May 6, 2010: I love the smell of eminent domain abuse in the morning. It smells like land grabs and taxpayers being soaked. A truly fragrant blast of the stuff is wafting up from Brooklyn, where developer Forest City Ratner and the Empire State Development Corporation (ESDC) have cleared the last man standing in the footprint of the behemoth Atlantic Yards project. Eminent domain was used to acquire much of that footprint. Until becoming a footprint, the area was a neighborhood in Prospect Heights. Atlantic Yards, which is being heavily backed by New York taxpayers, will include an arena (Barclays Center) to showcase the sad sack New Jersey Nets. Though the sacks currently belong to a group headed by Bruce Ratner (of Forest City You Know Who) a murky Russian plutocrat is in the process of becoming majority owner. The cash infusion to Atlantic Yards is sorely needed by Ratner.
Atlantic Yards will be way more than a sports arena. Picture towering stacks of NYC market rate residential units. Not that Ratner is all about over-priced shoe boxes. “Affordable” ones will be provided as well. Though the “affordable” units haven't received final OK for federal subsidies, I suspect the cash will be granted. When it comes to development projects, HUD likes 'em big and sleazy. And the HUDster rarely objects to dubious uses of eminent domain.
Eminent domain is the constitutional right of government to take private property for projects defined as “public use”. Owners are supposed to receive “just compensation”. In ye old days “public use” meant things such as hospitals, schools, and bridges. Eminent domain protected the public coffers from extortion. But eventually, eminent domain started being used to advance private commercial projects such as shopping malls, entertainment complexes, and luxury housing. Typical rationales for this odd take on “public use” are job creation and the greater (albeit projected) tax revenues such projects will deliver when/if completed. Eminent domain as commercial tool is often wielded by quasi-public agencies. As in, entities less answerable to the nattering nabobs of representational government.
New York State knows good quasi-public. The powerful Empire State Development Corporation (ESDC or ESD) has thrown its weight behind Forest City Ratner and Atlantic Yards. Though quasi-public, the ESDC has the power of eminent domain, can dispense public money, override local land use laws, and commit taxpayers to debt. For roughly seven years Ratner has been blessed by all of the above. But Atlantic Yards is still little more than a hole in the ground. Why? Real estate woes in part. But mainly because a group of property owners resisted being forced from the footprint, and because that resistance received support from the large number of Brooklynites who believe the Atlantic Yards project isn't right for Prospect Heights.
The non-profit group Develop Don't Destroy Brooklyn (DDDB) has been the primary opponent of Atlantic Yards. A mean resistance machine. Protests were huge, publicity smart, donations rolled in. DDDB also attempted to block Ratner and ESDC with myriad legal actions. I won't detail the complex wrangles, suffice to say it was Bleak House writ again and again and again. The book essentially closed in late 2009, when the highest court in the state refused to rule against ESDC's use of eminent domain on behalf of Forest City Ratner in the Atlantic Yards footprint.
In April 2010, in negotiations overseen by a judge in a NYC courtroom, Daniel Goldstein, co-founder and essential force behind DDDB, accepted a three million dollar settlement from ESDC and Ratner. Goldstein's condo (which he bought for $595,000 shortly before the Atlantic Yards project was announced) had already been been taken by the ESDC. The 3 mil covered compensation. As part of the deal, Dan agreed to resign as DDDB spokesperson and leave his former property sooner than legally required. Ratner and ESDC were hot to see Dan go. The murky Russian plutocrat's deal to buy the Nets comes up for final approval in mid May; it might fall through if Dan were still living in the b-ball arena 2 b.
Eminent Domain & Me
In the past five years I've written a lot about eminent domain abuse. Locations covered include New London, Connecticut, former home of Susette Kelo. Kelo and other property owners in the blue collar neighborhood of Fort Trumbull took their resistance to development-related eminent domain all the way to the Supreme Court. In 2005, the Court deprived them of their property rights. I followed the end game of settlement negotiations and quasi-public machinations and finally, the bulldozing of Fort Trumbull. The settlements the resisters received flowed from taxpayers, as did most of the funding for the entire failed development project. (Fort Trumbull is now a wasteland, not the upscale enclave planners envisioned.) Hold-outs got more for their property than owners who folded earlier. The resistors weren't unflaggingly noble. After awhile, the declarations some made about having to be dragged from their land rang a tad hollow. Ultimately money talked and everyone walked. None of which cancels the fact that when it came to the big picture, the resistors fought the good fight and were overwhelmingly in the right.
At one point, Kelo ran parallel with Atlantic Yards. To me, the social difference in the two situations spoke to the ubiquity of eminent domain abuse. I wrote four or five pieces about Atlantic Yards over an equal number of years and consistently forwarded DDDB press releases. Not only did I forward, I expanded. I definitely agreed with the need to oppose the ESDC/Ratner use of eminent domain. Still do. What I have a hard time getting behind is Dan Goldstein's three million dollar deal. And after all my partisan writing, forwarding, and expanding, I feel some final words are warranted.
Dan has lots of reasons for taking the 3 mil. To paraphrase a few: He was going to be evicted anyway, it was sensible to get what he could. What would he achieve by being a martyr? At one point he was outrageously low-balled for his property, so squeezing ESDC and Ratner for a high-ball was justified. Though he agreed to resign as DDDB spokesperson, he didn't surrender his right to speak against Atlantic Yards. And so on and so forth. Dan's loyal supporters are also doing some splainin'. Saying Dan was only doing the responsible thing for his family. And the 3 mil is less than it seems, given the tax bite, the legal bills for the non-DDDB attorney who represented Dan in the settlement negotiations, and how expensive it will be for Dan to get another place in NYC. (Personally, I think the last excuse should be dropped. It's bound to grate with all the folks who somehow manage to find something for under a mil.)
I Want To Believe. But the words three million dollars three million dollars three million dollars keep beating in my brain. No matter how I twist it, the amount seems a little-- dare I say it?-- greedy. Which wouldn't be a big thing (we're all human) if the greed of Forest City Ratner and ESDC hadn't been such a DDDB theme-- and if Dan Goldstein weren't working so hard to paint himself as totally free of impure motives. As said, a lot of Dan's supporters are helping him paint. The pro-Ratner crowd is making with the jeers. (Bertha Lewis of ACORN did a bile dump almost immediately.) But anger and disappointment is also being expressed by people who are against Atlantic Yards and expected Dan Goldstein to be unflaggingly noble. You can scoff at those expectations, but DDDB helped build them.
That being said, I don't believe what some of Dan's more disillusioned fans are suggesting in Internet places. I don't believe “he was just in it for the money”. The “it” he was “in” was a tough situation which lasted for years. Receiving a multi-million dollar settlement at the end of the road was no sure thing. Quite the contrary. Plus, DDDB with Dan at the helm put up an incredibly tenacious, effective fight against a mega developer backed by the government of one of the most powerful states in the nation. Anyone concerned about eminent domain abuse owes DDDB a debt of gratitude for exposing the mechanics of New York State's quasi-public land grabs.
Eminent domain abuse is a social injustice. But it's also a real estate deal. A coercive one in which people are forced to sell their homes, businesses, and investment properties to more powerful private individuals and entities. Even if “just compensation” is given, the payment smacks of noblesse oblige; the bag of coins hits the pavement as the coach rolls over your land. Eminent domain at the service of commercial development inevitably engenders resentment. Some property owners will always go to the wall. For love of place-- and for pride and profit. Grudge matches are the norm and the desire to come out on top trumps principle. If property owners have public opinion on their side, they gain a powerful weapon. With that in mind, resistors and their advocates gloss over the real estate deal aspects. As well as the contradiction of denouncing developers for tapping taxpayer jack, then taking oversize buyouts funded, either directly or indirectly (public money being fungible), from the same source.
Does any of this mean I don't support folks fighting eminent domain abuse? Hell no. When it comes to the big picture of social injustice, they're overwhelmingly in the right.
Carola Von Hoffmannstahl-Solomonoff
Addendum: Are reports of the demise of resistance to Atlantic Yards greatly exaggerated? Another citizen of the footprint has stepped forward to sue the ESDC. Property owner Peter Williams claims ESDC improperly seized the
air rights he owns on a lot located where Barclays Center is set to rise. If Williams is correct (and if he doesn't get a humongous settlement) Forest City Ratner will only be able to build low. The New Jersey Nets would have to play on their knees! As for the murky Russian plutocrat, his deal to buy the team from Ratner won't get an OK unless the arena is ready to be built. Presumably full size, not munchkin.
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