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A Unique Civic Alliance Goes to Court:
Protecting City Parkland, Corona, and Willets Point

By Robert LoScalzo
Willets Point United, Willets Point, Queens County, New York City

Eighteenth Annual National Conference on
Private Property Rights
October 25, 2014
The Century House, Latham, N.Y.

 

With me, sitting at the table in the center at the rear are Irene Prestigiacomo, an owner of property at Willets Point where commercial businesses are operating, and Joseph Ardizzone, who also owns property and is the soul resident of Willets Point. Joe has recently been called "The Last Man Standing," although that's something of a misnomer because there are many, many other businesses still operating there. Irene and Joe are two members of Willets Point United which is a coalition of property and business owners opposing the City of New York's attempt to oust all of the property owners and redevelop Willets Point.

Last year, at this time, we stood here in this room and said that a lawsuit needed to be organized and filed because of the City's recent decision to add over forty acres of public parkland to this development with no public review. And, indeed, a lawsuit was organized and filed earlier this year. So, I will get to that but first, I think, you need a bit of background and context about the area and why it's in the circumstance that it is and why anybody needs to sue over the use of parkland. You're going to see a lot of facts and figures. We want everybody to know that we have the documentation for every number that you're going to see here and we can defend those numbers.

Willets Point is a sixty-two acre area that's located in Queens, New York, just a few miles from the island of Manhattan. It's directly across the street from Citi Field Stadium where the New York Mets play baseball. The stadium property and much of the surrounding property is mapped "parkland" within Flushing Meadows-Corona Park. Here you see the proximity to the stadium, which is on the left. Willets Point is home to a concentration of roughly two hundred industrial, manufacturing, and mechanical businesses and is best known for its network of scores of automotive repair shops. Many of those are operated by new immigrants from Latin America, Afghanistan, India, Ukraine, and so on. It is a unique, fascinating area and it is very active and I don't happen to think it's underutilized.

It has also been neglected by the City of New York. There's no sanitary sewer system, no municipal services, no street maintenance or repair. Taxes are being paid there by property owners but nothing is provided in return. Throughout Willets Point the City has deliberately created blight-like conditions, which it then leverages to say that the whole area is in need of urban renewal.

In 2007, then-Mayor Michael Bloomberg announced a plan to redevelop all sixty-two acres into a "vibrant mixed-use neighborhood," with housing and affordable housing as the lynchpin. Whether voluntarily or by eminent domain, all owners of private property must relinquish their properties to the City and all businesses must vacate the area. Eminent domain for economic development purposes was affirmed by the Supreme Court in the Kelo case in 2005.

The City's Economic Development Corporation (EDC) and another local development corporation that it funded, then lobbied for legislative approval authorizing the development, lobbying which the state Attorney General's office eventually found was unlawful. The EDC was required to restructure but no one was ever held to account for this activity and legislators made the decision to authorize the development and the taking of property in the context of illegal lobbying. And personally, if I were one of the property owners to whom that had been done I would be livid off the charts. And I think that's where Irene and Joe are coming from.

In 2008, a generic development plan was approved with no developer attached. And the key aspects of it are that you need to understand it pertained to the entire sixty-two-acre site. It would comprehensively remediate the whole site. It would provide many, many housing units. The developer for this would be chosen by the mayoral administration but there would be a safeguard for the public that a Queen's-based so-called "Willets Point Advisory Committee," which consists of Queens elected officials would participate in and help to guide the developer selection so the community would have some assurance that local officials would buy into whatever the ultimate design was going to be.

Flash forward a couple of years. In 2011, the City announced that it would split that project into phases, with an initial Phase 1 nearest the Citi Field Stadium consisting of twenty-three acres. The City then commenced eminent domain proceedings to acquire Phase 1 property. They held an eminent domain public hearing and they issued eminent domain determination and findings supporting the takings. Willets Point United challenged the takings in court. The Property Rights Foundation of America filed an amicus brief in that case which was authored by John Marwell and Jeremy Marwell. And I think you'll hear from John a little bit later.

May 2, 2012, just days before the oral argument in that case, the City agreed not to proceed under its determination and findings or to acquire any properties by eminent domain under those findings. Essentially the City withdrew that instance of eminent domain which is virtually unheard of. So, what was going on? Well, the City had already issued a request for proposals (RFP) to develop Phase 1 —twenty-three acres within Willets Point only. There was no mention of any other property at that time in that RFP. Now, there were a total of four responses to the RFP. Three of them, which you see synopsized here, would have conformed to the specifications of the RFP and would have built exactly what was expected within the Phase 1 area. Now remember, this is the point at which the Queens-based Willets Point Advisory Committee is supposed to come into play and chime in on the selection among or from those four proposals that were submitted. But instead Mayor Bloomberg violated the pledge, instituted a closed-door process, and chose the fourth proposal, which is this. Now, this expands the development to include forty acres of public parkland located west of Citi Field Stadium, property that was never mentioned in the RFP and is not even connected to Willets Point. Who submitted that winning proposal? A joint venture of Sterling Equities, whose owners also own the New York Mets, and Related Companies as a partner. So, this looks like a naked attempt to consolidate the properties surrounding the stadium for the benefit of Sterling Equities. And the joint venture is called the "Queens Development Group."

Now, when you build a mall on that parking lot, you have to replace the parking. So, they intend to move the parking over onto the Willets Point Phase 1 property. There would also be ancillary retail stores and a hotel there which you can barely make out along there. [Pointing to exhibit.] Well, what about the housing that was touted as the basis to approve any development of the area? They say that they'll do that in the year 2025 after the City builds new highway access ramps. So, at least in the short term what was originally touted as a new, vibrant mixed-use community including affordable housing has somehow morphed into a mall-centric development on other parkland to the west with the rest of the so-called neighborhood allegedly coming later. If you're thinking, "How can they so drastically alter the plan?" then consider also, the terms of the deal put in place by then-Mayor Bloomberg. The City actually spent more than $400 million to acquire the Phase 1 property from its former private owners. That cost was supposed to be recouped through the eventual sale to a developer. Instead, the Bloomberg Administration arranged to "gift" that property to Queens Development Group for just one dollar. That is one dollar for twenty-three acres located just five miles from Manhattan, resulting in headlines like that. [Pointing to exhibit.] But there's much more. If keep a running tally of the taxpayer cost connected to this development, it looks something like this: Twenty-three acres of property given away; sewer construction paid by the taxpayers; the new highway ramps, grant of taxpayer funds; loss of real estate taxes; and an [New York City] Industrial Development Agency tax credit to the developer. You add that all up and the total cost so far, of what we know publicly, is over $600 million. Meanwhile, a Willets West megamall would consist of more than two hundred retail stores and would significantly impact the nearby neighborhood and shopping district of Corona. All in all, the plan was not well received. And the only approval sought for any of this was a special permit to allow Willets Point property to become a temporary parking lot. The approval did not address any change in use of the parkland on which the megamall would be built. Willets Point United wanted to challenge the expansion of the project onto parkland. At the same time, City Club of New York was interested in filing a lawsuit but they needed a lot of information very quickly. The two organizations connected. It turns out that when someone is going to build a megamall adjacent to your community and parkland is implicated surrounding communities and civic groups are eager to get involved. The court case was filed on February 10, 2014, with the lead plaintiff being state Senator Tony Avella. Other plaintiffs, including City Club, the Queens Civic Congress, which represents over a hundred civic associations throughout the borough, NYC Park Advocates, park users, local business owners, Willets Point property owners including Irene and Joe, and a resident whose view overlooks the site of the proposed megamall. A similar case has also been filed by something called the Sunrise Cooperative, which is a group of tenant businesses that are dissatisfied by the City's failure to relocate them and that case makes many of the same arguments.

A rally was held on March 22 to show support for the lawsuit and opposition to the mall on parkland. Representatives of numerous civic organizations that you see listed in the tiny print there attended. Defendants are the City of New York, involved agencies, and the developer. When we say that the proposed site of the mall is parkland, we mean that it is part of the larger Flushing Meadows-Corona Park. And on that map the proposed mall site is at the top inside the red oval, shown here next to the old Shea Stadium which has since been replaced by Citi Field slightly to its right. What's at stake is the use of that site. Most of the time it is used as a parking lot for Citi Field events. However, it is also used as parkland for numerous recreational events. Here are a few of those: Men's Health Ubanathlon, which goes throughout the entire park but is anchored on the property that is at issue here. There's a [Living Social 5K] Glow in the Dark Dance Party which looks like that and apparently is great fun. There is a wheelchair softball tournament that has to occur on an asphalt surface for which that parking lot is ideal. There's the Electric Daisy Carnival. You see just tens of thousands of people coming and enjoying this for a multi-day festival. Cirque du Soleil sets up for a couple of months on that space. The Mets' own website even advertises that these parking lots are perfect for big events. And ironically, their plan will prevent these events from coming there. Now, all of those events would be displaced by the megamall.

Now, let me summarize some of the elements of the legal case. There is a public trust doctrine pertaining to parkland. As you see here, once land has been dedicated to use as a park it cannot be diverted for uses other than recreation in whole or in part, temporarily or permanently, even for another public purpose without legislative approval. The authorization contained in the act must be plainly conferred, specific, direct or explicit. In this case the plaintiffs say there has been no such legislative approval. As the plaintiffs put it, neither the state legislature, nor the City Council, nor the City Planning Commission, nor the affected community boards which are three, four, six, seven, eight, and nine, had any opportunity to consider or vote on the development of the parkland as a shopping mall. But defendants counter that there already has been legislation back in 1961 for the financing and construction of Shea Stadium on that same site. They believe that the 1961 law provides all of the approval that is needed for the Willets West megamall, now. And I'm not going to read all of that but I would draw your attention the fact that leases can be authorized for things including recreation —which is somewhere there in the middle and at the end— for the improvement of trade and commerce. To which the plaintiffs say, "Sure, the law refers to a right to use the parking areas but not to demolish them and supplant them with mall buildings. The law specifies constructing just one thing: the stadium. Everything else the law authorizes is really a use of the parking lot space. A shopping mall is a private commercial use, not a public use and the 1961 legislation only permits those uses with the approval of the Board of Estimate." Now, that's a defunct entity whose powers devolved both to the City Council and to the mayor. So, there would need to be some approval on account of that provision. Now, all of that is a huge oversimplification of what is actually a much more complex legal case. And I've left out a lot. But the case boils down to an interpretation of that 1961 law.

Just on a personal note, I think it's absurd that decision makers fifty-three years ago, having no knowledge at that time of what the surrounding communities would actually be like now, could reasonably authorize such a large project in the distant future. And yet, that is exactly what is to happen here.

Oral argument in court took place on July 30, 2014, before Justice Manuel Mendez. Interestingly, to make their case defendants hired none other than Judith Kaye, former chief judge of the New York State Court of Appeals, now of counsel at Skadden, Arps. So, Imagine if you will, the former chief judge of the state, the New York State Court of Appeals, coming into the courtroom of Justice Mendez and assuring him that the 1961 legislation is certainly sufficient authorization for the mall. You see the dynamic. For Justice Mendez to rule otherwise he would have to disagree with the former chief judge. A pressure tactic. No?

Former Judge Kaye even went so far in the courtroom as to tell Justice Mendez that she classifies a mall as recreation activity, that the overwhelming reason that people, including her, would go to a mall is for recreation. Never mind the commercial transactions that take place underline the whole thing.

Audience member: We call it tourism.

Mr. LoScalzo: Yeah. And if I can remember, she said, "This is the way that people enjoy themselves in the Twenty-first Century. These are gathering places for youth and they attract people in ways that are certainly recreative. I don't know about you judge, but I would put this under recreation." That was the give and take in court and therefore the mall is allowed under the 1961 law. The plaintiffs' lawyers afterwards, were nonetheless very pleased with how things went in court and with the status of the whole case and they believe that they had proven their case. That was short lived. Shortly afterwards Justice Mendez dismissed the case. Plaintiffs lose. And he wrote, "The public trust doctrine does not apply. The improvement of trade and commerce resulting from leasing the parkland including use as a shopping mall is part of the development plan for purposes of creating an entire special district and community which ultimately will result in the public benefit of removal of urban blight from Willets Point." Creating a linkage between the two properties and justification that there is some public purpose for siting a mall there. No one has ever shown the mechanism by which having a mall, and profits derived from a mall, is going to enable anything to happen on Willets Point. And that's part of the arguments that are made.

The plaintiff's attorneys issued this statement. "The plaintiffs believe that the decision misunderstands the common law doctrine that prohibits any non-park use of parkland without the specific and explicit approval of the state legislature. The state legislature when it passed the 1961 law permitting construction of Shea Stadium did not intend to allow construction of a shopping mall. That law did not allow the construction of anything except the stadium and related facilities on the site. Plaintiffs will appeal and believe that this decision will be reversed on appeal." In fact, plaintiffs have filed their notice to appeal with the Appellate Division. City Club of New York is going to hold a reception on Tuesday, October 28, 6:00 PM, partly to raise funds to offset the cost of appealing which are reproducing the record and so on. And we will be there. And that concludes my remarks. Thank you very much.

If anybody has any questions, I'm sure if we have a minute or two I would take a question if anybody… Sure?

Audience member: Would you explain to me the idea of the public trust doctrine more fully? It's something people rarely hear about but it comes up quite a lot.

Mr. LoScalzo: And my understanding is that it is a common law doctrine, which for all intents and purposes means that once property has been designated as parkland or once the use of it, in fact, constitutes parkland, whether there has been any official designation or not, that there is a public trust and the government is to respect the fact that that has been designated as parkland and cannot be used for any other purpose without the legislature very specifically, as that slide a few minutes ago showed, there needs to be an act of the legislature which purposefully takes that property away from being parkland —alienating the parkland. In this case here with the mall, what the government seems to be saying is that it's going to continue to be parkland. We are not preventing its use as parkland. We are not alienating the parkland. The parkland was not alienated back in 1961, for Shea Stadium, nor were the surrounding grounds, and we are not going to alienate it now because we're going to put a structure there which is a 1.4 million-square-foot entertainment and retail center that serves a recreative purpose the same way any other part of the park serves a recreative purpose. The difference being that this one involves a structure of brick and mortar that's several stories tall but that does not mean that the 1961 authorization is any less legitimate. I hope that that addressed it but… Yes, sir?

Audience member: Why not use the environmentalists' tactics and put on the City and the parties who are in litigation here and basically say that you have a NEPA, national environmental protection act assessment? Have they done all the environmental impact assessments to protect the public's interest. Because this is a collective interest doctrine. And that's the whole point of it is that it you've got the interest of the many against the interest of the few. And if the interest of the many are in any way in danger because of environmental blight etc., etc. involving construction and all of the development and all of the forsaken aesthetics. You can use this against them in a constructive way.

The second question I have is economics. What are the owners of the Willets Point businesses.. have they argued and secured an agreement to essentially move them and basically pay them fair market value for what their businesses and companies are worth?

Mr. LoScalzo: On your point about the environmental studies there's a point that is very well taken and we will go back to Willets Point and convey that to people who are much more knowledgeable than we are about such things. I can say that a supplemental environmental impact statement was prepared when their project was expanded to include this parkland. And the way that they cooked these numbers, you know, they say that there is actually less traffic generated by this project by adding the mall there than there would have been by developing sixty-two acres of Willets Point. And they've virtually doubled the size of the project but they're saying that they've found ways to alter traffic light signal timings and such so that there isn't going to be any problem at all. That environmental supplemental impact statement also says there isn't any economic impact on the Mom and Pop stores down the road in Corona because these are mall stores. They serve a different kind of audience. And they've got facts and figures that show that the people who will be attracted to shop at this mall are looking for entirely different products than already are shopping in Corona. So, there's no competition. There's not any environmental harm to doing this. And they have figured this out.

Audience member: Well, that's smoke and mirrors.

Mr. LoScalzo: Yeah. Oh, it is. But they've created enough smoke that that's where this is.

Audience member: You guys have to make [unintelligible] comments.

Mr. LoScalzo: But if there isn't any public review... If there's no opportunity for my elected official to cast a vote specifically on whether they want this project to proceed then where's the leverage?

Audience member: I think you've got due process arguments here because there is no [unintelligible] comments to ferret out all these facts.

Mr. LoScalzo: I think there was on the environmental impact statement. In other words, that was a separate track unto itself. They acknowledge they were going to expand the project. They did hold a public hearing pertaining to the supplemental impact statement but no elected officials later voted to actually have this done. So, what I'm saying is there's a disconnect between the environmental impact portion of this and any kind of voting in the Twenty-first Century given what the community has become versus 1961, fifty-three years ago.

On your other question about what is being done to relocate businesses, we'd love to come back next year and do a whole twenty minutes on that but what it boils down to is you have property owners which the City was negotiating with in an attempt to purchase those properties and most of the people in Phase 1, I assume, were happy enough with the prices being offered that they left and so the Phase 1 territory is now, pretty much, under the control of the City. But the tenant businesses who had been tenants of private owners of that property then became tenants of the City, at which point the City said, "Please leave by December 31, of 2013, and if you will do so we will give you a check equivalent to twelve months of your rent." The rents in this area not being very high at all. That is not sufficient funds for someone to relocate a business, outfit a new space for what they need. So, a lot of these guys figured, "That's the best offer I'm ever going to see. I'll have to take that money." And they did and they vacated the area. The ones who stayed were told, "All right. New deadline." I think it was March 31. "If you're not out by then, we'll give you six months' rent." The amount went down because you overstayed. So, they either accepted these deals or they were evicted. And at the moment in the Phase 1 area there's just a handful of businesses left because they've got good lawyers that were able to reason with the City and say, "Look, you don't need this property now. You have lawsuits that are pending. You're really not sure what's going to happen. Why are you asking anybody to leave when it's premature to do so?" The tenants formed their own cooperative. They found a property located in the Bronx where they would like to move. The City came up with additional funds and said that for any tenants that move in a group of five or more, we'll give each tenant up to $45,000, which is a reasonable amount to cover relocation costs. The problem is you've got to have four friends willing to move with you to a common site.

So, they got together, found a site in the Bronx. Now, Joe and I have gone up to the Bronx and scouted that site. It's nothing like the situation that they have in Willets Point which Carol described before where they're on the open street and vehicles would drive down and they can actually be solicited by people whose businesses they can see. This Bronx location is in the interior [of a] warehouse. A potential customer would have to drive into like a shrouded building where he would meet the first couple of vendors to who were there.

Audience member: The sixth Tuesday of the month

Mr. LoScalzo: Right. So you see where that's going. The City has been paying rent on that site in the Bronx to kind of take it off the market not knowing what the outcome is going to be here. But that plan is very much in limbo and it remains to be seen how that's going to shake out. Personally, I would have thought that if the City made an executive decision of some kind that they want this area to be vacated and they're serious about pursuing it, the first order of business should have been to figure out some alternative place where businesses could operate. They didn't do that at all. They made great speeches at the time about, "Oh, don't worry. We have programs. We're going to come up with funding." But it never really materialized. And now it's too little, too late. Sure.

Audience member: You haven't mentioned it but are you aware that these kinds of projects are happening all over the state of New York and all over the country and it's part of sustainable development under Agenda 21?

Mr. LoScalzo: We have heard of that.

Audience member: Okay.

Mr. LoScalzo: When you say that it's happening all over I'm not sure that it's happening on this kind of a scope and scale with sixty-two acres in play, parkland being implicated. I mean, this is a huge…

Audience member: Well, it isn't… the scale is not the point that I'm making. These are policies that have been implemented and it's going to be happening all over the country. It's already started through the policies of sustainable development. It's a much larger plan than just what happened at Willets Point.

Mr. LoScalzo: Well, we're not in isolation. I get you. Yes?

Audience member: I would just like to comment that what happens with Agenda 21 and that kind of thing it's upstate. It's a whole different thing the state's trying to do. Here they want to keep this green areas all over. They want to push the population to move down to your area so build the malls down there. Get the people down there. Get the jobs down there. Keep this pristine upstate. That's one of the goals, too. I mean it depends on the location what the objective is by these government officials.

Mr. LoScalzo: Sir?

Audience member: My understanding of the state eminent domain law is that when the government wants to exercise its powers of eminent domain the first activity they have to undertake is the filing of a map in the county clerk's office defining the taking. And with the filing of that map the taking has been effectuated. The rest is just a question of price. That's the opening paragraph of the eminent domain law.

Mr. LoScalzo: What happened in this instance as best I understand it, I'm not an attorney, is that, yes, they took the steps necessary to use eminent domain and take the Phase 1 property. The legitimacy of the entire taking, not just the price, the price is a separate section of the EDPL [Eminent Domain Procedure Law], the legitimacy of the entire taking and the procedures they used, the failure to notify tenants. Most of them speak Spanish not English and yet the notices that were served were all in English. A lot of people didn't get a notice. So, there were technical flaws in the way that they proceeded with eminent domain. That was challenged and that's where the amicus brief came in and the City basically withdrew that instance of eminent domain. So, it's my understanding no map was filed that would, you know, give the City that property at that time.

You're signaling me that I'm done. Thank you all very much.

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