Basketball in Brooklyn: Taking it to the . . . Courts?

Recent news concerning the NBA's New Jersey Nets imminent move to
Brooklyn has met with protest from residents of the neighborhood where
the proposed arena is to be built.  In particular, a community group
composed of neighborhood organizations and individuals who live near
the proposed development site called Develop Don't Destroy Brooklyn is
leading the court battle against the proposed Barclays Arena and
Atlantic Yards development that would bring new life to the open-air
storage facility for buses and rail cars, but will also require the
destruction of currently occupied residential and commercial spaces. 
[1]  The Atlantic Yards development is a $4 billion, eight million
square feet project spanning 22 acres along Brooklyn's Atlantic Avenue
which includes a basketball arena for the New Jersey Nets' move to
Brooklyn, office buildings, thousands of apartments and condominiums (a
significant portion of which will be "affordable" as opposed to market
priced), as well as parks, overall dramatically altering the Brooklyn
landscape with 16 total skyscrapers planned. [2] On-going litigation in
the case of Develop Don't Destroy Brooklyn v. Empire State Development Corporation
[3]  pits the community mobilization group against the high-powered
developers who are backed by both New York Governor George Pataki and
New York City Mayor Michael Bloomberg. [4]  The issues in debate
concern environmental inspections, public safety concerns, as well as
disqualification of counsel arguments. [5]  However, it seems likely
that despite this litigation, the Atlantic Yards development will go
forward with the planned opening of the arena in time for the 2009-2010
NBA season. [6]

Early in the
proposal of the Atlantic Yards development, concerns of an illegal
exercise of eminent domain powers ("taking") were at the forefront
because the project involves the condemnation of private property to be
used by a private developer. [7]   Property can legally be taken for
"public use" by providing just compensation to the property owner [8],
but this project is being developed and financed by a private
development company for profit.  Of the $4 billion the Atlantic Yards
project will cost, $100 million is being provided by the State of New
York and another $100 million is being provided by the City. [9]  The
developer stands to make huge profits on the deal with current
estimates that the return on the project will be between 7-10% on the
$4 billion project over a period of 10 years. [10]  With the massive
amounts of profits to be made by a private developer, it is very
surprising that this was not the main subject of litigation.  It seems
likely that the developer offered the property owners a significant
enough amount of money that they felt comfortable selling their
property, and thus were satisfied with the outcome such that no claim
for an illegal taking was filed.  Also, the state was likely
comfortable with condemning this property due to the New York Governor
and New York City Mayor's support of the project.

However, the community group Develop Don't Destroy Brooklyn has
filed suit.  While this group would not have standing to argue the
eminent domain issue, the group has instead challenged the proposed
development based on the only possible issues that could earn them a
day in court:  environmental issues and public safety concerns, while
also throwing into the mix what has proved to be a losing argument
concerning a conflict of interest to try to force disqualification of
the developer's counsel to retry their suit and delay the development
project. [11]  Develop Don't Destroy Brooklyn lost their first suit and
appealed to the Supreme Court of New York, Appellate Division, arguing
on appeal that Empire State Development's attorney should be
disqualified based on the "appearance of impropriety." [12] 

The main argument centers around the fact that prior to approval for
the project, the development company must comply with the State
Environmental Quality Review Act ("SEQRA"). [13]  Empire State
Development is the main governmental agency working on the project in
connection with the actual project developer, Forest City Ratner
Companies.[14]  In order to ensure compliance with the SEQRA, Forest
City Ratner Companies hired David Paget, one of the leading
environmental attorneys in the country, who also happened to be the
outside counsel for Empire State Development.  [15]  Thus, Develop
Don't Destroy Brooklyn argued that Paget should be disqualified as the
attorney since he was simultaneously representing both the governmental
agency working on the project as well as the developer of the project. 
However, the court shot down this argument, reasoning that in order to
succeed on a conflict of interest claim, the petitioner (Develop Don't
Destroy Brooklyn) must show that "a lawyer who represented a client in
a matter shall not . . . represent another person in the same or a
substantially related matter in which that person's interests are
materially adverse to the interest of the former client's."  [16] 
 Here, the petitioners' argument fails because both of Paget's clients
are working together on the development project and have the same
interests, not materially adverse interests.  In addition, Paget
represented each of his clients on different matters concerning the
project. [17]  Thus, the court held there was no "prima facie showing
of conflict" of interest concerning the project. [18]

Develop Don't Destroy Brooklyn is attempting the only possible
arguments they can conjure up to delay the construction of the Atlantic
Yards project out of concern that the character of their neighborhood
will be changed and the neighborhood may be cluttered with excess
people and traffic. [19]  When in reality, the project has been
characterized as "vital to the resurgence of downtown Brooklyn" [20]
with its creation of 22,000 jobs during its 10-year construction
period, and 5000 jobs upon completion, as well as producing $944
million in state tax gains. [21]  With final approval by the Public
Authorities Control Board after 3 years of debate [22], all hurdles
have been cleared for the project to go forward, and though litigation
will likely continue until the project is completed, no argument is
likely to be successful as long as the city, state, Governor, and Mayor
remain supporters of the Atlantic Yards development.

Sources

[1] Develop Don't Destroy Brooklyn v. Empire State Dev. Co. &
Forest City Ratner Co., 816 N.Y.S. 424, 427 (N.Y. App. Div. 2006).

[2] Nicholas Confessore, State Approves Major Complex for Brooklyn, N.Y. Times, Dec. 21, 2006, available at http://query.nytimes.com/gst/fullpage.html?res=9C05E7D71031F932A15751C1A9609C8B63&n=Top%2fReference%2fTimes%20Topics%2fSubjects%2fS%2fStadiums%20and%20Arenas; Jotham Sederstrom, Here Come the Nets, N.Y. Daily News, Dec. 20, 2006, available at http://www.nydailynews.com/front/story/481966p-405639c.html.

[3] 816 N.Y.S. 424 (N.Y. App. Div 2006).

[4] CBSsportsline.com, Nets Owner Clears Important Hurdle to Build Brooklyn Arena, Dec. 8, 2006, http://sportsline.com/nba/story/9859538 (last visited Feb. 26, 2007).

[5] Develop Don't Destroy Brooklyn, 816 N.Y.S. at 427-28.

[6] Sederstrom, supra note 2.

[7] Giovanna D'Orazio, Taking Property to Build an Urban Sports Arena:  A Valid Exercise of Eminent Domain Powers?, 69 Alb. L. Rev. 1135, 1135-36 (2006).

[8] Id. at 1141.

[9] Sederstrom, supra note 2.

[10] Confessore, supra note 2.

[11] Develop Don't Destroy Brooklyn v. Empire State Dev. Co. &
Forest City Ratner Co., 816 N.Y.S. 424, 426-27 (N.Y. App. Div. 2006).

[12] Id. at 427.

[13] Id.

[14] Id.

[15] Id.

[16] Id. at 430.

[17] Id. at 431.

[18] Id.

[19] Sederstrom, supra note 2.

[20] Id. (quoting statement of New York City Mayor Bloomberg).

[21] CBSsportsline.com, supra note 4.

[22] Condessore, supra note 2.

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