Unfair Substitution of Fiction For Fact in the Atlantic Yards Dialogue

A prevailing hallmark of the promotion for Forest City Ratner’s proposed Atlantic Yards Brooklyn real estate mega-monopoly is the extremely unfair way that fiction has been routinely substituted for and intermingled with what are theoretically the actual facts. Not only have the fictions enlisted to support this abusive eminent domain taking been patently false factwise; they have for the most part not even been believable.

Things That Are Not True About Atlantic Yards

One supreme work of fiction in the mix has been the AKRF “blight” study. With high-end condominiums recently developed and built within and immediately outside of the megadevelopment’s footprint it is clear that there was no blight. Another unfortunate way that the intrusion of fiction has been amplified is that for the Court of Appeals decision its official “record” of non-facts was closed as of late 2006 by which choice the court ignored all sorts of conspicuous subsequent events that contradicted the fictions on the record.

Here is a list of other significant fictions that Forest City Ratner and the state officials servicing that firm have unfairly intruded into the public discussion. The list is not exhaustive. To make it so would be a difficult challenge.

● That the Ratner mega-monopoly is a public project

● That public officials working on the megadevelopment are looking out for the public interest

● That project will provide public benefit. (The truth: The basketball arena, the only identified portion of the mega-project about which anything is yet known will be at least $220 million net loss to the public and the rest of the project can readily be projected to be a net loss as well, since the mega-monopoly status conferred upon the developer decimates the public’s ability to subsequently negotiate for public benefit. Newly released information that state agencies were covertly planning the issuance of an additional $400 million in tax-exempt bonds means that the calculated net losses to the public could be driven even more deeply into the red if that now disavowed plan is reactivated.)

● That the megadevelopment is NOT driven primarily with an intent to benefit the developer (at the public’s expense).

● That the project will provide a significant amount affordable housing and is well designed to do so

● That the mega-project design involving the shutting down of streets and avenues in order to gift them over to the developer is a good design

● That it won’t almost certainly be decades (perhaps 3 to 4) before the mega-development replaces the swath of neighborhood it is tearing down. (The truth: There are likely to be vast parking lots for decades.)

● That there is reasonable assurance about what the developer will ultimately build or is committed to actually provide

● That politicians like Bloomberg who have promised not to give the mega-project more subsidy won’t surreptitiously keep slipping the project more subsidy nonetheless

● That Forest City Ratner has ownership and control of much more land than it actually has such as such the property it tried to take through collusive action from Henry Weinstein

● That there is crime in the area of the site anywhere other than in developer’s own shopping malls

● That there are no other developers who could develop portions of the site interested in competing with Forest City Ratner

● That Atlantic Yards is somehow different from comparable situations like that the one in New London, Connecticut, where after years of litigation and a perhaps more than a hundred million dollars to bulldoze a taxpaying neighborhood (all blessed as part of the “well considered plan” that was the subject of the U.S. Supreme Court’s infamous Kelo eminent domain opinion), Pfizer, the private entity that was the central reason for the destructive takings is abandoning the cleared site

● That it wasn’t clear that the public in modern-day terms and with a modern understanding of the issues wanted the state constitutional protection against eminent domain abuse to remain intact

● That there can’t be any constitutional protection afforded against eminent domain abuse in New York State because when interpreting such fundamental Bill-of-Rights protections the judiciary must defer to the legislative and executive branches which, according to the New York Times recent editorial assessment, is up for sale on a “pay to play” basis with few or “no limits.” According to the Times:

. . . big money rules in Albany. Big business, big unions, and any wealthy individual or interest group can buy access, block reforms, and sometimes even write their own laws.

(See: Editorial: It’s All About the Money, published: November 29, 2009)

In other words, these Bill-of-Rights protections for the individuals aren’t even getting erased from the state constitution (and the federal constitution) by courtesy of a majority vote of the community (which would be unobtainable); they can be bought and paid for, plain and simple, by anyone with access and a big campaign check.

Are any of the above-listed fictions believable? Not if you are paying attention to New York politics or have even an ounce of skepticism in your body. Are any of the above actually true? No, none these promulgated fictions are the least bit true.

How Unfair? Bruce Says “Supersize Me!”?

How unfair is it to mix facts with fictions when engaging in the public debate? Consider this story we’d like to tell about an exchange between an New York State official and a lawyer that conveys how entirely unfettered eminent domain abuse will now be in New York.. . . . . It is amazing what can come out, at a meeting open to the public, when state officials and those they hobnob with carelessly chat, thinking they will not be overheard or stand too close to an open microphone or a running recording device.

As you may know, last week we were at the offices of the Empire State Development Corporation for the meeting of the BALDC subsidiary agency the ESDC controls. BALDC is being used as a tool by ESDC to issue tax-exempt bonds for ESDC’s financing of the Atlantic Yards basketball arena. Last Tuesday the BALDC board of directors met to authorize issuance of tax-exempt arena basketball bonds. (See: Wednesday, November 25, 2009, Picturing What Could Have Been Said If Public Officials Accepted Public Comment at the Atlantic Yards Bond Approval Meeting.) The same day the Court of Appeals, the state’s highest court, released its opinion that eminent domain can be abused to create the Ratner mega-project. Naturally, the decision was something to talk about.

To start, some necessary background: First, let us remind you that we have pointed out how the purpose of Atlantic Yards is to give developer/subsidy-collector Forest City Ratner an unprecedented monopoly on a swath of Brooklyn real estate that eliminates the otherwise burgeoning competition in their own back yard. Next, you need to know this: In the reception area of its One MetroTech Center headquarters Forest City Ratner displays a full wall-sized live camera projection of the Atlantic Yards site. It has been pursuing a bidless acquisition of the site since at least June of 2003. From time to time the angle from which the site is viewed in the reception area changes, but whatever the shift in angle the displayed land that Ratner covets is the same.

Hard as it is to believe, it is absolutely true that Ratner displays the property in his office reception area. Of course, the land displayed isn’t owned by the Ratner organization, but it nevertheless is displayed in their reception area, the way other real estate firms would display their actually conquered assets. If you doubt us ask: Those who go up to visit Ratner know this. (We could cynically observe that Ratner ought to also mount on the wall as trophies a few counted-upon politicians, Mayor Bloomberg and Governor Paterson included. He can brazenly expect to get his land only if he considers them in his pocket. It will probably serve, however, simply to mount as wall plaques the myriad news stories of how readily Bloomberg and Paterson have capitulated in the facilitation of extra giveaways for the mega-project.)

The above background now provided, here for your discerning evaluation is this account of an exchange after last Tuesday’s court ruling. (FYI: People on the inside of these transactions can be inclined to regard the behavior of others on the inside with a certain amused casualness.) Here’s the exchange:

So he says to [Bruce] Ratner, “I guess with today’s Court of Appeals decision you finally get all that land* you’ve been projecting on your reception area’s wall.” Ratner doesn’t miss a beat: “Actually, with this Court of Appeals decision I’m going to have to get a bigger wall!”

(* This is technically incorrect. The Court of Appeals decision applied only to the half of the land needed for the arena that Ratner is seeking to acquire via eminent domain. Another half of the land needed for the arena is coming from the MTA and there is an entirely separate lawsuit brought by legislators and community groups to block any transfer of it to Ratner since he never bid for it and the land was never appraised as required under the provisions of the Public Authorities Accountability Act that were specifically intended to prevent such favored transactions. Further, other aspects of the eminent domain litigation are still in court, while another suit is being brought to reinstate claims based on the new, now substantially changed facts respecting Ratner’s attempted taking of the property.)

What’s Truly Most Unfair?

Is it believable that Ratner made this statement about needing to “get a bigger wall”? Yes, it is absolutely believable. This is the same man who (in what was apparently intended to be a puffy PR interview piece with Crain’s during the pendency of the Court of Appeals decision) said that the public didn’t have a right to know what the project he might build might consist of: “Why should people get to see plans?" he said. "This isn't a public project.” (See: Tuesday, November 17, 2009, Be Careful What (Change of Law) You Ask For; You Might NOT Get It: Atlantic Yards and 1967's Rejected NYS Constitutional Amendment.)

It is therefore absolutely believable that Ratner said he needed to “get a bigger wall” but is it really true that he said it? We can only guess. We haven’t bothered to contact the Ratner office to inquire. (We’ll leave it to others to confirm what statements Mr. Ratner might actually have made about his wall after the ruling, or those he will admit to.) We suspect that it would be rather awkward for Ratner to talk about his wall-of-desire in such conversations. Ratner is also likely to have trouble denying that he has actually made remarks like those in the exchange related. But whether or not Ratner actually said he needed to “get a bigger wall” the fact of the matter is that with last week’s Court of Appeals decision Mr. Ratner probably is speculating on the further enlargement of his holdings through eminent domain. And even if he didn’t actually say that he needs to “get a bigger wall” we wonder which is really more unfair; for people to start believing that he said it when he didn’t or that his company has been involved in interjecting into the public debate the far more multitudinous falsehoods that it regularly provides?

Is it actually true that Ratner said he needed to “get a bigger wall”? Perhaps we can helpfully analogize to the words cleverly used by lawyers defending the findings of “blight” on Ratner’s behalf to describe the non-existent blight of properties they wanted to seize. They said that properties "were found to have indicia of blight" because they had (here’s the indirect language they used) “one or more blight characteristics.” (See: Thursday, October 15, 2009, At eminent domain oral argument, judges skeptical of both sides; court spends more time on process, low-rent housing issue than AY as sweetheart deal.) Applying this formulation to Ratner’s saying that he needed to “get a bigger wall”: It has the characteristics of truth or what can be referred to as “one or more truth characteristics.”

Picturing What Could Have Been Said If Public Officials Accepted Public Comment at the Atlantic Yards Bond Approval Meeting

We were at Tuesday’s Brooklyn Arena Local Development Corporation (“BALDC”) meeting where that authority approved the issuance of bonds to finance the proposed Atlantic Yards Nets basketball arena. What is that agency in relation to the Empire State Development Corporation and its co-located sister agency, the New York State Job Development Authority? What makes it distinct? Or is it? Don’t ask unless you want to get into some needlessly byzantine distinctions that don’t exactly help the public understand or hold its government authorities accountable. If you do want to get into these distinctions and get an explanation for why this agency was trying to run off the radar without taking public comment or making information available ahead of time, read Atlantic Yards Report with all the gory details: Arena bonds authorization coming Tuesday: questions about transparency, PILOTs, and infrastructure spending remain (Monday, November 23, 2009).

Picturing Imperfect

We went to the meeting and were perfectly prepared to say something about the bonds being authorized for issuance but since the public officials there were not interested in public comment we brought images telling what we had to say, which we held aloft in succession as the meeting proceeded, right through to the bitter end. Below are those images, followed by the words that would accompany them if given the opportunity. Atlantic Yards Report covered the board meeting and our “brandishing” of our “mini-poster” messages in a post that also includes videos. The last of that post’s imbedded videos includes an interview we did with NY1 covering many of our concerns. (See: Wednesday, November 25, 2009, Arena bonds authorized, underwriter Goldman confident, but questions remain about rating, insurance, market.)

A Precedent Not to Be Proud Of

One thing to note first. Shortly before the 10:00 AM meeting began, word came down that the state’s highest court, the Court of Appeals, had decided against the plaintiffs in one of the many cases brought to oppose the use of eminent domain for Atlantic Yards. It was an important case and a significant loss in many ways. As a post in the The Volokh Conspiracy says:

The case is also significant because it is the first major state supreme court defeat for property rights on a public use issue since Kelo. Over the last 10 years, the tide had been going the other way, with more and more state high courts applying restrictive definitions of “public use” and forbidding economic development takings of the kind upheld in Kelo, including important decisions in Ohio, Oklahoma, and Michigan, among others. Hopefully, Goldstein will not be the start of a counterrevolution.

The people in the Empire State Development Corporation offices where the “BALDC” meeting was held were not gloating obscenely about the court decision. Why should they? They have nothing to be proud about. There is no reason to be proud of what they are trying to do at Atlantic Yards. They have no reason to be proud of the legal arguments offered to try to sustain their proposed abuse of eminent domain there and they have no reason to be proud of how they “won” the court decision which, because it consigns to the trash heap the protection of fundamental constitutional rights, has many people wondering if the decision in the state’s highest court was simply politically rigged like so much of what happens with Atlantic Yards. We will come back to spend some time on the “logic” (or lack of it) of the opinion offered by the court when it determined that the public should not be protected against politically connected developers. That will be in a later post.

Our Visuals and Putting Words to the Pictures

Here then are the visuals we held aloft at the meeting followed by the message we would have delivered if our comment had been allowed in words.

1. Why? Why are you financing something that will be $220 million net loss to the public?
2. And what kind of net loss will the rest of the Atlantic Yards site be to the public? You don’t know because you haven’t done the analysis and you have set public up for a big net loss by giving the developer a monopoly on site development options, freely renouncing your negotiating power.3. And why are you using the power of the government to consolidate Forest City Ratner’s monopoly on developing Brooklyn? Once upon a time the U.S. Supreme Court went out of its way to say that one of the rare purposes for which eminent domain could be used was to break up land that was overwhelmingly concentrated in the hands of a few private landowners. You are doing the opposite: Using eminent domain to artificially concentrate monopoly ownership in the hands of Forest City Ratner.4. There are of course many questions to be asked about why you are issuing bonds with so many tell-tale loose ends. We could ask you why, for instance you aren’t reviewing and approving the involvement of Mikhail Prokhorov as a proposed principal in this transaction?

5. Of all the multiple loose ends that make this so transaction dangerous, perhaps the most important to ask you about is this: Why are you financing an arena that is different from the one that the ESDC board and the PACB actually approved and which will be so much more risk for the bondholders? You are financing an arena which, among other things is so much smaller that it won’t be able to host a second team playing hockey.
6. Of course, you should be worrying that these bonds will default and consequently don’t deserve a good rating. A default will negatively affect the market for all New York issuers. But that is not all you should be worrying about. Moody’s has warned that the entire state is weeks away from a substantial downgrade of its credit rating if it doesn’t close its budget gap. Governor Paterson is asking the legislature to take steps to close that gap but who can take the governor seriously when on his behalf you are still pursuing this supremely wasteful financing that is driving the state into a deeper financial hole. You are responsible for the misapplication of billions of public money to Atlantic Yards.
7. The consequence of your misconduct doesn’t end here. Sometimes the question comes up whether the most productive use of our time is to address the kind of misconduct and waste by public officials we see here or to turn instead to issues such as global warming that threaten the entire planet. There is really no distinction: The selfish pursuit of things that don’t make economic sense, that harm the larger community so that one company with too much political power can destructively get more than their fair share of the pie is all part the same bigger picture.

8. Sometimes sports stadiums and arenas are worth a lot less than the public pays for them. Above the Silverdome stadium that just sold at auction for less than the price of a one-bedroom apartment.
9. Your Ratner-comes-first infliction of harm on the greater community should be a warning sign to anyone who might consider buying these bonds. What kind of transaction will you foist on them? What kind of song and dance will you use to misrepresent things to them? We know the fictions you’ve been selling us:

Ostensible, pretextual, is what you gave to us
Aweful vice, a Ratner heist, is what we’re loath to see

You made our lives preposterous, you can't blame us for feeling clamorous
Ostensible, pretextual, is what you gave to us

Obviously the conclusion above provides an appropriate musical accompaniment to our slide show.- So now you have, pictures, words and a tune to hum.

Going Weirdly From “Tutti Frutti” to “Rocky Road”

Before the meeting we were talking with one of the Goldman Sachs bankers involved in issuing the bonds, commenting that this must be the weirdest transaction on which they had ever worked. We were told that they had worked on some pretty weird transactions. We challenged them to name one as strange or involving so many oddities. Various other transactions were named. . . and discarded as candidates. We never came up with a transaction that even marginally approached being comparably strange. We commented that this transaction probably had within it every element of every weird deal that had been done anywhere else that strange things were going on in New York. Our banker mentioned that he sometimes tells people he does “Tutti Frutti” deals. Then he sighed, and perhaps realizing what was more apropos to this deal, he said, “Or I sometimes tell them I do `Rocky Road.’” “This,” we said certainly involves more than one scoop of “Rocky Road.” And god knows how many scoops of something else.

Press Conference on Bonds for More Expensive, Different Arena Than Approved, With Lower Capacity to Generate Income

After the board meeting was over there was a press conference where the Goldman Bankers and ESDC (“BALDC”) officials answered questions about the proposed issuance and marketing of the “Rocky Road” bonds. As Atlantic Yards Report reported, we asked about the fact that the bonds proposed to be issued are much riskier and are different from the financing approved by the ESDC board and the Public Authorities Control Board (“PACB”). The arena is significantly smaller, less functional and less capable of producing revenue, and much more revenue is going to be needed to pay for it because it is going to cost far more than the PACB was told. We thought it was interesting that Goldman bankers has said at the meeting that they were going to take the bonds out on “road show,” an atypical move that indicates to us that they view these bonds as an extreme version of “story bonds,” bonds that bondholders won’t feel comfortable buying based on what is in the offering statement unless it is supplemented with a lot of explanation, hand-holding and soothing about the transaction’s many ugly warts.

Question Dodging?

Initially one of the Goldman Bankers, Marvin Marcus (as seen in one of the videos), tried to block our risk question put to another Goldman banker, Goldman Sachs Managing Director Gregory Carey, saying that Goldman only wanted to take questions from “the press.” The tactic seemed particular unfair given that Mr. Marcus had told us only a half-hour before that he had actually been reading our work. We had only left it undetermined where he had been reading what we write, in Noticing New York, the Huffington Post, the New York Sun, the Brooklyn Paper, or a consolidation with a pick-up of a Reuters story or somewhere else.

What Would Jane Jacobs Do?

Atlantic Yards Report commented that with our sometimes multiple hats, which involve not only writing commentary but also asking questions and asking for accountability by via activist tactics we may sometimes make it more difficult to get answers to our legitimate and tough questions. Acknowledged. We do give consideration about how to structure our role. Noticing New York is a truth-seeking, truth-exposing endeavor. The model for what we do is probably closest to Jane Jacobs, who wrote extensive commentary on urban events and at the same time used devices to illustrate and contrast her point of view with the point of view (and sometimes false facts) that stage-managed events attempt to promulgate. We don’t think there are easy answers to how to report on events about which one may have a point of view except to be honest in reporting one’s point of view. We will continue to think about this. Meanwhile we think our visuals present questions that need to be asked and answered.

Dealing With Greater Risk?

Goldman’s Carey responded to our question about the extra risk as you can see from the detailed Atlantic Yards Report account saying, among other things, that there was “less leverage on this transaction” than with respect to the old transaction. “Less leverage” is often a way to reduce risk in a transaction when it is being acknowledged to be riskier, so in a way that could be viewed as an indirect acknowledgment that the deal, as should be obvious, is riskier than the one that was approved by the PACB and the ESDC board, but Carey gave a bottom-line, on-script answer that “we actually view this as a much more secure transaction.” In our view, the PACB didn’t approve such “less leverage” fix-ups of a risky transaction. Mr. Carey did not himself offer a point of view on the PACB approval saying he wasn't familiar with what the PACB approved.

State of Risk?

Relating to this question of approved risk, WNYC’s Matt Schuerman asked ESDC attorney Jonathan Beyer, ESDC Chief Financial Officer Frances Walton (“BALDC President) ESDC Senior Counsel Steve Matlin if the state would be willing to let BALDC’s Ratner bonds default when financial difficulties materialized. Here, reported in AYR, is the response he got, which though technically accurate bears some explanation:

"I don't know if I'd characterize it as willing," Beyer responded, "it's just that the documents do not require us to make any payments."

"This is a bondholder risk," added ESDC Senior Counsel Steve Matlin. "That's what the bondholders are looking at when they're purchasing bonds."

"That's not saying the exact same thing," Scheurman followed up. "You might actually decide, though you're not obligated, to bail out these bonds."

"That's speculation," Walton said, shaking her head.

What all this means is that although the bonds are issued by an authority that is a form of state agency, the bonds are non-recourse against the state itself, which means that the bondholders are at risk if these riskier bonds default. Because the state is not required to rescue defaulting bonds, it can technically walk away from them and it might. But if the state does walk away and lets the bondholders suffer when the bonds default, it will hurt the market for all New York State bond issuers, so the state may want to step in to prevent that from happening. Either way, the state takes a loss. That’s why the PACB was created to give prior review and approval to or prevent the kind of extra risky transactions that can provoke such problems from going out to market. Nevertheless, ESDC and BALDC want to avoid taking the inherently riskier transaction back to the PACB. In fact, they don’t even want to answer questions about the risk they are exposing the state and te bondholders to.

Questions About Transaction’s Greater Risk Left Unanswered

We asked the three PACB officials about the inherently more risky nature of this transaction involving a smaller, less functional arena than approved though it needs to somehow generate income to pay back a much higher construction cost. As Atlantic Yards Report details in its account, first they ignored me. Then they tried to avoid the question as not being from “accredited media.” Finally they walked away as we commented that we took this to mean that they had no response to our question about the greater and unapproved risk of the bond transaction the “BALDC” board had just authorized.

On old saying goes: “If you can’t stand the heat, get out of the kitchen.” Here we would adapt it as follows: “If you can’t answer questions about the risk, don’t issue the bonds.”

If you want to see in video form much of what we would have said in presenting our images to the state officials uninteresting in taking comment go to this video from Atlantic Yards Report (the quality of the video is better if you click on the first version of the video below which is from the AYR post- original videography by Jonathan Barkey).

Be Careful What (Change of Law) You Ask For; You Might NOT Get It: Atlantic Yards and 1967's Rejected NYS Constitutional Amendment

In the years we spent as a lawyer in government we drafted and supervised the drafting and proposal of a substantial volume of legislation. A respectable amount of it passed. Some of it didn’t. That’s what brings us to the point where we will begin a discussion addressing why eminent domain cannot be used for Forest City Ratner’s proposed Atlantic Yards.

The first rule of proposing a change to the law, by passage of legislation or otherwise, is to consider if you really need the change or whether it is possible to construe the law as already saying what you want it to. Why? Because if you propose a change in law and fail that failure will forever afterwards stand as evidence you CAN’T then interpret the law as already saying what you want it to. This is for two reasons. First, proposing a change in law puts on the record the evidence that everyone and most particularly the legal experts on the subject, believe that the law DOESN’T already say what you are asking it to be changed to say, and second, when the proposed change in law doesn’t pass it shows that those who voted it down (those with authority and from whom the law flows) are opposed to modification of the law to make it say what you proposed.

In 1967 New York State Voters Rejected Eminent Domain for “Economic Development”

All this is relevant because in 1967 New York State voters voted against a “public use” amendment to the New York State constitution proposed for the purpose of permitting the use of eminent domain for “economic development.” Even though that amendment was rejected state agencies officials are attempting to use eminent domain in exactly that way at the proposed Atlantic Yards megadevelopment site.

Gelinas’s Wall Street Journal Op-ed Summary of Arguments

The other day Nicole Gelinas of the Manhattan Institute explained this very nicely in a an op-ed for the Wall Street Journal: The Empire State and Eminent Domain, November 14, 2009. Though her arguments reflect those of lawyer Matt Brinkerhoff in DDDB’s petition now before the state’s highest court in the Goldstien v. Pataki eminent domain appeal we were impressed with the way Ms. Gelinas’s boiled them down to simple op-ed directness:

1. The New York State Constitution did not permit eminent domain taking for “economic development.”

2. In 1967 New York voters rejected an attempt to change the Constitution so that eminent domain could be used for “economic development.”

3. In the face of such rejection New York State officials, wanting to do the Atlantic Yards “economic development” project, have attempted to redefine “blight” as “underdevelopment,” thus circumventing the voters’ rejection of eminent domain for “economic development.” (Under prescribed circumstances, the state Constitution permits the use of eminent domain to remove blight.) Addressing herself to the AKRF report by virtue of which the state agencies (pretextually) found the “blight” they needed to seize property, Ms. Gelinas writes:

Mainly, however, the report pointed to "underutilization" of the land, concluding that the area wasn't being used to the maximum economic benefit allowed by law. But that means the Atlantic Yards is really an economic-development project—and that the politicians along with Mr. Ratner want to manage Brooklyn's economy rather than let competitive forces continue to improve the neighborhood.

4. We would add to Ms. Gelinas’s points this additional observation offered as a comment extending her point #3 above by Mike McDougal in a discussion of her article on The Volokh Conspiracy (New York: Where “Underutilization” Equals “Blight”). He says that all development can therefore be promoted as ostensible “blight” removal:

That’s exactly right. Another obvious way to put it is this: Every rational for-profit real estate developer is attempting to eliminate “blight.”

Prospect Heights: Not a Slum, Not in Need of Eminent Domain for Development

Ms. Gelinas points out (as we have) that the Prospect Heights neighborhood wasn’t a slum (i.e. wasn’t “blighted”) and that government intervention to improve the neighborhood was superfluous as private market forces were already taking advantage of the development opportunities there:

In fact, the Prospect Heights neighborhood that Mr. Goldstein and his wife have made their home is hardly a slum. Prospect Heights was thriving before Atlantic Yards construction began. It's a hip neighborhood that's a short hop on the subway from Manhattan.

To meet the needs of in-flowing residents, developers had been converting sturdy old warehouses into condos. One of the newer arrivals, Mr. Goldstein, paid $590,000 in 2003 for his three-bedroom condo in a distinctive, eight-story dry-goods warehouse designed by a renowned Chicago architect and solidly built nearly 80 years before. His neighborhood was home, too, to small-scale industrial firms and a still-operating Prohibition-era bar, as well as to working-class renters.

Unrevealed Ratner Megadevelopment Not a “Public Project”

Ms. Gelinas utilizes developer Bruce Ratner’s immediately infamous November 8, 2009 quote that appeared in a Crain’s interview to remind us that the sort of projects the state would bring into existence don’t even have to involve revealed plans or actually be considered “public projects.” Crain’s reported about asking Mr. Ratner about his mega-project’s designs and said, “Mr. Ratner refuses to discuss what the project will look like, whether or not it will include an office building and even who will design the first residential tower” . . . “He has no intention of sharing the designs for the complex.” And the exact Ratner quote that has now become infamous? Here is Ms. Gelinas slipping in appropriate commentary:

Just last week, Mr. Ratner bristled at requests from a reporter at Crain's New York Business to see his specific building plans. "Why should people get to see plans?" he said. "This isn't a public project." A curious statement, given the state's use of eminent domain on behalf of the project.

Pfizer Shadow on Kelo Case

Ms. Gelinas’s op-ed ran Saturday, November 14th. Only days before, news broke (covered in the New York Times paper edition on Friday) that Pfizer Pharmaceutical has announced that it was leaving the New London, Connecticut even though New London cleared the land Pfizer was vacating via the challenged use of eminent domain in what became the highly controversial Kelo litigation that went to the Supreme Court.

The Kelo case, which said that the federal Constitution doesn’t prohibit the use of eminent domain for economic development, is mentioned by Ms. Gelinas who says, “The decision sparked a national outcry that led more than 40 states to pass restrictions on eminent domain,” She probably did not have time for a last-minute revision to her op-ed to refer to the Pfizer departure. No need: Almost anyone reading Ms. Gelinas’s critique would have been reminded by the concurrently breaking Pfizer departure news that while governments intruding with eminent domain may preferentially anoint one owner to replace another (even a developer to replace other already active developers as at Atlantic Yards), these subsidized rearrangements are more likely to fail economically than what they replace.

Why these forced rearrangements of ownership so often fail is something we will have to return to at length in another post, but it partly has to do with the way that the new owners have less “skin in the game” than the old. Ms. Gelinas deals with one indicator of this diminished investment on the part of the newcomers when she writes about the Atlantic Yards developer’s offers of compensation for the condemned property that are unfairly below market. (Something we have also written about.)

Jane Jacobs?

Suffice it to say that the decisions of the New York voters not to amend the New York Constitution to permit the use of eminent domain for “economic development” was probably a wise one. Perhaps some of those 1967 voters were thinking of what they had read in Jane Jacob’s seminal book, “The Death and Life of Great American Cities” that came out in 1961. It doesn’t seem all that long ago but we wonder if government officials think it has been long enough to forget the lessons we learned from Jacobs.

What the State Constitution Says

The provision of the State of New York Constitution (in the “Bill of Rights”* Article I, Section 7) that prohibits the taking of private property except for public use says now, as it said in 1967:

Private property shall not be taken for public use without just compensation.

(* To read what we wrote about how Alexander Hamilton presumed our New Yorkers liberties would be protected without a state bill of rights, click here.)

(There is a long line of cases that interpret this provision and the similarly worded federal Constitution to mean that private property cannot be taken unless the taking is for public use. In other words, it isn’t enough to pay compensation, whether just or otherwise.)

What the State Constitution Doesn’t Say

In 1967 the above provision of the state Constitution was proposed to be amended to add the words “public purpose” so that it would then have read as follows (emphasis supplied):

Private property shall not be taken or damaged, as such term is defined by law, for public use or purpose without just and timely compensation.

Because of prior case law the exact intent of inserting the words “or purpose” to eliminate the restriction on the use of eminent domain for “economic development” was well-defined. As noted, it was rejected.

Making a Federal Case of the State Constitution?

Is the New York State’s Constitution worded similarly to the federal Constitution and should it be similarly interpreted? The question is important because, as noted, the Kelo decision says that (within the parameters it describes) the federal Constitution does not prohibit the use of eminent domain for “economic development” which is why the fifty states have been addressing the question with their own laws.

Though there are some similarities of wording, there are some very important differences in the wording of the two constitutional provisions and the New York Constitution should be interpreted differently from the federal Constitution. For one thing, even if the wording were the same (as it once was long ago) the difference in the legislative history that includes the New York State voters’ 1967 rejection of “economic development” use, would necessitate diverging interpretations. Beyond this, words have been added to the state Constitution over time that make it clear that the unamended “public use” phrase is to be strictly construed.

Wisdom of 1846

In 1846, without changing the original clause, language was added into the state Constitution specifically for the limited purpose of allowing the opening of private roads across another’s private land if roads were necessary. (Given the premium this rare and specific amendment places on the value of road access, it is interestingly ironic that the Atlantic Yards megadevelopment involves the closing and shutting down of public streets, sidewalks and avenues to convert them into developer-owned property.) This amendment incorporated a procedural protection that no such taking for a private use could not occur unless a “jury of freeholders” (fellow property owners) first determined the “necessity of the road and the amount of all damage to be sustained by the opening thereof.” In contrast, when New York State agencies today try to use eminent domain they declare that they are entitled to avoid any impartially adjudicated fact-finding as to whether their actions make sense, are justifiable and non-pretextual. They also avoid having to do any assessment of the damage they are doing to the community.

Wisdom of 1894

1894 saw a similar specific change, adding additional language to the constitution that permitted construction on the land of others of “drains, ditches and dykes” as drainage for agricultural lands (now also swamps) but only pursuant to the passage of “general laws” together with a belt-and-suspenders prohibition that “no special laws shall be enacted for such purposes.” Ergo, in 1894 New York State citizens amending the state Constitution were on guard against the kind of selective favoritism by which government officials are conspicuously specially benefitting Forest City Ratner, the Atlantic Yards developer.

In Brief, There Are Even More Arguments

It should be said that while we have interjected some of our own editorializing, most of the above analysis is from the legal arguments in the brief for the plaintiffs in the Goldstein v. Pataki case challenging the use of eminent domain which is now before our state’s highest court. The above is but a fraction of the multiple arguments they have presented in making a very good case, all of which bear reading.

Respect the Wisdom of the 1967 Voters and Our State Constitution

Now to reiterate what we have said here. The record shows in 1967 it was the consensus of legal experts that the New York State Constitution did not permit eminent domain takings for “economic development.” The voters then rejected an attempt to change this situation. New York State officials have now attempted to circumvent the voters’ rejection by redefining “blight” as “underdevelopment” which would mean that eminent domain could be used to anoint any developer as the owner of any development the developer wishes to undertake. Finally, we have warned that such economic development projects involving politically connected developers receiving heavy subsidies are bad policy because they are more likely to fail economically than what they replace. That means the voters were wise when they refused to change to the state Constitution to permit abuses like those of the proposed Atlantic Yards, which come dressed in pretextual but unspecified and unevaluated “public benefit.”

A Post That is Just a Bit Montesquieued

(Charles de Secondat, baron de Montesquieu)

We thought we found the New York Times editorial page today sounding rather like Noticing New York except the Times never sounds like us when its subject is the Atlantic Yards megadevelopment, that project being done by the Times' eminent domain-abusing business partner Forest City Ratner. In fact, the Times today was addressing another very serious matter. This is some of what the Times had to say:

The ruling distorts precedent and the Constitutional separation of powers to deny justice . . . and give officials a pass for egregious misconduct. The overt disregard for the central role of judges in policing executive branch excesses has frightening implications for safeguarding civil liberties, as four judges suggested in dissenting opinions.

To find out what the Times was writing about read Editorial: A National Disgrace (November 11, 2009). To find out how it resembles what we were saying about Atlantic Yards this week see: Judicial Review of Atlantic Yards Corruption: Laws Should Not Be A "Dead Letter"(Tuesday, November 10, 2009).

Judicial Review of Atlantic Yards Corruption: Laws Should Not Be A "Dead Letter"

(Alexander Hamilton)

Alexander Hamilton has been on our Noticing New York mind recently. Hamilton, is the most notable of all our founding fathers for two things: a love for the honor of adhering to principle in the face of politics and an attentiveness to the detailed mechanics of what makes our public institutions work. It is probably thematically fitting that the opponent who killed him in a duel, Vice President Aaron Burr, was a politician who was involved in the founding of what became Tammany Hall and whose interest in pubic service was suspiciously regarded* as being for the pleasure of making personal profit rather than an interest in principle. Hamilton, a prolific writer, authored a quote of a certain minor fame that you can get adorning T-shirts and coffee mugs. That quote has got us to thinking recently. The quote: “Laws are a dead letter without courts to expound and define their true meaning and operation.”

(* Burr’s “The rule of my life is to make business a pleasure, and pleasure my business” is widely quoted. We are not sure, however, what PBS’s American Experience used as a basis to put in Burr’s mouth the words: “Compared to the drudgery of the law, the life of a politician is honorable, fun ... and very profitable.”)

The Federalist Papers and Atlantic Yards: The Need For Court Review That is Not Illusory

Hamilton’s quote: “Laws are a dead letter without courts to expound and define their true meaning and operation” is from the Federalist Papers No. 22, the Federalist Papers being those collected newspaper articles in which Hamilton, James Madison and John Jay pseudonymously argued why the Constitution and its incorporated principles should be adopted. (All of the Federalist Papers were addressed “To the People of the State of New York,” New York being Hamilton’s home state.) We were thinking about this quote in regard to the proposed Atlantic Yards megadevelopment and the various litigations that have been brought to stop it. We have been thinking of the quote in relation to the obligation of the courts to stand up and assume their responsibility to act like courts and give meaning and effect to the law by stopping Atlantic Yards.

We have previously written about the increasing predilection of public development officials to disregard laws for political motivations, encouraged by the feeling that they can do so with impunity. We have also written about how whatever initial doubt might once have existed about their support of Atlantic Yards, public officials such as Mayor Bloomberg and Governor Paterson have long since by their own actions outed the truth that their support for the megadevelopment is corrupt, a commitment to a wired deal abusing eminent domain to give developer Forest City Ratner a no-bid mega-monopoly on a swath of valuable Brooklyn real estate, no matter the harm or absence of public benefit. Laws and fundamental rights are clearly being violated: The only question is whether the courts will let those laws become Hamilton’s “dead letter” by deferring to a fictional version of reality conjured up by governmental officials wherein by pretense and pretext those government officials feign that they have not violated the law and all its basic principles.

If the courts supinely succumb to whatever manufactured fictions public officials trump up as a pretext to steal private property through eminent domain abuse then they have, in essence, abdicated their function out of existence and we are left, for all intents and purposes, without courts or law.

The Importance of an Independent Judiciary Historically Recognized

An active independent judiciary was considered quite important at the time that Hamilton was writing and that is partly why he wrote the words we quoted. Courts that can do no more than simply mirror what the executive branch wants do not supply that. When he argued for the adoption of the Constitution Hamilton argued for an independent judiciary that could stand up to the executive, but the idea of an independent judiciary already had deep historic roots. The tradition of judicial independence was a principle honored in England and the idea that it wasn’t being honored in America was something the colonists took offense at when they drafted the Declaration of Independence.

We found a paper by the American College of Trial Lawyers, Judicial Independence: a Cornerstone of Democracy Which must Be Defended, which provides an excellent resource on the historical origins of the principle of judicial independence. The principal draftsman of this paper was Robert L. Byman, FACTL, Jenner & Block, LLP, Chicago, Illinois.

Here is what that paper has to say about judicial independence as written about in the Declaration of Independence:

A century before Lord Acton was to utter in Parliament his famous phrase, “Power tends to corrupt, and absolute power corrupts absolutely,” our forefathers already knew that it was essential to divide and separate the powers of government.

Of all the grievances detailed in the Declaration of Independence, none was greater than the total dependence of Colonial judges upon King George:

He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

Declaration of Independence, July 4, 1776.

English judges were assured life tenure during their “good behavior” by the Act of Settlement of 1700, but their Colonial counterparts served at the pleasure of the King. Their salaries were subject to his whims. Judges beholden to the King, not surprisingly, often ruled as he pleased, no matter how unfairly. Our post-Revolution government needed to ensure an independent judiciary.

Independence Means More Than Appointment for Life and Salary Protection

Much of the thinking of what is necessary to constitute an independent judiciary is based on judges not serving at the will of the executive and similarly that their salary and compensation should not be at their whim. Here we are going to talk about something only a shade removed in terms of concern, judicial independence in terms particular to modern New York State-style eminent domain abuse: That courts are not independent if they are not entitled to engage in fact finding, if the public officials politically in power tell the courts that eminent domain takings cannot be subject to standard and traditional adversarial truth-finding processes for discovering and determining facts, and that there is no judicial independence if a court must simply accept as its record of facts a set of fictions whipped up the same government in power that is seeking to act without restraint by law or the courts.

Independence Before the Declaration of Independence

(Charles de Secondat, baron de Montesquieu)

Before the Declaration of Independence was written the influential Baron de Montesquieu (1689 - 1755), a nobleman and a judge in a French court, was tackling the subject of judicial independence in his The Spirit of the Laws (1748). The College of Trial Lawyers paper also quoted him: “There is no liberty, if the power of judging be not separated from the legislative and executive powers.”

At the risk of being pedantically boring, here is a longer extract containing that quote:

When the legislative and executive powers are united in the same person, or in the same body of magistrates, there can be no liberty; because apprehensions may arise, lest the same monarch or senate should enact tyrannical laws, to execute them in a tyrannical manner.

Again, there is no liberty, if the power of judging be not separated from the legislative and executive powers. Were it joined with the legislative, the life and liberty of the subject would be exposed to arbitrary control, for the judge would then be the legislator. Were it joined to the executive power, the judge might behave with all the violence of an oppressor.

There would be an end of every thing were the same man, or the same body, whether of the nobles or of the people to exercise those three powers that of enacting laws, that of executing the public resolutions, and that of judging the crimes or differences of individuals. “

Hamilton was a reader of Montesquieu and said that he agreed with exactly the same quote seized upon by the College of Trial Lawyers paper.

Checks and Balances: Human Beings Are Not Angelic and Government is Obliged to “Control Itself”
(James Madison)

We now think of the Constitution as a system of “checks and balances.” It is, but at the time this concept was being argued for it hadn’t been reduced to that frequently used catch phrase. Although Hamilton clearly understood why checks and balances were necessary and argued for them, it is James Madison who is credited with giving the most classic essay in the Federalist Papers on why checks and balances are necessary in government. He does so in terms of pointing out basic human nature, that human beings are not angelic and that therefore government by such nonangelic beings must be obliged to “control itself.” Here is what he says in The Federalist No. 51 (emphasis supplied):

It is equally evident, that the members of each department should be as little dependent as possible on those of the others, for the emoluments annexed to their offices. Were the executive magistrate, or the judges, not independent of the legislature in this particular, their independence in every other would be merely nominal.

But the great security against a gradual concentration of the several powers in the same department, consists in giving to those who administer each department the necessary constitutional means and personal motives to resist encroachments of the others. The provision for defense must in this, as in all other cases, be made commensurate to the danger of attack. Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place. It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.

(It should perhaps be noted that the authorship of this essay is officially recognized as “disputed” and, as such, is sometimes attributed to Hamilton although most scholars consider that it is assuredly Madison’s.)

The Proof is In Atlantic Yards

If one has any questions about what the “human nature” Madison euphemistically refers to might look like in action when government does not feel obliged to “control itself,” one can see a stunning “reflection” of what we would less euphemistically refer to as base human greed by looking at the Atlantic Yards mega-project. The list of abuses for the sole sake of the developer is endless.

Inherently Feeble Courts Need to be Independent

Hamilton’s eloquent quote, “Laws are a dead letter without courts to expound and define their true meaning and operation” was tossed off in The Federalist No. 22 (a continuation of the essay Hamilton started in The Federalist No. 21) where his principal subject is another balance of powers question, the states giving up powers to the federal government. In connection therewith he argues for a federal judiciary so that there may be a “sanction to” the laws of the United States, such as treaties. It is actually in a series of six later essays on the judiciary (Nos. 78-83), beginning with and particularly The Federalist No. 78, that he argues for the judiciary’s independence as an essential part of its being effective.

Hamilton found himself walking a line in his arguments as he tried to sell the Constitution in his writings. A judiciary that was too strong and by being separate was unaccountable was feared, so he argued simultaneously that the judiciary would actually be relatively weak compared to the other branches of government but that it needed to be independent to be sufficiently strong to carry out its purposes.

In the paragraphs below, Hamilton argues that a separate judiciary would be the weakest branch of government while concurrently arguing (by invoking the Montesquieu quote mentioned above) that a judiciary that is not “truly distinct” from the other branches of government, or that forms a “union with either of the other departments,” presents a situation where there is “every thing to fear” because as Montesquieu says there would be "no liberty” in such a situation.

Whoever attentively considers the different departments of power must perceive, that, in a government in which they are separated from each other, the judiciary, from the nature of its functions, will always be the least dangerous to the political rights of the Constitution; because it will be least in a capacity to annoy or injure them. The Executive not only dispenses the honors, but holds the sword of the community. The legislature not only commands the purse, but prescribes the rules by which the duties and rights of every citizen are to be regulated. The judiciary, on the contrary, has no influence over either the sword or the purse; no direction either of the strength or of the wealth of the society; and can take no active resolution whatever. It may truly be said to have neither FORCE nor WILL, but merely judgment; and must ultimately depend upon the aid of the executive arm even for the efficacy of its judgments.

This simple view of the matter suggests several important consequences. It proves incontestably, that the judiciary is beyond comparison the weakest of the three departments of power; that it can never attack with success either of the other two; and that all possible care is requisite to enable it to defend itself against their attacks. It equally proves, that though individual oppression may now and then proceed from the courts of justice, the general liberty of the people can never be endangered from that quarter; I mean so long as the judiciary remains truly distinct from both the legislature and the Executive. For I agree, that "there is no liberty, if the power of judging be not separated from the legislative and executive powers." And it proves, in the last place, that as liberty can have nothing to fear from the judiciary alone, but would have every thing to fear from its union with either of the other departments; that as all the effects of such a union must ensue from a dependence of the former on the latter, notwithstanding a nominal and apparent separation; that as, from the natural feebleness of the judiciary, it is in continual jeopardy of being overpowered, awed, or influenced by its co-ordinate branches; and that as nothing can contribute so much to its firmness and independence as permanency in office, this quality may therefore be justly regarded as an indispensable ingredient in its constitution, and, in a great measure, as the citadel of the public justice and the public security.

Also notable above is the way that Hamilton describes the temperamental tightrope courts walk which may cause them to be less assertive than they ought. Simultaneously, the judiciary must be conservative, exercising “all possible care is requisite to enable it to defend itself against their [the other two branches’] attacks” while “notwithstanding a nominal and apparent separation” the judiciary must also be concerned that given its “natural feebleness” it is “in continual jeopardy of being overpowered, awed, or influenced by its co-ordinate branches.”

Rights of Individuals Against “Designing Men”

Hamilton then goes on strengthening his arguments that the judiciary must be independent so that it can, among other things, protect the “the rights of individuals from the effects of those ill humors, which the arts of designing men, or the influence of particular conjunctures, sometimes disseminate among the people themselves.” It is hard when reading Hamilton’s arguments not to endow him with a prescience about the kind of abuses we would see with the pursuit of the Atlantic Yards and the Columbia expansion that takes over West Harlem.

“Cabals of the Representative Body,” Majorities and Fundamental Rights

When Hamilton was writing he was speaking of a not-yet-adopted Constitution which he himself would argue did not need to have a Bill f Rights appended to it. He makes the point, however, that constitutional provisions should NOT be overturned by “cabals of the representative body” even “where legislative invasions of it had been instigated by the major voice of the community.” (We have pointed out a couple of things relevant to these concerns in cases such as Atlantic Yards: First, that it would be improper for the Fifth Amendment and other constitutional protections of individuals to be annulled by laws backed a majority of the people and, second that Atlantic Yards is not supported by a majority of constituents on a one-man, one-vote basis; it is instead supported by the “money constituency” of a developer making financial contributions to politicians. The Federalist Papers in their thoroughness do not neglect to deal with such political problems and the need to have checks and balances against bribery.)
Hamilton says that even though it may take judges with “an uncommon portion of fortitude” to stand up against such incursions they should not be permitted “until the people have, by some solemn and authoritative act” amended the Constitution (as he acknowledges the people have a fundamental right to do). See below (emphasis supplied):

This independence of the judges is equally requisite to guard the Constitution and the rights of individuals from the effects of those ill humors, which the arts of designing men, or the influence of particular conjunctures, sometimes disseminate among the people themselves, and which, though they speedily give place to better information, and more deliberate reflection, have a tendency, in the meantime, to occasion dangerous innovations in the government, and serious oppressions of the minor party in the community. Though I trust the friends of the proposed Constitution will never concur with its enemies, in questioning that fundamental principle of republican government, which admits the right of the people to alter or abolish the established Constitution, whenever they find it inconsistent with their happiness, yet it is not to be inferred from this principle, that the representatives of the people, whenever a momentary inclination happens to lay hold of a majority of their constituents, incompatible with the provisions in the existing Constitution, would, on that account, be justifiable in a violation of those provisions; or that the courts would be under a greater obligation to connive at infractions in this shape, than when they had proceeded wholly from the cabals of the representative body. Until the people have, by some solemn and authoritative act, annulled or changed the established form, it is binding upon themselves collectively, as well as individually; and no presumption, or even knowledge, of their sentiments, can warrant their representatives in a departure from it, prior to such an act. But it is easy to see, that it would require an uncommon portion of fortitude in the judges to do their duty as faithful guardians of the Constitution, where legislative invasions of it had been instigated by the major voice of the community.

Meaningful Judicial Review as Encouragement of Good Government Character via the Scrupulous Check on Unjust Partiality and “Iniquitous Intention”

Hamilton’s next paragraph can also readily be applied to Atlantic Yards when it speaks about the need for the judiciary’s firmness in protecting against “unjust and partial laws” and also when he suggests that fortifying an interventionalist temperament on the part of the “judicial magistracy” will operate as a check on the “iniquitous intention” and “sinister expectations” of the legislature in passing laws. Hamilton argues this is because the legislature will perceive “obstacles” to success in their nefariousness if they expect “the scruples of the courts” are to be applied. He suggests that the likelihood of court intervention will have a beneficial “influence upon the character of our governments” and moderate mischiefs because of the anticipation that judicial review will be in “a manner compelled, by the very motives of the injustice they meditate.” In other words, ill motivation will be looked at and the more that such injustice is intended by a governmental act the more likely it is to be overturned. By contrast the Empire State Development Corporation’s lawyers want there to be a very high bar to the examination of that agency’s pretextual motivations when it abuses eminent domain.

Hamilton is, of course, talking about the legislature in his last paragraph above, while in the case of situations like Atlantic Yards the ill-motivated and pretextual actions in question are being taken by public authorities, not by the legislature, per se. Public authorities, something Hamilton didn’t envision, are more analogous to the executive branch but Hamilton’s admonitions still apply fittingly. Further, the theory pursuant to which public agencies like the Empire State Development Corporation are exercising eminent domain is that the power of legislative eminent domain determinations have been delegated to the ESDC by the legislature, thus making this analogy all the more apt.

Here is what Hamilton says:

But it is not with a view to infractions of the Constitution only, that the independence of the judges may be an essential safeguard against the effects of occasional ill humors in the society. These sometimes extend no farther than to the injury of the private rights of particular classes of citizens, by unjust and partial laws. Here also the firmness of the judicial magistracy is of vast importance in mitigating the severity and confining the operation of such laws. It not only serves to moderate the immediate mischiefs of those which may have been passed, but it operates as a check upon the legislative body in passing them; who, perceiving that obstacles to the success of iniquitous intention are to be expected from the scruples of the courts, are in a manner compelled, by the very motives of the injustice they meditate, to qualify their attempts. This is a circumstance calculated to have more influence upon the character of our governments, than but few may be aware of. The benefits of the integrity and moderation of the judiciary have already been felt in more States than one; and though they may have displeased those whose sinister expectations they may have disappointed, they must have commanded the esteem and applause of all the virtuous and disinterested. Considerate men, of every description, ought to prize whatever will tend to beget or fortify that temper in the courts: as no man can be sure that he may not be to-morrow the victim of a spirit of injustice, by which he may be a gainer to-day. And every man must now feel, that the inevitable tendency of such a spirit is to sap the foundations of public and private confidence, and to introduce in its stead universal distrust and distress.

Impartial Adjudication of Laws Because the Tables May Turn

Note that Hamilton concludes this paragraph talking about the importance that there should not be distrust about whether the laws are administered virtuously and disinterestedly because “no man can be sure that he may not be to-morrow the victim of a spirit of injustice, by which he may be a gainer to-day.” This is something to which we shall return before we conclude this piece. It is relevant to the way that it is perceived that eminent domain is currently used exclusively in favor of developers in the “big developers” club, like Forest City Ratner and never used against such developers. For instance, eminent domain is not being used in the case of Joe Sitt’s Thor Equities, which has been speculating on land in Coney Island, or against the Dolan family, who were unwilling to accommodate the improvement of the new Penn (Moynihan) Station design by moving their Madison Square Garden arena, with the public building them a new one.

Lack of Review Generates Corruption Revisited: The Fallacy of Confusing Hoped-for Conduct From an Office With Those who Occupy It
(John Dalberg-Acton, 1st Baron Acton)

Hamilton’s thesis that absence of review generates a higher level of corruption was essentially adopted by Lord Acton when, as quoted above in the American College Lawyers, piece he made his famous statement “Power tends to corrupt, and absolute power corrupts absolutely.” Acton was at the time arguing against adopting a doctrine that the Pope was infallible. Our courts in the case of the Atlantic Yards litigations do something similar to making the Pope infallible when they bend over backwards, as they now do, to defer to public officials even in the face of extreme evidence that those officials are abusing their office. It is a similar error for them to endorse procedures that prevent evidence to this effect from becoming part of the record and a basis for their decisions.

Another Lord Acton quote that is quite famous ends Acton’s famous the “power corrupts” paragraph and it is quite appropriate in its ridicule of the notion that human beings acting with unchecked power should be confused with the good conduct we only hope for from the offices the occupy: “There is no worse heresy than the fact that the office sanctifies the holder of it.” Here is the longer passage from Acton’s famous letter:

I cannot accept your canon that we are to judge Pope and King unlike other men with a favourable presumption that they did no wrong. If there is any presumption, it is the other way, against the holders of power, increasing as the power increases. Historic responsibility has to make up for the want of legal responsibility. Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or certainty of corruption by full authority. There is no worse heresy than the fact that the office sanctifies the holder of it.

Human Folly, Wickedness and Depravity: The Deep Skepticism of the Founders

As can be observed from what we have already quoted above, the Founding Fathers had a dependable skepticism about human nature that cropped up in almost all their considerations of the proper institutional mechanics of government they were considering. Here is Hamilton once more near the end of his easy (Federalist No. 22) on the quality of the men who might be appointed as judges. He speaks of how the “folly and wickedness of mankind” necessarily make our laws voluminous and how few there are who will be fit to be judges given the “ordinary depravity of human nature”:

It has been frequently remarked, with great propriety, that a voluminous code of laws is one of the inconveniences necessarily connected with the advantages of a free government. To avoid an arbitrary discretion in the courts, it is indispensable that they should be bound down by strict rules and precedents, which serve to define and point out their duty in every particular case that comes before them; and it will readily be conceived from the variety of controversies which grow out of the folly and wickedness of mankind, that the records of those precedents must unavoidably swell to a very considerable bulk, and must demand long and laborious study to acquire a competent knowledge of them. Hence it is, that there can be but few men in the society who will have sufficient skill in the laws to qualify them for the stations of judges. And making the proper deductions for the ordinary depravity of human nature, the number must be still smaller of those who unite the requisite integrity with the requisite knowledge.

We cannot help but contrast this realistic skepticism and caution with the fatalistic tendency of New York courts to defer to the determination of public agencies behaving pretextually and politically as if government officials are presumably the angels which Madison in his essay told us that human beings are not.

Skeptical Enough For a Bill of Rights?

As skeptical as Hamilton was, he could have been more so. Apparently the rest of the Founding Fathers were. This raises one matter where we, with the benefit of hindsight, find ourselves agreeing with the rest of the Founding Fathers as opposed to Hamilton. In The Federalist No. 84 Hamilton argued that no bill of rights was necessary, that the Constitution itself would afford sufficient protections of liberty for the individual. We think that history has proven how essential the Bill of Rights (the Fifth Amendment containing protections against eminent domain abuse) ultimately were.

Hamilton’s argument presupposes that unless the federal government is granted a power in the Constitution specifically to do so, it should lack the power to restrain any liberties one might enumerate in a bill of rights.

I go further, and affirm that bills of rights, in the sense and to the extent in which they are contended for, are not only unnecessary in the proposed Constitution, but would even be dangerous. They would contain various exceptions to powers not granted; and, on this very account, would afford a colorable pretext to claim more than were granted. For why declare that things shall not be done which there is no power to do? Why, for instance, should it be said that the liberty of the press shall not be restrained, when no power is given by which restrictions may be imposed? I will not contend that such a provision would confer a regulating power; but it is evident that it would furnish, to men disposed to usurp, a plausible pretense for claiming that power. They might urge with a semblance of reason, that the Constitution ought not to be charged with the absurdity of providing against the abuse of an authority which was not given, and that the provision against restraining the liberty of the press afforded a clear implication, that a power to prescribe proper regulations concerning it was intended to be vested in the national government. This may serve as a specimen of the numerous handles which would be given to the doctrine of constructive powers, by the indulgence of an injudicious zeal for bills of rights.

The Presumed Right to Liberty in Hamilton’s Own New York State

Hamilton is talking about the federal government and Atlantic Yards is a situation where property rights are being trampled upon by the state, but given Hamilton’s philosophy he would probably be very surprised at the way that eminent domain is being abused in New York because he appears to presuppose that the states similarly do not need bills of rights to avoid abuses. In arguing that a federal bill of rights is not necessary, he early on observes that as of the time he is writing “the constitutions of several of the States,” New York among their number, contain no bill of rights. Would Hamilton observing the conduct of our present day New York officials conclude that the abuse in New York has ironically been made possible, as he suggested above, because the insertion of a bill of rights protections against eminent domain abuse in both the United States and the New York State Constitutions has thereby done the opposite and afforded “a colorable pretext to claim more than were granted”?

Not Only Forethought: Washington’s Farewell Address
(George Washington)

The concern for separation of the departments was not merely forethought before the Constitution was adopted. Vigilance to preserve separation was a concern of the Founding Fathers after the Constitution was adopted. They understood that the usurpations consolidating power in one branch of government can be insidious. Let us now invite Founding Father George Washington into the conversation. About the separation of powers he said: “To preserve them must be as necessary as to institute them.” This is from Washington’s 1796 farewell speech in which Washington also said, “The spirit of encroachment” “tends to consolidate the powers of all departments in one, and thus to create, whatever the form of government a real despotism.” To be fair, we are back to Hamilton again because Hamilton provided Washington significant help in writing the speech. Here is the pertinent excerpt at length:

It is important, likewise, that the habits of thinking in a free country should inspire caution in those entrusted with its administration, to confine themselves within their respective constitutional spheres, avoiding in the exercise of the powers of one department to encroach upon another. The spirit of encroachment tends to consolidate the powers of all the departments in one, and thus to create, whatever the form of government, a real despotism. A just estimate of that love of power, and proneness to abuse it, which predominates in the human heart, is sufficient to satisfy us of the truth of this position. The necessity of reciprocal checks in the exercise of political power, by dividing and distributing it into different depositaries, and constituting each the guardian of the public weal against invasions by the others, has been evinced by experiments ancient and modern; some of them in our country and under our own eyes. To preserve them must be as necessary as to institute them. If, in the opinion of the people, the distribution or modification of the constitutional powers be in any particular wrong, let it be corrected by an amendment in the way which the Constitution designates. But let there be no change by usurpation; for though this, in one instance, may be the instrument of good, it is the customary weapon by which free governments are destroyed. The precedent must always greatly overbalance in permanent evil any partial or transient benefit, which the use can at any time yield.

Here are some of Hamilton’s notes about how insidiously the Constitution can be vanquished, which he made when he was preparing Washington’s speech:

One method of assault may be, to effect alterations in the forms of the Constitution tending to impair the energy of the system, and so to undermine what cannot be directly overthrown. In all changes that you might be invited remember that time and habit are necessary to fix the true character of governments as of any human institution; that experience is the surest standard by which the real constitutions of government can be tried . . .

A Modern Boiling Down

These days we are many years removed from the era when the nation was founded and we tend to get these same precepts that the founders struggled with in much simpler, boiled down terms. The American Bar Association Standing Committee on Judicial Independence provides this on its website:

What is Judicial Independence?

* * * *

Ours is a government of laws, not men. The rule of law is a fundamental concept of our government. It allows all our citizens to enjoy the liberty and freedoms promised by our state and federal constitutions and protects against tyranny of the majority. By interpreting state and federal constitutions, the judicial branch checks the will of the legislature and executive, to ensure that all citizens, whether part of the majority or not, are allowed equal access to all rights and liberties guaranteed them.

A Vintage Monarchical Boiling Down
(Louis XIV of France)

Louis XIV’s boiled down the concept of a government of laws vs. a government of men even more succinctly with his famous statement: “L’Etat, c’est moi” (“The state is me”). If the courts do not assert themselves, that is what you are left with when it comes to the law and whether its spirit or letter will be observed. Without meaningful intervention by the courts the state agencies simply respond, “We are the state, you must defer to us.” This is not what one wants to hear when confronted by a government that wants to take your property through eminent domain for pretextual reasons to benefit a politically connected developer.

What Would the Founders Think of the Atlantic Yards Mega-Monopoly?
(John Adams)

What would our Founding Fathers think of the proposed Atlantic Yards megadevelopment which is clearly not intended to benefit the public* and is principally an excuse to give a developer a mega-monopoly on a 30+ acre swath of valuable Brooklyn real estate, excluding all other competition.

(* No public benefit analysis has been done by the agencies pushing the project forward and to the extent that anything is known, the arena, the only part of the megadevelopment actually proceeding and for which a deal on benefits exists, will be a $220 million net loss to the public.)



(Above: A rendering of the Atlantic Yards arena, suspect for many reasons.)

We think we know what the founders would think. It is time to quote John Adams, the Founding Father who succeeded Washington as president. (Jefferson came next and we have already quoted James Madison who came after that.) Like Hamilton, Adams was a member of the Federalist party though that party was in the end put asunder by an unfortunate feud between Hamilton and Adams. Our Adams quote comes to us courtesy of the new Michael Moore film, Capitalism a Love Story, which brought it to our attention. The quote appears during the roll down of the film’s final credits together with quotes by Jefferson and Franklin). What did John Adams say that answers the question on Atlantic Yards? Here is the quote:

Property monopolized or in the possession of a few is a curse to mankind

Revolution: Pardon Our French

(Louis XVI of France)

Louis XIV of “L’Etat, c’est moi” (“The state is me”) fame was eventually succeeded by Louis XVI who oversaw the excesses and insensitivity that ushered in the French Revolution. Hamilton, a classicist who believed in restraining the worst side of human beings, was horrified by the “political convulsion” and Reign of Terror that was the French Revolution, unlike Jefferson, who endorsed it. Ironically Jefferson was part of the Virginian aristocracy and an owner of slaves while Hamilton, who entered the country as an immigrant with few resources save his own intellect, was an egalitarian believer in merit wherever in society it was found, so much so that he helped found the New York Manumission Society to promote the abolition of the slavery in New York. The more important point, however, is this, no matter who was in power, Hamilton believed in restraint and saw in France events that were: “subverting the foundations of right security and property, of order, morality and religion.”

Giving Turnabout a Fair Play

This brings us back to a point we promised to return to, that Hamilton believed in a strong judiciary that would enforce the laws with virtuous and disinterested fairness because “no man can be sure that he may not be to-morrow the victim of a spirit of injustice, by which he may be a gainer to-day.” We have, ourselves, always believed that the test of justice is to imagine how the shoe would feel if it were on the other foot. This becomes less theoretical and more a practical matter for concern when revolutions are possible. The Michael Moore film we just mentioned advocates a revolution against the kind of plutocracy+plutonomy that supports projects like Atlantic Yards that are at the expense of the majority to enrich a few. As the effects of the current wealth-oriented economy become more severely grating there are also those such as author David Sirota in his new book (“The Uprising”) who are, in fact, predicting a popular uprising.

We cannot say for certain that an uprising or revolution will occur but if one does things will be turned upside-down to extent that all we have is “a government of men.” Those now in power would, we presume, be hoping at such a topsy-turvy that time that we actually have a “government of laws.” We mentioned earlier in the piece how the current determinant of whether eminent domain is used for or against a property owner is whether that owner is a member of the big developer’s club. That would likely no longer be so.

When Brooklyn Heights Under the New Administration Becomes Prospect Heights

Similarly, although Prospect Heights is being now being attacked by the government with accusations that it should be torn down and replaced by the Atlantic Yards mega-monopoly because there is pretextually-determined blight plus a good confluence of subways, my own wealthy neighborhood of Brooklyn Heights no doubt feels secure as of this moment that it will never be attacked by eminent domain abuse. But we have walked both neighborhoods and the “weeds” in Prospect Heights that were the basis for the government to find blight there can also be found here. Across Atlantic Avenue from us in Brooklyn Heights is a gas station virtually identical to the one that has been cleared as “blight” in Prospect Heights. There are more subway lines and stations in Brooklyn Heights than virtually anyways else in the city and excellent arguments can be made on this basis that Brooklyn Heights ought to torn down wholesale and replaced with buildings of much greater density. Doing so would redistribute the infrastructure wealth that exists here amongst a much larger population. The property could be taken away with eminent domain arguments that this was being done in the name of economic development.

Let History Be Your Guide to Preposterousness
(Robert Moses)

It may seem preposterous that historic Brooklyn Heights could be leveled in the name of such arguments. If you are still reading this article you probably have a love of history and believe in remembering, not obliterating the past. But if you remember recent history the preposition that Brooklyn Heights’ currently protection could vanish with a change in political climate is not so preposterous. Brooklyn Heights is one of the neighborhoods that was threatened with destruction by Robert Moses and barely survived. Some of it didn’t. The Brooklyn Queens expressway was rerouted to save a greater portion of the neighborhood but some was destroyed nonetheless. In addition, more of the neighborhood was torn down for urban renewal projects.

Revolutions Can Invite Even Conservative Spirits
(The Delaware Regiment at the Battle of Long Island)

Revolutions do come and they attract even classically oriented believers in law, order and restraint and conservative believers in principle like Hamilton. Hamilton fought in the revolution. He was amongst the troops who joined Washington early on for the Battle of Long Island. From the hills in Prospect Park next to where that battle took place it is possible to see down to the site where Atlantic Yards (about which the documentary “Battle of Brooklyn” is being made) will, if ever built, be visible. Physically, it is not so far way. Neither are we so far away in terms of the evolution of the human spirit and the ill-fated attractions of unfettered power examined in the time of Hamilton. What was known in Hamilton’s time should be remembered now.

An Atypically Fundamental Argument

While we are equipped with a law degree and have under our belt thirty continuous years as a lawyer, we acknowledge that the arguments with which we have involved ourselves here are not the typical lawyer’s arguments you might expect when addressing the superficial niceties generally refereed to as “administrative law,” the body of law that governs challenging state agencies for failure to comply with the law. What we are talking about here is something more fundamental than what usually gets discussed. But these fundamentals underlie the law and sometimes we drift too far away from fundamentals when we discuss only technical niceties without remembering what makes them important deep down. When dealing with a fundamental right such as protection against eminent domain abuse we think that fundamentals should govern what judges do. In Federalist Papers No. 78, Hamilton said as much about what judges should do: “They ought to regulate their decisions by the fundamental laws, rather than by those which are not fundamental.” He was talking about when the will of the legislature (expressed in statutes) collides with fundamental constitutional declarations:

It only supposes that the power of the people is superior to both; and that where the will of the legislature, declared in its statutes, stands in opposition to that of the people, declared in the Constitution, the judges ought to be governed by the latter rather than the former. They ought to regulate their decisions by the fundamental laws, rather than by those which are not fundamental.

Does the Modern Day Tammany Hall have the Power to Put Asunder Laws and the Principles Behind Them?
(From Wikipedia: “Thomas Nast denounces Tammany as a ferocious tiger killing democracy; the tiger image caught on.”)

Hamilton was shot and killed by a man who helped found what became New York’s Tammany Hall. Atlantic Yards with its perversion of politics for private gain is the modern version of the scams of Tammany Hall. With proper review and backbone the courts can stand up and prevent Atlantic Yards’ abuse of fundamental liberties. If the courts instead simply defer without question to the pretextual preposterousness of political agencies, partially administering government with the fixed intent of abusing eminent domain to create no-bid mega-monopolies for Forest City Ratner then our laws will have become Hamilton’s sad “dead letter.” We certainly hope this is not to be the case. We certainly hope that New York State will have “a government of laws, not men” and that when the government, in the form of its authorities like ESDC wants to take private property it will be insufficient for them to say “L’Etat, c’est moi” whenever their pretextual motives are challenged. Otherwise, it is indeed time for a revolution.