do so. In thiscontext, however, the thrust of the argument is not that a feasible alternative to the proposedaction was unreasonably rejected by the ESDC, but more fundamentally that the ESDC had nolegitimate role to play with respect to the blocks in question since they are not in fact"substandard and insanitary" and accordingly not a proper subject of an ESDC sponsored "planor undertaking for the[ir] clearance, replanning, reconstruction and rehabilitation" (Uncons Laws§ 6253 [6] [c]).
Before considering this issue and petitioners' challenge to the other proffered justification forthe ESDC's sponsorship of proposed project, i.e., that it is a "civic project" within the meaning ofUnconsolidated Laws § 6253 (6) (d), we note that the constitutional sufficiency of thepublic purposes upon which the ESDC's involvement in the Atlantic Yards project as acondemnor was predicated has been the subject of now completed litigation. In Goldstein vPataki (516 F3d 50 [2008], supra), the Second Circuit Court of Appeals held that theESDC's exercise of its eminent domain power to take private property for the project, andspecifically to take private property [*6]within the non-ATURAproject blocks, was supported by the project's rational relation to "several classic public useswhose objective basis is not in doubt" (id. at 63). Among these "classic public uses"were the alleviation of blight in both the ATURA and non-ATURA project areas and theprovision of a sporting arena (id. at 55, 58-59, 62). In rejecting the plaintiffs' claim thatthese purposes were under the specific circumstances presented inadequate to support theESDC's exercise of its eminent domain power, indeed that they amounted to no more thanpretexts for bestowing a private benefit upon FCRC, the court, citing numerous authorities, butmost notably Berman v Parker (348 US 26 [1954]) and Hawaii Housing Authority vMidkiff (467 US 229 [1984]), emphasized that it is an essentially legislative, and not ajudicial function to define the public agenda, and, accordingly, that in all but the mostextraordinary cases—those in which there is no conceivable public purpose to beserved—courts reviewing the adequacy of a use advanced in support of an exercise of theeminent domain power are bound to defer to the public purpose findings of the Legislature andits agencies (Goldstein, 516 F3d at 57-60). In this last connection, the court specificallyrejected the contention that the findings of the ESDC were, by reason of its status as a publicbenefit corporation, nonlegislative and thus undeserving of deference, holding instead that, inmaking the findings upon which its exercise of the takings power was to rest, most particularlythose contained in its blight study, the ESDC acted as an agent of the Legislature (id. at60). In any case, it was, according to the court, undisputed that over half the project area was infact blighted, and that there was significant blight in the takings area (i.e., the non-ATURAproject area) amid which the plaintiffs' properties were situated. That the plaintiffs' propertieswere not themselves blighted did not require alteration of the project footprint since "communityredevelopment programs need not, by force of the Constitution, be on a piecemealbasis—lot by lot, building by building" (id., quoting Rosenthal & RosenthalInc. v New York State Urban Dev. Corp., 771 F2d 44, 46 [1985], cert denied 475US 1018 [1986], quoting Berman, 348 US at 35), and "[o]nce it has been shown that thesurrounding area is blighted, the state may condemn unblighted parcels as part of an overall planto improve a blighted area" (id., quoting In re G. & A. Books, Inc., 770 F2d 288,297 [2d Cir 1985]).
While petitioners' challenges to the ESDC's findings authorizing the project as one for thepublic purposes of land use improvement (Uncons Laws § 6260 [c]) and the provision ofcivic facilities (§ 6260 [d]) are not legally precluded by Goldstein,post-Goldstein petitioners are reduced to arguing that although the uses of the project aresufficiently public to support a justly compensated taking of property within the project footprintby the ESDC through its power of eminent domain, the identical uses will not supportredevelopment of the very same property pursuant to the UDCA. This posited, evidentlyanomalous disparity finds no support in the cases, which, as a matter of basic constitutionaldesign, counsel extreme judicial circumspection in assessing the adequacy of the public purposesadvanced by the Legislature and its agencies in support of government actions falling, evenarguably, within the state's police power. As Justice Douglas wrote in Berman, "[t]hedefinition [of the police power] is essentially the product of legislative determinations addressedto the purposes of government . . . Subject to specific constitutional limitations,when the legislature has spoken, the public interest has been declared in terms well-nighconclusive" (348 US at 32). This admonition has been strictly followed and nowhere more sothan in cases where the purpose advanced for the proposed governmental action is, as it was inBerman and is here, that of alleviating or preventing "substandard and insanitary"conditions, or "blight."
These terms, whose potentially capacious reference has not been meaningfully reduced bystatutory definition (see e.g. Uncons Laws § 6253 [12]), are to be understood"liberally" so as not to [*7]unduly constrict the governmentalprerogative to take measures directed at improving the urban environment (see YonkersCommunity Dev. Agency v Morris, 37 NY2d 478, 481-484 [1975]). This definitional checkupon judicial revision of determinations substantially and appropriately committed to thepolicy-making branches of government is complemented and reinforced by a standard of reviewthat may with great understatement be described as lenient: "[W]hen [the agencies to which theinitial blight determination has been committed] have made their finding, not corruptly orirrationally or baselessly, there is nothing for the courts to do about it, unless every act anddecision of other departments of government is subject to revision by the courts" (Kaskel vImpellitteri, 306 NY 73, 78 [1953], cert denied 347 US 934 [1954]).
Contrary to petitioners' argument, there exists no ground to suppose that this standard,compelling deference to agency blight findings when they are not utterly without rational basis,is applicable only in the context of evaluating whether there is a sufficient public use to supportcondemnation. Condemnation is not an end in itself, but merely an instrument for theachievement of a social purpose, here urban redevelopment (see Berman, 348 US at 33;Rosenthal & Rosenthal Inc. v New York State Urban Dev. Corp., 771 F2d 44, 46[1985]). Courts, even in the condemnation context, have understood that the issue before them indetermining whether property was blighted was not simply whether it could be condemned andcleared but ultimately whether by reason of blight it "qualifie[d] for renewal" (YonkersCommunity Dev. Agency, 37 NY2d at 484; and see Kaskel, 306 NY at 79 [framingthe inquiry in the condemnation proceeding as whether the property at issue was "so substandardor insanitary, or both, as to justify clearance and redevelopment under the law"(emphasis added)]). The essential purpose of the blight finding in connection withcondemnation, i.e., to qualify property for urban renewal, is not different under the ESDC'senabling statute (Uncons Laws § 6260), and, accordingly, the adequacy of blight findingsin the two contexts should not be judged by different standards. What is fundamentally at issuein both contexts is the extent of the government's unitary power to define, and act in pursuanceof a public purpose. It makes no difference that the agency through which the government hashere acted, the ESDC, is organized as a public benefit corporation. It is nonetheless a"governmental agency of the state, constituting a political subdivision [thereof]" (Uncons Laws§ 6254 [1] [UDCA § 4 (1)]) and, as such, its public purpose findings within thescope of its legislative authorization are entitled to extraordinary judicial deference (seeKaskel, 306 NY at 78-80; and see Goldstein, 516 F3d at 60; Jackson, 67NY2d at 424-425; Matter of West 41st St. Realty v New York State Urban Dev. Corp.,298 AD2d 1, 6-7 [2002], appeal dismissed 98 NY2d 727 [2002], cert denied 537US 1191 [2003]; East Thirteenth St. Community Assn. v New York State Urban Dev.Corp., 189 AD2d 352, 359 [1993], affd 84 NY2d 287 [1994]). We have, of course,employed this deferential standard, not only in the condemnation context, but also in reviewingblight findings made by the ESDC pursuant to Unconsolidated Laws § 6260 (c) (seeTribeca Community Assn. v New York State Urban Dev. Corp., 200 AD2d 536, 537 [1994],lv denied 84 NY2d 805 [1994]), and in judging the adequacy of the blight predicate foran urban renewal designation pursuant to article 15 of the General Municipal Law (see Jo &Wo Realty Corp. v City of New York, 157 AD2d 205, 217-218 [1990], affd on othergrounds 76 NY2d 962 [1990]).
Petitioners naturally seek to bring their claims within the very narrow circumstanceshypothetically reserved by Kaskel for judicial scrutiny, i.e., where an area's physicalcondition "might be such that it would be irrational and baseless to call it substandard orinsanitary" (306 NY at 80). However, the facts are very much against them. Indeed, this case isin significant [*8]respects very much like Kaskel, inwhich blight findings were upheld for an area including the part of Columbus Circle upon whichthe Coliseum was to be erected. Like petitioners, Kaskel maintained that the proposeddevelopment encompassed areas which, although contiguous, were of distinctly differentcharacter, one displaying indicia of blight and the other, the area on Columbus Circle, beingrelatively free of such conditions (id. at 82-83 [Van Voorhis, J., dissenting]). Also,similar to the argument petitioners now make, Kaskel maintained that the allegedly distinct,nonblighted Columbus Circle area had been made part of the proposed urban renewal projectarea, not because it was blighted but because it was coveted by the developer as a site for theColiseum, which the developer wished for financial reasons to erect as an element of an urbanrenewal project. The Court rejected this argument with language dispositive of petitioners'present contentions as to the propriety of the ESDC's blight finding respecting the non-ATURAproject blocks: "There is no real question of fact here since the details as to age, condition andpresent use of the properties involved are undisputed and indisputable, as shown by the exhibits.Plaintiff does not dispute with defendants as to the condition of these properties or of the wholearea. He is simply opposing his opinion and his judgment to that of public officials, on a matterwhich must necessarily be one of opinion or judgment, that is, as to whether a specified area isso substandard or insanitary, or both, as to justify clearance and redevelopment under the law. Itis not seriously contended by anyone that, for an area to be subject to those laws, every singlebuilding therein must be below civilized standards. The statute (and the Constitution), like othersimilar laws, contemplates that clearing and redevelopment will be of an entire area, not of aseparate parcel, and, surely, such statutes would not be very useful if limited to areas whereevery single building is substandard. A glance at the photographs, attached to the city's affidaviton these motions, shows that a considerable number of buildings in this area are, on a mereexternal inspection, below modern standards because of their age, obsolescence and decay. Theother exhibits confirm this. Therefore, the question here is not whether certain public officialshave acted arbitrarily or unwisely in coming to a certain conclusion. Here we have a nakedquestion of legality, that is, of power, and the particular power to make a determination on thismatter of judgment has been conferred by statute on these defendants" (id. at 79-80).Here too there is no real issue as to the actual condition of the properties at issue or of the wholearea; it is conceded that over half the project area is blighted within the meaning of the statuteand, although petitioners dispute whether the non-ATURA area may be characterized asblighted, the existence of circumstances indicative of "substandard and insanitary" conditions inthat area is extensively documented, photographically and otherwise, in the ESDC's lot-by-lotblight study. While it is possible to disagree with the agency's conclusion that the area at issue isblighted, and to argue that the blight designation is not warranted by the area's character andpotential, on this record, all that is involved is a difference of opinion. In such a case, it does notmatter whether we would be inclined to agree with petitioners; we are bound to defer to theagency to which the determination has been legislatively committed. This is not the[*9]"conceivable" case hypothesized by Kaskel in which thearea in question so absolutely defies description as "substandard and insanitary" as to render ablight designation susceptible of characterization as irrational or baseless, and thus vulnerable tojudicial disturbance. Rather, this presents "a naked question of legality" that must be resolved inrespondent agency's favor. The issue posed is not which of the parties has more persuasivelycharacterized the area in question, but whether there was any basis at all for the exercise by theagency of the legislatively conferred power to make a blight finding, and plainly there was.
In the many years since Kaskel, agency blight findings have been found deficient inthis state only where they were utterly unsupported (see e.g. Yonkers Community Dev.Agency, 37 NY2d at 484), and there has been no case in which the condition of an area hasbeen deemed sufficiently at odds with an agency blight finding to raise a factual issue as towhether the agency exceeded its authority in making the finding. This is not because the limits ofthe blight concept have been untested. Indeed, if ever a claim of blight challenged one'scommonsense understanding of the term it was in Jo & Wo Realty Corp. v City of NewYork (157 AD2d 205 [1990], supra) in which the City urged that the Coliseum siteat Columbus Circle (now the location of the Time Warner Building)—undoubtedly, evenat the time of the litigation, one of the most valuable pieces of real estate in the City, borderingupon the very exclusive southwestern corner of Central Park—was blighted and thusappropriate for designation as an urban renewal site. This Court, however, citing Kaskel,and accepting the City's contention that the site was outmoded, underbuilt and insufficientlyutilized, found the proposed designation proper (Jo & Wo Realty Corp. at 218)notwithstanding the site's obvious, indisputable potential for private development. The point tobe made is that "blight" has proved over time to be a highly malleable and elastic conceptcapable of enormously diverse application. This is not in the main attributable to the ingenuity ofconsultants eager to please the developers who pay their bills, but because the concept, withinthe field of its likely use, is more facilitative than limiting.
Petitioners' final contention is that the ESDC was without power to authorize the project as a"civic project" pursuant to Unconsolidated Laws § 6260 (d) based on FCRC's proposedconstruction of a professional sports arena within the project footprint. As is here relevant, thestatute conditions civic project designation upon findings that there is a need in the area in whichthe project is located for a recreational facility (§ 6260 [d] [1]), i.e., that there is a publicpurpose for the proposed facility, and that the need will be met by "a building . . .for . . . recreational . . . or other civic purposes" (§ 6260 [d][2]). Although it is now conceded that the proposed arena will serve a recreational purpose,petitioners urge that the purpose is not sufficiently civic to justify the arena's designation as a"civic project." Here, petitioners emphasize that the arena will be leased on a long-term basis,and provide financial benefit to private parties. However, it is established that a sports arena,even one privately operated for profit, may serve a public purpose (Murphy v ErieCounty, 28 NY2d 80 [1971]), and, in any event, the agency findings to the effect that theproposed arena will serve a public purpose by providing a needed recreational venue in the areaof the project are for reasons already discussed largely beyond our review; they are neitherirrational nor baseless. We perceive no support for petitioners' contentions that the agency wasnot permitted under its enabling legislation to authorize construction of the proposed arena as a"civic project," or that such a project could be authorized only by a separate act of theLegislature. The plain language of the existing enabling enactment authorized the agency to doas it did.
While we do not agree with petitioners' legal arguments, we understand those arguments[*10]to be made largely as proxies for very legitimate concernsas to the effect of a project of such scale upon the face and social fabric of the area in which it isto be put. Those concerns, however, have relatively little to do with the project's legality andnearly everything to do with its socioeconomic and aesthetic desirability, matters upon which wemay not pass. To the extent that the fate of this multibillion dollar project remains, in anincreasingly forbidding economy, a matter of social and political volition, the controllingjudgments as to its merits are the province of the policy-making branches of government, not thecourts.
Motion seeking leave to file reply appendix granted.
Concur—Gonzalez, J.P., Sweeny and DeGrasse, JJ.
Catterson, J., concurs in a separate memorandum as follows: Because I believe that theUrban Development Corporation Act (UDCA) (L 1968, ch 174, § 1, as amended)(McKinney's Uncons Laws of NY § 6251 et seq.) is ultimately being used as a toolof the developer to displace and destroy neighborhoods that are "underutilized," I writeseparately. I recognize that long-standing and substantial precedent requires a high level ofdeference to the Empire State Development Corporation's (hereinafter referred to as ESDC)finding of blight. Reluctantly, therefore I am compelled to accept the majority's conclusion thatthere is sufficient evidence of "blight" in the record under this standard of review. However, Ireject the majority's core reasoning, that a perfunctory "blight study" performed years after theconception of a vast development project should serve as the rational basis for a determinationthat a neighborhood is indeed blighted.
The Atlantic Yards Arena Redevelopment Project (hereinafter referred to as the Project)covers 22 acres in the Prospect Heights neighborhood of Brooklyn. Defendant Forest City RatnerCompanies, LLC (hereinafter referred to as FCRC) is the developer of the Project, the largestsingle-developer project in New York City history. Five of the eight city blocks encompassed bythe Project are within the Atlantic Terminal Urban Renewal Area (hereinafter referred to as theATURA), including eight acres owned by the Metropolitan Transportation Authority (MTA)(hereinafter referred to as Vanderbilt Yards) for use as a below-grade rail yard. The remainingthree blocks, 1127, 1128 and 1129, comprise almost 40% of the Project footprint and are notincluded within the ATURA (hereinafter referred to as non-ATURA). These three blocks areprivately-owned contiguous blocks located on the south side of Pacific Street, directly acrossfrom the Vanderbilt Yards.
FCRC purchased large portions of these blocks over the past several years. Now,codefendant ESDC, a quasi-governmental organization, has labeled the whole area "blighted"and intends taking the lots not owned by FCRC by eminent domain.
In 1968, the ATURA was established by the City of New York to facilitate theredevelopment of an admittedly blighted area of Prospect Heights in Brooklyn. Theredevelopment plan for this area has undergone several revisions, the most recent in 2004. In allof those years, the ATURA area has only been expanded once. Several redevelopment projectshave been undertaken within the ATURA since its inception and the Vanderbilt Yards are theprimary portion of the ATURA that remain undeveloped.
In December 2003, Mayor Bloomberg, FCRC's principal, Bruce Ratner, and other [*11]notables publicly announced that the New Jersey Netsprofessional basketball team would be purchased by Ratner and moved to Brooklyn to a newarena proposed as part of a multiuse development project.
Progress through the various bureaucratic processes was facilitated by the State throughESDC, a nonelected, quasi-public corporation. The first memorialization of the cooperationbetween the entities was a memorandum of understanding executed on February 18, 2005between New York City, the ESDC and FCRC. That same day, and without first issuing arequest for proposals, the MTA entered into an agreement with FCRC giving FCRC rights todevelop above the MTA's Vanderbilt Yards. Three months later, the MTA belatedly issued arequest for proposals (hereinafter referred to as RFP). Three months after that, the MTAaccepted FCRC's bid.
On September 16, 2005, just two days after the MTA's acceptance of FCRC's bid, the ESDCdesignated itself as the lead agency for the Project under the State Environmental QualityReview Act (hereinafter referred to as SEQRA) and noted for the first time that this project wasintended to cure "blight" in the privately owned non-ATURA blocks at issue. Over the next yearor so, FCRC and related entities purchased many properties in the Project area. These FCRCproperties remained largely vacant as the ESDC conducted the scoping process required underSEQRA. This included an economic impact statement and a "blight study." The documentsnecessary to these studies were prepared either directly by or with the close assistance of AKRF,Inc. (hereinafter referred to as AKRF), its perennial environmental consultant.[FN1]
On March 31, 2006, the final scoping document was released by the ESDC. By May, FCRCand its subsidiaries had acquired a majority of the properties in the three non-ATURA blocks inthe Project area. AKRF's "blight study" was completed, signed by ESDC, and published with thegeneral project plan (hereinafter referred to as the plan) on July 18, 2006. Six days later, on July24, the plan was released along with a draft environmental impact statement (hereinafter referredto as the DEIS). Among the 3,000-plus pages, there was a notice of public hearing to be held onAugust 23, 2006 and a notice that the ESDC would accept written comments until September 22,2006.
The public hearing held on August 23, 2006, drew a crowd of hundreds of local residents.Many were denied access due to overcrowding. The hearing ran three hours overtime, andsubsequently two community forums were held on September 12 and 18, 2006.
Despite substantial adverse public response to the findings reported in the DEIS and theplan, a final environmental impact statement (hereinafter referred to as the FEIS) was acceptedby the ESDC's Board of Directors on November 15, 2006. Within days, however, it wasdiscovered that the FEIS had erroneously omitted all of the written comments submitted bymembers of the community; under SEQRA these were required to be addressed.
A new DEIS was prepared and accepted by the ESDC Board on November 27, 2006. OnDecember 8, 2006, AKRF provided the ESDC with a memorandum addressing the written [*12]comments received by the public on the blight study. Sparing nota minute for reflection, the ESDC reviewed the memorandum and approved its SEQRA findingsand the plan that same day. On December 13, 2006, the MTA's Board of Directors moved withequal alacrity and approved a "summary" of the SEQRA findings. On December 20, 2006, theNew York Public Authorities Control Board also approved the Project.
On April 5, 2007, the petitioners commenced a CPLR article 78 proceeding and action fordeclaratory judgment by order to show cause, seeking a temporary and preliminary injunction ofFCRC's demolition and construction of the Project. On April 20, 2007, they were denied atemporary restraining order, and on January 11, 2008, the court below denied the motion for apreliminary injunction. In this article 78 proceeding, the petitioners challenge, inter alia, ESDC'sreliance on AKRF's "blight study" to support a determination of blight in the non-ATURAblocks.
Judicial review of this administrative determination is limited to consideration of whether ornot that determination is rationally supported. AKRF's report must be viewed as a whole todetermine whether ESDC had a rational basis for accepting the findings of blight; namely,whether the blight finding is supported by evidence of record. The UDCA circumscribes thepower of the ESDC and limits ESDC to certain enumerated types of development projects.(Uncons Laws § 6253 (6) (a)-(c); § 6254 [UDCA § 3 (6) (a)-(c); § 4].)The ESDC, pursuant to the UDCA, classified the subject project as a land use improvementproject, which is: "A plan or undertaking for the clearance, replanning, reconstruction andrehabilitation or a combination of these and other methods, of a substandard and insanitary area,and for recreational or other facilities incidental or appurtenant thereto, pursuant to and inaccordance with article eighteen of the constitution and this act. The terms 'clearance,replanning, reconstruction and rehabilitation' shall include renewal, redevelopment,conservation, restoration or improvement or any combination thereof as well as the testing andreporting of methods and techniques for the arrest, prevention and elimination of slums andblight." (§ 6253 [6] [c].)
The term "substandard or insanitary area" has a specific meaning under the UDCA: "a slum,blighted, deteriorated or deteriorating area, or an area which has a blighting influence on thesurrounding area, whether residential, non-residential, commercial, industrial, vacant or land inhighways, waterways, railway and subway tracks and yards, bridge and tunnel approaches andentrances, or other similar facilities." (§ 6253 [12].)
Additionally, the ESDC must make a twofold determination: "That the area in which theproject is to be located is a substandard or insanitary area, or is in danger of becoming asubstandard or insanitary area and tends to impair or arrest the sound growth and development ofthe municipality." (Uncons Laws § 6260 [c] [1] [UDCA § 10 (c) (1)].)
There is no dispute that the MTA allowed the portion of the Project footprint which it owns,the Vanderbilt Yards, to deteriorate into a substandard, unsanitary, and blighted condition.Furthermore, there is no dispute the blight designation for that area was made decades before theProject was conceived. That portion of the Project area falls squarely within the bounds of theATURA. However, the important question presented by this appeal is whether there is a rational[*13]view of the evidence which supports the ESDC'sdetermination, that the non-ATURA portion of the Project area—tax blocks 1127, 1128,and 1129, which lie south of Pacific Street—was "substandard or insanitary" under theUDCA.
In my view, any determination that these blocks were substandard or insanitary shouldproperly be based on a snapshot of the conditions that prevailed at the time that the Project wasannounced by FCRC in 2003. Any blight study that does not reflect this temporal limitationwould necessarily allow the mere announcement of the massive project to predetermine theoutcome of the study. On this point, I believe that the petitioners argue persuasively that anyproposed or intended development in these blocks such as the Project would curtail any otherprivate development; and that no new development would occur on property that might besubject to the broad powers of condemnation as wielded by a coalition of the ESDC and FCRC.
The ESDC purported to set out the factors that its consultant AKRF should consider in itsblight study. In its contract with AKRF, the ESDC stated that: "The characteristics of blight caninclude, but are not limited to: physical deficiencies (insanitary/substandard building conditions,building/housing/fire code violations, site vacancy or underutilization), economic deficience(building vacancies, low rents, high rental turnovers) or other deficiencies (incompatible landuses, multiple ownerships that hamper assemblage of properties, traffic congestions, pollution).Taken together, these characteristics may demonstrate that the area under study is substandard,insanitary, or deteriorating."
The contract also provided specific criteria and methodology to be used in preparation of thestudy:
"Using currently available data and information from ESDC and DCP, and if necessary asupplemental survey, we will document and record patterns of ownership, utilization of the sites,land use, zoning, and physical conditions for the affected area. This work will also draw oninformation being gathered for the land use task being performed for the EIS effort, includingmaps and other graphical data.
"More specifically, the blight study will include the following tasks:
"A. Determine the study area for analysis of blight conditions and prepare and draft criteriathat will be used as the basis for the blight study area, in consultation with state and cityagencies, including ESDC and DCP.
"B. Document blighted conditions, including the following:
"º Analyze residential and commercial rents on the project site and within the studyareas;
"º Analyze assessed value trends on the project site, and compare to sample blockswith comparable uses in the study area, such as the Atlantic Center;
"º Describe residential and commercial vacancy trends;
"º Compare current economic activity on the project site, such as direct and [*14]indirect employment, with relevant surrounding sites;
"º Review New York City Police Department (NYPD) crime statistics for the affectedarea; and
"º Identify physical conditions, including New York City Department ofBuildings (DOB) building code and other pertinent violations (e.g. New York City FireDepartment, Department of Environmental Projection, etc.), and determine Certificate ofOccupancy compliance on the project site.
"C. Identify/estimate the public benefit generated by the proposed project, includingestimates of construction period and operating period, including direct and indirect employment,wages and salaries, and non-real estate taxes generated. This task assumes that an economic andfiscal impact analysis has been previously performed by AKRF for FCR Sports, LLC."
The blight study, however, seamlessly combined the ATURA area with the threenon-ATURA city blocks. The "executive summary" to the blight study, in a less than admirablesleight of hand, sets out the goals for the ATURA that were articulated in 2004. That studysuccinctly captures the respondents' view of the entire project and this litigation. The summarybegins with observations limited to the ATURA and the City's most recent plan for the ATURA;the 10th amendment to a plan originally drafted in 1968:
"º Redevelop the Area in a comprehensive manner, removing blight and maximizingappropriate land use.
"º Remove or rehabilitate substandard and insanitary structures.
"º Remove impediments to land assemblage and orderly development.
"º Strengthen the tax base of the City by encouraging development and employmentopportunities in the Area.
"º Provide new housing of high quality and/or rehabilitated housing of upgradedquality.
"º Provide appropriate community facilities, parks and recreational uses, retailshopping, public parking, and private parking.
"º Provide a stable environment with the Area which will not be a blighting influenceon surrounding neighborhoods."
Thus, AKRF was tasked with reconciling the goals of redevelopment with the actualconditions as they existed in both the ATURA and non-ATURA properties at the time the studywas conducted.
In my view, the petitioners are correct in asserting that the blight study failed to comportwith the majority of the specific criteria set out in AKRF's contract. Furthermore, ESDC'scontention that "as a matter of law," ESDC could only look at conditions contemporaneous withthe study, which was conducted years after the announcment, is ludicrous on several levels.
Initially, it should be noted that ESDC offers no legal support for that claim other than the[*15]obvious point that ESDC is permitted by statute to revitalizeblighted areas. Second, ESDC's contract with AKRF as described above, clearly contemplatedthat AKRF would analyze both assessed value trends and current economic activity atthe site and surrounding area. Finally, the obvious point raised by petitioners and dismissed byESDC is that if the non-ATURA properties were in the midst of an economic revival, it would becounter to ESDC's mandate to step in, stop all productive development, and, in partnership witha private enterprise, develop the neighborhood according to its own vision of urban utopia,complete with professional basketball for the masses.
It is undisputed that the record contains several examples of redevelopment in this area thatoccurred prior to the announcement of the Project. In 2002, the Spalding Factory across from theVanderbilt Yards was converted into 21 loft condominiums; Newswalk, a 137-unit luxurycondominium building opened in the former Daily News printing plant; and the Atlantic ArtBuilding opened with 31 luxury condominium units in 2003. Other developers in the area havealso filed plans with the Buildings Department for conversion of space from industrial tohousing. This rapid, private residential redevelopment of the area was commonly known andpublicly reported in newspapers and periodicals. Even after the ESDC's announcement of theProject, surrounding property values continued to climb with townhouses selling for as much as$1.5 million last year. Newswalk, whose market value is high whether through direct purchase oreminent domain, has been carved out of the Project's plan.[FN2]
Were this redevelopment more expansive and pervasive in the non-ATURA area, thepetitioners would carry the day. Unfortunately for that position, FCRC's purchase of a significantportion of the non-ATURA area as well as many other dilapidated properties still held in privateownership and set out in the record supports, by the barest minimum, the agency's determinationof blight. It is clearly within the agency's expertise to consider the effect of FCRC's consciousdecision to allow its properties located within the non-ATURA area to lay fallow.[*16]
While I deplore the destruction of the neighborhood inthis fashion, I cannot say, as a matter of law, that the ESDC did not have sufficient evidence ofrecord to find "blight." [See 2008 NY Slip Op 30104(U).]
Footnote 1: It should be noted that AKRFand the ESDC were recently criticized by this Court for their failure to maintain a relationshipseparate and distinct from the developer in another gargantuan project. (See Matter of Tuck-It-Away Assoc., L.P. vEmpire State Dev. Corp., 54 AD3d 154 [2008, Catterson, J.].)
Footnote 2: Should ESDC be able to takethe properties within the scope of the Project by eminent domain, the condominium units at theformer Spalding Factory and the Atlantic Art Building, located on the same block, will bedemolished.