A view of the east end of the site for the proposed Atlantic Yards development taken in October 2008
AP Photo/Kathy Willens

Proponents of the Atlantic Yards, the largest single-developer project in the history of New York, scored another legal victory yesterday as a state appeals court upheld the dismissal of a challenge by the coalition Develop Don't Destroy Brooklyn.

By a vote of 3-0 with one judge concurring, the Appellate Division, First Department, rejected numerous claims by Develop Don't Destroy, the most active opponent of the 16-building development regarding the lead agency's environmental impact statement and eminent domain findings.

The coalition might have legitimate grievances, the majority held, but it did not set forth any legitimate claims.

"While we do not agree with petitioners' legal arguments, we understand those arguments to be made largely as proxies for very legitimate concerns as to the effect of a project of such scale upon the face and social fabric of the area in which it is to be put," the majority held in its unsigned opinion, Develop Don't Destroy v. Urban Development Corporation, 104597/07.

The First Department decision will be published Monday.

"Those concerns, however, have relatively little to do with the project's legality and nearly everything to do with its socio-economic and aesthetic desirability, matters upon which we may not pass," the panel said. "To the extent that the fate of this multi-billion dollar project remains, in an increasingly forbidding economy, a matter of social and political volition, the controlling judgments as to its merits are the province of the policy-making branches of government, not the courts."

Justices Luis A. Gonzalez (See Profile), John W. Sweeny Jr. (See Profile) and Leland G. DeGrasse (See Profile) were in the majority. Justice James M. Catterson (See Profile) concurred.

Then-Presiding Justice Jonathan Lippman also heard oral arguments before he was appointed chief judge of the Court of Appeals.

Developed by Bruce Ratner's Forest City Ratner Companies and designed by Frank Gehry, the Atlantic Yards would eventually, according to its blueprints, cover 22 acres of Prospect Heights and Park Slope, just east of downtown Brooklyn. The plans include 6,430 condominium units and an 18,000-seat arena for Mr. Ratner's basketball team, the New Jersey Nets.

About 60 percent of the buildings would be built over open land and rail yards owned by the Metropolitan Transit Authority. The remainder, the equivalent of three city blocks, would be built on private land.

Some private owners have already sold their property to Forest City.

Forest City's intention to acquire the rest of the private property via eminent domain has become a central legal sticking point.

The plaintiffs set forth numerous claims in the present hybrid Article 78-declaratory judgment action, including that the Empire State Development Corporation improperly designated the property as "blighted" for eminent domain purposes.

The plaintiffs also alleged that the environmental statement submitted by the development corporation - the quasi-governmental lead agency in connection with the project's environmental review - was deficient because of its failure to address the risk of a terrorist attack.

All four judges disagreed and voted to uphold Manhattan Supreme Court Justice Joan A. Madden's (See Profile) dismissal last year of the plaintiffs' claims (NYLJ, Jan. 17, 2008).

'Blighted' Area

The three-judge majority found that the development corporation's determination that the property was "blighted" was not arbitrary, capricious, an error of law or an abuse of discretion, and therefore could not be disturbed.

"'[B]light' has proved over time to be a highly malleable and elastic concept capable of enormously diverse application," the majority concluded. "This is not in the main attributable to the ingenuity of consultants eager to please the developers who pay their bills, but because the concept, within the field of its likely use, is more facilitative than limiting."

The majority also held that terrorism concerns were more appropriately addressed by a different governmental branch.

"[T]he project at issue does not pose extraordinary inherent risks; it does not involve the siting of a nuclear storage facility, or a biological weapons laboratory, or any comparably risk-elevating action, but rather the creation of a venue dedicated to routine residential, commercial and recreational purposes," the majority held.

"These latter purposes, even when realized in the form of a major urban development situated at a pre-existing transit hub, do not so clearly increase the risk of terrorism, much less of terror-induced environmental harm, as to render the lead agency's determination not to address terrorism as an environmental impact of the proposed action unreasonable as a matter of law."

In a 13-page concurring opinion, Justice Catterson said he "believe[s] that the New York Urban Development Corporation Act is ultimately being used as a tool of the developer to displace and destroy neighborhoods that are 'underutilized.'"

However, he added, the law compelled the panel to uphold the dismissal.

"While I deplore the destruction of the neighborhood in this fashion," Justice Catterson wrote, "I cannot say, as a matter of law, that the ESDC did not have sufficient evidence of record to find 'blight.'"

Develop Don't Destroy has now lost all three of its efforts to block the Atlantic Yards project.

Last June, the U.S. Supreme Court denied certiorari in Goldstein v. Pataki. Last week, the Appellate Division, Second Department, heard oral arguments in the coalition's appeal of the dismissal of Goldstein v. Empire State Development Corporation.

Both sides have said they do not believe the economy will become the roadblock to Forest City.

Bruce C. Ratner, Forest City's chairman and CEO, has said that the economic downturn will force a slower construction pace, though not a more modest design.

In a statement released yesterday, Mr. Ratner said, "Once again the courts have decided in favor of Atlantic Yards. This project has been reviewed as thoroughly as any in the City and now it is time to put these cases behind us and get to work."

Develop Don't Destroy's co-founder and spokesman, Daniel Goldstein, said by phone yesterday that he believes "the project as approved will never be built," though as of now "no one knows what the project will be."

"The goal," Mr. Goldstein said, "is to gain control of the 22 acres."

Jeffrey S. Baker of Young, Sommer, Ward, Ritzenberg, Baker & Moore in Albany represented Develop Don't Destroy.

Mr. Baker said that the First Department applied the wrong standard of review.

"The underlying factual determination here is, 'Is the area blighted?'" Mr. Baker said. "They're using the language of exceptional deference - any facially valid study would qualify."

Philip E. Karmel of Bryan Cave and Daniel Chorost and David Paget of Sive, Paget & Riesel represented the Empire State Development Corporation.

Jeffrey L. Braun of Kramer Levin Naftalis & Franke represented Forest City Ratner Companies.

Mark.Fass@incisivemedia.com