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Ratner: Arena deal with state, MTA near

Forest City Ratner is close to an agreement with the Metropolitan Transportation
Authority and the Empire State Development Corp. for development of the
Atlantic Yards arena, office and housing development in Prospect Heights.

The memorandum of understanding (MOU) would establish the Empire State
Development Corp. (ESDC) as the lead agency on the 24-acre development
that would emanate from the intersection of Flatbush and Atlantic avenues
and including a 19,000-seat basketball arena for developer Bruce Ratner’s
recently purchased New Jersey Nets, and four soaring office towers and
a residential complex that the Brooklyn developer and his partners would
build.

Forest City Ratner spokesman Joe Deplasco confirmed the tripartite agreement,
which he said should be signed in upcoming weeks, but said the details
were “still being worked out.”

Prospect Heights Councilwoman Letitia James, an opponent of the $2.5 billion
plan, is calling on the MTA — over whose Long Island Rail Road storage
yards much of the development would be built — to solicit competitive
bids for development of the site.

The 11 acres of LIRR rail yards run along Atlantic Avenue from Flatbush
to Vanderbilt avenues.

The MTA declined to comment on how much the air rights to develop over
the yards would cost.

“It’s really surprising that the MTA would sign on to a MOU
in the absence of a competitive bid,” James said this week. “It
goes against the notion of capitalism.”

Several developers also interested in the Atlantic Yards site have approached
James, she said, noting that the pending agreement “smacks of favoritism.”
The site abuts two of Ratner’s other developments, the soon-to-be-complete
Atlantic Terminal mall and office complex and the ailing Atlantic Center
mall. James has criticized Gov. George Pataki for having a friendly relationship
with Ratner that dates back to their days attending Columbia University
Law School together.

The arena plan would require condemning more than two square blocks of
private property and displacing anywhere from 400 to 800 residents and
businesses.

In a Feb. 26 letter to Prospect Heights state Sen. Velmanette Montgomery,
ESDC Chairman Charles Gargano said the state had “not determined
whether the project is viable or whether it is in the best interest of
the State and City” and vowed to “solicit input from the community”
before a decision is made.

“I don’t see how a memorandum of understanding could be finalized
in light of this statement from Gargarno,” Montgomery shot back this
week.

“That this is being done essentially in secret, is very troubling,”
she said, adding, “They have not, in fact, made a determination of
the viability or whether or not this is in the best interest of the community.”

At a tourism conference at the New York Marriott Brooklyn last month,
Gargano declined to comment on the arena development, explaining the city
was taking the lead on the project.

And this week, ESDC spokesman Chapin Fey, also declined to comment. “It’s
still too early for us to be speaking about specifics of the Nets deal,”
Fay said.

As early as last August, Ratner had asked city officials to sign a memorandum
of understanding.

Ratner pulled back the curtain on the Atlantic Yards project in December
and announced plans to purchase the Nets and move them to Brooklyn. He
agreed to purchase the team from Yankee-Nets for $300 million the next
month and must come up with the money by June.

Some residents this week said they were concerned about the potential
agreement.

“We were told the lead agency wouldn’t be announced until after
the NBA vote. And we’re worried about what agreements might be put
forth in that memorandum,” said Daniel Goldstein, a resident at 636
Pacific St., a luxury apartment building that would face the wrecking
ball if the plan goes through.

“That’s what we expected. It just means that things might be
moving faster than we expected and faster than we told,” added Goldstein,
who is also a member of Develop Don’t Destroy Brooklyn, a group of
residents who are in opposition to the current arena plan.

Scott Bullock, a senior attorney for the Washington, D.C.-based Institute
for Justice, a non-profit public interest law firm specializing in eminent
domain issues, said MOUs are a common first step in moving towards a development
agreement.

“The train is starting to the leave the station once the memorandum
of understanding is signed,” Bullock said.

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