Another Lawsuit On Atlantic Yards as Financing Clock Ticks
Eliot Brown Oct. 19, 2009, 10:50 a.m.
Once again, there’s a new lawsuit seeking to stop Atlantic Yards.
On Monday morning, a series of Brooklyn neighborhood and community groups announced they had filed a suit challenging the approval of the $4.9 billion mega-project, an action that comes as the clock ticks ever closer to a Dec. 31 financing deadline that developer Forest City Ratner must meet.
The lawsuit–which challenges the approval process when the state re-approved a modified version of the project in September–is now the fifth major suit brought or organized by the main group opposing the plan, Develop Don’t Destroy Brooklyn. There have been two eminent domain suits, the second of which was heard at the state’s top court last week; an environmental review lawsuit; and a recently filed lawsuit challenging the re-approval by the M.T.A., which owns much of the site.
Of course, it’s not clear that any of these lawsuits stands in the way of Bruce Ratner’s firm as it tries to sell $700 million in bonds to finance the centerpiece Nets basketball arena before the end of the year. Mr. Ratner has said he is seeking a setup where investors buying the bonds would put money into escrow, and would be able to get their money back should the lawsuits ultimately topple the project–a prospect considered unlikely at this point by many attorneys familiar with development litigation.
Mr. Ratner is indeed scrambling to pull all the pieces together, rounding up more cash and sped-up subsidies, and trying to get his bonds rated so they can be marketed and then, he hopes, bought by investors. Whether or not the timid bond market will take them is the big question for the project.
This most recent lawsuit essentially claims that the project changed so much between the initial approval, late 2006, and the new approval in September that the state’s development agency should have done a new environmental review document, among other issues.
Further, the M.T.A., in its separate approval, effectively acknowledged a 25-year likely timeline for the project, far more than was in the Modified General Project Plan approved in September (which said the whole 22-acre mixed-use project could be done in 10 years). With a longer construction period, the state should have done a separate environmental review of the impacts that would have, the lawsuit charges.
The new General Project Plan also does not discuss a need for housing subsidies in order for the below-market rate housing to be built, the lawsuit says.
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