Tuesday, November 24, 2009

Fine With Me 'Cause I've Let It Slide

Today comes news that the New York Court of Appeals rejected challenges to the state's forcible purchase of private land in downtown Brooklyn to enable Bruce Ratner's development of the site (to be called "Atlantic Yards") for residential/commercial construction and a new stadium for the (formerly) New Jersey Nets. Ratner has stated that the goal of the project is to "transform a blighted area into a vibrant mixed-use community", although several businesses currently operate at the site.

Here is the text of the court's opinion. The court ruled (see page 13) that the NY state constitutional requirement of "public use" for an eminent domain seizure can be satisfied if the taking is for a "dominant public purpose". Apparently a basketball arena is sufficiently public for the court, even though the average primary-market ticket price to see a game is $50. The court also approvingly quoted itself from a similar 1950s case in which it ruled that although "none of the buildings are as noisome or dilapidated as those described in Dickens' novels ... a substantial part of the area is substandard and insanitary by modern tests." (Page 15) Gee, if substandard and insanitary conditions you seek, try checking out the men's room at a typical NBA game!

(As a side note, you may know from "Law and Order" that judicial nomenclature in New York is rather confusing: ordinary trial court is called "Supreme Court", while the "Court of Appeals" is not just an ordinary appeals court, but the highest court in the whole state.)

Here is a Google map of the proposed area, currently consisting of various residential/retail facilities and Long Island Railroad yards, to be condemned and built up. Below is a schematic map of the proposed site plan (click the image to enlarge), from Ratner's 2006 environmental impact statement.

The best source of information on the Atlantic Yards project is Norman Oder's amazingly prolific blog dedicated to the saga; I cannot say any more than he has. I recommend, in particular, this January 2009 post on common myths re the project.

What does the decision mean for the NBA? Assuming the infrastructure bond issuance goes smoothly (and in this interest rate environment, this is certainly a favorable time to borrow from the capital markets), it seems that we can expect a new stadium in Brooklyn in time for the fall 2012 NBA tipoff. So the Nets will have at least two more seasons in New Jersey after this one. A definite terminus on the Nets' East Rutherford stay does make them slightly more attractive to a potential 2010 free agent like James or Bosh, but then again, who wants to join a team that started the previous season 0-13? Perhaps the Nets might be a more attractive free-agent destination in the summer of 2011, when the team is improved and the Brooklyn move looms closer. Assuming Harris and Lopez are cornerstones for the Nets, the top role-filling free agents in 2011 will be Carmelo Anthony, David West, and Caron Butler. Anthony is likely to stay with the Nuggets (his mates Hilario, Smith, Afflalo, and Lawson are all fairly young) while West and Butler are likely to sniff out other climes. A team of Harris, Lopez, and Butler could be pretty solid, especially if youngsters like Yi and Terrence Williams continue to improve.

We can add to this the announced sale of the Nets from Ratner to Mikhail Prokhorov, a very wealthy Russian oligarch. According to the above-linked article, Prokhorov would be acquiring 80% of equity in the team and 50% of equity in the Atlantic Yards project, though presumably Ratner would retain control of the Yards. Regardless, Prokhorov is undoubtedly pleased at today's decision. In addition to the opportunity to build a great asset in the middle of New York City, Prokhorov may be uniquely able to market basketball to Brooklyn's Ukrainian and Russian communities.
UPDATE: After I posted this, later on Tuesday Ilya Somin of Volokh Conspiracy wrote a post with some similar points. (He is a libertarian and generally opposed to eminent domain.) He also similarly lambasted the quizzical nomenclature of NY courts.

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