Tomorrow, the New York State Court of Appeals will hear arguments in a case that could clear the way for Bruce Ratner to construct an arena for the Nets and his Atlantic Yards project above the MTA’s Vanderbilt Railyards. If Ratner wins, the state will be able to use eminent domain to clear out the last remaining residents on Yards’ land. With success for Ratner looking likely, the real estate mogul is now facing a new roadblock from a suit aimed at the MTA over their sweetheart renegotiation of a sweetheart deal.
Develop Don’t Destroy Brooklyn along with four state representatives and the Straphangers Campaign have filed suit against the MTA for renegotiating the Ranter land sale without going through the proper legal procedures. According to the files, the MTA did not have the current value of the property appraised and did not open up the property rights sale to a competitive bidding process. Both procedures, the plaintiffs allege, are required under state law, and they are seeking an annulment of the sale.
“We have laws in this state that forbid these kinds of sweetheart deals. With the Atlantic Yards, the MTA violated our legislation and the public trust. Their sale of the Vanderbilt Yard to Ratner must be annulled,” State Sen. Velmanette Montgomery said.
So what did the MTA do? Well, instead of opening up the process to a new round of bidders and requests for proposals, the agency has simply sweetened the deal for Ratner. Instead of a lump sum payment of $100 million, he will pay just $20 million upfront and cover his purchase in installments totaling $80 million over the next 22 years. He will pay $2 million a year from 2012-2016 and then $11 million a year for the following 15 years. Instead of a $225 million rail facility, he will supply one with three-quarters of the original plan capacity for $150 million instead.
At the time, MTA Board members protested the deal, and now the politicians are angry. This could be a long fight for the MTA, and an injunction against the sale could impact Ratner’s ability to secure financing. He has until the end of the year to secure $700 million in tax-free bonds for the Barclays Arena.
“While the MTA is forcing service cuts and fare increases on the people of New York, they are giving Forest City Ratner just about a free ride,” Montgomery’s statement said. “You can’t shortchange the public to benefit a developer.”