PEOPLE FOR GREEN SPACE FOUNDATION, INC., : Index No.: LORI SCHOMP and J OSEPH MERZ ( ) : Petitioners, : For a J udgment Pursuant to Article 78 of the Civil Practice Law and Rules : -against- : NEW YORK STATE URBAN DEVELOPMENT CORPORATION, doing business as, EMPIRE STATE : DEVELOPMENT COPORATION AND BROOKLYN BRIDGE PARK DEVELOPMENT CORPORATION, :
PETITIONERS MEMORANDUM IN SUPPORT OF PETITION AND PRELIMINARY INJUNCTION
ABRAMS, FENSTERMAN, FENSTERMAN EISMAN, FORMATO, FERRARA & WOLF, LLP Frank V. Carone, Esq. 1 Metrotech Center, Suite 1704 Brooklyn, New York 11201 (718) 215-5300
Attorneys for Petitioners People For Green Space Foundation, Inc., Lori Schomp and J oseph Merz
2
TABLE OF CONTENTS
PAGE
PRELIMINARY STATEMENT3
FACTS..4
ARGUMENT...7 I. PETITIONERS ARE ENTITLED TO A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJ UNCTION...7
II. PETITIONERS ARE LIKELY TO PREVAIL ON THE MERITS OF THE PETITION....8
A. ESDC Violated SEQRA by Failing to Prepare a Supplemental EIS..8
1. A Supplemental Environmental Impact Statement is Required Due to Change in Circumstances12 a. Superstorm Sandy...12
b. Increased Vehicular and Pedestrian Traffic....13 2. A Supplemental EIS Is Required Due to Newly Discovered Information.15
a. Change in Park Finances.....15
b. School Overcrowding......19
B. ESDC Has Violated the UDCA Because the RFP Contains an Impermissible Alteration to the Project Inconsistent with the GPP..21
III. PETITIONERS WILL SUFFER IRREPARABLE HARM ABSENT INJ UNCTIVE RELIEF..24
IV. THE BALANCE OF EQUITIES TILTS IN PETITIONERS FAVOR...25
CONCLUSION..26
3
PRELIMINARY STATEMENT
Petitioners submit this Memorandum of Law in support of their Petition, an application for a temporary restraining order and for a preliminary injunction seeking: (a) a declaration that Respondents New York State Urban Development Corporation d/b/a the Empire State Development Corporation (ESDC) and Brooklyn Bridge Park Development Corporation (BBPDC) acted in a manner that is arbitrary, capricious, an abuse of discretion and in violation of law; (b) enjoining Respondents from accepting or approving or taking any other actions concerning proposals submitted in response to a Request for Proposal (RFP) dated May 13, 2014 concerning development of Pier 6 in Brooklyn Bridge Park; (c) annulling the RFP; (d) directing Respondents to prepare or cause to be prepared a Supplemental Environmental Impact Statement (Supplemental EIS); (e) awarding Petitioners costs and reasonable attorneys fees; and (f) granting such other and further relief as the Court may deem just, proper and equitable. Brooklyn Bridge Park was designed to be a financially self-sustaining entity with as minimal development in the Park as necessary to support its budget for maintenance and operations. However, the RFP requires developers to include affordable housing which substantially alters the Project without performing a proper environmental review and without abiding by the requisite administrative procedures. First, ESDCs actions violate the State Environmental Quality Review Act (SEQRA), N.Y. Environmental Conservation Law 8-0109, by failing to analyze the changes in circumstances and newly discovered information concerning Brooklyn Bridge Park in a Supplemental EIS before releasing its RFP. N.Y. Comp. Codes R. & Regs. tit. 6, 617.9. (1996). Since the Final Environmental Impact Statement (FEIS) was issued in 2005, Brooklyn Bridge Park has experienced significant changes in circumstances and new information 4
discovered, including the occurrence of Superstorm Sandy, significantly increased vehicular and pedestrian traffic, a change in Park finances, and overcrowding in neighborhood schools. According to SEQRA, the ESDC is required to review the significant adverse impacts of these changes on the Project area in a Supplemental EIS before issuance of a RFP. Second, ESDC, which is subject to the Urban Development Corporation Act (UDCA), violated the UDCA by altering the Project by including affordable housing without modifying the GPP. N.Y. Unconsol. Law 6266 (McKinney 1990). The Project contemplates as minimal development in the Park as financially possible. ESDC was therefore required to follow the required notice and comment procedure set out in the UDCA before altering the Project Plan. FACTS
The original Brooklyn Bridge Park Development Corporation was established in 1998 by Downtown Brooklyns elected officials and funded by the State of New York. (See Illustrative Master Plan (IMP), Exhibit A, Page 2). The corporation developed an Illustrative Master Plan (IMP) in 2000, which set forth a vision for a financially self-sustaining park along the Brooklyn waterfront providing recreational and cultural opportunities, subject to any refinements thereto arising from the completion of the planning and environmental review processes for the Project. (See Memorandum of Understanding (MOU), Exhibit B, Page 3). The IMP was heavily influenced by the Thirteen Guiding Principles, which include the Principle of Develop[ing] a Fiscally Prudent Plan. (See Thirteen Guiding Principles, Exhibit C, Page 2). This Principle states that [t]he site shall have only so much commercial development in a park-like setting as is necessary to enliven the area, to provide security and to finance ongoing operations. (Exhibit C, Page 2). 5
On May 2, 2002, then Governor George Pataki and then Mayor Michael Bloomberg signed a Memorandum of Understanding (MOU) providing for the creation of what is now known as the Brooklyn Bridge Park Development Corporation (BBPDC) to plan, design, and build Brooklyn Bridge Park. (Exhibit B, Page 3). BBPDC is a subsidiary of ESDC. (Exhibit B, Page 3). The two parties to the MOU agreed that the IMPs provisions would guide the Project. (Exhibit B, Page 3). The MOU states that not less than 80% of the Project would be reserved as open space and would be dedicated as parkland, and the MOU requires that all revenue derived from appropriate commercial activities in the Project area be used exclusively for the maintenance and operation of the Project. (Exhibit B, Page 3). The GPP, adopted J uly 26, 2005, notes that the MOU requires that the park be financially self-sustaining. (See General Project Plan (GPP), Exhibit D, Page 5). To accomplish this mandate, the GPP included a plan for revenue-generating developments in the Park to provide funding. (Exhibit D, Page 5). This funding analysis was included in the FEIS, dated December 2005, prepared before the GPP was formally adopted in its modified form on December 18, 2006. (See FEIS, Exhibit E, Page F-1). The FEIS states that the proposed project would introduce . . . market rate housing units to accommodate the financially self- sustaining mandate. (Exhibit Z, Page 4-7) Although ESDC was committed to having a financially self-sustaining park, the ESDC was also committed to minimal Park development. In 2007, the ESDC submitted a Brief to the Appellate Division in Brooklyn Bridge Park Legal Def. Fund v. New York State Urban Dev. Corp., 856 N.Y.S.2d 235 (2d Dept 2008), and announced its commitment to building the minimum development necessary to cover the Parks maintenance and operation needs. (See 6
Brief for Respondents-Respondent, dated May 30, 2007 (ESDC Brief), Exhibit F, Page 15). ESDC also promised that if market conditions allowed for less development to support the Parks needs, the development program would be reduced accordingly. (Exhibit F, Page 16). On May 13, 2014, BBPDC released an RFP for development at Pier 6, requiring proposals to be submitted by J uly 21, 2014. (See RFP, Exhibit G, Page 1). According to the RFP, each of the two development parcels on Pier 6 consists of approximately 9,880 square feet of vacant land. (Exhibit G, Page 5). Parcel A has a maximum build height of 315 feet and Parcel B has a maximum build height of 155 feet. (Exhibit G, Page 9). In total, the Pier 6 parcels consist of approximately 4,643,600 square feet. Although the RFP requires developers to submit proposals that abide by the GPP requirements, the RFP also requires that approximately 130,000 gross square feet of the Pier 6 parcels (approximately 30% of the apartments) be allocated for affordable housing. (Exhibit G, Page 9). The RFP was the first time in the history of the Project that inclusion of affordable housing was required. Yet, BBPDC provided no rationale whatsoever in the RFP or subsequent documents for the new affordable housing mandate. Affordable housing would provide little to no revenue to the Park, such that its inclusion in the Pier 6 development directly conflicts with the Projects objective of having as minimal development as necessary to fund the Park. The allocation of 30% of Pier 6s development to uses generating little or no revenue indicates that the Park can afford to have less development to support its financial needs. Even if the affordable housing units actually generate revenue, these units would still provide much less revenue than the market rate apartment units the FEIS contemplated. Since the affordable housing units would be sold or rented at a much lower rate than the market rate 7
apartment units, Brooklyn Bridge Park would be losing the maximum revenue potential from these apartments. Moreover, more units of affordable housing would be necessary to generate the same amount of revenue that market rate units would generate. The construction of more apartments than financially necessary in Pier 6 violates the Projects objective of minimal development and is inconsistent with the GPP. ARGUMENT I. PETITIONERS ARE ENTITLED TO A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
CPLR 6301 provides in relevant part: A temporary restraining order may be granted pending a hearing for a preliminary injunction where it appears that immediate and irreparable injury, loss or damage will result unless the defendant is restrained before the hearing can be had. CPLR 6313 also provides that [i]f, on a motion, for a preliminary injunction, the plaintiff shall show that immediate and irreparable injury, loss or damage will result unless the defendant is restrained before a hearing can be had, a temporary restraining order may be granted without notice. Yonkers Racing Corp. v. Catskill Regional Off-Track Betting Corp., 143 A.D.2d 345, 346, 532 N.Y.S.2d 407, 408 (2d Dept 1988) recognized that a temporary restraining order is premised on a demonstration that immediate and irreparably injury, loss or damage will result unless the [other party] is restrained before the hearing can be held. It is well settled that in order to be entitled to a preliminary injunction, a movant must clearly demonstrate (1) the likelihood of ultimate success on the merits, (2) irreparable injury absent a granting of the preliminary injunction, and (3) a balancing of the equities in the movants favor. E.g., Doe v. Axelrod, 73 N.Y.2d 748, 750, 532 N.E.2d 1272, 1273 (N.Y. 1988); McVay v. Wing, 303 A.D.2d 727, 758 N.Y.S.2d 88 (2d Dept 2003); MacIntyre v. Metropolitan Life Ins. Co., 221 A.D.2d 602, 634 N.Y.S.2d 180, 180-81 (2d Dept 1995). 8
A preliminary injunction is a provisional remedy; its function is not to determine the ultimate rights of the parties, but to maintain the status quo until there can be a full hearing on the merits. Destiny USA Holdings, LLC v. Citigroup Global Markets Realty Corp., 69 A.D.3d 212, 889 N.Y.S.2d 793 (4 th Dept 2009). In ruling on a motion for a preliminary injunction, the courts must weigh the interests of the general public as well as the interests of the parties to the litigation. Id. at 223. Once the RFP is completed and proposals are in, the community will be hard pressed to stop the momentum and will be forced to litigate with the developer and their press teams, et al. Essentially, the RFP completion will render the developer of Site A and B for Pier 6 a fait accompli before the requisite Supplemental EIS is prepared and GPP is modified. Additionally, contractors, developers, and all parties involved would be irreparably harmed based on their reliance on the illegitimate parameters set forth in the RFP. Specifically, the RFP improperly includes the mandate of affordable housing. The Respondents further failed to adequately address various adverse environmental impacts in a Supplemental EIS before issuing the RFP. The RFP is therefore misleading and would result in irreparable harm to anyone submitting a response thereto since the affordable housing component is contrary to the GPP and in violation of the UDCA. Indeed, bidders are relying, to their detriment, on this inappropriate scheme when composing proposals for submission. The proposals will be for a building that is drastically and materially different than what the GPP requires. As such, the contractors and developers would be irreparably harmed unless the RFP is stayed. II. PETITIONERS ARE LIKELY TO PREVAIL ON THE MERITS OF THE PETITION
A. ESDC Violated SEQRA by Failing to Prepare a Supplemental EIS 9
According to the GPP, ESDC is the lead agency of the Project and is subject to SEQRA for environmental review of the Projects impacts. (Exhibit D, Page 16). The standard of duty for a lead agency under SEQRA, and the standard of review for the Courts, is well established: courts may, first, review the agency procedures to determine whether they were lawful. Second, we may review the record to determine whether the agency identified the relevant areas of environmental concern, took a hard look at them, and made a reasoned elaboration of the basis for its determination. Court review, while supervisory only, insures that the agencies will honor their mandate regarding environmental protection by complying strictly with prescribed procedures and giving reasoned consideration to all pertinent issues revealed in the process.
Jackson v. New York State Urban Dev. Corp., 503 N.Y.S.2d 298 (N.Y. 1986).
Once a project has obtained its necessary approvals and the lead agency has issued its statement of findings, the SEQRA process is completed. Id. However, when there are changes proposed to the project and new or amended approvals are necessary, the obligations of the lead agency under SEQRA are revived and the agency may not approve the project again without fulfilling its SEQRA obligations, as the amended approval is an action under SEQRA. 6 N.Y.C.C.R.R. 617.2. The SEQRA regulations recognize that in certain circumstances changes to the project, changes in circumstances or material new information may require the preparation of a Supplemental Environmental Impact Statement (Supplemental EIS). The regulations state: Supplemental EISs. (i) The lead agency may require a supplemental EIS, limited to the specific significant adverse environmental impacts not addressed or inadequately addressed in the EIS that arise from: [a] changes proposed for the project; or [b] newly discovered information; or [c] a change in circumstances related to the project. [ii] The decision to require preparation of a supplemental EIS, in the case of newly discovered information, must be based upon the following criteria: 10
[a] the importance and relevance of the information; and [b] the present state of the information in the EIS. [iii] If a supplement is required, it will be subject to the full procedures of this Part.
6 N.Y.C.C.R.R. 617.9. Although SEQRA does not define changes in circumstances, the purpose of a [Supplemental EIS] is to account for new information bearing on matters of environmental concern not available at the time of the original environmental review. Coalition Against Lincoln West, Inc. v. Weinshall, 21 A.D.3d 215, 799 N.Y.S.2d 205 (1 st Dept 2005); Municipal Art Soc. of New York, Inc. v. New York State Convention Center Development Corp., 15 Misc.3d 1138(A) (N.Y. Sup. Ct. 2007). In lieu of a Supplemental EIS, agencies often prepare a Technical Memorandum to examine and address potential environmental effects associated with proposed modifications . . . and changes in background conditions. Jackson, 67 N.Y.2d 400, 423; Coalition Against Lincoln West, Inc., 21 A.D. 3d 215, 219; Municipal Art Soc. of New York Inc., 841 N.Y.S.2d 821, 827. In Develop Dont Destroy (Brooklyn), Inc. v. Empire State Development Corp., 914 N.Y.S.2d 572 (N.Y. Sup. Ct. 2010) the court held that the UDC erred in not taking a hard look at impacts of delays in project construction and not providing a reasoned elaboration for its determination. The shift from a 10-year construction period to a 25-year construction period was a changed circumstance in the Project that the UDC should have evaluated. Id. at 628. The Brooklyn Bridge Park Projects FEIS was prepared in 2005. (Exhibit E, Page 1). Edward Applebome, one of the project directors for the FEIS, followed the guidelines of the 2001 City Environmental Quality Review (CEQR) Technical Manual to conduct the environmental review of the Project. (See Affidavit of Edward Applebome in Support of Cross- Motion to Dismiss Petition, dated J une 28, 2006 (Applebome Aff.), Exhibit H, Page 3). 11
(Applebome prepared the FEIS in accordance with the CEQR Manual because it is standard practice for projects located in New York City to conduct such review. (Exhibit H, Page 3). According to the 2001 and 2014 CEQR Technical Manuals, Build Year is defined as the year when the action would be substantially operational, since this is when the actions effects would be felt, and when mitigation of project impacts would have to be in place. (See City Environmental Quality Review Manual, dated 2001 (2001 CEQR Manual), Exhibit I, Page 2-4); City Environmental Quality Review Manual, dated 2014 (2014 CEQR Manual), Exhibit J , Page 2-4). (Applebome estimated the Projects Build Year to be 2012 and conducted his analyses accordingly. (Exhibit H, Page 4). However, it is clear that the analyses based off the 2012 estimated year of completion are outdated and have been rendered obsolete. As of 2014, two years after the estimated year of completion, the Project is not even remotely close to being considered substantially operational. In fact, only one of the five proposed developments in Brooklyn Bridge Park is completed and three other developments are still undergoing construction. (Exhibit G, Pages 10-11). Meanwhile, the RFP for development on Pier 6 was only released in May 2014 and there has yet to be any construction on Pier 6. (Exhibit G, Page 1). Moreover, since 2005, Brooklyn Bridge Park has experienced significant changes in circumstances and new information discovered which change the entire complexion of the Project. These changes and newly discovered information include, but are not limited to, the effect of Superstorm Sandy, substantially increased vehicular and pedestrian traffic, a change in Park finances, and the overcrowding of schools. Each of these issues has resulted in significant environmental impacts in and around Brooklyn Bridge Park. Yet, ESDC has failed to prepare a Supplemental EIS or a Technical Memorandum to address these significant adverse 12
environmental impacts. Therefore, the RFP process must be stayed until these impacts are properly evaluated in a Supplemental EIS. 1. A Supplemental EIS is Required Due to Changes in Circumstances
a. Superstorm Sandy Since the FEIS was published in 2005, Pier 6 has experienced a dramatic increase in flood risk. According to FEMAs revised New York City flood map, Pier 6 development sites went from having a 0.2% risk of catastrophic flood activity to a 1% annual risk. (See FEMA Flood Map, Exhibit K). An area with a 1% Annual Chance of Flood (ACF) is considered by FEMA to be a High Risk Area. (Exhibit K). This five-fold increase demonstrates the transition of Pier 6 from a Low Risk Area to a High Risk flood area. The Pier 6 area is also categorized by FEMA as an AE Zone which is considered a high-risk flood area with a capacity for damage and destruction to buildings. (Exhibit K). Accordingly, there is a Federal flood insurance mandate for that area. (Exhibit K). FEMA has also provided construction guidelines for such flood zones, and the RFP only recommends, but surprisingly does not require, proposals to consider flood resiliency measures. (Exhibit G, Page 5). Moreover, according to New York Citys Climate Resilience Deliverables Report, sea levels are likely to rise 1-2 feet and could rise by more than 2.5 feet, in addition to the 1 foot rise that has already occurred since 1900. (See New York Citys Climate Resilience Deliverables Report (CRD Report), Exhibit L, Page 6). As sea levels rise, they increase the chances of extreme floods by todays standards. (See Climate Centrals New York and the Surging Sea Report (CC Report), Exhibit M, Page 17). 13
Sandy produced a storm surge of 9 feet. (Exhibit M, Page 17). Assuming a 2 foot sea level rise, the annual chance of extreme flooding would increase from 1% to 10%, over ten times todays estimate. (Exhibit M, Page 17). Sandy, which flooded Pier 6 and is now designated as a 100 year flood, would become a 10 year flood. (Exhibit M, Page 17). With a 2 foot level sea rise and a storm comparable to Superstorm Sandy, Pier 6 would experience significant flooding. (See Sea Surge Map 8 feet (SS 8), Exhibit N; Sea Surge Map 10 feet (SS 10), Exhibit O). Obviously, if flooding comparable to Sandy could recur every 10 years, it would be folly not to evaluate the potential impact in a Supplemental EIS prior to receiving RFP responses from developers. Unlike Hurricane Floyd in Riverkeeper, Inc. v. Planning Bd. Of Town of Southeast, 9 N.Y.3d 219, 233, 851 N.Y.S.2d 76, 82, 881 N.E.2d 172, 178 (N.Y. 2007), Superstorm Sandy is a change of circumstances that has caused significant adverse impacts as demonstrated by the five- fold increase of flood risk to the Pier 6 area and the designation of Pier 1 as an evacuation flood zone by FEMA. Therefore, the effects of Superstorm Sandy on Brooklyn Bridge Park require preparation of a Supplemental EIS. b. Increased Vehicular and Pedestrian Traffic The FEIS analyzed the proposed traffic impacts associated with the proposed Park and on site commercial and residential uses on the downtown Brooklyn waterfront. (See FEIS, Chapter 14: Traffic and Parking (FEIS, Ch. 14), Exhibit P; FEIS, Chapter 15: Transit and Pedestrians (FEIS, Ch. 15), Exhibit Q). According to the FEIS, the Project would generate a net total of 3,132 person trips in the weekday AM peak hour, compared to 8,040, 7,175 and 9,189 new trips during the weekday midday, PM and Sunday midday peak hours, respectively. (Exhibit P, Page 14-1). 14
The FEIS also stated that there would likely be no new significant traffic or parking impacts in the AM peak hour not already disclosed for the other peak hours when project- generated demand would be substantially greater. (Exhibit P, Page 14-1). The Project would generate demand for an estimated 1,282 parking spaces in the weekday midday and 1,497 spaces in the Sunday midday. (Exhibit P, Page 14-45). As for the subway and pedestrian impact, the FEIS stated that the Project would generate an estimated 989 subway trips during the weekday midday peak hour, 1,558 trips during the 5:00-6:00PM peak hour and 1,375 trips during the Sunday 2:00-3:00PM peak hour. (Exhibit Q, Page 15-2). The FEIS also estimated that four of the areas subway stations or station complexes (York Street, High Street, Clark Street, Borough Hall/Court Street) would only experience a peak hour demand in excess of 200 persons per hour in either the PM or Sunday peak hours, or both. (Exhibit Q, Page 15-2). Additionally, the FEIS stated that significant adverse pedestrian impacts were not expected to occur at sidewalks along the principal pedestrian access corridors serving the proposed project area. (Exhibit Q, Page 15-35). However, these estimates conducted in the 2005 FEIS are completely outdated and are no longer reliable. For instance, the estimates severely underestimated the traffic impact on the surrounding neighborhood even without the proposed Project. Traffic in the surrounding neighborhood has also drastically increased as a result of the Atlantic Yards Project. Moreover, pedestrian traffic has also drastically increased beyond what the FEIS anticipated. The FEIS expected the Park to generate approximately 27,000 trips during a typical summer Sunday and 15,000 trips during a typical summer weekday. (See FEIS, Appendix B, Exhibit R, Page 1). 15
However, the actual numbers have turned out to be much higher. Nancy Webster, Executive Director of the Brooklyn Bridge Park Conservancy, stated that while Brooklyn Bridge Park has yet to carry out a visitor count in 2014, roughly 100,000 people visited [the Park] each Saturday and Sunday [in 2013]. (See Mary Frost, Mayor de Blasio re-nominates Regina Myer president Brooklyn Bridge Park Corp, Exhibit S). On the topic of the 2014 visitor count, Webster stated that while [Brooklyn Bridge Park] [hasnt] counted, the numbers feel higher. (Exhibit S). These numbers demonstrate that the FEIS drastically understated the number of visitors and pedestrians of Brooklyn Bridge Park, even without the Pier 6 development. In view of the aforementioned, ESDC should be required to prepare a Supplemental EIS to include evaluations on vehicular and pedestrian traffic as well as a recalculation of the Projects Build Year. 2. A Supplemental EIS is Required Due to Newly Discovered Information
a. Change in Park Finances The Parks maintenance and operations budget proposal is $15.2 million, as calculated by Singe Nielsen, an agent of the Respondents, in 2004. (See Affidavit of Signe Nielsen, for Respondents, In Support of Cross-Motion to Dismiss Petition and in Opposition to Petition, dated J uly 30, 2006 (Nielsen Aff.), Exhibit T, Page 3). Since its inception, Brooklyn Bridge Park was meant to be financially self-sustaining and developments were to be constructed according to the Parks need for revenue. (Exhibit C; Exhibit A; Exhibit B). Respondents previously conceded in Brooklyn Bridge Park Legal Def. Fund v. New York State Urban Dev. Corp., that the development program would be reduced depending on market conditions: 16
BBPDC has committed to building the minimum development necessary to cover the park's maintenance and operations needs. Accordingly, the plan analyzed in the FEIS and described in the GPP represents the maximum build-out that would occur as part of the Project. If, once requests for proposals are issued for the development components, it becomes clear that market conditions will allow for less development to support the park's needs, the development program will be reduced accordingly. (Exhibit F, Pages 15-16)(Emphasis added). BBPDCs statements supporting minimal development in Brooklyn Bridge Park are also included in the FEIS. The FEIS analyzed the necessary development of the Park and acknowledged that market conditions may impact the size of development: The final step in the [development] analysis was to create the smallest program that could prudently support the annual maintenance and operations of the park . . . it should be noted that the revenue analysis was completed in late 2004 and all assumptions, including land values, construction costs, and financial assumptions, are based on data available at that time. (See FEIS, Chapter 1, Exhibit U, Page 1-15). The development program contained in the proposed plan represents the minimal level of development that is required to prudently support the annual maintenance and operations of the park based on the analysis undertaken in 2004 . . . development may be smaller, if market conditions permit it, because the value of land and other factors may well be different from those assumed in this analysis. (Exhibit U, Page 1-18)(Emphasis added). Since Brooklyn Bridge Park is financially self-sustaining, revenues from its development sites as well as other Park revenues provide the Park with funding to cover its expenses. To date, the Park has four active real estate development projects: 1 Brooklyn Bridge Park, Pier 1 Development (Pierhouse), J ohn Street development, and Empire Stores. (Exhibit G, Pages 10-11). 17
Once these four projects and the Pier 6 project are completed, Brooklyn Bridge Park is estimated to cost $12 million per year to operate and maintain, with an approximate $210 million in total to cover one-time maritime infrastructure repair expenses related to the Parks waterfront piers. (See Pier 6 Development Sites RFP Update, dated April 10, 2014 (RFP Update), Exhibit V, Page 4). The Park projects that revenue from the four development sites awarded to date will cover 92% of annual operating expenses (approximately $11 million of the $12 million project annual budget upon completion) and 38% of maritime expenses (approximately $80 million of $210 million in projected expense over the next 50 years). (Exhibit V, Page 5). Revenue from the Pier 6 development sites is expected to cover the remainder of the operating and maritime expenses. (Exhibit V, Page 5). Pier 6 is one of the most valuable development sites in Brooklyn and the condominium prices in Brooklyn Bridge Park are rapidly increasing. Since the 2005 FEIS, there have been dramatic increases in real estate prices and land value in Brooklyn Bridge Park. The Pier 1 and Pier 6 development sites were projected to sell for $750 and $725 per square foot in the FEIS in 2005. (See FEIS, App. C., Exhibit W, Page 3). However, according to the Wall Street J ournal, prices for the Pierhouse development site of Pier 1 have been raised six times since launch and are 25% higher than the developer projected last fall. (See J osh Barbanel, Brooklyn Park Condos Sizzle, Exhibit X, Page 1). The condominium units have sold at an unusually fast pace at an average price of $1,800 per square foot, a record for Brooklyn. (Exhibit X, Page 1). Obviously, the projected estimates of $750 or $725 per square foot are far below the current $1,800 per square foot sale price in Brooklyn Bridge Park. This difference in sales price implies that the potential revenue from these two developments sites is much more than what 18
was projected in the 2005 FEIS. Meanwhile, the annual maintenance and operations budget has only modestly increased since 2005. According to Appendix C of the 2005 FEIS, the annual budget was $15.2 million, while the BBP Financial Model Update in October 2013 stated that the projected expenses would be $16 million. (Exhibit W, Page 56); (See BBP Financial Model Update, dated October 21, 2013 (BBP FMP), Exhibit Y, Page 4). If the Park meets its funding threshold through property taxes of the existing four development projects and market conditions thereby allow for less development to support the Parks needs, the Pier 6 housing development must be reduced or may even be unnecessary. Furthermore, BBPDCs inclusion of affordable housing in the Pier 6 development scheme contributes to the idea that the Parks budget for maintenance and operations can be met without total completion of the proposed Pier 6 development plan. BBPDC mandated that 130,000 gross square feet (approximately 30% of the apartments) be allocated to affordable housing. (Exhibit G, Page 9). Assuming a sale price of $1,800 (the market value of square footage in Brooklyn Bridge Park) and a 15% loss factor to calculate net saleable square feet, the Park could be foregoing almost $200 million in revenue in order to accommodate affordable housing. This is clearly illogical and BBPDC has failed to provide any rationale for the inclusion of this less than profitable housing scheme in the RFP. If Brooklyn Bridge Park can afford to forego millions of dollars by including affordable housing in the Pier 6 development, then Brooklyn Bridge Park has enough funding to reduce development on Pier 6 instead of injecting affordable housing into a scheme that only contemplates a self-sustaining Park of minimal development. See ESDC Brief, at 16. Because these finances are a change in circumstance and an example of newly discovered 19
information since the FEIS in 2005, the Parks finances should be evaluated in a Supplemental EIS to determine the necessity of Pier 6s development. b. School Overcrowding Chapter 4 of the FEIS evaluated the effects the Project would have on community facilities, such as schools. (See FEIS, Chapter 4, Exhibit Z). The FEIS concluded that the proposed project would not have significant adverse impacts on community facilities. (Exhibit Z, Page 4-1). The FEIS stated even with the student-age population generated by the proposed project, there would be sufficient capacity in the public school system to accommodate this added demand. (Exhibit Z, Page 4-1). The Brooklyn Bridge Park project site lies within the boundaries of Region 2 of Community School District 13 (CSD 13). (Exhibit Z, Page 4-2). According to the Department of Educations (DOE) enrollment and capacity figures from the 2003-2004 school year, the elementary schools in this Region were operating at approximately 65% capacity. (Exhibit Z, Page 4-2). According to the FEIS, all of the children living in the proposed residential buildings on the project site would be zoned to attend public schools in CSD 13. (Exhibit Z, Page 4-7). Even with the estimated additional 327 elementary school students from the Project, the FEIS calculated that elementary schools in Region 2 of CSD 13 would only operate at 75% capacity in 2012. (Exhibit Z, Page 4-7). However, according to the New York State School Construction Authority, the elementary schools listed in the FEIS are, in fact, operating over capacity and overcrowded. (See New York State School Construction Authority, 2012-2013 Enrollment, Capacity and Utilization Report (NYSSCA Report 2012), Exhibit 1, Pages 60-61); New York State School 20
Construction Authority, 2013-2014 Enrollment, Capacity and Utilization Report, Book One (NYSSCA Report 2013), Exhibit 2, Pages 94-95). P.S. 8 and P.S. 46 are two elementary schools listed in the FEIS that are operating over capacity. For example, in the 2012-2013 school year, P.S. 8 operated at 119% capacity while P.S. 46 operated at 103% capacity. (Exhibit 1, Pages 60-61). Overall, the schools listed in the FEIS for CSD 13 operated at 90% capacity in the 2012-2013 school year. (Exhibit 1, Pages 60-61). This 15% difference in operational capacity demonstrates that the FEIS drastically underestimated the significant adverse impact the Project has on schools. Furthermore, the Project continues to have an increasingly significant adverse impact on surrounding schools. For example, in the 2013-2014 school year, P.S. 8 operated at 142% capacity while P.S. 46 operated at 103% capacity. (Exhibit 2, Pages 94-95). Overall, the schools listed in the FEIS for CSD 13 operated at 95% capacity in the 2013-2014 school year and were significantly overcrowded. (Exhibit 2, Pages 94-95). Even though the Project currently has only one completed development, the significant overcrowding of schools demonstrates that the Project already has a significant adverse impact on surrounding schools in addition to the significant adverse impact from population increases in the surrounding neighborhood. Moreover, the three developments currently undergoing construction have yet to contribute more elementary school students into this already overcrowded school system. (Exhibit G, Pages 10-11). It follows that the Project would continue to have a significant adverse impact on school capacity, even without the inclusion of the Pier 6 development. 21
The overcrowding of schools is newly discovered information that has arisen since the FEIS was executed in 2005 and therefore the Projects significant adverse impact on community facilities should be reevaluated in a Supplemental EIS. In sum, given the effect of Superstorm Sandy, the substantial increase in vehicular and pedestrian traffic, the change in Park finances, and the increase in school overcrowding, Petitioners have demonstrated that ESDC failed to identify the areas of environmental concern and did not take a hard look at them. 825 N.Y.S.2d at 356. Therefore, ESDC must prepare or cause a Supplemental EIS to be prepared to analyze these changed circumstances and this newly acquired information before proceeding with the Pier 6 development. B. ESDC Has Violated The UDCA Because the RFP Contains an Impermissible Alteration to the Project Inconsistent with the GPP The determination to release the RFP was arbitrary and capricious, affected by an error in law and an abuse of discretion because the inclusion of affordable housing is an impermissible alteration to the Project and a violation of the UDCA. The UDCA of 1968 created the UDC for the purpose of improving New York States economy through various development projects. N.Y. Unconsol. Law 6252. UDC, doing business now as ESDC, is subject to the provisions of the UDCA. Id. at 6262. BBPDC, as a subsidiary of ESDC, is also subject to the provisions of the UDCA. (Exhibit D, Page 2). According to the UDCA, ESDC must provide notice and opportunity for comment on proposed changes to the Project Plan before commencing the . . . alteration or improvement of any project. N.Y. Unconsol. Law 6266(2). After providing notice to the community of these proposed changes, the corporation must conduct a public hearing pursuant to such notice and if any substantive negative testimony or comment is received at such public hearing, the 22
corporation may, after due consideration of such testimony and comment, affirm, modify, or withdraw the plan. Id. As conceded by ESDC in Develop Dont Destroy Brooklyn v. Empire State Dev. Corp., 914 N.Y.S.2d 572, In practice . . . when the need for modification arises, ESDC adopts amendments to the GPP to incorporate the relevant modifications; and thereafter affirms a modified GPP, following the statutory public hearing process for the initial adoption of such a plan. (See Respondents Memorandum of Law, dated November 12, 2009 (ESDC MOL), Exhibit 3, Page 7). The GPP never contemplated affordable housing. The GPP has only previously contemplated revenue-generating commercial or residential developments in the Park. As noted by the 2006 GPP: [A] need of the Project is to include program components that are appropriate commercial uses that can generate sufficient funds to support the annual maintenance and operations of the Project. (Exhibit D, Page 2). The cost of operations, maintenance and upkeep would be paid out of the revenues received from appropriate commercial activities and residential projects located within the Project. (Exhibit D, Page 3). [T]he MOU requires the Project to be self-sufficient by providing for its own ongoing maintenance and operations. Therefore, appropriate commercial revenue producing activities would be located within the Project to support its annual maintenance and operations. (Exhibit D, Page 5). The 2002 MOU . . . outlining conditions for the creation and operation of the Project, requires that the park be financially self- sustaining, that is, that the parks annual operation and maintenance budget be provided by revenue generated from within the Project. 23
(Exhibit D, Page 12). This revenue-generating commercial and residential mandate must be considered in light of the BBPDCs promises to have as minimal development as necessary to fund the Park. (Exhibit F, Page 16; Exhibit U, Page 1-18). The GPP lacks any mention whatsoever of affordable housing units. In fact, the only kind of housing units the FEIS analyzed is market rate housing units. (Exhibit Z, Pages 4-1 and 4-7). Since affordable housing units would, at best, be below market rate, this inclusion of affordable housing in the development of Pier 6 would be an alteration to the Project that is subject to the notice and comment procedure outlined in the UDCA. Enjoining the BBPDC from accepting or approving Pier 6 proposals until formally modifying the GPP is the appropriate remedy under the UDCA. The UDCA implicitly grants municipalities the power to require a development corporation to perform Project work according to the Project Plan provisions and the power to subject said corporation to penalties when the corporation does not act in accordance with the terms of the Project Plan. N.Y. Unconsol. Law 6266(3). Enjoining the BBPDC from accepting or approving Pier 6 proposals that include affordable housing would also be an appropriate penalty incidental to the proper enforcement of the project plan, since the plan makes no mention of including affordable housing in Brooklyn Bridge Park. Id. Moreover, ESDC provided no rationale whatsoever for the inclusion of affordable housing in the Pier 6 development. Petitioners strongly object to BBPDCs attempts to bypass the administrative review process by sneaking in this significant alteration in the later stages of the Project and not providing a basis, let alone a justifiable basis, for its inclusion. Accordingly, Petitioners respectfully request that BBPDC be directed to act in conformance with the requirements of the UDCA and hold a duly noticed public hearing on such proposed 24
modifications and to provide an opportunity for the general public to submit oral and written comments on the inclusion of affordable housing in Brooklyn Bridge Park. III. PETITIONERS WILL SUFFER IRREPARABLE HARM ABSENT INJUNCTIVE RELIEF Irreparable injury, for purposes of equity, has been held to mean any injury for which money damages are insufficient. E.g., Walsh v. Design Concepts, Ltd., 221 A.D.2d 454, 455, 633 N.Y.S.2d 579, 580 (2d Dept 1995); Klein, Wagner & Morris v. Lawrence A. Klein, P.C., 186 A.D.2d 631, 633, 588 N.Y.S.2d 424, 426 (2d Dept 1992). Petitioners would be irreparably harmed by construction of a development based on the illegitimate parameters set forth in the RFP. Specifically, the RFP improperly includes the mandate of affordable housing, and the Respondents failed to adequately address adverse environmental impacts in a Supplemental EIS before releasing the RFP. Absent injunctive relief, the planning and construction of Pier 6 would commence according to the illegitimate parameters of the RFP. Petitioners would be subjected to an unnecessarily oversized development on Pier 6. Respondents made promises that only as much development as financially necessary would be constructed. (Exhibit F, Pages 15-16). As frequent users of the Park and advocates for green space, Petitioners would be harmed by the unnecessary overdevelopment of the Park and the unnecessary reduction of the Parks natural resources. Moreover, Petitioners would be harmed by the Pier 6 developments adverse environmental impacts on the surrounding neighborhood that were not adequately addressed in a Supplemental EIS. Respondents have not analyzed the changed circumstances and newly discovered information relating to the Project since the 2005 FEIS and have not even attempted to mitigate these significant adverse environmental impacts accordingly. Petitioners will be 25
irreparably harmed by the unnecessary increase in vehicular and pedestrian traffic and the unnecessary increase of students into a school region that is already experiencing significant school overcrowding. As such, Petitioners would be irreparably harmed absent injunctive relief. IV. THE BALANCE OF EQUITIES TILTS IN PETITIONERS FAVOR A balancing of the equities requires that the motion be granted if the irreparable injury to be sustained by plaintiff is more burdensome than the harm caused to defendants through imposition of the injunction. E.g., Fischer v. Deitsch, 168 A.D.2d 599, 563 N.Y.S.2d 836 (2d Dept 1990); Nassau Roofing & Sheet Metal Co. v. Facilities Development Corp., 70 A.D.2d 1021, 418 N.Y.S.2d 216 (3d Dept 1979). A preliminary injunction has been held to be warranted in a case in which irreparable harm to the plaintiff was debatable, but the balance of equities was in plaintiffs favor; plaintiff made a strong showing on the merits that the injunction would merely maintain the status quo. See Danae Art International Inc. v. Stallone, 163 A.D.2d 81 (1 st Dept 1990). Essentially, the purpose of a preliminary injunction is to maintain the status quo pending ultimate determination. See Walker Memorial Baptist Church v. Saunders, 285 N.Y 462, 474; Bachman v. Harrington, 184 N.Y. 458, 464. That is the basis of the instant proceeding. If the injunction were granted, Respondents would merely be required to abide by the governing law (SEQRA and UDCA), and be delayed in the construction of the Pier 6 development. Respondents inconvenience is far outweighed by the irreparable harm Petitioners will suffer if an injunction is not granted. If the injunction were not granted, the planning and 26
construction of Pier 6 according to the illegitimate parameters of the RFP would proceed and it will become increasingly more difficult to undo once the process moves forward. Since the Pier 6 development is still only in the RFP phase and construction has yet to begin, the preliminary injunction would maintain the status quo until Petitioners claims can ultimately be decided. See, Fischer, 168 A.D.2d 599; Nassau Roofing & Sheet Metal Co., 70 A.D.2d 1021; Walker Memorial Baptist Church, 285 N.Y 462; Bachman, 184 N.Y. 458. CONCLUSION For all of the foregoing reasons, Petitioners application and petition should be granted in its entirety. ABRAMS, FENSTERMAN, FENSTERMAN, EISMAN, FORMATO, FERRARA & WOLF, LLP
By: ______________________ Frank V. Carone Attorneys for Petitioners 1 MetroTech Center, Suite 1704 Brooklyn, New York 11201 (718) 215-5300