Brooklyn Judge Issues Condemnation Order for 7 Atlantic Yards Properties

A rendering of Pacific Park. (COOKFOX)

A rendering of Pacific Park. (COOKFOX)

In what one participating lawyer called a “friendly little condemnation” proceeding, a judge issued an order today in the Brooklyn Supreme Court of the State of New York granting an eminent domain petition filed last month on behalf of Empire State Development (ESD), the public corporation presiding over Pacific Park—the mega development formerly known as Atlantic Yards. The order authorizes the filing with the county clerk of what is known as an “acquisition map,” which, once stamped and entered into public records, will make official the transfer of seven properties that fall inside the planned Pacific Park footprint. Structures housing both market rate and affordable housing are slated to rise on the condemned land, which includes parcels on Atlantic and 6th Avenues, as well as on Dean Street.

The term “condemnation” does not generally conjure visions of Kumbaya campfires. But major legal objections—if not their attendant acrimony—to Atlantic Yards-related condemnations were put to rest some years ago, and today’s decision represented more or less a foregone conclusion. Michael Rikon, a partner at Goldstein, Rikon, Rikon & Houghton representing two of the property owners—at 700-714 Atlantic Avenue and 718-728 Atlantic Avenue—asked only that the court extend the deadline by which owners (er, former owners) must file for just compensation, which represents the next step in the process. Judge Wayne Saitta agreed, pushing it back from 120 days to two years. Mr. Rikon told the Observer that although he will file immediately on behalf of his clients, he was concerned that the smaller window might unfairly harm recently dispossessed individuals who were not represented at the proceeding.

The next round of filings, however, won’t have dollar values attached, Mr. Rikon said. It will act as a kind of placeholder for an exchange of property appraisals between the city and those recently relieved of their holdings, which will come later, and which will in turn lead eventually to final settlements. (The city’s appraisals will, of course, likely differ substantially from those commissioned by property owners.) Commercial leaseholders are also entitled to file claims to obtain compensation for improvements made to properties. (Most of the tenants in question are commercial; Mr. Rikon represents several.)

But lest you come to think from the foregoing that Atlantic Yards has become a Land of Milk and Honey, be advised that there remain some pending disagreements that will require hashing out. Before the exchange of appraisals, the city will issue an advance payment equal to what ESD asserts the property is worth. But Mr. Rikon, who has represented other Atlantic Yard-affected owners, isn’t counting on lavish munificence.

“My personal experience is that [the city has] been low-balling the value of the properties,” he said. “We’ve uniformly obtained more money than was appraised.” Mr. Rikon said that in a recent case involving a property at 730 Atlantic Avenue, also before Judge Saitta, the city’s appraisal came in at roughly $3 million, but the judge ultimately award more than $9 million.

He feels confident that the pattern will continue. “At 700 Atlantic Avenue, I think the estimate is even less than the owners paid for it. Knowing what real estate values in Brooklyn are, they’re just way under on these properties.”

Appraisals are not allowed to take into consideration the influence on local property values of the Atlantic Yards project itself. Evaluations must arrive at prices based on comparable properties unaffected by the development. But occupying as they do the intersection between a handful of Brooklyn’s most desirable neighborhoods—Fort Greene, Boerum Hill, Park Slope, Prospect Heights, Clinton Hill—the condemned properties are in no need of a leg-up from Pacific Park in the appraisal department.

Had city officials worked more efficiently to condemn property, they might have avoided the steep payouts they’re likely to come in for—and the somewhat embarrassing low-ball estimates they’ve been issuing. “The fact of the matter is that all of Brooklyn is on fire in 2014,” Mr. Rikon said. “If the city had moved faster,” he said, “it absolutely would have been to their benefit.”