Lawsuit against Atlantic Yards is losing its plaintiffs one by one

Two of the final holdouts in the Atlantic Yards footprint have quietly settled with developer Bruce Ratner, a move that signifies that the opposition to Brooklyn’s largest real-estate project may be entering its endgame.

The two tenants who settled had sued the developer — along with 11 other property owners and tenants whose homes and businesses the state intends to condemn to make way for Ratner’s Frank Gehry-designed towers.

Their withdrawal from the one-year-old lawsuit should not be construed as support for the Atlantic Yards mega-development, but merely an acceptance of reality, according to their lawyer, Jennifer Levy.

“[The tenants] don’t agree with the project, but their rights are limited under the law, so if they are being offered something that protects their rights, they will take it,” she said.

The tenants’ exit from the case — which was dismissed by a judge in June, but will be heard in a federal appeals court on Oct. 9 — indicates that some have lost hope that the $4-billion, state-approved project can be stopped.

Four other renters represented by Levy are currently in settlement talks with the developer, she said.

The tenants declined to speak publicly because of confidentiality clauses in the agreements.

The move represents a change of strategy for Forest City Ratner, which earlier had been unwilling to negotiate with tenants in the lawsuit, said Levy.

“There is certainly a sense now that [the developer] would like to move forward with a settlement,” she said, ascribing the change to a desire to “stick with [the project’s] timeline.”

The need to settle and relocate the small number of holdouts who remain in the project’s 22-acre footprint is partly motivated by simple economic fact. Each month of delay costs Forest City Ratner $4.15 million in construction and carrying costs, according to a legal affidavit submitted by the company last year.

State law requires the developer to relocate anyone who loses a home to eminent domain. The laws that surround renters, however, are murkier. Rent-stabilized tenants often lose their most-cherished protection against a booming real-estate market: a state-regulated, below-market-rate lease.

Even a generous settlement will not help tenants find another protected unit, or permanently guard them from the city’s gentrifying real-estate market, though Ratner has promised to provide the displaced tenants stabilized apartments in Atlantic Yards when he completes the first phase of the project in, he says, 2010.

“Some of these people don’t have other options,” said Develop Don’t Destroy Brooklyn spokesman Daniel Goldstein, who stands to lose a luxury condo to the project and is the lead plaintiff in the lawsuit.

One rent-stabilized tenant who remains a plaintiff in the lawsuit said he recently reopened informal negotiations with Ratner. Ratner had stopped discussing a buyout last year after the tenant rejected an offer that he felt was stingy, the tennant said. The new offer on the table calls for more money, he said.

He said that he felt the developer was trying to knock him out of the eminent domain suit before that Oct. 9 appeal hearing.

“They want to be able to say that the plaintiffs are dropping like flies,” he said.

Forest City Ratner declined to comment on the litigation or settlements.

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