Tuesday, July 15, 2014


On June 18, 2014, New York State Supreme Court Justice Peter Moulton handed a gift to Goliath and a really tough blow to David. On that day, Judge Moulton lifted a temporary restraining order he had issued only weeks before which barred Hudson Companies from pouring concrete at 626 Flatbush Avenue. The judge also denied a request by the PLG community to enjoin Hudson from construction activities at the project site until a full administrative review of the case could be had. In essence, the court ruled in Prospect Park East Network vs. New York State Homes, the Hudson tower is “as of right,” so necessarily there can be no significant adverse environmental harms, or if there are any, they can only be slight.

In our view, this means that no matter how much irreversible and public environmental harm this 23-story luxury rental tower is likely to impose, none of it is substantial enough to outweigh the rights of David Kramer (Hudson Principal) and Hudson Companies to receive and use $72 million in taxpayer monies in order to position their massive architectural finger in the midst of a predominantly low-rise, low-income community which borders Prospect Park. Why? Because, in practical terms, the court adopted Hudson’s arguments that the community has no rights under New York State environmental laws that a state financing agency and a wealthy, private developer must respect if the developer says that under New York City zoning laws his project is, “as of right.”

We believe that the court’s decision is flawed in many respects. At its core, the ruling now places City zoning laws and State environmental laws onto a legal collision course that was never intended by the drafters of either statutory scheme. On the one hand, the purpose of the City’s zoning laws is to regulate building size, use, and area density throughout the five boroughs. Thus, when a proposed development project is not in accord with currently existing zoning codes, a developer must seek special permissions from the City in order to proceed with a lawful build. However, if the proposed plans don’t invoke the need for a variance or other zoning exemption, that project is then deemed to be one that is “as of right.” In such cases, if the project is wholly privately financed, the developer is typically free to proceed without risk of significant legal challenges.

On the other hand, the State Environmental Quality Review Act (“SEQRA”) applies to state government agencies (NYC agencies are subject to NYC environmental rules) and is triggered whenever such entities exercise discretion in approving or funding a private or public development project. The purpose of the SEQRA laws is to determine whether or not the proposed project would have any significant adverse environmental impacts upon the community in which the action is to take place and, if such exist, the state agency must determine ways to avoid or reduce those harmful impacts. It is important to note that SEQRA defines the environment broadly to include social and economic factors. SEQRA says the “[e]nvironment means the physical conditions that will be affected by a proposed action, including land, air, water, minerals, flora, fauna, noise, resources of agricultural, archeological, historic or aesthetic significance, existing patterns of population concentration, distribution or growth, existing community or neighborhood character, and human health.” NYCRR Sec. 617.2(1)

There has never been a dispute that the 626 project is to be built “as of right” under the City zoning laws. However, because Hudson has also asked the New York State Housing Financing Agency (“HFA”) to award them taxpayer dollars sufficient to pick up nearly three quarters of the financing costs of their project, SEQRA now comes into play. PPEN and others argue that the so-called environmental assessment mandated by SEQRA and conducted by HFA in this case was cursory and incomplete, such that the agency’s decision to award Hudson public funds rose to the level of being arbitrary and capricious and constituted an abuse of the agency’s discretionary process. More specifically, PPEN and others argue that HFA failed to take a hard look at the potential adverse impact of the 626 project on the socio-economic character of PLG’s existing neighborhood populations, on the architectural and historic character of this low-rise community and on the aesthetics and environment of Prospect Park. In response, HFA says they looked at these factors but forgot to make an adequate record of this. Indeed, they failed to give a reasoned explanation as to why those adverse impacts were insignificant. Hudson meanwhile argued that no matter the sufficiency of the agency’s environmental review, it was irrelevant nonetheless because the project would be proceeding “as of right” in any event.

Judge Moulton has sided with the defendants. However, at the same time, his ruling now places into controversy a significant question of law which has never previously been decided. That is: When a private developer seeks the award of public funds for a private construction project and asserts that the project will be built “as of right” under the City’s zoning laws, is the state funding agency still required to (1) investigate and analyze that project’s potential for adverse environmental impacts upon the community in which it is to be built and (2) to offer a reasoned and substantiated explanation of the results of its environmental impact review before it releases those public monies to the developer? Or, (cutting to the chase): Is it legally permissible for the New York State Housing Finance Agency to simply rubber stamp a public financing process for a private development project because the developer says his project is being developed “as of right” under NYC’s zoning laws? PPEN and others think not. Thus, on July 7, 2014, PPEN (Prospect Park East Network, PLGNA (Prospect Lefferts Garden Neighborhood Association), FTC (Flatbush Tenants’ Coalition), FDC (Flatbush Development Corporation), and several individual PLG homeowners and tenants filed an appeal from Judge Moulton’s ruling denying a preliminary injunction, and the litigation now continues in the next highest court – the Appellate Division. (Judge Mouton reserved ruling on the underlying Article 78 Petition for another day.)

In PLG and elsewhere, the fight against hyper-gentrification and its corporate driven government-backed weapons of irresponsible and reckless development is, indeed, a battle of David vs. Goliath proportions. In fact, it’s important to note that this private developer, David Kramer, Principal of Hudson Companies, is particularly well-connected. Among other things, Mayor De Blasio appointed a member of Kramer’s staff to the Rent Guidelines Board, one of only two private landlord representatives on the Board. This is quite an achievement in NYC where there are a lot of powerful real estate developers to choose from.

So, while our local fight is considerably smaller in scope, reference to the recent community vs. mega-developer battle which took place over the Atlantic Yards project is unavoidable. As well-known urban planning expert Tom Angotti has noted:

“Like Alice in Wonderland in her looking-glass world, the planning for Atlantic Yards was all backwards. In planning without the mirrors, government creates a plan for the area, looks at the potential environmental impacts of the plan, decides what to do and then either takes action by itself or puts the plan out to private developers to bid on. In Atlantic Yards and increasingly in other megaprojects throughout the neoliberal city, the reverse is happening: the private developer does the plan, persuades government officials to back it and then announces a done deal. This ideology of the fait accompli becomes a key instrument for moving through all stages of the planning and public approval process. It poses a serious challenge to community organizers because even those who find the project to be unacceptable are led to believe that nothing can be done to change or stop it.” New York For Sale: Community Planning Confronts Global Real Estate (MIT Press, 2008 @ p.216)

Yet we do not despair and neither should those who love and appreciate the low-rise, diverse and family friendly character of our neighborhood as well as the green refuge of our communal backyard that is Prospect Park. In fact, the petitioners-appellants in Prospect Park East Network vs. New York State HOMES, believe much can be done to change the 626 Flatbush project. Thus, we do not accept it as a done-deal for David Kramer, without any rights whatsoever for the taxpaying citizens of our community who are ultimately helping to fund it and who will forever suffer the adverse environmental impacts of this unsolicited towering invasion if it is allowed to proceed unaltered. Nor do we surrender to Hudson’s “done deal” claim -- even as the trial court has issued its erroneous ruling and even as the construction work drones on at the 626 construction site. If anything, as we continue to win supporters on the ground, while our appeal to a higher court goes forward, we are reminded that there was one day even Goliath was forced to succumb to a lousy slingshot.

And so the fight continues.