SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

x

DEVELOP DON'T DESTROY (BROOKLYN), INC., : Index No. 114631/09

et al.,

Petitioners,

For a Judgment Pursuant to Article 78 of the

Civil Practice Law and Rules,

- against - : IAS Part 57

Justice Friedman
EMPIRE STATE DEVELOPMENT CORPORATION
and FOREST CITY RATNER COMPANIES, LLC,

Respondents.

PROSPECT HEIGHTS NEIGHBORHOOD DEVELOP- : Index No. 116323/09

MENT COUNCIL, INC., et al.,

Petitioners,

For a Judgment Pursuant to Article 78 of the

Civil Practice Law and Rules,

- against -

EMPIRE STATE DEVELOPMENT CORPORATION

and FOREST CITY RATNER COMPANIES, LLC,

Respondents.

MEMORANDUM OF LAW OF RESPONDENT FOREST CITY RATNER

COMPANIES LLC IN OPPOSITION TO THE SUPPLEMENTAL PETITIONS ,

KRAMER LEVIN NAFTALIS FRIED, FRANK, HARRIS, SHRIVER

& FRANKEL LLP & JACOBSON LLP
1177 AVENUE OF THE AMERICAS ONE NEW YORK PLAZA
NEW YORK, NY 10036 NEw YORK, NY 10004
(212) 715-9100 (212) 859-8000


Table of Contents

Page

Table of Authorities ii

Preliminary Statement 1

Statement of the Case 1

Argument 2

I. ESDC'S DETERMINATION THAT NO SUPPLEMENTAL ENVIRONMENTAL

IMPACT STATEMENT WAS REQUIRED IN CONNECTION WITH ITS
APPROVAL OF THE 2009 MGPP WAS RATIONAL AND PROPER 2

A. The Basic Principles Governing the Supplementation of EIS's Compel the

Conclusion That There Was No Requirement to Prepare an SEIS Here 2

B. There Is No Merit to Petitioners' Claims That This Court Erred in Not

Previously Invalidating the 2009 MGPP 5

C. ESDC's Determination on Remand That an Assumed 10-Year Build-Out Was

Appropriate Was Rational and Proper 7

D. ESDC Acted Properly in Examining the Potential Impacts of a 25-Year

Build-Out 11

E. ESDC's Determination That an Extended 25-Year Build-Out Would Not

Have Significant Environmental Impacts Not Previously Examined by
ESDC Was Rational and Amply Supported by the Technical Analysis
Prepared in Response to the Remand Order 13

II. ESDC WAS UNDER NO OBLIGATION TO HOLD A PUBLIC HEARING

BEFORE MAKING THE DECEMBER 16, 2010 FINDINGS 25

III. THE COURT SHOULD NOT STAY CONSTRUCTION OF THE PROJECT 27

Conclusion : 30

i
 Table of Authorities

Cases

Action for Rational Transit v. W Side Highway Project,

536 F. Supp. 1225 (S.D.N.Y. 1982) 9

Aetna Ins. Co. v. Capasso,

75 N.Y.2d 860 (1990) 28

Amer. Standard Inc. v. Swiss Reinsurance America Corp.,

71 A.D.3d 221 (1st Dep't 2010) 6

Barney v. City of New York,

83 A.D. 237 (1st Dept 1903) 28

Burke's Auto Body, Inc. v. Ameruso,

113 A.D.2d 198 (1st Dep't 1985) 11

Chatham Towers, Inc. v. Bloomberg,

6 Misc.3d 814 (Sup. Ct. N.Y. Co. 2004), affd,
18 A.D.3d 395 (1st Dep't 2005) 6

Chinese Staff & Workers Assoc. v. City of New York,

68 N.Y.2d 359 (1986) 7

C/S 12th Avenue LLC v. City of New York,

32 A.D.3d 1 (1st Dep't 2006) 2, 3

Develop Don't Destroy (Brooklyn), Inc. v. Urban Dev. Corp.,

59 A.D.3d 312 (1st Dept 2009), Iv to app. denied,
13 N.Y.3d 713, rearg. denied,
14 N.Y.3d 748 (2010) 3

Develop Don't Destroy Brooklyn v. Empire State Dev. Corp.,

31 A.D.3d 144 (1st Dep't 2006), lv. to app. denied,
8 N.Y.3d 802 (2007) 3

DePina v. Educational Testing Service,

31 A.D.2d 744 (2d Dep't 1969) 28

Doe v. Axelrod,
73 N.Y.2d 748 (1988) 28

Fisher v. Giuliani,
280 A.D.2d 13 (1st Dep't 2001) : 14, 26

u
Golden v. Steam Heat, Inc.,
216 A.D.2d 440 (2d Dep't 1995) 28

Goldstein v. N.Y S. Urban Dev. Corp.,

13 N.Y.3d 511 (2009), rearg. denied,
14 N.Y.3d 756 (2010) 30

Goldstein v. Pataki,
516 F.3d 50 (2d Cir.), cert. denied,
128 S.Ct. 2964 (2008) 30

Hell's Kitchen Neighborhood Assn v. City of New York,

A.D.3d , 2011 WL 382796 (1st Dep't Feb. 8, 2011) 13

Holloway v. Cha Cha Laundry, Inc.,

97 A.D.2d 385 (1st Dep't 1983) 6

Industrial Liaison Committee v. Williams,

72 N.Y.2d 137 (1988) 25

Jackson v. New York State Urban Dev. Corp.,

67 N.Y.2d 400 (1986) 2, 3, 4

MG. Sales, Inc. v. Chemical Bank,

137 A.D.2d 433 (1st Dep't 1988) 6

Martin v. City of Cohoes,

37 N.Y.2d 162 (1975) 6

Montgomery v. Metropolitan Transportation Authority,

2009 WL 4843782 (Sup. Ct. N.Y. Co. Dec. 15, 2009) 30

Neville v. Koch,
173 A.D.2d 323 (1st Dep't 1991), affd,
79 N.Y.2d 416 (1992) 14

Riverkeeper, Inc. vPlanning Bd. of Town of Southeast,

9 NY3d 219 (2007) 2

Silvercup Studios, Inc. v. Power Authority,

285 A.D.2d 598 (2d Dep't 2001) 6

Town of Dickinson v. County of Broome,

183 A.D.2d 1013 (3d Dep't 1992) 7

ui
Tri-County Taxpayers Ass'n, Inc. v. Town Board of Town of Queensbury,
55 N.Y.2d 41 (1982) 7

Village of Westbury v. Dep't of Transportation,

146 A.D.2d 578 (2d Dep't), affd,
75 N.Y.2d 62 (1989) 6

Vitiello v. City of Yonkers,

255 A.D.2d 506 (2d Dep't 1998) 7

WEOK Broadcasting Corp. v. Planning Board of Town of Lloyd,

79 N.Y.2d 373 (1992) 14

Wilder v. N.Y.S. Urban Dev. Corp.,

154 A.D.2d 261 (1st Dep't 1989) 4, 5

Statutes

State Environmental Quality Review Act passim

N.Y. Unconsol. Laws § 6256 26

N.Y. Unconsol. Laws § 6266 26

Rules

6 NYCRR § 617.7(c)(1)(i) 19

6 NYCRR § 617.7(c)(1)(v) 14, 18

6 NYCRR § 617.7 (c)( 1 )(vii) 14

6 NYCRR § 617.7 (c)( 1 )(viii) 18

6 NYCRR § 617.7(c)(1)(xii) 16

6 NYCRR § 617.9(a)(7)(i) 2

iv
 Preliminary Statement

Respondent Forest City Ratner Companies LLC ("FCRC") respectfully submits

this memorandum in opposition to the supplemental petitions in these proceedings. By decision

and order dated November 9, 2010, this Court remanded these matters to respondent Empire

State Development Corporation ("ESDC") with a direction to make findings on (1) the impact of

the terms of a finalized Master Development Agreement (the "Development Agreement")

between ESDC and FCRC and finalized agreements between FCRC and the Metropolitan

Transportation Authority (the "MTA Agreements") on ESDC's use of an assumed 10-year build-

out in its environmental assessment of a modified General Project Plan (the "2009 MGPP") for

the Atlantic Yards project (the "Project"), and (2) whether a Supplemental Environmental Impact

Statement ("SETS") is required or warranted.

On December 16, 2010, ESDC's Board of Directors made findings responsive to

the Court's remand order. On January 18, 2011, petitioners in these two proceedings served

supplemental petitions challenging ESDC's findings and again asking the Court to void the 2009

MGPP pending ESDC's preparation of an SETS — and to enjoin work on the Project in the

meantime. The supplemental petitions are without merit. '

Statement of the Case

The relevant facts are set forth in the respective verified answers of FCRC and

ESDC, the affidavits of Brian Collins and MaryAnne Gilmartin, and the administrative and

supplemental records submitted by ESDC, to all of which the Court is respectfully referred.

' The two supplemental petitions are identical, except that the DDDB petition contains a third cause of
action that does not appear in the Prospect Heights petition. The Prospect Heights petitioners also have
submitted a lawyer' s affirmation, affidavits and a memorandum of law, and a separate motion for a stay.
To date, the DDDB petitioners have submitted no further papers.


Argument

I. ESDC'S DETERMINATION THAT NO SUPPLEMENTAL ENVIRONMENTAL

IMPACT STATEMENT WAS REQUIRED IN CONNECTION WITH ITS
APPROVAL OF THE 2009 MGPPWAS RATIONAL ANDPROPER

A. The Basic Principles Governing the Supplementation

of EIS's Compel the Conclusion That There Was No
Requirement to Prepare an SEIS Here

This Court previously recognized in this case that the standard for judicial review

of ESDC's determination not to prepare an SEIS "is well settled." March 10, 2010 Dec'n, at p.

5. The Court continued:

A lead agency's determination whether to require an SEIS is

"discretionary." (Matter of Riverkeeper, Inc. v Planning Bd. of Town of
Southeast, 9 NY3d 219, 231 [2007].) The court's review is limited to
whether the lead agency "took the requisite hard look at project and
regulatory changes that arose after the filing of a SEQRA findings
statement, and made a reasoned elaboration that [an SEIS] was not
necessary to address those changes." (Id at 228-229, 231-232, citing
Matter ofJackson v. New York State Urban Dev. Corp., 67 NY2d 400,
417 [1986].) As the Court of Appeals emphasized: The courts may not
"second-guess" agency decision making. "Accordingly, an agency
decision should be annulled only if it is arbitrary, capricious or
unsupported by the evidence. The lead agency ... has the responsibility to
comb through reports, analyses and other documents before making a
determination; it is not for a reviewing court to duplicate these efforts ....
While judicial review must be meaningful, the courts may not substitute
their judgment for that of the agency for it is not their role to weigh the
desirability of any action or to choose among alternatives." (Riverkeeper,
Inc., 9 NY3d at 232 [internal quotation marks, citations, and brackets
omitted].)

Id at pp. 5-6 (emphasis added). See also 6 NYCRR § 617.9(a)(7)(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") (emphasis added).

An SETS is required "only if environmentally significant modifications are made

after issuance of an FEIS." C/S 12th Avenue LLC v. City of New York, 32 A.D.3d 1, 7 (1st Dep't

2006). "The mere fact that a project has changed does not necessarily give rise to the need for

2
the preparation of a supplemental EIS." Id. As the Court of Appeals has recognized, "[t]he EIS

process necessarily ages data," and "[a] requirement of constant updating, followed by further

review and comment periods, would render the administrative process perpetual and subvert its

legitimate objectives." Jackson, 67 N.Y.2d at 425.

Here, a comprehensive Final Environmental Impact Statement ("FEIS") analyzing

the potential environmental impacts of the Project was prepared by ESDC in conjunction with its

approval of the General Project Plan in 2006, and the adequacy of that FEIS was sustained by the

courts. Develop Don't Destroy (Brooklyn), Inc. v. Urban Dev. Corp., 59 A.D.3d 312 (1st Dep't

2009), lv. to app. denied, 13 N.Y.3d 713, rearg. denied, 14 N.Y.3d 748 (2010) ("DDDB IP').2

Since then, none of the elements of the Project has changed in any environmentally significant

way. The elements of the Project that were examined in the FEIS — i.e., an arena, 16 other

buildings (including at least 2,250 units of affordable housing), a new rail yard for the LIRR, a

new subway entrance and eight acres of open space — remain the elements of the Project. While

there have been modifications to the design of some of those elements, there has been no claim

that those modifications were anything but minor in scope, and no claim that they were not

consistent with the Design Guidelines previously adopted by ESDC in conjunction with the 2006

General Project Plan. These modifications thus are without adverse environmental impacts.

The change that is relied upon by petitioners to support their assertion that an

SEIS should have been prepared in 2009 was a change in the implementation of site acquisition

for the Project: instead of ESDC condemning the entire Project site at once and FCRC acquiring

all required land and development rights from the MTA at once as contemplated in the 2006

2
While this Court has referred to the Appellate Division decision in its own prior decisions as " DDDB I,"
we refer to it as "DDDB II" because of an earlier lawsuit brought by DDDB against the Project. Develop
Don't Destroy Brooklyn v. Empire State Dev. Corp., 31 A.D.3d 144 (1st Dep't 2006), lv. to app. denied, 8
N.Y.3d 802 (2007).

3
General Project Plan, the 2009 MGPP contemplates that ESDC will condemn land in stages and

FCRC will acquire land and development rights from the MTA in stages. In that way, the land

for the Project will not be acquired at the outset and then held for future use; it instead will be

acquired as needed; and FCRC can avoid the enormous initial capital outlay required to acquire

the entire Project site at once. This change does not have significant environmental

consequences, inasmuch as it always was anticipated that the elements of the Project would be

built incrementally over time. This change in the timing of land acquisitions has no effect on

construction of the Project. Instead, it is the other way around, in that it is progress in

construction of the Project — which in turn will reflect market conditions — that will determine

when the various portions of the Project site are acquired.

The Appellate Division previously confronted a similar issue in connection with

ESDC's redevelopment of Times Square. In Wilder v. N.Y.S. Urban Dev. Corp., 154 A.D.2d

261 (1st Dep't 1989), project opponents claimed that a change in plans for the project's

implementation that substituted "the phased acquisition and construction of building sites" for

"simultaneous acquisition and construction " necessitated the preparation of a new EIS. The

Appellate Division disagreed:

As to the sequential acquisition of building sites and the likelihood of

staggered construction as sites are acquired, it is reasonably clear that the
simultaneous construction contemplated in the original plan ... was
rendered impractical by events which took place during the period that
various legal challenges wound their way through the courts, culminating
in the project's approval in Matter of Jackson v. New York State Urban
Dev. Corp. (67 NY2d 400 [1986]).

154 A.D.2d at 262. The Appellate Division concluded that "it would be most inappropriate" to

require ESDC to perform a further environmental review of the project. Id. at 263.

The change in implementation of the Times Square project that was at issue in

Wilder was even more dramatic than the change at bar, because, in the case of Times Square, the

change from "simultaneous" to "phased" implementation was not limited to site acquisition, but

included both "acquisition and construction" (emphasis added). By contrast, the 2006 General

Project Plan for the Atlantic Yards project contemplated "phased" rather than "simultaneous"

construction, and the shift at issue in this case relates only to a change in the implementation of

site acquisition, not construction. As the change in Wilder did not require ESDC to prepare an

SEIS, a fortiori the substantially more limited change at bar did not require one.

B. There Is No Merit to Petitioners' Claims That This Court

Erred in Not Previously Invalidating the 2009 MGPP

Both supplemental petitions' first cause of action asserts that ESDC violated

SEQRA by approving the 2009 MGPP without preparing an SEIS. The petitions thus claim that

ESDC failed to identify and take a "hard look" at important areas of environmental concern in

the 2009 Technical Memorandum (Supp. Peens ¶¶ 13-19). The petitions specifically assert that

the 2009 Technical Memorandum failed to (1) address a build-out that would extend beyond

2035, (2) identify or consider the MTA Agreements and the Development Agreement as

evidence that the build-out would extend beyond 2035, (3) identify or evaluate the adverse

impacts on adjoining neighborhoods of 25 years of construction, (4) identify or evaluate the

adverse impacts of vacant lots on adjoining neighborhoods during an extended construction

schedule, and (5) take a "hard look" at the consequences of maintaining large new surface

parking lots rather than underground parking (id.).

The inclusion of this cause of action in the supplemental petitions appears to be an

assertion, at least by implication, that the record previously before this Court required the Court

to invalidate the 2009 MGPP and direct ESDC to halt work on the Project until it had prepared

5
and considered an SEIS. This claim is untenable, because, assuming that this Court was correct

in concluding that the prior record did not adequately support ESDC's determination not to

prepare an SEIS, it was well within this Court's discretion to not invalidate the 2009 MGPP, and

instead to remand the matter to ESDC for further findings.

In the first place, to the extent that the supplemental petitions' first cause of action

relitigates any issues that previously were determined adversely to petitioners, the re-litigation of

those issues at petitioners' behest is barred by the law of the case. See Martin v. City of Cohoes,

37 N.Y.2d 162, 165 (1975); Amer. Standard Inc. v. Swiss Reinsurance America Corp., 71

A.D.3d 221, 225 (1st Dep't 2010); M. G. Sales, Inc. v. Chemical Bank, 137 A.D.2d 433, 434 (1st

Dep't 1988); Holloway v. Cha Cha Laundry, Inc., 97 A.D.2d 385, 386 (1st Dep't 1983). Thus,

to the extent that petitioners make any claims that are not related to this Court's remand order

and ESDC's compliance with that order, those claims must be rejected.

Furthermore, a judicial determination that there has been a failure to comply with

SEQRA does not automatically require that the court halt work on the affected project or annul

the approval at issue. To the contrary, the decision whether to enjoin work on a project "is one

that lies within the sound discretion of the trial court." Chatham Towers, Inc. v. Bloomberg, 6

Misc.3d 814, 825-26 (Sup. Ct. N.Y. Co. 2004), aff'd, 18 A.D.3d 395 (1st Dep't 2005). See also

Village of Westbury v. Dep't of Transportation, 146 A.D.2d 578 (2d Dep't), aff'd, 75 N.Y.2d 62

(1989); Silvercup Studios, Inc. v. Power Authority, 285 A.D.2d 598 (2d Dep't 2001).

Here, the Court's November 9, 2010 decision indicates that, while the Court was

not satisfied that the record before it demonstrated that ESDC had fully complied with its

obligations under SEQRA, it also was not persuaded that ESDC was required to prepare an

SEIS. Given this uncertainty, the importance of the Project and the prior determinations by

ESDC and numerous courts that the Project serves the public interest, the Court acted well within

its discretion in allowing work on the Project to continue, declining to vacate the 2009 MGPP,

and remanding the matter to ESDC for further findings?

C. ESDC's Determination on Remand That an Assumed 10-Year

Build-Out Was Appropriate Was Rational and Proper

This Court remanded the matter to ESDC "for findings on the impact of the

Development Agreement and of the renegotiated MTA agreement on its continued use of a 10

year build-out for the Project, and on whether a Supplemental Environmental Impact Statement

is required or warranted" (Nov. 9, 2010 Dec'n, at p. 18). On December 16, 2010, pursuant to

this order, ESDC made three findings on remand: (1) that the Development Agreement and the

MTA Agreements "do not have a material effect on whether it is reasonable to use a 10-year

construction schedule for the purpose of assessing the environmental impacts of the Project"; (2)

that it is "unlikely that the Project will be constructed on a 10-year schedule because construction

... has lagged [due to] continuing weak general economic and financial conditions"; and (3) that

"[a] delay in the 10-year construction schedule, through and including a 25-year final completion

date, would not result in any new significant adverse environmental impacts not previously

identified and considered in the FEIS and 2009 Technical Memorandum and would not require

or warrant an SEIS" (SAR 7631-32, see also SAR 7729). 4

' The cases cited by petitioners to support theft claim that ESDC ' s approval of the 2009 MGPP should be
annulled (Mem. at 9) all involved situations where the agency did not prepare any EIS at all before
approving a project. See Chinese Staff & Workers Assoc. v. City of New York, 68 N.Y.2d 359 (1986)
(special permit for development project issued without any EIS); Tri-County Taxpayers Ass 'n, Inc. v.
Town Board of Town of Queensbury, 55 N.Y.2d 41 (1982) (sewer district established without any EIS);
Vitiello v. City of Yonkers, 255 A.D.2d 506 (2d Dep 't 1998) (rezoning enacted without any EIS); Town of
Dickinson v. County of Broome, 183 A.D.2d 1013 (3d Dep ' t 1992) (construction of public safety complex
approved without any EIS). Here, by contrast, ESDC prepared a comprehensive Final EIS that was the
subject of intense public review and comments, and then was sustained by the courts in DDDB H.

' Citations herein to "SAR" refer to the Supplemental Administrative Record that is being submitted to
the Court by ESDC with its answers to the supplemental petitions.

7
 In response to this Court's order, ESDC also issued a lengthy document entitled

"Atlantic Yards Land Use Improvement and Civic Project/ESDC Response to Supreme Court's

November 9, 2010 Order" (hereafter, the "ESDC Response" [SAR 7728-64]). In the ESDC

Response, ESDC examined the salient provisions of the Development Agreement and the MTA

Agreements and summarized those provisions in detail (see SAR 7733-45). ESDC then set forth

a careful analysis of the possible relevance of those provisions to the assumed build-out schedule

for the Project and concluded on the basis of that analysis that the use of an assumed 10-year

build-out for purposes of ESDC's environmental review was reasonable (see SAR 7746-48).

This analysis concluded that the contractual provisions regarding timing and scheduling are not

intended "to extend the schedule for construction of the Project to the outside dates" that trigger

specified penalties and defaults, but instead "create a legally binding framework of rights and

obligations designed to: (i) require construction to proceed towards completion of the Project at

a commercially reasonable pace, with the goal being completion in 2019; and (ii) in addition,

establish deadlines to define the outer allowable limits for Project completion" (SAR 7746).

ESDC further concluded that, in fact, "the agreements are structured to facilitate construction of

the Project at a commercially reasonable pace" (SAR 7747) (emphasis in original), and that

"[t]he agreements also put into place the safeguards needed to assure that the work, once

commenced, is pursued and completed on time" (SAR 7748). ESDC therefore summarized its

conclusions as follows:

In sum, the Development Contracts do not preclude the Project from being
constructed in 10 years and both require and encourage construction to
take place at a commercially reasonable pace. In light of these
considerations, the Development Contracts are not inconsistent with a ten
year schedule for Project construction.

(SAR 7748.)

8
 ESDC's painstaking analysis of the Development Agreement and the MTA

Agreements demonstrates a rational basis for ESDC's conclusion that those agreements, when

examined closely and viewed in their entirety, have no material effect on the use of an assumed

10-year build-out as the basis for ESDC's environmental analysis. The 2009 MGPP's

specification that the developer will use commercially reasonable efforts to complete the Project

within 10 years, the incorporation of that obligation in the Development Agreement, and FCRC's

financial incentive to build the Project as quickly as market conditions allow provide further

support for the rationality of ESDC's conclusion.

Petitioners base their claim that ESDC's first finding is irrational on conclusory

allegations that ESDC acted with an "overriding self-interest" and "doubtful good faith" (Butzel

Aff. ¶ 7, Mem. at 12). 5 Petitioners support this assertion by pointing to the MTA Agreements —

the basic terms of which were known to ESDC when it approved the 2009 MGPP, even though

the agreements themselves had not been finalized and executed — and an oral statement allegedly

made by ESDC's former Chief Executive Officer in an interview (Butzel Aff. ¶¶ 10-14).

However, as shown by the comprehensive analysis of the MTA Agreements in the ESDC

Response, these agreements allow FCRC to acquire the development rights over parts of the

LIRR rail yard over time rather than all at once, but do not affect the schedule for construction of

the Project and are not inconsistent with the use of an assumed 10-year build-out for purposes of

ESDC's environmental analysis. In addition, a vague, off-the-cuff oral statement made in an

s The veracity of petitioners ' admission that they "have not attempted to research cases in which agency
action has been rejected by the courts because it was not taken in good faith" (Mem. at 14) is apparent,
because the four decisions that petitioners cite are inapposite. These decisions all arose from the same
litigation about the Westway project, and are based on devious conduct in violation of the defendants '
obligations under the National Environmental Policy Act. See, e.g., Action for Rational Transit v. W. Side
Highway Project, 536 F. Supp. 1225, 1249, 1250 (S.D.N.Y. 1982) (voiding a permit, because the agency
knew that crucial facts in the EIS were "the complete opposite of the true facts " and "proceeded in a
fashion virtually designed to avoid" obtaining the expert opinions of other agencies).
interview does not establish that ESDC acted in bad faith when it decided to use an assumed 10-

year build-out for purposes of its environmental analysis of the 2009 MGPP.

Petitioners consistently ignore the fact that, although the Development Agreement

and the MTA Agreements allow FCRC to build the Project over 25 years, those contractual

provisions do not mean that it will take 25 years for FCRC to complete the Project. In other

words, petitioners consistently ask this Court to make the false assumption that, because FCRC

may take up to 25 years to complete the Project, FCRC necessarily will extend the Project's

construction over this 25-year period. Petitioners ignore the obvious fact that, having already

made an enormous investment in the Project, it is to FCRC's economic advantage to build the

Project as quickly as market conditions allow. Furthermore, the Development Agreement

specifically requires FCRC to use "commercially reasonable efforts" to complete the Project by

2019. Petitioners' assumption that the Project will not be completed until 2035 is, thus,

completely speculative.

Petitioners also argue that ESDC's second finding — that, as of December 16,

2010, "it appears unlikely that the Project will be constructed on a 10-year schedule" — is

evidence that ESDC knew, 14 months earlier, when it approved the 2009 MGPP in September

2009, that the Project would not be completed in 10 years (Butzel Aft ¶ 8). This contention is

preposterous. ESDC's Response explains that, because of "continuing weak general economic

and financial conditions," as of December 2010 the Project is not proceeding on the schedule that

was envisioned by ESDC in September 2009. In 2009, it was contemplated that by the end of

2011 three or four non-arena buildings would be under construction. As of December 2010,

however, FCRC had not started the construction of any non-arena buildings, and "it appears

likely" that only one non-arena building will be under construction by the end of 2011 (SAR

10


7749). However, as of September 2009, when ESDC approved the MGPP, the Project was not

behind schedule as it is now. Therefore, ESDC had no basis to assume at that time that the

Project would not be completed within 10 years.

Furthermore, it is a huge and inappropriate jump in logic to infer from the fact

that the Project is now somewhat behind a 10-year schedule that it will be 25 years before the

Project is completed. It is possible that market conditions will allow the Project to proceed at a

pace in the future that allows completion of the Project within a period that only slightly exceeds

the previously assumed 10-year build-out, and that is within the 15-year build-out that also was

examined by ESDC in the 2009 Technical Memorandum.

D. ESDC Acted Properly in Examining the Potential Impacts

ofa25-Year Build-Out

Although it is difficult to decipher precisely what petitioners' position is, they

also seem to argue that ESDC exceeded its authority under this Court's remand order by

analyzing whether a 25-year build-out would have significant adverse environmental impacts not

already disclosed in the FEIS or the 2009 Technical Memorandum, and only should have

analyzed whether an assumed 10-year build-out is rational (Mein. at 4, Butzel Aff. ¶ 6).

Petitioners seem to be saying that ESDC should have confined itself to reconsidering the

relevance of the Development Agreement and the MTA Agreements to the assumed 10-year

build-out, and should have made a new determination as to whether to prepare an SEIS solely on

the basis of that analysis. There is no merit to this claim.

As an initial matter, it "is within the jurisdiction and discretion of the

administrative body in the first instance" to determine how to proceed in accordance with a trial

court's remand order. Burke's Auto Body, Inc. v. Ameruso, 113 A.D.2d 198, 201 (1st Dep't

1985).

11
 Here, ESDC made further findings that cover all aspects of this Court's remand

order, which directed ESDC to make additional findings as to the effect of the agreements "on its

continued use of a 10 year build-out for the Project, and on whether a Supplemental

Environmental Impact Statement is required or warranted" (Dec'n, at p. 18) (emphasis added).

The reasonable inference to be drawn from the language of the remand order is that the further

findings that ESDC was directed to make on remand were not necessarily limited to ESDC's

reliance on an assumed 10-year build-out, but instead encompassed anything that reasonably

might be germane to the ultimate issue — i.e., "where a Supplemental [EIS] is required or

warranted" for the 2009 MGPP. Therefore, any claim that ESDC exceeded the scope of its

authority under the remand order is simply incorrect.

Petitioners argue that the Technical Analysis prepared by ESDC in response to the

remand order "could not cure the failure of the ESDC Board to have had such an evaluation

before it at the time it approved the MGPP" (Butzel Aff. ¶ 20; see also Mem. at 4). Not only is

this assertion inconsistent with the apparent intent of the Court's remand order, but it is

inconsistent with the crux of petitioners' prior positions in these proceedings. Petitioners' basic

position in these cases has been that the Project allegedly will not be completed until 2035 or

beyond, and that ESDC allegedly failed to identify or take a "hard look" at the environmental

impacts of such an extended build-out. Given that position, petitioners should not be allowed to

convert these cases into a game in which ESDC is precluded from doing on remand what

petitioners previously claimed it should have done. In fact, petitioners' effort to persuade the

Court to disregard the 2010 Technical Analysis is evidence of bad faith on the part of petitioners,

because it exposes the fact that their real interest is not a fair-minded examination of the

12


environmental impacts of the 2009 MGPP, but, instead, hijacking SEQRA to achieve their actual

aim, which is to kill or cripple the Project.

E. ESDC's Determination That an Extended 25-Year Build-Out

Would Not Have Significant Environmental Impacts Not Previously
Examined by ESDC Was Rational and Amply Supported by the
Technical Analysis Prepared in Response to the Remand Order

The supplemental petitions' second cause of action (Pet'ns IN 27-30) asserts that

the Technical Analysis prepared on remand from this Court does not support ESDC's third

finding, which is that even "a 25-year final completion date" would not cause "any new

significant adverse environmental impacts not previously identified and considered," and

therefore that "an SETS is not required or warranted for the 2009 MGPP" (SAR 7631).

According to the petitions, the Technical Analysis suffers from a litany of supposed "failings."

As an initial matter, however, it is axiomatic that, when courts review the

substance of an agency's environmental studies, a "rule of reason" applies, because "`... not

every conceivable environmental impact ... need be addressed in order to meet the agency's

responsibility" under SEQRA. Hell's Kitchen Neighborhood Ass 'n v. City of New York,

A.D.3d 2011 WL 382796 at *2 (1st Dep't Feb. 8, 2011), quoting C/S 12th Avenue LLC, 32

A.D.3d at 5. Furthermore, "`generalized community objections' are insufficient to challenge an

environmental review that is based on empirical data and analysis ...." Id. at *2, quoting WEOK

Broadcasting Corp. v. Planning Board of Town of Lloyd, 79 N.Y.2d 373, 385 (1992).

A review of each of petitioners' objections to the 2010 Technical Analysis

demonstrates that none of petitioners' criticisms has merit.

1. Reasonable worst case scenario for construction. Petitioners assert that a

construction schedule that extends beyond 10 years and may continue for as long as 25 years

represents the "reasonable worst case" scenario that SEQRA obligated ESDC to analyze (Supp.

13


Pet'ns ¶ 24). This contention, which is proffered as a conclusion without meaningful supporting

analysis, is simply wrong.

SEQRA requires examination of the "reasonable worst case scenario," but this

requirement means that, considering the range of possible scenarios that are reasonably likely,

the scenario with the worst or most destructive environmental consequences should be analyzed.

See, e.g., Neville v. Koch, 173 A.D.2d 323, 325 (1st Dep't 1991), aff'd, 79 N.Y.2d 416 (1992);

Fisher v. Giuliani, 280 A.D.2d 13, 17 (1st Dep't 2001). Here, construction that extends over 25

years rather than 10 years is not necessarily the worst case. To the contrary, the 2010 Technical

Analysis concluded that construction of the Project on a prolonged schedule would have lesser

environmental impacts, because it would entail fewer simultaneous construction activities for

different buildings at different locations, and thus would result in "overall lower intensity in

construction activities on the Project site" (SAR 7685). In other words, a longer construction

schedule attenuates the effect of intrusive construction activities and is not the worst case in

terms of environmental impacts.

2. "Health and viability of adjoining neighborhoods." Petitioners assert that

the 2010 Technical Analysis failed to take a "hard look" at the "long-term impact" of 25 years of

construction on "the health and viability of adjoining neighborhoods" (Supp. Pet'ns ¶ 27[A]).

Petitioners explain that the term "health and viability of adjoining neighborhoods" means "not

the physical health of residents but the fabric of the neighborhood" (Butzel Aff. ¶ 22).

The State's regulations under SEQRA list the criteria that are to be considered in

determining whether a project will create significant impacts, and these enumerated criteria

include the "impairment" of "existing community or neighborhood character." 6 NYCRR §§

617.7(c)(1)(v), (vii). The FEIS prepared for the Project in 2006 analyzed the potential impacts

14
on "neighborhood character" that could be anticipated to result from construction activities on

the Project site. The FEIS disclosed that there would be adverse impacts in the immediate

vicinity of the Project site during construction, but not in the larger neighborhoods surrounding

the site (AR 1120). 6 The 2010 Technical Analysis also considered neighborhood character in its

assessment of potential impacts resulting from construction of the Project over a 25-year period.

It concluded that, as disclosed in the FEIS, there would be impacts on neighborhood character in

the immediate vicinity of the Project site during construction due to traffic from trucks and

workers' vehicles, street closures and changes in travel patterns, and also construction noise, but

it further concluded that, with a 25-year build-out, while the over-all duration of these effects

would be longer, they would be less intense and more localized at any one time (SAR 7680).

Petitioners also express concern that long-term construction will cause business

owners and residents to leave the neighborhood and discourage home owners from making

improvements (Butzel Aff. ¶ 22). The FEIS examined the effect of the Project's construction on

businesses, including potential interference with access that could lead to a reduction in foot

traffic. The PETS concluded that, while access to businesses would temporarily be impeded by

construction, it was not anticipated that construction would cause significant impacts on

businesses (AR 1121). The 2010 Technical Analysis also considered impacts on businesses

resulting from construction and concluded that an extended build-out would not change the

conclusion that had been reached in the FEIS (SAR 7686).

The FEIS, the 2009 Technical Memorandum and the 2010 Technical Analysis

also considered other impacts that could adversely affect residents during construction, including

noise, traffic and air quality. These analyses all concluded that there will be impacts in these

sCitations herein to "AR" refer to the Administrative Record that was submitted to the Court by ESDC
with its answers to the original petitions.

15


categories during construction, but that these impacts will either be mitigated to the extent

practicable, or will be localized and temporary.

3. Cumulative impacts on the surrounding neighborhood. Petitioners assert

that the 2010 Technical Analysis "dealt with neighborhood impacts on an isolated, localized

basis, rather than evaluating the cumulative impacts" of the extended build-out on the broader

area around the Project site (Supp. Pet'ns ¶ 27[B]). SEQRA does require the examination of

"cumulative impacts," but petitioners misuse the term. Under SEQRA, the term "cumulative

impacts" refers to the impacts of two or more related governmental actions (6 NYCRR §

617.7(c)(1)(xii)) — not some subjective aggregation of different types of impacts of a single

governmental action.

As noted above, the FEIS did contain an analysis of the Project's impacts on

"neighborhood character." This analysis integrated several areas of analysis, including land use,

urban design and visual resources, cultural resources, socioeconomic conditions, traffic and

pedestrians, and noise (AR 1063-64). It concluded that there would be no adverse impacts, and

that the Project actually would change neighborhood character for the better (AR 1061-62). The

2009 Technical Memorandum (AR 4798-99) and the 2010 Technical Analysis (SAR 7668)

reached the same conclusion. Furthermore, the FEIS, the 2009 Technical Memorandum and the

2010 Technical Analysis examined those impacts on a broad geographic area: the analysis of

impacts on neighborhood character was based on a study area of one-half mile beyond the

boundaries of the Project site. This study area included portions of Boerum Hill, Downtown

Brooklyn, Fort Greene, Clinton Hill, Prospect Heights and Park Slope (AR 1061, 1067-71). The

FEIS concluded that a larger study area, extending to one mile or even three-quarters of a mile

16


from the Project site, was not necessary, because these additional areas were too far from the site

for their character to be meaningfully affected (AR 1063).

4. Construction plan. Petitioners complain that the 2010 Technical Analysis

was not based on a "firm construction plan" and therefore did not adequately analyze impacts

such as traffic and noise from construction in an extended build-out (Supp. Pet'ns ¶ 27[C]).

Because FCRC intends to complete the Project on a much shorter schedule than 25 years (and is

obligated to use commercially reasonable efforts to complete it in 10 years), no actual schedule

for a 25-year build-out exists. Any detailed construction schedule for this extended build-out

would be a fiction.

Furthermore, a firm construction schedule for a 25-year build-out was not

necessary to assess potential construction impacts. The 2010 Technical Analysis was based on a

general sequence of construction activities broken down, for analytical purposes, into seven

sequential stages (SAR 7683-86), which were used to identify and assess the potential impacts at

various points of the Project's build-out. This analysis showed that, if construction is spread out

over 25 years, there would be less simultaneous construction activity at multiple building sites,

and therefore less overall intensity in construction activity (SAR 7685). For example, the 2010

Technical Analysis examined the potential impact of construction traffic and concluded that

there would be no significant adverse impacts not previously identified, because, among other

things, prolonged construction would result in fewer street and sidewalk closures at any one

time, and less demand by construction workers for parking, mass transit and sidewalk access

(SAR 7690). Similarly, noise levels produced by construction activities also would be

comparable to or less than those predicted in the FEIS, because there would be less overlap of

activities and more time between construction of different buildings. Therefore, the 2010

17


Technical Analysis concluded that the construction impacts of a 25-year build-out would be

comparable or less intense than those previously disclosed in the FEIS (SAR 7698).

5. Block 1129. An important component of petitioners' contentions is a

claim that the 2010 Technical Analysis failed to take a "hard look" at the impacts — such as

"pollution of their views," noise and traffic — of using Block 1129 as a temporary open parking

lot for as long as 12 to 15 years rather than the shorter period anticipated in the FEIS (Supp.

Pet'ns ¶ 27[D], Butzel Aff. ¶ 27). However, both the 2009 Technical Memorandum and the

2010 Technical Analysis adequately considered the impact of a temporary surface parking lot's

existence on Block 1129 for much longer than assumed in the FEIS.

In the first place, "pollution of views" is not a recognized subject of

environmental analysis under SEQRA. Views are considered under SEQRA to the extent that

there are potential impacts on public views of historic structures or landscapes, or existing view

corridors. See 6 NYCRR §§ 617.7(c)(1)(v), (viii). None of these characteristics applies to Block

1129, which had no historic structures, landscapes or view corridors. Nevertheless, the 2010

Technical Analysis considered the effect on neighborhood character of the temporary surface

parking lot on Block 1129. It concluded that the parking lot would not have adverse land use or

urban design impacts, because the parking lot and the areas reserved for construction staging

would be screened from surrounding streets and blocks by a well designed tall fence

(approximately 10 feet high) and a landscaped zone around the fence that would contain

climbing plants, ground cover and evergreens. The design of the fence and the landscaping

would provide a visual buffer for pedestrians and residents of the adjacent neighborhood (SAR

7688, 7726). In addition, the 2010 Technical Analysis pointed out that views from the upper

floors of the residential buildings immediately across the street from the parking lot would

18
change from views of several undistinguished and poorly maintained small buildings and

scattered small parking lots to views of the screening and landscaping around the new temporary

parking lot, which would not constitute a significant adverse impact (SAR 7706). Petitioners

nowhere explain why views of deteriorated old buildings showing indicia of blight are preferable

to views of a screen comprised of a carefully designed fence and landscaping.

A "substantial adverse change in ... noise levels" is an impact criterion

enumerated for consideration in the SEQRA regulations (see 6 NYCRR § 617.7(c)(1)(i)), but not

every imaginable type of noise is significant and must be studied. While a SEQRA analysis may

examine noise from mobile sources such as car, bus and truck engines and tires in a high-traffic

thoroughfare, the more sporadic sounds of car doors closing or people speaking while parking or

retrieving their cars never have been recognized as potentially significant impacts requiring

examination under SEQRA. Petitioners' claim that ESDC was obligated to examine these

sporadic sounds runs afoul of the "rule of reason" that governs judicial review of the substance

of agencies' environmental analyses. Similarly, while petitioners complain about noise from

stackers that will be used to park cars on top of other cars in the parking lot, this equipment

typically operates by means of hydraulic lifts, which do not create noise substantial enough to be

heard beyond the parking lot (see Collins Aff. ¶ 4).

Finally, although petitioners complain that the temporary parking lot will have

traffic impacts, petitioners provide no factual or technical analysis to support this claim.

Significant parking facilities will exist on Block 1129 once the permanent buildings that are part

of the Project have been constructed on the block. Therefore, neither the 2009 Technical

Memorandum (AR 4803) nor the 2010 Technical Analysis (SAR 7690) concluded that there

19


were no new or additional significant adverse traffic impacts other than those that previously had

been identified in the FEIS.

6. Multiple events, including the circus. Petitioners also complain of an

alleged failure to examine the impacts of multiple daily events at the arena, particularly

performances of the Ringling Brothers Circus (Supp. Pet'ns ¶ 27[E], Butzel Aff. ¶ 30).

However, the circus coming to town is not a significant change in the Project. The FEIS analyzed

the potential impacts of an arena that was expected to host 225 events per year, including family

shows like the circus (AR 106, 117). The subsequent announcement that an actual circus in fact

will perform at the arena changes nothing. Therefore, there was no need to consider the circus

specifically in either the 2009 Technical Memorandum or the 2010 Technical Analysis.

The FEIS determined that Nets basketball games represented the "worst case

scenario" for assessing the impacts of events at the arena, taking into account the frequency of

home basketball games and the high number of attendees and associated demands on travel-

related infrastructure that a professional basketball game is expected to generate (AR 2228

[FEIS, Appendix C, "Transportation Planning Assumptions"). Other events such as "family

shows" were expected to occur with less frequency, attract fewer spectators and generate a lower

level of travel demand than a Nets game (AR 2228, see also 794, 829). The FEIS assumed a

sold-out basketball game with 100% attendance for all 18,000 seats (AR 2229). The FEIS

analyzed the trips generated by 18,000 spectators during the hours before and after typical

weekday and weekend games, and for the hours during which the Project's residential, office and

retail components would create the highest travel demands (AR 796-97). By contrast, a circus

would not generate anywhere near 18,000 spectators for a single performance. In addition,

because families with children are a circus's target audience, more people can be expected to

20


travel to the arena in each car, thus generating fewer car trips than a basketball game. In

addition, the circus will be in town only once per year for a limited engagement typically lasting

two weeks. Therefore, multiple daily circus shows would occur only a handful of times per year.

The circus's impacts thus are not greater than what previously had been studied in the FEIS

(FCRC Answer ¶ 27).

7. Construction staging. Petitioners also complain that, in the event of a

longer build-out, Block 1129 could no longer be used for construction staging because of the

need to use it for parking, and staging would have to be accommodated on public streets (Supp.

Pet'ns ¶ 27[F], Butzel Aff. ¶ 29). This objection is pure speculation and is simply incorrect,

because construction staging will not be located on public streets.

In the event of a 25-year build-out, Block 1129 would be used for construction

staging for a longer period of time than described in the FEIS, but the extended build-out would

not alter the construction staging planned for Block 1129. The southern portion of this block

always was intended to be used both for staging of construction materials and equipment and

parking for construction workers (AR 1099, 1104, 1118, 1097, 1100; SAR 7685). The 2010

Technical Analysis observes that, for part of the extended build-out, there would be prolonged

use of one area on Block 1129 for construction staging and other areas of Block 1129 for surface

parking (SAR 7639). Materials for construction on the arena block that cannot be staged on the

arena block itself would be staged on a portion of the northeast corner of Block 1129, while the

existing building at 752 Pacific Street — the only remaining building on Block 1129 that will not

be demolished at this time — would be used for construction field offices. The remainder of

Block 1129 would be used to accommodate parking for construction workers and arena patrons

(SAR 7683, 7687-93). The 2010 Technical Analysis also reports that, for the construction of

21


buildings on the arena block other than the arena itself, staging areas for materials, supplies and

equipment generally would be located on the building sites themselves, because those sites are

large enough to provide space for staging during construction of buildings at those sites. In

addition, staging for the construction of the smaller building sites on the arena block that cannot

themselves be used for staging will be located on the west end of Block 1128 and the northeast

corner of Block 1129 (SAR 7683).

8. Elimination of two interim parking lots. Petitioners further claim that

Figures 9 and 10 in the 2010 Technical Analysis show that two interim parking lots on Block

1120, which contain 652 spaces in the aggregate, have been eliminated, and that the impacts of

this change have not been studied (Supp. Pet'ns ¶ 27[G], Butzel Aff. ¶ 30). This claim has no

merit, because there will be sufficient parking in both Stage 1 and Stage 2 of the extended build-

out, which are the two stages that Figures 9 and 10 depict.

In Stage 1, the only building that would be in operation is the arena (SAR 7716).

The arena's parking demand would be accommodated by the 1,100-vehicle surface parking lot

on Block 1129 (SAR 7685), as well as public off-street facilities within one-half mile of the

Project (AR 846). At Stage 2, Buildings 2, 3 and 4 on the arena block and Site 5 would be

constructed, adding 650 below-grade parking spaces — 400 at Site 5 and 250 on the arena block

(AR 845, 4776). Under the worst-case scenario in the FEIS, Buildings 1, 2, 3 and 4 and Site 5

would generate demand for 753 additional spaces (AR 847). 7 Because Building 1 is assumed not

to have been constructed at Stage 2 in the Technical Analysis, the actual parking demand would

be less than 753. Nevertheless, a potential demand for up to 753 spaces would be accommodated

' Table 12-17 in the FEIS shows that the weekly hourly parking demand is highest between the hours of
8:00 p.m. and 9:00 p.m. During this hour, the parking demand of the arena is 2,517, and the total demand
of the arena block and Site 5 is 3,270. Subtracting 2,517 from 3,270 is 753, which would be the total
parking demand for the non-arena buildings and Site 5.

22


by the 650 below-grade parking spaces noted above and, if necessary, 103 or more additional

surface parking spaces on Block 1120 (see SAR 7717 [Technical Analysis, Figure 10], which

shows that the yellow-colored western portion of Block 1120 remains available for surface

parking). Petitioners' claim that necessary parking has been eliminated is, thus, incorrect.

9. The Pertz affidavit. The affidavit of Stuart Pertz, submitted by the

Prospect Heights petitioners, purports to give his "professional opinion" on additional impacts

that might occur from a 25-year build-out. Its assertions about the 2010 Technical Analysis are

purely theoretical and without merit, and it is not even apparent from the affidavit that Mr. Pertz

actually has read the FEIS, the Technical Memorandum or the Technical Analysis.

Mr. Pertz claims that the "EIS does not consider the additional 15 years of open,

unshaded" parking, fencing, construction sheds, street closures and traffic diversions and

ongoing residential "disruption" and annoyance from ongoing construction (Pertz Aff. at pp. 1,

2). To the contrary, the FEIS, the 2009 Technical Memorandum and the 2010 Technical

Analysis did examine construction impacts of the Project in detail (see AR 1088-1205, AR 4799-

4807, SAR 7685-90). In particular, the 2010 Technical Analysis analyzed the potential impacts

of a 25-year build-out on traffic and transportation, air quality, noise and neighborhood

character. For example, as discussed above (see # 3, supra), with respect to traffic and

transportation the 2010 Technical Analysis found that, because fewer Project components would

be under construction at any given time, the intensity of construction activities would be less

than assessed in the FEIS (SAR 7689), and there would be fewer street and sidewalk closures

than anticipated in the FEIS (SAR 7690).

Mr. Pertz also claims that the extended build-out would cause delays in the

implementation of mitigation measures such as the construction of schools, open space and road

23
improvements (Pertz Aff. ¶ 3; see also Butzel Aff. ¶ 24). This assertion is a half-truth, because it

fails to acknowledge that the need for these mitigation measures also will be delayed in the event

of a 25-year build-out. The 2010 Technical Analysis thus acknowledges that a temporary

adverse impact represented by a shortage of open space for residential occupants of the Project

site, which was disclosed in the FEIS, would be extended (SAR 7647). However, it is the

creation of new residential units as part of the Project that creates the demand for open space.

Therefore, if new residential units came on line more slowly, the need for open space also would

occur more slowly, and the adverse impact would be both created and mitigated at a slower pace

as the Project is built. Impacts on schools — i.e., a shortage of classrooms as more residential

buildings are built — similarly are tied to development of residential units, and as discussed in

the 2010 Technical Analysis, any delay in the Project's development also would delay not just

the creation of a new school but also the demand for new schools (SAR 7646).

Mr. Pertz also claims that interim parking lots in the extended build-out will

create traffic impacts that have not been studied. In particular, he contends — without citing any

support — that temporary parking lots generate a different type of traffic, Le., that construction

workers will drive cars and park in temporary lots every day and come and leave at the same

time, while, by contrast, residents of the Project will choose not to drive during those times

(Pertz Aff. ¶ 5). However, the FEIS examined traffic during the hours that construction workers'

vehicle and truck trips would be the most intense (AR 1130-33) and disclosed the adverse

impacts on traffic. The 2010 Technical Analysis looked at the same issue and concluded that,

with an extended build-out, the numbers of construction workers coming to the site on a daily

basis during each stage of construction would be lower than what was estimated in the FEIS

24
(SAR 7689-90). Therefore, the adverse impacts on traffic also would be diminished in the event

of an extended build-out.

Finally, Mr. Pertz makes the ridiculous assertion that the Project necessarily will

change "significantly" over 25 years, creating numerous other "serious" environmental impacts

that have not been analyzed (Aff. at p. 2). This assertion is entirely speculative, and SEQRA

does not require an analysis of speculative potential impacts. Industrial Liaison Committee v.

Williams, 72 N.Y.2d 137, 146 (1988). Of equal or greater significance, if the Project were to

change "significantly" in a manner that is not consistent with the 2009 MGPP, ESDC would be

compelled to modify the 2009 MGPP and, in doing so, would be obligated under SEQRA to

perform a review of the environmental impacts of these modifications.

As this Court previously recognized, "in a SEQRA review, it is not the province

of the court to resolve disagreements between petitioners' and ESDC's experts." March 10,

2010 Decision, at p. 14, citing Fisher v. Giuliani, 280 A.D.2d 13, 19-20 (1st Dep't 2001).

However, because of its purely theoretical nature, the Pertz affidavit does not even rise to the

level of conflicting expert opinion. It in no way undermines the adequacy of the environmental

review set forth in the 2010 Technical Analysis, or the rationality of ESDC's decision on remand

that even a 25-year build-out would not have significant adverse environmental impacts that are

different from the impacts that previously were addressed by ESDC in the FEIS. Therefore,

ESDC's determination on remand that there was no need to prepare an SETS was in all respects

rational, reasonable and proper.

II. ESDC WAS UNDER NO OBLIGATION TO HOLD A PUBLIC

HEARING BEFORE MAKING THEDECEMBER16,2010FINDINGS

The DDDB petition, unlike the Prospect Heights petition, contains a third cause

of action that asserts that ESDC's December 16, 2010 determination should be annulled because

25
ESDC did not hold a public hearing pursuant to § 6266 of the UDC Act (DDDB Pet'n ¶¶ 31-37).

The claim is that, because ESDC held a public hearing and accepted public comments before it

approved the 2009 MGPP, ESDC was obligated to hold another public hearing and accept

further comments on the remand from this Court (id. at ¶¶ 36-37). This assertion has no merit,

because neither the UDC Act nor SEQRA required ESDC to hold a public hearing before

making further findings under SEQRA as to whether an SETS is required.

Nothing in SEQRA requires ESDC to hold a public hearing when considering

whether or not to prepare an EIS, including an SEIS — period, end of story.

The UDC Act requires ESDC to hold a public hearing when it adopts a general

project plan. See N.Y. Unconsol. Laws §§ 6266(2)(a), (c). It is our understanding that, although

the statute does not explicitly require it, ESDC's practice is to also hold a public hearing when it

adopts modifications to a general project plan, as it did in 2009 with respect to the Project. This

2009 public hearing also was held pursuant to UDC Act § 6256, which requires ESDC to hold a

public hearing before selling or leasing property in connection with a "land use improvement

project." See § 6256(1)(c). A public hearing with respect to the Project was required under this

provision when ESDC adopted the 2009 MGPP, because the Project is a "land use improvement

project" under the UDC Act, and ESDC also approved the disposition to affiliates of FCRC of

certain parcels of real property that it intended to acquire in furtherance of the Project. However,

there was no requirement under the UDC Act or SEQRA to hold a public hearing or accept

public comments when ESDC made its December 16, 2010 determination. The DDDB petition's

third cause of action is without merits

B
At its December 16, 2009 meeting, ESDC ' s Board of Directors considered and then adopted fmdings in
response to this Court's remand order. Petitioners ' counsel were advised that the matter would be
considered at the Board meeting two days prior to the meeting, and representatives of petitioners appeared
at the meeting and spoke.

26
III. THE COURTSHOULDNOT STAY CONSTRUCTION OFTHEPROJECT
Petitioners claim that construction of the Project should be stayed, because: (1)

ESDC did not comply with SEQRA when it approved the 2009 MGPP and thus the work now

underway is pursuant to an invalid approval; (2) FCRC only has been able to proceed with

construction of the arena because of ESDC's failure to disclose the terms of the Development

Agreement, and the alleged violation of SEQRA should have prevented the release of escrowed

bond proceeds necessary to finance the arena; and (3) petitioners have shown the requirements

for injunctive relief (Mem. at 15-16).

As discussed in detail above, ESDC has complied with SEQRA in connection

with its approval of the 2009 MGPP. Petitioners' second contention — that the arena is being

constructed only because ESDC failed to disclose the terms of the Development Agreement to

the Court in a timely manner — is simply incorrect and evidences a misunderstanding of the

relevant documents. The bonds' indenture trustee's disbursement of bond proceeds is governed

by the Supplemental Bond Indenture between the issuer of the bonds and the trustee, which

provides that the trustee could not disburse bond proceeds until it had received an "Arena Project

Effective Date Certificate" from the title company (see §§ 1.02(b), 2.10(a)(ii)) 9 The issuance of

this certificate in turn was governed by a Commencement Agreement (SAR 7802-24), which

established five conditions precedent to the title company's issuance of the certificate, none of

which is the absence of any legal challenge to the 2009 MGPP or the absence of an adverse

ruling in such a challenge. Therefore, an earlier ruling by this Court would not have been a

condition that precluded the release of bond proceeds (see § III(3)(d), (e)).

' A copy of the Supplemental Bond Indenture previously was submitted to this Court as Exhibit A to the
affirmation of Jeffrey L. Braun dated December 10, 2010, in opposition to petitioners ' motion for a
preliminary injunction.

27
 Petitioners' assertion that they have established the standards for injunctive relief

also has no merit. A preliminary injunction may be granted only upon a demonstration by

petitioners of each of three necessary elements: (1) a likelihood of ultimate success on the

merits; (2) irr eparable harm in the absence of an injunction; and (3) a balance of the equities in

their favor. See, e.g., Aetna Ins. Co. v. Capasso, 75 N.Y.2d 860, 862 (1990); Doe v. Axelrod, 73

N.Y.2d 748, 750 (1988). On a motion for a preliminary injunction, the courts also should

consider the public interest. See Golden v. Steam Heat, Inc., 216 A.D.2d 440, 441-42 (2d Dep't

1995); DePina v. Educational Testing Service, 31 A.D.2d 744, 745 (2d Dep't 1969); Barney v.

City of New York, 83 A.D. 237, 241 (1st Dep't 1903).

First, as shown above, the supplemental petitions' claims are without merit, and

petitioners have no likelihood of ultimate success on the merits of their petitions. In addition,

were the Court to annul the 2009 MGPP, FCRC would be entitled to continue to proceed with

the currently ongoing work — construction of the arena, the new LIRR yard and the new subway

entrance, and demolition on Block 1129 — pursuant to the General Project Plan adopted in 2006

and previously sustained by the courts.

Second, petitioners claim that they have established irreparable injury because

construction will cause noise, dust and traffic, and will disrupt the lives of petitioners and their

neighbors. However, the Project was approved in 2006, those approvals have been sustained

despite numerous challenges (including a challenge to the FEIS, which exhaustively examined

the Project's effects on surrounding neighborhoods), and petitioners have not demonstrated that

anything has happened since then that requires further environmental review. Petitioners claim

that the demolition of the remaining buildings on Block 1129 to convert it to a parking lot for

longer than assumed in the FEIS will "expand the area of disruption" and create greater impacts

28
than previously analyzed (Mem. at 17, Oratowski Aff. ¶ 5), but as shown above in Point I, the

anticipated uses of Block 1129 will not create adverse environmental impacts that have not

already been disclosed multiple times. Petitioners do not explain how the "area of disruption"

will be expanded, and there is no evidence that supports this vague claim. Moreover, the

possibility that Block 1129 may be used as a parking lot for longer than previously anticipated

does not constitute imminent and irreparable harm, because a parking lot would be there under

the Project's 2006 approvals. Furthermore, the continuation of the current condition of Block

1129 — with only four buildings still standing, three of which will soon be demolished — hardly

can be to anyone's legitimate advantage. Petitioners offer no explanation for why a block that

has been almost entirely demolished, with three undistinguished vacant buildings remaining (see

Gilmartin Aff. Ex. D), is preferable to a parking lot that is screened and landscaped, or why a

parking lot would cause them any irreparable injury at all.

Furthermore, the Gilmartin affidavit submitted by FCRC demonstrates that FCRC

and others will suffer enormous financial harm if an injunction is issued and construction is

halted. The injury to FCRC from an injunction would be so severe in comparison to the alleged

harm about which petitioners complain that the balance of the equities overwhelmingly favors

the denial of any injunction. Hundreds of millions of dollars (including about $231 million in

public funds) already have been spent in furtherance of the Project, and FCRC has made

contractual commitments to spend hundreds of millions of additional dollars. As described in

the Gilmartin affidavit (¶¶11-15), an injunction would cause FCRC severe financial injury, and

it also would put hundreds of innocent unionized construction workers out of work.

The public interest also favors denial of an injunction. As Justice Staliman

previously expressed the point, "[i]t has been established that the Atlantic Yards project ... is

29
intended to further the public health, safety and welfare as well as the economic interests of the

city and state." Montgomery v. Metropolitan Transportation Authority, 25 Misc.3d 1241(A),

2009 WL 4843782, *8 (Sup. Ct. N.Y. Co. Dec. 15, 2009), citing Goldstein v. N.Y.S. Urban Dev.

Corp., 13 N.Y.3d 511 (2009), rearg. denied, 14 N.Y.3d 756 (2010), Goldstein v. Pataki, 516

F.3d 50 (2d Cit.), cert. denied, 128 S.Ct. 2964 (2008), and the Appellate Division's decision in

DDDB II.

Conclusion

The supplemental petitions should be denied, ESDC's determination to not

prepare an SETS should be sustained, and no injunctive relief should be granted.

Dated: February 18, 2011

New York, NY

KRAMER LEVIN NAFTALIS & FRIED, FRANK, HARRIS, SHRIVER

JACOBSON LLP

One New York Plaza

New York, NY 10004
1177 Avenue of the Americas (212) 859-8000
New York, NY 10036
(212) 715-9100

Attorneys for Respondent Forest City Ratner Companies LLC

30