SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

Index No.:
In the matter of the application of
BROOKLYN HEIGHTS ASSOCIATION,
INC.,
Petitioner,
For a Judgment Pursuant to Article 78 and
3001 of the Civil Practice Law and Rules,
-against-

VERIFIED PETITION TO
ANNUL ACTION TAKEN
BY BROOKLYN BRIDGE
PARK CORPORATION
ON JUNE 7, 2016 AND
FOR RELATED RELIEF
UNDER CPLR ARTICLE
78

NEW YORK STATE URBAN

DEVELOPMENT CORPORATION d/b/a
EMPIRE STATE DEVELOPMENT,
BROOKLYN BRIDGE PARK
DEVELOPMENT CORPORATION, and
BROOKLYN BRIDGE PARK
CORPORATION d/b/a BROOKLYN BRIDGE
PARK,
Respondents,
-andRAL DEVELOPMENT SERVICES LLC,
OLIVERS REAL ESTATE GROUP LLC d/b/a
OLIVERS REALTY GROUP,
LANDING A ASSOCIATES LLC, AND
LANDING B ASSOCIATES LLC,
Interested Party-Respondents.

This Verified Petition of the Brooklyn Heights Association, Inc. (BHA) for a judgment
pursuant to Article 78 of the New York Civil Practice Law and Rules (CPLR), by its attorneys,
Jenner & Block LLP, respectfully alleges and states as follows:

TABLE OF CONTENTS
INTRODUCTION AND SUMMARY OF PETITION ...................................................................1
JURISDICTION AND VENUE ....................................................................................................12
PARTIES .......................................................................................................................................12
A. Petitioner .................................................................................................................................12
B. Respondents ............................................................................................................................14
C. Interested Party-Respondents .................................................................................................14
FACTUAL BACKGROUND ........................................................................................................15
A. The Longstanding Restriction on Real Estate Development at the Park ................................15
1.

The Limitation on Development in the Parks Initial Vision ..........................................15

2.

The Commitments to Limited Development Made During the 2004-2005

Environmental Review Process .......................................................................................16

3.

The Final, Binding Restrictions on Development in the GPP, SEQRA Findings,

and Representations to the Court .....................................................................................18

B. BBPCs Changed Financial Circumstances............................................................................20

1.

The Dramatic Rise in Brooklyn Real Estate Values .......................................................20

2.

The Increased Size of the Parks Other Developments ...................................................23

3.

BBPCs Admission Its Development at Pier 6 is Unnecessary .......................................24

4.

BBPCs Refusal to Disclose Its Financial Needs ............................................................25

5.

BBPCs Contrived Need for Immediate Cash .................................................................26

6.

BBPCs Refusal To Consider Financing the Cost of Its Preventative

Maintenance Plan ............................................................................................................30

C. The Pier 6 RFP in May 2014 ..................................................................................................33

D. BBPCs Tainted Selection of Real Estate Developers for Pier 6 ...........................................35
E. Respondents Admissions that the Proposed Pier 6 Development Requires a
Modification to the GPP .........................................................................................................37
F. The Community Advisory Councils Resolutions ..................................................................45

G. ESDS Choice Not To Approve Any Modification to the GPP .............................................47

H. BBPCs June 2016 Pier 6 Development Plan .........................................................................47
I.

The Inaccurate and Unreliable Information on which BBPC Approved the Pier 6
Plan .........................................................................................................................................48
1.

The Flaws in BBPCs Predicted DOF Valuations, which Are Below the
Neighborhood Average ...................................................................................................49

2.

The Multiple Flaws in the Report of BBPCs Consultant ...............................................53

3.

BBPCs Inaccurate Disparagement of the Report by the Communitys

Independent Appraiser.....................................................................................................55

First Cause Of Action: Against BBPC For Violation Of The GPP And UDCA ...........................62
Second Cause Of Action: Against BBPC, BBPDC, And ESD For Violation Of The GPP
And UDCA .............................................................................................................................65
Third Cause Of Action: Against BBPC For Violation Of The GPP And UDCA .........................68
Fourth Cause Of Action: Against BBPC For Violation Of BBPC RFP Procedure And
City Procurement Rules ..........................................................................................................69
Fifth Cause Of Action: Against BBPC For Violation Of BBPC And CAC Bylaws .....................71
Sixth Cause Of Action: Against ESD For Violation Of SEQRA ..................................................72
Seventh Cause Of Action: Against ESD For Violation Of SEQRA ..............................................77
Eighth Cause Of Action: Against BBPC For Violation Of SEQRA .............................................82
Ninth Cause Of Action: Against Respondents For Damages And Attorneys Fees ......................84

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INTRODUCTION AND SUMMARY OF PETITION

1.

The BHA brings this action to prevent Brooklyn Bridge Park Corporation

(BBPC) from continuing to act in defiance of law in authorizing a new private commercial real
estate development worth more than $500 million at Pier 6 of Brooklyn Bridge Park (BBP or
the Park).
2.

On June 7, 2016, BBPC approved a massive new residential complex at Pier 6

that will permanently disfigure the Park with more than 400,000 square feet of new apartments in
two towers totaling some 43 stories of real estate. BBPCs action will take much-needed land
that should be an important part of the Park (its entrance), exacerbate the dramatic overcrowding
in the communitys schools, which are already in crisis, and loom incongruously over the
adjacent low-rise neighborhood of Brooklyn Heights (New York Citys first historic district).
3.

BBPCs action to approve this massive development suffers from multiple legal

flaws. First, it defies the legal restrictions that govern development at the Park in fundamental
respects. Second, it fails to comply with several of BBPCs own rules and procedures
including BBPCs breach of its rule not to consider, much less award, a contract to real estate
developers who failed to comply with their legal obligation to register with the City Doing
Business Database and thereby become subject to lower campaign contribution limits. Third, it
was approved on the basis of significant misinformation supplied to the BBPC Board of
Directors by BBPCs management. Fourth, it lacks the required supplemental environmental
impact statement (SEIS) that is necessitated by the significant changes in circumstances that
have indisputably taken place since the only environmental review was conducted more than a
decade ago.
4.

BBPCs action violates the General Project Plan (GPP), the legally binding

document that governs the Parks development and overrides all provisions of the Citys zoning

resolution; it therefore also violates the Urban Development Corporation Act (UDCA) under
which Respondents Empire State Development (ESD) and its subsidiary Brooklyn Bridge Park
Development Corp. (BBPDC) issued the GPP.
5.

Respondents and their predecessors committed repeatedly to the community for

decadesas is expressly stated in the GPPthat commercial development at the Park would be
limited solely to the amount necessary to fund the Parks operations and maintenance.
6.

The GPP, issued in 2006, authorized the future development of two large

residential towers at Pier 6 but stated: The building envelopes described represent the maximum
build-out within the Project, with the intention being to build only what is necessary to support
annual maintenance and operations. This statement reflects explicit commitments made in the
final environmental impact statement (FEIS) prepared with respect to the GPP in 2005, which
states: only the development needed to support the park, as determined by the RFP process,
would be developed, and that ESD has committed to reducing the size of the proposed
development program should market conditions allow for it to do so.
7.

Respondents have not and cannot satisfy the GPPs financial need test that is a

prerequisite to lawful real estate development at Pier 6. Real estate values have skyrocketed in
Brooklyn since the GPP was issued in early 2006 and since the FEIS was issued the year before.
BBPC has exploited this increase in values by recently developing four other sites at the Park
(apart from the just-authorized additional development at Pier 6); those new projectstwo
luxury condominium complexes, a luxury hotel, and an historic warehouse repurposed for retail
and office useare only starting to generate revenue. The four recent projects have been
extraordinarily successful, as the two condominium developments, with their breathtaking views
of lower Manhattan and the Brooklyn and Manhattan Bridges, were the two most expensive new

residential properties in Brooklyn last year with average selling prices of more than $1,900 per
square foot, and the office/retail complex promises to be the most desirable in Brooklyn.
8.

The revenues that BBPC derives from the Parks real estate developments are

naturally affected by their value, including the up-front payments BBPC receives from the
developers and the annual real estate taxes paid by the owners (which go solely to BBPC). Since
the value of the Parks real estate developments are unquestionably far higher today than was
anticipated at the time the GPP was issued a decade ago, BBPC has not and cannot show with
any rational methodology that its financial needs compel the just-approved massive additional
new development at Pier 6.
9.

Because four of the five existing properties at the Park are very new and will not

be assessed by the Citys Department of Finance (DOF) until next year, BBPCs determination
of its financial needs to support a decision now about the scope of any required development at
Pier 6 necessarily depends in part on its predictions of what the DOFs assessments (and
resulting tax revenues to BBPC) will be.
10.

As shown below, BBPCs key predictionsupon which the approval of the Pier 6

development was predicated on June 7are irrational. Thus, BBPCs predicted assessment for
its record-breaking luxurious Pierhouse and John Street condo projects are less than DOFs
average assessment of the relevant residential properties in the surrounding neighborhoods.
Simple common sense shows that DOFs assessments of the Parks condo properties should be
substantially higher than the neighborhood averages, not less.
11.

In other words, BBPCs Board of Directors has just approved a huge real estate

development at the Parks Pier 6 on the basis of a forecast of revenue that disregards key facts
and defies reason.

12.

BBPCs action is also irrational because BBPC has chosen to act now on the basis

of flawed projections of revenues based on predictions of DOFs future valuations when the
actual DOF valuations will become available starting in January 2017, only 7 months from now.
13.

Moreover, BBPC management has not played straight with its own Board of

Directors or the community. It did not disclose to its Board or the public the discrepancy
between its predicted appraisals and the DOFs published average appraisals for the surrounding
neighborhoods. It also told the Board that it should disregard the far higher appraisal calculated
by an experienced independent expert retained by the community and claimed that this report is
demonstrably false. But that, too, was inaccurate and part of the misinformation provided by
BBPC management to the Directors, as shown below.
14.

Apart from BBPCs irrational financial predictions, it has effectively admitted

that the Pier 6 project is far larger than even its own financial model would suggest it needs for
Park maintenance and operations because BBPC is allocating most of one of the two new
buildings to non-remunerative affordable housing.
15.

In recognition that the development of non-remunerative housing plainly violates

the GPPs limitation of real estate development to only the amount required for BBPCs financial
needs, beginning in mid-2015, BBPC engaged in a year-long effort to obtain ESDs approval for
a modification of the GPP that would eliminate the financial need test for additional development
at Pier 6.
16.

That modification would have rescinded the commitment Respondents made

more than a decade ago to maximize parkland and minimize real estate development. As a
result, the 2015 proposed modification drew widespread opposition from the community during

a nearly year-long public comment process, including from essentially all of the communitys
local elected officials.
17.

At the end of this long process, ESD did not approve BBPCs requested

modification of the financial need requirement.

18.

But BBPC chose not to be constrained by the rule of law. In the words of the

Chair of the BBPC Board, Deputy Mayor of New York City Alicia Glen, as reported in the New
York Times on May 17, 2016: [w]ere going forward anyway.
19.

BBPC, including its Board Chair, Deputy Mayor Glen, has characterized the

communitys opposition to its Pier 6 development plan as motivated by an untoward antipathy to

the affordable housing that BBPC has included in the proposed development.
20.

But that is a shameful argument for BBPC to make: BBPC knows full well that

the community opposed housing at Pier 6 for more than a decade, long before mid-2014 when
BBPC first suggested the inclusion of moderate and middle income housing, and that it opposed
all housing at Pier 6 when the only development at issue was luxury housing. The communitys
opposition to housing at the Park from the beginning centered on its desire that the Park be
devoted as much as possible to desperately-needed open space and not become a shrine for real
estate developers.
21.

BBPCs unseemly criticism of the opposition comes with particularly ill grace in

view of the position taken about potential high-rise development at Pier 6 by then-Councilman
and now-Mayor Bill de Blasio over a decade ago. In commenting on the draft environmental
impact statement (DEIS) for the Park in 2005, Councilman de Blasio objected that [t]he 30

story building needs to decrease in height. It is not necessary from a budget perspective. There
are other ways to achieve the revenue necessary. Ex. 1 (2005 FEIS, Chapter) at 45 (cmt. 117).
22.

Councilman de Blasios objection was the same as that expressed by the

community then and today.

23.

Moreover, the BHA recently told BBPC, in a June 4, 2016 letter, that, as part of

an effort to help overcome the rift that BBPCs arrogant conduct has created with its neighboring
community, the BHA would support a modification to the GPP to authorize affordable housing
at the Park as long as such housing was located in an existing under-utilized and readilyexpandable building that has already satisfied environmental review as future housing. That
location would be preferable to the Pier 6 plan because it would not preclude the use of the Pier 6
locations for parkland. The BHA proposal requested BBPC to defer its decision about
development at Pier 6 for a few years until a more reliable assessment of financial need could be
made on the basis of the actual DOF assessments of BBPCs soon-to-open other developments
that will become available starting next year. Ex. 2 (June 4, 2016 BHA Letter to BBPC Board).
24.

BBPC summarily dismissed the BHA proposal at its June 7 meeting.

25.

BBPCs action also violates the GPP for a reason unrelated to the absence of

financial need. The proposal that BBPC just approved violates the height limitation set out in the
GPP, which permits one 315 feet tall tower and one 155 feet tall tower. BBPC disclosed on June
6, 2016 that the smaller tower will be 182 feet high, or about three stories higher than the
maximum height permitted by the GPP.

Exhibits cited herein are submitted, along with this Verified Petition, as attachments to the
Affirmation of Daniel H. Wolf.

26.

Wholly apart from BBPCs violations of the GPP, its action must also be annulled

because it is procedurally flawed. It ignores the commitment BBPC made in its 2014 Request
for Proposals (RFP), as mandated by the Citys contracting guidance, that it would not even
consider, much less award, a contract to a developer that did not comply with the disclosure
obligations of Local Law 34. That law limits campaign contributions by developers and others
seeking to do business with the City.
27.

A review of the pertinent public database provided by New York City shows that

neither Interested Party-Respondents RAL Development Services (RAL) nor Olivers Real
Estate Group (Olivers) had registered as required with New York Citys Doing Business
database in 2014 when they submitted their proposal or in 2015 when BBPC considered their
proposal and selected them for the Pier 6 Project.
28.

BBPCs failure to abide by its own RFP procedures and the Citys procedures has

created the appearance of impropriety around its contract award.

29.

Developer RAL contributed in mid-2015 to the controversial fundraising vehicle

Campaign for One New Yorkwithout having registered as doing business with the Cityjust
weeks after BBPC management selected its proposal, just weeks before BBPC management
publicly announced the selection, and while the selection was awaiting approval by BBPCs
Board of Directors.
30.

The taint created by RALs contribution led ESD, according to its public

statement in May, 2016, to decline to act on BBPCs requested modification to the GPP. But
BBPC has chosen to subvert the rule of law by insisting on proceeding with an unlawful project
that is the direct result of its materially flawed bidding process.

31.

The action is also procedurally flawed because BBPC failed repeatedly to provide

key information to the Community Advisory Council (CAC) that BBPC itself created.
32.

The CACs bylaws, which BBPC approved, require that BBPC provide the CAC

information on a timely basis on major aspects of its policies and operations affecting Brooklyn
Bridge Park to enable the Advisory Council to properly fulfill its advisory role to the
Corporation. Ex. 3 (CAC By-Laws) at 1, I (definition omitted).
33.

BBPC rejected out of hand all of the CACs attempts to obtain the information it

requested to assess whether the GPPs financial need requirement had been satisfied, just as
BBPC refused the same requests by numerous local elected officials and the BHA.
34.

Finally, BBPCs action cannot proceed without preparation of an acceptable SEIS

as required by the State Environmental Quality Review Act (SEQRA) given BBPCs
immensely increased financial resources and the rapid growth of the area elementary-school
population since the prior environmental review was conducted more than a decade ago.
35.

BBPCs changed financial resources require ESD, as the lead agency for

environmental review, to assess whether an alternative to immediate Pier 6 development is

feasible in 2016 even if it may not have been considered in 2005, or rejected as financially not
feasible at that time.
36.

Compelling alternatives to immediate Pier 6 development that appear to be

available today and therefore must be reviewed in an SEIS include:

a.

deferring the decision until actual DOF property valuations have become
available starting next year, as that deferral may lead to establishing that a
no-build or smaller-build option is financially feasible and thereby

eliminate entirely or at least reduce the adverse environmental impacts of

the pending Pier 6 development; and
b.

financing BBPCs future revenue stream (which BBPC acknowledges will

create a massive surplus of hundreds of millions of dollars in future years)
to fund the major near-term capital expenditure for pier repairs that BBPC
management has recently identified to justify the need for immediate Pier
6 development, rather than funding those expenditures with the permanent
disfigurement of the Park created by the proposed real estate development.

37.

In addition, an SEIS must consider the adverse impact of additional residents at

the Park on the local elementary schools, which are dramatically overcrowded in light of an
explosive increase in residential development in the neighborhood since 2005.
38.

In short, BBPCs action is unquestionably unlawful for multiple reasons. As

pleaded below, BBPCs action:

a.

violates the legally binding restrictions, including those in the GPP, that
limit BBPC to authorizing only as much real estate development at Pier 6
as BBPC requires to fund the Parks operations and maintenance because
BBPC has failed to make any formal finding that it needs the revenues
from the new development and its arguments about financial need depend
on a prediction of future revenues from its other soon-to-open projects that
is contradicted by undisputable facts and was predicated on inaccurate
information;

b.

violates the GPP, even if BBPC actually requires the revenue from the
market-rate housing included in the project, because more than 25% of the

project is allocated to non-remunerative, affordable housing, and BBPC

for the past year sought ESD approval for a modification of the GPP that
would have permitted it to proceed without regard to Project finances,
but ESD has not approved the modification BBPC requested;
c.

violates the GPP because one building will be 182 feet tall but the GPP
limits its height to 155 feet;

d.

violates BBPCs own rules and City procurement requirements because

BBPC awarded the contract to developers who failed to register with the
Citys Doing Business Database when they submitted their proposal,
despite the requirement in BBPCs RFP and City procurement rules that
developers must submit Doing Business registration forms before they
may be considered for, much less awarded, a City development contract,
with the result that the procurement process BBPC followed for this $500
million real estate development is tainted by the appearance of
impropriety;

e.

violates BBPCs own rules and procedures because of BBPCs failure to

supply information to the CAC about the project and BBPCs financial
requirements, which disabled the CAC from rendering any meaningful
advice, and ignored the CACs resolutions seeking delay of any final
decision until the CAC is permitted to perform its advisory function in a
meaningful way;

f.

violates SEQRA because ESD has failed to prepare an SEIS that is

required by the key changes in circumstances that have occurred since the

10

Pier 6 project was reviewed in an FEIS prepared in 2005, including the

complete failure to assess in 2016 the feasibility of less intrusive
alternatives to the massive new project in light of BBPCs current
financial circumstances that have dramatically improved since ESD
dismissed less intrusive alternatives as financially not feasible in the FEIS
in 2005, and ESDs failure to take any meaningful look at the adverse
impact of the development on the local public schools in light of the
unforeseen and rapid increase of the local elementary school population;
and
g.

is irrational, arbitrary and capricious because BBPC has chosen to act at a

time that it necessarily must rely on contested predictions of DOF property
valuations even though a deferral of the Pier 6 decision until it could be
made on the basis of actual, reliable DOF data that will start becoming
available seven months from now would not prejudice BBPCs financial
condition, which BBPC management admitted at the June 7, 2016 Board
meeting.

39.

In sum, Petitioner brings this proceeding pursuant to New York Civil Practice

Law and Rules (CPLR) 7803 for a judgment:

a.

annulling the final action taken by BBPC on June 7, 2016 to approve

development at Pier 6 and prohibiting BBPC and the other Respondents
from taking any actions in furtherance of the development at Pier 6;

b.

directing ESD to require BBPC to comply with the current GPPs

restriction on unnecessary real estate development; and

11

c.

directing ESD to prepare or cause to be prepared an SEIS, as required by

SEQRA and enjoining any actions in furtherance of the Pier 6
development until an acceptable SEIS has been completed.

40.

BHA also seeks damages that it has incurred incidental to the primary relief

identified above pursuant to CPLR 7806, and an award of attorneys fees pursuant to CPLR
8601(a).
JURISDICTION AND VENUE
41.

This action arises under the laws and regulations of the State of New York,

including the UDCA and SEQRA. Accordingly, this Court has subject matter jurisdiction over
this proceeding.
42.

Pursuant to CPLR 7804(b) and 506(b), venue in this proceeding lies in the

County of New York, the Judicial District where Respondents ESD and BBPDC and Interested
Party-Respondents RAL, Olivers, Landing A Associates LLC (Landing A Associates), and
Landing B Associates LLC (Landing B Associates) have their principal places of business and
where material events pertinent to this proceeding took place.
PARTIES
A.

Petitioner
43.

The BHA is a volunteer community organization, incorporated under the laws of

the State of New York and with its principal place of business in Brooklyn, New York. The
BHAs members live primarily in Brooklyn Heights, which abuts the Park. The Brooklyn
Heights neighborhood and the BHAs members will be directly and negatively impacted by the
proposed residential development at Pier 6 due to the effect of the two towers on both the
character of the neighborhood and on the Park, and by the burdens imposed by such towers on
the local infrastructure, including effects on schools, traffic, and essential public services.

12

44.

The BHAs mission is to preserve and improve the quality of life in the Brooklyn

Heights neighborhood. Its membership is open to all interested neighborhood residents.

Established in 1910, the BHA is among the oldest ongoing neighborhood associations in the City
and is supported by dues-paying members in the community. As a unique repository of
information about the neighborhood, as a sponsor of neighborhood events and improvement
projects, and as an advocate for the community, the BHA works with residents, local businesses,
and elected officials to address issues of local importance including real estate development,
parks, schools, traffic, transit, sanitation, and preservation of the neighborhoods historic
character.
45.

The BHA has a long history of accomplished advocacy on behalf of the Brooklyn

Heights community. Its efforts helped establish the Brooklyn Heights Promenade and Cadman
Plaza Park. It played a critical role in causing Brooklyn Heights to be designated the Citys first
Historic District under the Landmark Preservation Law in 1965, and to become the first
neighborhood protected by Limited Height zoning in 1967.
46.

Over the past 30 years, the BHA and its members have vigorously supported the

vision and creation of a park on the Brooklyn Heights waterfront and have participated actively
in the public dialogue concerning the Park, including by providing comments during the
environmental review process in 2004-2005, providing written and oral comments in the course
of the BBPCs efforts in 2015 to obtain a modification to the GPP that would eliminate the
financial need requirement, and by bringing suit to require the BBPCs development at Pier 1 to
comply with New York Citys only scenic view district.
47.

A representative of the BHA has been a member of the CAC since the CAC was

created because the BHA qualifies under the Councils bylaws as a representative of [the] local

13

community . . . with a relevant interest in or relationship to the Park. Ex. 3 at 1, II(b). Many of
the BHAs members visit the Park on a regular basis, including spending time at the playgrounds
and other facilities located at Pier 6, and they will be particularly injured by the development at
Pier 6. Many BHA members reside in the portions of the Brooklyn Heights neighborhood that
are directly adjacent to the Park and to Pier 6 in particular.
B.

Respondents
48.

Respondent ESD is a New York public benefit corporation, whose primary role is

to assist and support businesses and encourage economic investment and prosperity in New York
State. ESD was established by the State Legislature. ESD is headquartered at 633 Third
Avenue, New York, New York.
49.

Respondent BBPDC is a public benefit corporation and subsidiary of ESD

organized and existing under the laws of the State of New York. It is charged by ESD with
responsibility for the planning, construction, maintenance and operations of Brooklyn Bridge
Park. BBPDC is headquartered at 633 Third Avenue, New York, New York.
50.

Respondent BBPC is a public charity established in 2010 under the New York

State not-for-profit law that, pursuant to an agreement with BBPDC, is responsible for the
discharge of certain of BBPDCs responsibilities with respect to the Park. The majority of
BBPCs Directors are appointed by the Mayor of the City of New York, and the current Chair of
the Board is a Deputy Mayor, Alicia Glen. BBPC is headquartered at 334 Furman Street,
Brooklyn, New York.
C.

Interested Party-Respondents
51.

RAL is a limited liability company based in New York City. It is a real estate

developer of luxury apartment, condominium, and resort communities. RALs principal place of
business is at 434 Broadway, New York, New York.

14

52.

On information and belief, Olivers is a limited liability company based in New

York City that does business as Olivers Realty Group. It is the independent investment,
development, and brokerage arm of Olivers Company, LLC, and was established in 1995.
Olivers principal place of business is at 313 West 22nd Street, New York, New York.
53.

Respondent Landing A Associates is a limited liability company based in New

York City that, on information and belief, was formed to facilitate the Pier 6 development project
awarded to RAL and Olivers. According to BBPC Board of Directors resolutions approved on
June 7, 2016, BBPC has executed or will execute a sublease with Landing A Associates LLC for
development of a residential building at Parcel A at Pier 6. Ex. 4 (June 7, 2016 BBPC Board
Resolutions).
54.

Respondent Landing B Associates is a limited liability company based in New

York City that, on information and belief, was formed to facilitate the Pier 6 development project
awarded to RAL and Olivers. According to the BBPC Board of Directors resolutions approved
on June 7, 2016, BBPC has executed or will execute a sublease with Landing B Associates LLC
for development of a residential building at Parcel B at Pier 6.
FACTUAL BACKGROUND
A.

The Longstanding Restriction on Real Estate Development at the Park

1.

The Limitation on Development in the Parks Initial Vision

55.

Plans for redeveloping the docks and piers beneath the Brooklyn Heights

Promenade and near the Brooklyn Bridge began in the 1980s when the Port Authority of New
York and New Jersey, which owned the piers, announced plans to sell them for commercial
development. Community groups promptly arose to oppose the prospect of the transformation of
the piers into commercial real estate and advocated for the creation of a waterfront park instead.

15

56.

Because of financial constraints on the government, the plan from early on

included the concept that the Park would need a source of revenue sufficient to pay for its
ongoing operations. At the same time, the community understood that, if real estate
development was required, it would be kept to the minimum necessary to support the Parks
financial needs.
57.

Thus, as early as 1992 a set of Thirteen Guiding Princip[le]s issued by the

Brooklyn Borough President in conjunction with community groups stated that The site shall
have only so much commercial development in a park-like setting as is necessary . . . to finance
ongoing operations and to provide for security and enliven the area. Another guiding principle
provided for full public participation and full public review throughout the planning,
development and management processes. Ex. 5 (13 Guiding Principles).
58.

After decades of community advocacy and the assistance of local elected officials,

the State and City agreed in 2002 to a firm plan for the creation of the Park. At that time Mayor
Michael Bloomberg and Governor George Pataki executed a Memorandum of Understanding
(MOU) that finalized a commitment to allocate $150 million of government funding to design
and construct the Park. The MOU led to the creation of BBPDC as a subsidiary of ESD to
oversee the creation, development, and operation of the Park. Ex. 6 (2002 Memorandum of
Understanding).
2.

The Commitments to Limited Development Made During the 2004-2005

Environmental Review Process

59.

BBPDC engaged in planning efforts for the next 3 years, culminating in a draft

GPP for the project on July 26, 2005.

60.

The draft GPP recites that it exercises the statutory authority conferred on ESD to

override local zoning requirements in their entirety.

16

61.

The draft GPP identified real estate development in a variety of locations,

including Pier 1 and Pier 6, that BBPDC envisioned might be necessary to support the Parks
financial needs.
62.

The potential plan for Pier 6 included one 315 feet tall tower (about 31 stories)

and one 155 feet tall tower (about 15 stories) that would create 290 and 140 market-rate
apartments, respectively. Ex. 7 (GPP) at 12.
63.

ESD, as the designated lead agency, conducted the environmental review process

required by SEQRA concerning the draft GPP. ESDs draft environmental impact statement
(DEIS) drew many comments from the public, community groups, and elected officials that
vigorously opposed such massive development at Pier 6.
64.

The BHAs comments included the following:

[e]ffort should be made to decrease the height of the residential buildings

and bulk could be redistributed.

[t]hirty-one stories is a bad precedent, including for future development on

the Columbia Street corridor.

[t]he nearest building [to those proposed for construction at Pier 6] is only
2-stories tall. It is inappropriate for the waterfront and should be reduced.

[t]hey must fit into the neighborhood context. A 30 story building is

inappropriate when neighboring buildings are 5 to 6 stories.

Ex. 1 at 45 (cmt. 117), 83 (cmt. 215), 88 (cmt. 222), 91 (cmt. 228).

65.

The BHA expressly requested that [o]nly the number of residential units or

development necessary to meet the revenue requirements and pay for ongoing [Park]
maintenance should be built. Ex. 1 at 34 (cmt. 80).
66.

Notably, then-Councilman de Blasio submitted comments in response to the

DEIS, stating that [t]he 30 story building needs to decrease in height. It is not necessary from a
budget perspective. There are other ways to achieve the revenue necessary. Ex. 1 at 45 (cmt.

17

41). De Blasio further noted that [t]he [proposed] Pier 6 buildings are too tall, and that their
height needed to be decreased so that they would fit into the neighborhood context and be in
scale with surrounding buildings. Id. (cmt. 117).
67.

The FEIS issued by ESD in December 2005 addressed many of the comments to

the DEIS.
68.

In response to the comments of the BHA and others, ESD and BBPDC expressly

promised that:

only the development needed to support the park, as determined by the

RFP process, would be developed, and, critically

[i]f it is determined during the RFP process that less development is needed
to support the parks maintenance and operations, then less development will
be incorporated into the final park plan.

Ex. 1 at 34 (response to cmt. 80), 44 (response to cmt. 80) (emphasis added).

69.

ESD and BBPDC further stated that BBPDC has committed to reducing the size

of the proposed development program should market conditions allow for it to do so. Ex. 1 at
47 (response to cmt. 123).
3.

The Final, Binding Restrictions on Development in the GPP, SEQRA

Findings, and Representations to the Court

70.

One month later, on January 18, 2006, ESD and BBPDC adopted a modified

version of the GPP.

71.

The GPP, as modified (and as remains in pertinent part in force today), expressly

provides that commercial development at the Park will be restricted to only the amount required
to fund the Parks financial needs.
72.

With respect to all development parcels, including those proposed for Pier 6, the

GPP states that [t]he building envelopes described [in the GPP] represent the maximum build-

18

out within the Project, with the intention being to build only what is necessary to support annual
maintenance and operations. Ex. 7 at 12.
73.

In conjunction with adopting the modified GPP, ESD issued a statement of

Findings pursuant to SEQRA.

74.

ESDs statement highlighted the need for revenue generation within the Park, but

only to the extent required to make the project financially self-sustaining. Ex. 8 (2006 SEQRA
Findings Statement) at 5. According to the Findings, the project would include sufficient
revenue-generating uses to cover the cost of maintenance and operations of the park. Id. ESD
reiterated that one of the key objectives for the development plan was to create the smallest
program that could prudently support the . . . park and that [d]evelopment [within the Park]
should maximize parkland while minimizing building footprints. Id. at 13-14. ESD confirmed
that the actual level of development may be smaller [than that proposed in the GPP], if market
conditions permit it, because the value of land and other factors may well be different from those
assumed in this analysis. Id. at 16.
75.

Although some residents in nearby neighborhoods brought litigation a decade ago

to challenge the real estate development contemplated by the GPP, the BHA did not do so.
76.

The BHA instead chose to support the GPP in reliance upon Respondents clear

commitment that the GPP and FEIS described a theoretical maximum amount of development,
and that BBPC would in fact develop only the minimum necessary and would reduce the scale of
the planned development in the future if economic conditions warranted it.
77.

To defend the legal challenge against proposed Park development, Respondents

reiterated the restriction they had embraced in the modified GPP in the form of a representation
to the Court: they told the Supreme Court in writing in 2006 that they were committed to

19

building the minimum development necessary to cover the parks maintenance and operations
needs and that, [i]f, once requests for proposals are issued for the development components, it
becomes clear that market conditions will allow for less development to support the parks
needs, the development program would be reduced accordingly. Ex. 9 (Respts 2006 Trial
Court Br.) at 11 (emphasis added).
78.

Indeed, the Supreme Court expressly credited Respondents representation in

rejecting the petitioners litigation, stating Respondents . . . noted that the GPP represents the
maximum build-out within the Project, and, if market conditions allow for less development to
support the parks needs, the development would be reduced accordingly. Brooklyn Bridge Park
Legal Def. Fund, Inc. v. N.Y. State Urban Dev. Corp., 14 Misc. 3d 515, 520 (Sup. Ct. Kings Cnty. 2006),
affd 50 A.D.3d 1029 (2d Dept 2008).

79.

Respondents repeated their commitment to develop only as necessary to support

the Parks maintenance and operations to the Appellate Division later in the litigation. In their
appellate brief, they again announced that they had committed to building the minimum
development necessary to cover the Parks operational and maintenance costs, and that, if
market conditions will allow for less development to support the parks needs, the development
program will be reduced accordingly. Ex. 10 (Respts 2008 Appellate Br.), at 8.
B.

BBPCs Changed Financial Circumstances

1.

The Dramatic Rise in Brooklyn Real Estate Values

80.

Available data demonstrates that, by 2014 and continuing to this day,

indisputable, recent increases in real estate values have improved BBPCs financial
circumstances in a manner that was unaccounted for in the FEIS financial projections, which
were made over a decade ago in 2004-2005.

20

81.

Revenue for the Park derives from several sources: (1) rent and other payments

made to BBPC in exchange for the ground leases that BBPC executes with developers to enable
private commercial and residential developments at the Park; (2) ongoing payments from the
owners of each development pursuant to an agreement with the City under which BBPC receives
the amounts that owners would otherwise pay to the City as (a) annual real estate property taxes,
referred to as Payments In Lieu Of Taxes (PILOTs), (b) mortgage recording taxes, referred to
as Payments in Lieu of Mortgage Recording Taxes (PILMRTs), and (c) sales and commercial
taxes, referred to as Payments in Lieu of Sales Taxes (PILOSTs); and (3) payments made by
the various concessions (e.g., restaurants) that BBPC permits to operate in the Park.
82.

In some cases BBPC has also negotiated a participation interest in the profits

the developers achieve upon sale of the development, and, on information and belief, the lease of
its Empire Stores commercial (office and retail) complex includes the payment of percentage
rent under which BBPC receives a percentage of the tenants revenues.
83.

It is indisputable that real estate values in Brooklyn have risen dramatically since

2005-2006 when the GPP was adopted and when the environmental review, culminating in the
FEIS, dismissed reduced density alternatives as financially not feasible.
84.

The values of BBPCs pending developments on Pier 1 and John Street in the

DUMBO section of the Park have skyrocketed in recent years.

85.

Instead of the sales prices predicted in 2005 in the FEIS of $750 per square foot

for the condos at Pierhouse, Ex. 11 (2005 FEIS, Appx C) at 3, as of May 2016, condos at
Pierhouse were selling at an average price of over $1,900 per square foot, setting a record for
Brooklyn, Ex. 12 (Streeteasy Website).

21

86.

The financial bonanza now anticipated for the developers of Pierhouse, the BBPC

development at Pier 1, is so impressive that the publicly-held nationwide real estate company,
Toll Brothers, that is developing the Pierhouse condominium and hotel buildings (as half of a
joint venture with another developer) boasted about its good fortune during a quarterly earnings
call with Wall Street analysts in 2014. Toll Brothers told the analysts that the two developers
total investment at both Pierhouse and the adjacent hotel was only about $76 million, and that
For the Pierhouse at Brooklyn Bridge, the condos are expected to have revenue just shy of $500
million. Bear in mind, were half of that. He continued, the other thing worth noting is:
There is a hotel there at Pierhouse that we own half of; and at some point, that will be sold as
well, and that could be as much as $100 million of revenue for each of us and [the other
developer]. Ex. 13 (Q4 2014 Toll Brothers Earnings Call), at 9. In other words, an investment
of $76 million was expected in 2014 to yield revenues of $700 million.
87.

According to a recent press report, the hotel being developed at Pier 1 was

recently put up for sale by the developers. Ex. 14 (Starwood Capital, Real Deal)
88.

For the development at John Street, the 2005 FEIS predicted a price of $700 per

square foot. But the June 1, 2015 issue of The Real Deal, which ranked newly built or recentlyconverted Brooklyn residential projects with active sponsor listings by average asking price per
square foot, found that the Parks John Street development took the top spot for priciest
building at $1,983 per square foot, and that Pierhouse has the second highest average listing
prices per square foot in the borough. Ex. 15 (Ranking Brooklyns Priciest Condo
Developments, Real Deal).
89.

The Parks plan to transform the historic Empire Stores warehouse in DUMBO

into a combination of high-end office and retail space has also exceeded the expectations at the

22

time of the FEIS in 2005. Noting that the space offers an alluring combination of the
buildings historic brick and wood with two new levels of glassy office space erected on top,
an article in Crains New York last year reported that leases for the available retail spacewhich
include both outdoor patio and rooftop space with breathtaking viewswere largely completed
while the furniture producer West Elm had become the office sections anchor tenant a year
earlier with a 135,000 square foot lease. The article states that the asking rents for the office
space are in the $80s per square foot, the highest office rents ever in Brooklyn. With respect to
the retail space, it quotes a representative of the developer: We started with asking rents of
$150 per square foot but have since bumped that to $200 per square foot because of the activity
and interest . . . . The rates were getting are much higher than we expected. Ex. 16
(Watchmaker, Crains).
90.

High sales prices for the Pierhouse and John Street condos and high rents for the

retail and office space at Empire Stores should eventually translate into high valuations by DOF
for property tax calculations and resulting PILOT payments.
91.

It is highly likely that the ground rent BBPC is paid by Pierhouse pursuant to its

2012 ground lease is far higher than the amounts anticipated when the FEIS was prepared in
2004-2005. And based upon a statement made by BBPC at a January 8, 2015 meeting in which
the BHA participated, BBPC has at least some profit-sharing interest with the Pierhouse
developers and will therefore likely receive some payment when they sell the hotel in the near
future.
2.

The Increased Size of the Parks Other Developments

92.

On information and belief, BBPCs revenue is also likely higher than predicted in

the FEIS because the size of the development at Pier 1 increased dramatically since it was

23

presented to the public in 2005 and, thus, should generate significantly more revenue than could
have been projected then.
93.

In the 2005 FEIS, development at Pier 1 was projected to be 325,000 gross square

feet. Ex. 11 at 3. But according to plans filed by the architect with the Department of Buildings
years later, the actual development at Pier 1 encompasses over 600,000 gross square feet. Ex. 17
(DOB Pier 1 Development Plan).
94.

The additional size of the developments at Pier 1 that was not considered in the

2005 FEIS is comparable to the size of the portion of the Pier 6 development plan allocated to
revenue-generating market-rate housing approved by the BBPC on June 7, 2016 (approximately
300,000 square feet).
3.

BBPCs Admission Its Development at Pier 6 is Unnecessary

95.

BBPCs request in its 2014 RFP to make approximately 30% of the Pier 6 units

permanently affordable housing for moderate- and middle-income households, Ex. 18 (Pier 6
RFP), at 16, is necessarily an acknowledgment that up to approximately 30% of the revenue that
could otherwise have been achieved from the FEISs plan for Pier 6 had become unnecessary.
96.

BBPC confirmed the non-remunerative nature of the affordable housing

component of the Pier 6 development in its Amendment No. 1 to the RFP, dated June 23, 2014.
In that document BBPC stated [w]ith respect to the affordable housing component of the
project, BBP anticipates that the base rent payable will appropriately reflect the affordable uses
and expressed the belief that the rents paid by the moderate and middle income households
would be enough so that the affordable component can be financially self-sustaining for the
developer and not require subsidies from BBPC. BBPC recognized, however, that instead of the
affordable component being revenue-neutral from the Parks standpoint, the developers might
require additional subsidies and if so their responses to the RFP should provide a detailed

24

explanation . . . and advise the amounts . . . of subsidies needed. Ex. 19 (Pier 6 RFP
Amendment) at 4 (question 29).
97.

The specific plan that BBPC approved on June 7, 2016, to the extent it has been

publicly disclosed, confirms that the size and scope of the Pier 6 development contemplated by
the FEIS is not necessary to sustain the Park. The action approved on June 7, 2016 includes an
allocation of about 25% of the more than 400,000 square feet of development to nonremunerative affordable housing.
4.

BBPCs Refusal to Disclose Its Financial Needs

98.

The BHA, the CAC, and local elected officials have repeatedly asked BBPC to

disclose the assumptions, data and methodology that it is relying upon to claim that it must
develop housing at Pier 6 in order to pay for its expenses. BBPC has refused these requests.
99.

Although BBPC insists that it has disclosed its 50-year financial model to the

community, that is simply incorrect. BBPC has refused to disclose to the BHA or others in the
community all of the terms of its ground leases, commercial leases, or any profit participation
interests. BBPC has likewise refused to make public the data underlying its future tax revenue
predictions.
100.

The BHA submitted a request to BBPC under the Freedom of Information Law

that requested, among other documents, BBPCs 50-year financial model. BBPC refused to
produce it.
101.

The most recent summary of BBPCs future revenue projections that BBPC has

publicly released is a short PowerPoint presentation dated June 7, 2016 that is an Update to a
prior set of PowerPoint slides it released on July 9, 2015. Ex. 20 (June 7, 2016 BBPC Financial
Model Presentation); Ex. 21 (July 9, 2015 BBPC Financial Model Presentation). Those
presentations provide only BBPCs conclusions rather than any of the data or assumptions and

25

the methodology applied to them. BBPCs narrow, selective disclosure prevents the public from
assessing the rationale and rationality of its projections of future revenue.
5.

BBPCs Contrived Need for Immediate Cash

102.

Although BBPC has not modified its predictions of future revenue in a manner

that reflects the dramatic increases in Brooklyn real estate values, in 2014, it dramatically
modified its longstanding approach to the single largest expense item it will incur in the next 50
years: the maintenance of the thousands of timber piles that support the piers.
103.

In August 2014, BBPC announced that it planned to change the technology it

would use to repair the timber piles and, although it would save money in the long run, it now
needed to come up with $100 million in the very near future to start the new process.
104.

Until 2014, when it issued its RFP for the Pier 6 development, BBPC had

estimated its future maintenance requirements based on a plan to repair individual timber piles
over the next 50 years or so only when required to ensure their ability to continue to support the
piers. Using this approach, even with its irrationally low predictions of future revenue, BBPCs
own model in mid-2015 showed that it would be in no danger of incurring any cash shortfall
without development of Pier 6 until 2029 (its 2016 Update advances this date somewhat to
2025 without explanation).
105.

In August 2014, however, BBPC announced that it now preferred a different

maintenance approach. Under the new approach, BBPC would repair a large majority of the
timber piles long beforeas much as decades beforethey are no longer capable of bearing the
necessary load. BBPC dubbed its new approach a preventative maintenance plan. The new
approach involves application of an epoxy sealant to the timber piles while they are still
sufficiently load-bearing while the longstanding approach, which BBPC re-labeled a reactive

26

plan, involves encasing the timber piles in concrete at the point at which they have ceased to be
load-bearing. Ex. 22 (Aug. 6, 2014 BBPC Financial Model Presentation) at 7.
106.

BBPC claimed that its new preventative maintenance plan would require it to

spend nearly $100 million in 2016, and lesser amounts over the next several decades. In
contrast, BBPCs longstanding prior maintenance plan contemplated spreading the necessary
repair costs over the next 50 years, with a majority of such expenditures required in the two
decades between about 2028 and 2046. Ex. 23 (CH2M Report) at 8.
107.

BBPCs new approach to timber pile maintenance has all the earmarks of a plan

intended to justify the Pier 6 development, rather than a plan compelled by sound maintenance
practice. BBPC released its new plan, with its huge up-front expense, only after the community
had begun to question the financial need for the Pier 6 development described in BBPCs May
2014 RFP.
108.

Indeed, at BBPCs June 7, 2016 meeting BBPC management made clear that the

Pier 6 development was justified primarily because of BBPCs desire to spend $100 million in
the near futurealmost exactly the amount the Pier 6 developers will pay BBPC as an up-front
payment for the ground lease and development rights.
109.

BBPCs purported need to spend $100 million in the very near-term makes no

logical sense. Independent technical experts have noted that repairing thousands of timber piles
before they otherwise require repair will simply accelerate the time at which those piles will
require repairs again, since BBPC admits that neither repair process has a useful life of more
than about 50 years.
110.

BBPCs plan would encase in epoxy in 2016 or 2017 many timber piles that have

years and perhaps decades more of useful life before any repairs are required for them.

27

111.

In other words, the preventative plan, as BBPC has disclosed it, involves the

acceleration of unnecessary repairs that would inevitably short-change future generations

because repairs of such piles would become due years earlier than would otherwise be the case.
112.

Even if the preventative epoxy technique is preferable to the concrete encasement

approach, logic suggests that the preserving epoxy technique should be applied at the point at
which a timber pile is still sufficiently load-bearing but will lose that functionality in the
foreseeable future. Applying the preventative approach on a phased rather than all-at-once basis
(as has always been the plan for the reactive approach) is obviously superior to BBPCs plan
because it would take advantage of much of the remaining useful life of the timber piles before
the repairs are applied.
113.

A phased application of the preventative approach is likely to cost less than either

the BBPCs all-at-once preventative approach or the reactive, concrete encasement approach.
Although BBPC claimed that the preventative approach would save it money in the long run
over the reactive approach, it failed to provide any net present value comparison of the new and
prior approaches, a clear logical flaw in light of the front-end loading of the cost in its new
approach. A net present value analysis is a necessary element of a rational economic choice
among alternatives.
114.

In any event, on information and belief, BBPC has not performed any analysis of

the costs of a phased-in rather than immediate preventative approach.

115.

An analysis of the cost and effectiveness of the phased-in preventative approach

would likely show that it would be more cost-effective than the only two approaches BBPC has
stated that it considered.

28

116.

The technical analysis BBPC released to attempt to justify its immediate need for

$100 million is seriously flawed. That report by BBPCs longstanding paid consultant CH2M
Hill (Ex. 23), does not even consider the feasibility of a phased-in application of the epoxy,
preventative approach. That failure is particularly inexcusable because CH2M expressly relies in
part on the application of the epoxy technique at Lake Pontchartrain in Louisiana, but on
examination it turns out that Lake Pontchartrain employed a phased-in approach.
117.

The CH2M Report also disregards the key available technical data by assigning

all of the timber piles the identical deterioration rate when the data show significant variation
by 43% depending on the location of the specific pierof creosote retention, an important
metric related to degradation and remaining useful life. Ex. 23 at 10. The CH2M Report also
strays from a technical analysis when it notes that . . . the driver for choosing the type of repairs
for marine structures is typically driven by available funding, and assumes that BBPC has
sufficient funding in place for the immediate preventative approach. Id. at 30. It is atypical that
a public entity has the opportunity to install preventative epoxy repairs on the majority of its
piles. Ex. 24 (CH2M Response to Goldenrod Blue Report) at 1.
118.

That argument is entirely circular: BBPC will not have available funding to

undertake what the CH2M Report calls an unprecedented and landmark epoxy project unless
it can show the need for such funding; the purported availability of $100 million in the coming
year cannot drive the technical choice. In assuming that the $100 million is available, the
BBPCs consultant simply ignored the costs that the development of more than 400,000 square
feet of real estate at Pier 6 will impose on the Park and the community.

29

119.

Apart from the highly questionable merits of its new preventative approach,

BBPC has never claimed that its purported preventative program must be initiated in full in 2016
to achieve its purported benefits.
120.

In fact, at the June 7 meeting, BBPCs management admitted, in response to a

Directors question, that BBPC could initiate the preventative plan at any point in the next couple
of years without detriment to its key purported benefits. Moreover, BBPC management
explained that the BBPC Board had just approved a few minutes earlier a budget that included
funding for concrete-style repairs for the next few years that will be performed before the
preventative program is ever implemented.
121.

BBPC therefore can defer deciding whether to pursue the preventative approach

until after it has obtained more reliable information about its financial resources. At that time it
will be able to determine if it will have revenue sufficient to fund an optional preventative
maintenance plan without additional development at Pier 6.
6.

BBPCs Refusal To Consider Financing the Cost of Its Preventative

Maintenance Plan

122.

Even if a preventative plan were truly preferable and less expensive than the

longstanding plan, on information and belief, BBPC has a ready alternative to permanently
developing Pier 6 to generate the funding needed to execute a preventative, epoxy approach in
the near term.
123.

Instead of the immediate Pier 6 development, on information and belief, BBPC

could easily finance its upfront costs by borrowing against its future receipt of PILOTs and other
annual revenues that it has long been planning to use to pay for the reactive maintenance
program over the next many decades.

30

124.

BBPC projects that once its pier repairs are completed decades from now its

continuing annual revenue stream from PILOTs and other sources will generate huge cash
surpluses. Its most recent financial Update projects surpluses, assuming the Pier 6
development and the preventative approach, starting in 30 years that grow to nearly $400 million
thereafter. Ex. 20 at 14. BBPC would enjoy similar surpluses even without the immediate Pier 6
development if, as the BHA believes and alleges below, its current estimates of future revenues
from its existing developments are dramatically understated.
125.

Municipal bonds are a common technique used by government bodies when there

is a timing mismatch between the immediate cost of long-term capital improvements and cash
receipts that will be generated during the period the improvements are providing value to the
community.
126.

Far from a necessary evil, when municipal borrowing is used to pay for long-term

infrastructure, such borrowing is recognized by experts in municipal government as appropriate

public policy to ensure intergenerational equity. In contrast, employing only current resources
to pay for infrastructure that will benefit citizens for decades into the future imposes unwarranted
cost on the current users of the infrastructure and unfairly benefits the future users.
127.

The cost of ensuring the safety of the piers that underlie the Park for the next 50

or more years is a classic example of an investment in long-term infrastructure that should be

financed so that the future generations that make use of it will equitably share in the cost. In
contrast, permanently developing Pier 6 in 2016 to generate the funds allocable to this long-term
infrastructure project is not rational.
128.

After the BHA asked BPPC to consider financing the cost of the pier repairs over

time to avoid the need for Pier 6 development, BBPC obtained a letter from New York Citys

31

Office of Management and Budget (OMB) in December, 2015 that advised that having
reviewed the BBPs projected revenues, BBPC would lack projected revenues to adequately
support the debt service on bonds. Ex. 25 (Dec. 3, 2015 OMB Letter to Myer).
129.

The OMB letter does not indicate that BBPC provided to OMB any of the data,

methodology or assumptions that BBPC used to create its revenue projections and OMB did not
purport to review the projections validity. The OMB letter also did not reflect any awareness
that BBPCs projections were not well grounded in fact or reason, including their prediction that
its new real estate developments would be assessed by DOF at far less than neighborhood
averages.
130.

The OMB letter also advised that it has a policy against affiliates of the City

incurring debt on their own. Ex. 25. The letter did not address whether BBPC could obtain the
necessary financing through the issuance of bonds by the pertinent state agencies, ESD or
BBPDC.
131.

ESD is fully empowered to issue such bonds, does so frequently, and can provide

the proceeds to its subsidiary BBPDC pursuant to the N.Y. State Urban Development
Corporation Act, secs. 5, 12 and 17, among others. BBPC has not given any reason why ESD
should not apply BBPCs future revenues to support an issue of ESD bonds that would finance
the preventative maintenance program if it is otherwise desirable.
132.

BBPC also released a report by Barbara Denham, an economist, in July 2015,

concerning BBPCs financial model (Denham Report). The Denham Report devotes only one
page to BBPCs ability to finance the cost of a preventative maintenance program, explaining
that BBPC has told her that borrowing is not a realistic option on both legal and policy
grounds. Ms. Denham then considers a single borrowing structurea 20-year bondpurely as

32

an economic illustration. Her conclusion that such a bond would be inadvisable also is based
on future revenues no higher than those projected by BBPC. Ex. 26 (Denham Report).
133.

The Denham Reports borrowing analysis is also flawed because it fails to

consider any borrowing structures other than the single issuance of a 20-year bond. Ms.
Denhams selection of a 20-year bond is inappropriate not only because it does not come close to
matching the useful life of the infrastructure repairs but also because it disregards the timing of
BBPCs future cash flows. Two of BBPCs real estate developments are subject to current tax
abatements that limit revenues from those projects until the abatements expire in 2024 (for the
condominium building at One Brooklyn Bridge Park) and 2032 (for the Empire Stores retail and
office complex), 8 and 16 years from now. A 30-year bond would be better-suited to BBPCs
future revenue receipts and also better match the useful life of the improvements. Another
borrowing structure that BBPC should have considered is the issuance of more than one bond,
each in smaller amounts than a single immediate issue, to finance repairs over time when
required.
134.

In short, the BBPC has not given any serious consideration to engaging in the

responsible management of debt financing to pay for its pier maintenance project as an
alternative to the immediate and irreversible real estate development at Pier 6.
C.

The Pier 6 RFP in May 2014

135.

On May 13, 2014, over eight years after the modified GPP had been approved by

ESD, BBPC released an RFP for residential development at Pier 6, requiring proposals to be
submitted by July 21, 2014. The RFP established the parameters of the Pier 6 development
parcels and the building height limits. According to the RFP, each of the two development
parcels on Pier 6 consisted of approximately 9,880 square feet of vacant land. Parcel A had a

33

maximum build height of 315 feet, and Parcel B had a maximum build height of 155 feet. Ex.
18. In total, the Pier 6 parcels consisted of approximately 450,000 square feet.
136.

Although the RFP required developers to submit proposals that compl[ied] with

the GPP requirements, the RFP also required that approximately 130,000 gross square feet of the
Pier 6 parcels (approximately 30% of the apartments) be allocated for affordable housing, a
housing option not contemplated by the GPP because it cannot contribute to the financial needs
of the Park, and that the buildings include a community space such as a childrens playroom. Ex.
18 at 15-16, 39-40; Ex. 7 at 9.
137.

The RFP stated that BBPC would consider proposals that included two more

features not provided for in the GPP: (a) reallocation between Parcel A and Parcel B of the
overall number of units determined in the GPP and (b) ground floor retail on Parcel A. Ex. 18 at
15.
138.

The RFP also contained a provision pursuant to Local Law 34, the Citys anti-

pay-for-play, anti-corruption law that, among other things, requires entities doing business with
the City to submit to registration in a public Doing Business database, making their business
with the City public information. Ex. 18 at 23.
139.

The RFPs Local Law 34 provision, consistent with procurement guidance issued

by the City, required each developer that responded to the RFP to submit a Doing Business Data
form, providing information to be entered into the Doing Business Database. The provision
further stated that any entities bidding for development of the Park Project were required to
complete a Doing Business Data Form before their Proposals can be considered or an award
can be made. Ex. 18 at 23 (emphasis added).

34

140.

The RFPs requirement mirrored City guidance, which similarly states that

entities applying for transactions covered by Local Law 34 must submit a Doing Business Data
form before they will be considered for or awarded the business with the City. N.Y.C. Mayors
Office of Contract Servs., Databases: Doing Business Accountability,
http://www1.nyc.gov/site/mocs/resources/database.page.
D.

BBPCs Tainted Selection of Real Estate Developers for Pier 6

141.

On June 30, 2015, while BBPC was beginning the process of seeking ESD

approval for the required modification of the GPP described below, BBPC publicly announced
for the first time that, subject to the approval of its Board, it had selected RAL as the developer
for the two residential towers at the Pier 6 site in partnership with another New York-based
developer, Olivers.
142.

But it was not until about a year later, on June 6, 2016, that BBPC publicly

disclosed that its management had actually selected RAL and Olivers in March 2015and not
on June 30, 2015. BBPC also publicly disclosed then for the first time that it had entered into
some sort of escrow agreement with the developers on March 18, 2015 that apparently
committed the parties to the terms of the Pier 6 leases that would be executed upon the approval
of BBPCs Board. Ex. 27 (June 6, 2016 Myer Letter to Editor).
143.

Despite the clear requirement in BBPCs RFP and in City procurement guidance

that any developer responding to the RFP must complete a Doing Business Data Form before
their Proposals can be considered or an award can be made, a review of the Citys Doing
Business Database shows that none of RAL, Olivers, or their respective principals submitted
that form before BBPC selected their proposal for Pier 6. Affirmation of Amanda Factor
(Factor Aff.) 3-6.

35

144.

According to the Doing Business Database available on the Internet, the doing

business start date for the required filing by RAL and its principals was March 1, 2016, more
than 18 months after it responded to the RFP and about a year after it executed the escrow
agreement with BBPC. Factor Aff. 5. To date, Olivers and its principals do not appear at all
on the Doing Business Database. Id. 4.
145.

BBPC had made the Doing Business Data Form readily available in 2014 to

developers who planned to submit proposals in response to the Pier 6 RFP. The RFP itself
explained the importance of the filing requirement: All entities that are . . . seeking to do
business with the City, as well as their principal officers, owners, and senior managers are
subject to Local Law 34 (LL 34). In order to avoid the actuality or appearance of a link between
governmental decisions and large campaign contributions, lower municipal campaign
contribution limits apply to the people listed in the Doing Business Database. . . . Entities that
propose for or are awarded [contracts] . . . must complete a Doing Business Data Form before
their Proposals can be considered or an award can be made. Ex. 18 at 23.
146.

BBPC disregarded the terms of its own RFP when it considered the proposal

submitted by RAL and Olivers despite their failure to have completed a Doing Business Data
Form.
147.

According to recent 2016 press reports, in between BBPCs improper selection of

the proposal by RAL and Olivers in March 2015 and the public announcement of their selection
about three months later, RAL and its lobbyist each contributed $10,000 to the Campaign for
One New York, a controversial fund-raising vehicle used to support Mayor de Blasios political
agenda. Ex. 28 (City Pushes Ahead, N.Y. Times); Ex. 29 (Lobbyists Use Loopholes, N.Y.
Daily News). This contribution far exceeded the $400 limit on contributions that individuals

36

doing business with the City are permitted to make directly to the campaigns of mayoral
candidates. N.Y.C. Admin. Code 3-702.20, 3-703(1-a).
148.

According to press reports, at about the same time that BBPC announced its

selection of RAL and Olivers to develop Pier 6, in violation of its RFP requirements, the New
York State Joint Commission on Public Ethics launched an investigation into Campaign for One
New York for violating State ethical rules by engaging in lobbying activities on behalf of Mayor
de Blasio without registering as a lobbyist. Ex. 30 (Group Supporting de Blasios Agenda,
N.Y. Times). That investigation remains ongoing. Ex. 31 (Why Mayor de Blasio Is Facing So
Many Investigations, N.Y. Times).
149.

The timing of donations by RAL and its lobbyist to a controversial fund-raising

vehicle taints BBPCs selection process because it occurred mere weeks after RAL and Olivers
were selected by BBPC management to develop Pier 6 and at a time when their selection was
awaiting approval by the Board of Directors of BBPC (a majority of whose members are
appointed by the Mayor) and when neither RAL nor Olivers had filed the required data form
and therefore did not appear on the Citys Doing Business Database.
150.

BBPCs selection of RAL and Olivers was made in violation of City conflict-of-

interest guidance and BBPCs own selection criteria.

E.

Respondents Admissions that the Proposed Pier 6 Development Requires a

Modification to the GPP
151.

In July 2014, a community organization called People for Green Space

Foundation and two local residents instituted an Article 78 proceeding, challenging BBPCs
action in undertaking the RFP for development at Pier 6. This challenge was brought two
months after the RFP was issued and about a year before BBPC disclosed that it had already
selected RAL and Olivers to develop Pier 6 in March 2014.

37

152.

Petitioners sought an order compelling ESD and BBPDC to prepare an SEIS.

Petitioners argued that BBPCs drastic change in financial circumstances, worsened

overcrowding projections at P.S. 8 (the zoned elementary school for residents of the proposed
Pier 6 development), and other changes since release of the FEIS in 2005 compelled the
preparation of an SEIS.
153.

Petitioners also sought an order annulling the release of the RFP for residential

development at Pier 6 because its plan for inclusion of non-remunerative affordable housing
violated the GPPs limitation on development solely to that required to support the Parks
financial needs. Any such change necessitated a modification of the GPP, and, under the UDCA,
the only entity with authority to approve a change to the GPP was ESD, which had not approved
any modifications.
154.

Accordingly, petitioners sought to enjoin ESD and BBPDC from accepting or

approving any proposals or bids to the RFP until such time as an SEIS was prepared and the GPP
was modified.
155.

Respondents defended the Article 78 proceeding primarily on the ground that the

claimants had initiated suit prematurely because BBPC had not undertaken any final action
and consequently the petition was not ripe. Ex. 32 (Respts PFGS Litigation Br.) at 2.
156.

Significantly, during the course of the litigation, Respondents acknowledged that

the development proposed in the RFP would require a modification to the GPP. Indeed,
Respondents position in defending the challenge was that Respondents had not violated the
UDCA by issuing the RFP only because nothing in the UDCA requires a modification of the
GPP before the issuance of an RFP. Ex. 32 at 22 (emphasis added). BBPC admitted that if it

38

moved forward with actual development on Pier 6, it would request that ESD amend the GPP to
allow for certain modifications of the Pier 6 development. Id.
157.

Accordingly, in a sworn affidavit filed in the proceeding, Deputy Mayor and

President of BBPC, Regina Myer, stated that her organization expect[ed] that the recommended
project will require modifications to the GPP and pledged that BBP[C] will request that
BBPDC and ESD approve such modifications. Ex. 33 (Myer PFGS Litigation Aff.) 23
(emphasis added). Myer posited that the potential modifications or clarifications could include
confirming that residential uses on the Pier 6 development site may include affordable units.
Id. 24. She stated that [a]ny modifications would be subject to BBPDC and ESDs discretion
and would undergo the administrative processes required for such approvals. A course of action
will, therefore, have been decided on when the developer is selected, the lease is executed and
the GPP is modified. Id.
158.

Respondents briefing in the proceeding underscored that modification of the GPP

by ESD was necessary before the development contemplated in the March 2014 RFP could
proceed. In their briefing, Respondents stated that BBP[C] expects that the recommended
project will require modifications to the GPP. BBP[C] will request that BBPDC and ESD
approve such modifications. Any modifications would be subject to the administrative processes
required for such modifications. Ex. 32 at 10 (emphasis added). They also noted that, once a
developer is selected, the proposed development of the Pier 6 site will require action by the
BBP[C] Board and the ESD and BBPDC Boards. . . . BBP[C] also will request that ESD and
BBPDC approve limited modifications to the GPP. Id. at 11 (emphasis added).
159.

On May 27, 2015, the parties reached a settlement agreement in that proceeding

under which BBPC committed to seek through an open, lengthy and multi-step public process

39

the modification to the GPP that it had admitted during the litigation it needed to obtain before it
could proceed with its proposed development at Pier 6. Respondents provided a written
description of the procedural steps they committed to undertake in connection with the
consideration of BBPCs request for a modification of the GPP. Ex. 34 (GPP Modification
Process Description).
160.

By coincidence or otherwise, on the same day that the Respondents entered into

that settlement, RAL and its lobbyist collectively contributed $20,000 to the Campaign for One
New York, and a month thereafter BBPC publicly disclosed its prior selection of RAL and
Olivers to develop Pier 6, subject to the approval of BBPCs Board of Directors.
161.

Beginning promptly after the settlement of the litigation, in June 2015, BBPC

initiated the process to obtain ESDs approval for the necessary GPP modification. This
included presenting its request for the modification at a meeting of the Board of Directors of
BBPDC at its headquarters in Manhattan on June 22, 2015 and at a meeting of the ESD Board of
Directors at its headquarters in Manhattan on June 25, 2015, at which BBPC officers Regina
Myer and David Lowin each spoke. BHA representatives spoke at both such meetings in
opposition to the proposed modification. Both Boards at their respective meetings approved
moving forward with the modification process but did not provide final approval for the
proposed modification.
162.

On July 30, 2015, a month after BBPCs public announcement of its selection of

RAL and Olivers to develop Pier 6, Respondents ESD and BBPDC convened a public hearing
in the auditorium at St. Franciss College in Brooklyn Heights to accept public comments on the
Pier 6-related modifications to the GPP. Ex. 35 (July 30, 2015 Notice of Hrg).

40

163.

The hearing was held without any disclosure to the public that RAL and Olivers

had failed to comply with Local Law 34 by not registering with the Citys Doing Business
database, that BBPC had violated its own RFP commitment not to consider any proposal from an
unregistered developer, or that RAL and its lobbyist had contributed $20,000 to Campaign for
One New York just two months earlier while its proposal was awaiting approval by BBPCs
Board of Directors.
164.

The proposed modification that BBPC had submitted to the Boards of BBPDC

and ESD, and that was the subject of the public hearing (though not made available with the
hearing notice) proposed to rescind the key limitation in the GPP that the developments
described in the GPP represent the maximum build-out within the Project, with the intention
being to build only what is necessary to support annual maintenance and operations by
expressly providing that, with respect to Pier 6, BBPC could authorize development without
regard to Project finances. Ex. 36 (2015 Proposed GPP Modification) at 3.
165.

The proposed modification also included other, minor changes to the GPPs

overall plan, including authority to create and determine the types of community facilities, to
change the location of retail space and allocation of residential units between the two buildings
(but no change to the total), and the potential closing of a loop road near the buildings. Ex. 36
at 3.
166.

At the July 30 hearing, Respondents continued to represent to the community that

it would modify the GPP prior to implementing a development proposal that included the
features discussed in the settlement agreement. Ex. 37 (July 30, 2015 Hrg Tr.).

41

167.

Richard Dorado, senior counsel to ESD, stated that at the hearing the Park

Corporations proposed Pier 6 development cannot go forward in all respects without some of
the modificationsproposed changes. Ex. 37 at 17:15-18.
168.

Ms. Myer, the President of BBPC, echoed Dorados view. Myer noted that [t]he

changes now proposed will allow for a Pier 6 development that includes permanently affordable,
moderate and middle income housing. Ex. 37 at 38:3-5.
169.

A large contingent of community members and elected officials alike spoke at the

hearing in opposition to the modification and development plans put forward by BBPDC and
ESD. Indeed, the auditorium at St. Francis College was filled to capacity, and approximately 90
individuals registered to speak for the allotted three minutes each.
170.

Elected officials, including U.S. Representative Nydia Velzquez, State Senator

Daniel Squadron, State Assemblywoman Jo Anne Simon, and City Councilmen Steve Levin and
Brad Lander, also spoke, and each vigorously opposed moving forward with residential
development at Pier 6. Ex. 37 at 41-57, 71-79, 106-17.
171.

Senator Squadron stated that he opposed housing at the Park and that this is the

position takenby every single local elected official surrounding the area and by every civic
organization in the area. Ex. 37 at 42:2-43:6.
172.

Many of the community members and public officeholders, representing a

significant portion of the community to be affected by the Pier 6 development, also called on
ESD to perform another environmental review including an SEIS. Noting that the FEIS was
outdated and did not reflect significant changes, such as significant overcrowding at P.S. 8
resulting from an estimated additional 820 new residential units in the nearby vicinity, the

42

speakers urged ESD to reassess the environmental impact of the proposed Pier 6 residential
development.
173.

Notwithstanding the clear expression at the hearing of the communitys decades-

long opposition to luxury housing at Pier 6 where parkland should be, Deputy Mayor Glen, the
BBPC Board Chair, took the standing-room only audience at the hearing to task, brazenly
accusing them of being opposed to affordable housing: what this is a discussion about is
whether or not to include, lets be honest, affordable housing at this site. Thats all this is about.
Ex. 37 at 33:5-8.
174.

Ms. Glen was mistaken about the communitys and the local elected officials

reasons for objecting to the proposed development at Pier 6. The community and its local
elected officials had long opposed any housing where parkland should be, before there had been
a suggestion of the development of anything other than luxury housing, and had obtained
commitments from BBPC and its predecessors that only the minimum housing actually required
for BBPCs financial needs would be developed at the Park.
175.

However, in acknowledging that from her standpoint this . . . discussion . . . is

[about] . . . affordable housing at this site. Thats all this is about, Ms. Glen accurately
expressed BBPCs reason for seeking a modification of the GPP to authorize its Pier 6
development without regard to Project finances. Ex. 37 at 23:12.
176.

The focus of the public hearings and comments on the proposed modification was

on BBPCs request for authority to rescind the longstanding commitment to limit housing
development at the Park to the minimum necessary for the Parks financial needs and instead to
authorize BBPC to build housing at Pier 6 without regard to Project finances. Ex. 37 at 23:12.

43

177.

The extensive record of the public hearings and comments concerning the

proposed modification to the GPP flatly contradict Respondents recently adopted position,
asserted in connection with its June 7, 2016 decision, that the current GPP authorizes it to
construct affordable housing at Pier 6 and the only modification that BBPC required was to
permit a Pre-K facility and some other community space, reallocate the number of apartment
units between the two buildings, and create more parkland by closing the loop road.
178.

At no time before ESD declined to act on BBPCs requested modification in May

2016 did any of the Respondents tell the public that BBPC did not require a modification of the
GPP to build affordable housing.
179.

Indeed, Chairman Glen said precisely the opposite in the statement quoted above.

180.

During the period for public comment following the hearing, the BHA, among

others, expressed its opposition in writing to the construction of the proposed residential towers
at Pier 6 in the absence of transparent disclosure by BBPC of the basis for its financial
projections, an updated and more reliable SEIS, and an independent finding by ESD that such
development was necessary to support the financial needs of the Park. Ex. 38 (2015 BHA Pier 6
Statement).
181.

Thereafter, neither ESD nor its subsidiary BBPDC took any action on BBPCs

requested modification. Press reports in the fall of 2015 revealed that ESDs Chair had requested
that the Mayor reach out to the community to attempt to achieve a compromise plan that would
obtain the support of the public and its elected officials. Despite this suggestion from ESD, no
attempt was made by BBPC or anyone representing the Mayor to reach out to the BHA, or, so far
as the BHA is aware, any other community groups.

44

F.

The Community Advisory Councils Resolutions

182.

After BBPCs May 2014 RFP had become public, BBPC presented to the CAC a

slide deck that provided a high-level summary of its financial model that purported to justify
the need for the market-rate housing portion of the proposed Pier 6 development. The CAC
asked BBPC to provide it with the information and data that supported the summary and
conclusions that BBPC had presented.
183.

When BBPC refused to do so, the CAC passed the following resolution on

September 23, 2014:

The CAC asks that the Brooklyn Bridge Park Corporation not
approve designation of the Pier 6 developer until the CAC and the
Board have received the following information with adequate time
to analyze and respond to it:

184.

a 50 year, cash flow projection for the Park with a worst case and best case
scenario

a line-by-line expense analysis on a fully built out scenario in comparison to

the Signe Nielson report (from 2004)

A capital reserves analysis to assess whether the capital reserves in the

projection are adequate or excessive.

At the next meeting of BBPCs Board of Directors on February 26, 2015,

Councilman Steven Levin, a member of the Board, requested that the Board discuss the CACs
resolution and made a motion that such a discussion be added to the meetings agenda. Deputy
Mayor Glen, the Chairman of the Board, refused to permit any such discussion by the Board,
stating that Board members could not make motions without the advance approval of the Chair.
Ex. 39 (Feb. 26, 2014 BBPC Board Minutes) at 2-3.
185.

The information requested by the CAC in its September 23, 2014 resolution has

still not been provided to the CAC.

45

186.

On November 21, 2014, ESD, as lead agency, issued a Technical Memorandum

for the Pier 6 Upland Development for the Brooklyn Bridge Park. Ex. 40 (2014 Technical
Memorandum).
187.

Once Respondents issued the 2014 Technical Memorandum to justify their failure

to prepare an SEIS with respect to the Pier 6 development BBPC had described in its mid-2014
RFP, the CAC passed the following resolution on November 25, 2014:
The CAC rejects, on a substantive and procedural basis, the
conclusions of the Technical Memorandum and reiterates its prior
resolution requesting a full second Environmental Impact Study be
undertaken in light of new information on schools, flooding and
park financials.
188.

On May 3, 2016, during the period BBPCs proposed modification to the GPP to

dispense with the financial need requirement was under consideration by the ESD, the CAC
passed another resolution, calling for BBPC to halt the development of any housing on Pier 6, as
follows:
In light of:

The three reports presented to the CAC on March 1, 2016 regarding the
Parks understated tax revenues (by real estate appraiser, Max Rosin), the
analysis of the funding surplus (by financial analyst, Ren Richmond), and
the technical pier maintenance program that is likely more costly and would
shorten the life of current pilings (by the marine engineering firm,
Goldenrod)

And

Both the City and State Comptrollers letter[s] regarding the opportunity for
the Park to issue bonds if, in the unlikely circumstance, more funds are ever
needed over the estimated $800 million funding surplus,

The CAC requests that the BBPC halt any plan to develop more housing on Pier
6.

46

189.

In a letter, dated June 3, 2016, the Co-Chair of the CAC asked Deputy Mayor

Glen to stop the pending Board vote and, instead, work with the community. Ex. 41 (June 3,
2016 CAC Letter to Glen).
G.

ESDS Choice Not To Approve Any Modification to the GPP

190.

On May 17, 2016, press reports disclosed that ESD and BBPC had agreed upon a

new, final development plan that they had anticipated unveiling that week, but that ESD had
suddenly withdrawn its support for the plan. Ex. 42 (Deal to Put Towers in Brooklyn Bridge
Park, Wall St. Journal).
191.

ESD announced that it had decided against the tentatively-agreed-upon plan

because, according to news reports, ESD became increasingly concerned by reports of conflicts
of interest. Ex. 42 at 2. One ESD official was quoted as stating, concerning BBPCs selection
of RAL and Olivers as the Pier 6 developers, that [i]t is difficult to understand any objections
to making sure the community is heard and that any and all potential conflicts are vetted. Id.
192.

Despite ESDs failure to approve the modification to the GPP that BBPC had

requested since June 2015, BBPC Chair Glen was publicly reported as saying, in defiance of the
rule of law, [w]ere going forward anyway. Ex. 28 at 1.
H.

BBPCs June 2016 Pier 6 Development Plan

193.

On May 24, 2016, BBPC announced that its Board of Directors would meet on

June 7, 2016, and, at that meeting, the Directors would be asked by BBPC to approve by final
action a development project submitted in response to the May 13, 2014 Request for Proposals
for the Pier 6 residential development. Ex. 43 (May 24, 2016 Notice of Hrg). The selected
developers were again RAL and Olivers.
194.

The development plan announced in 2016 is similar to the development plan that

BBPC selected in 2015. The plan calls for two residential towers at Pier 6. The tower on Parcel

47

A will be 28 stories and 315 feet tall, inclusive of rooftop mechanical structures, and contain 126
market-rate residential condo units. The tower on Parcel B will be 14-15 stories and 182 feet
tall, including the equivalent of three stories in rooftop mechanicals. The Parcel B tower will
contain a total of 140 units. Forty of those units will be designated for market-rate rentals, and
100 will be designated for affordable housing.
195.

The changes from the 2015 proposal to the just-approved 2016 plan are to

increase the height of the Parcel B building by three stories, reduce the number of apartment
units in the taller building (while keeping its square footage the same), change the allocation of
units between the two buildings, eliminate any community and pre-K spaces, and shift the
ground floor retail from the taller building to the Parcel B building. The new plan, like the 2015
plan, retains an affordable housing component, although it reduces it slightly. On information
and belief, BBPC made most of these changes in a disingenuous attempt to claim that the GPP
modification it spent the last year seeking is no longer required.
I.

The Inaccurate and Unreliable Information on which BBPC Approved the Pier 6
Plan
196.

Before the BBPC Board voted on the proposed Pier 6 development plan, BBPC

management supplied information that was material to the Boards decision and that was
inaccurate and unreliable. BBPC management provided this misinformation in oral remarks at
the June 7 hearing before the vote took place, in a set of slides displayed to the Board before its
vote entitled Financial Model Update, Ex. 20, and in written documents BBPC management
made available to the Board and public before the June 7 meeting, including the reports of
outside consultant Barbara Denham, Ex. 26, and a memorandum of BBPC management, dated
May 11, 2016, Ex. 44 (May 2016 BBPC Mgmt. Memorandum).

48

1.

The Flaws in BBPCs Predicted DOF Valuations, which Are Below the
Neighborhood Average

197.

The irrationality of BBPCs analysis of the purported financial need for the Pier 6

development is illustrated by BBPCs prediction that its soon-to-be-opened developments at Pier

1 and John Street will be valued by DOF, for purposes of setting the amount of the PILOTs, for
less than the average valuations DOF has currently set for the relevant residential buildings in the
surrounding neighborhoods. This is the case even though, as described above, Pierhouse and
John Street were the two most expensive new condominiums in all of Brooklyn last year.
198.

One of the few facts that BBPCs summary financial slide deck has disclosed is

that BBPCs revenue projections assume that Pierhouse and John Street will be valued by DOF
in the future at $134 per square foot, despite the fact that DOF has recently assigned values as
much as 77% higher to two recently-developed luxury condominiums nearby: DOF has valued 9
College Place in Brooklyn Heights and 384 Bridge Street in Downtown Brooklyn at $238.69 and
$203.88 per square foot respectively. The Pierhouse and John Street condos are far more
valuable than either of those nearby condominium buildings, and any fair valuation by DOF of
Pierhouse and John Street will, therefore, be higher.
199.

The one condominium development at the Park that has actually been appraised

by DOF to date, One Brooklyn Bridge Park at 360 Furman Street, which first became available
during the real estate downturn in 2008-2009, was valued by DOF for the current fiscal year at
$143.47more than the $134 per square foot predicted by BBPCs 2016 model update for One
Brooklyn Bridge Park itself. In view of the highly desirable nature of the Pierhouse and John
Street condos, as reflected in their recent selling prices, which exceed those at One Brooklyn
Bridge Park, there is no sound reason for BBPC to predict that DOF will value those properties
at less than the current assessment of One Brooklyn Bridge Park.

49

200.

On information and belief, BBPC has devised its predictions of DOFs future

valuations of Pierhouse and John Street by use of a methodology that cannot and will not be
applied by DOF itself. DOF has interpreted New York States Real Property Tax Law (RPTL)
to require that it value condominium properties as if they were rental apartment buildings. As
DOF explains to the public on its website, State law requires us to value residential cooperative
and condominium buildings as if they were rental apartment buildings. This means that we look
at the income and expense statements of rental buildings that have similar characteristics to
determine your condo or co-op buildings [sic] market value. Ex. 45 (DOF Assessment
Methodology).
201.

BBPC has refused to disclose to the BHA and the community the data,

assumptions, and methodology it has relied upon in predicting the amount of future PILOTs it
will receive with respect to the new developments at the Park, the condominiums at Pierhouse
and John Street, the hotel at Pier 1, and the office complex at Empire Stores, which will shortly
open for business and thereafter be valued by DOF. With respect to the Pierhouse and John
Street residential buildings, however, BBPC seemingly admits that it has not engaged in the type
of rental building analysis that DOF will necessarily apply when it values Pierhouse and John
Street.
202.

In its cryptic PowerPoint Financial Model Update of July 2015, BBPC noted

that it has based its assumed future PILOT revenue for those residential buildings on DOF
market values for comparable buildings. Ex. 21 at 19. But any rational estimate of DOFs
future valuation of those buildings should apply the rental building analysis that DOF is
obligated to apply, not the market value of comparable condominium buildings. As a result,

50

BBPCs method of making its prediction lacks a sound basis in reason and is procedurally
flawed.
203.

According to DOFs website, the median average DOF valuation for rental

apartment buildings in Pierhouses neighborhood of Brooklyn Heights is actually $207.76, or

55% more than BBPCs predicted DOF valuation of only $134 per square foot. DOF reports that
its average valuation of rental apartment buildings in DUMBO, the John Street neighborhood, is
$185.80, also dramatically higher than $134 per square foot.
204.

Although individual condo unit selling prices do not directly affect DOFs

assessment of condominium properties, DOFs assessment is necessarily related to the value of

the property at issue. Because Pierhouse and John Streets average selling prices exceeded all
other new Brooklyn condominium developments, it is irrational for BBPC to assume that those
developments will be valued by DOF at substantially less than the average assessments for rental
buildings in their respective neighborhoods. Instead, because there are no nearby rental
apartment buildings that offer the attributes of quality, amenities, new construction, and unique
views that distinguish Pierhouse and John Street, any fair valuation of those properties by DOF
will value them at far greater than the rental building averages for their neighborhoods.
205.

On information and belief, at no time prior to the June 7, 2016 vote did BBPC

management disclose to the Directors that its projected revenues were predicated on future DOF
valuations of the Pierhouse and John Street condominium properties that would be substantially
below both the average DOF valuations of rental apartment buildings in their neighborhoods and
the actual current DOF valuations of two recently-opened high-end condominium developments
nearby.

51

206.

Similarly, BBPCs estimate of DOFs future valuation of the Empire Stores

retail/office complex is materially low. BBPC has not revealed the office and retail rents that its
valuation estimate is predicated upon, but on information and belief, BBPC cannot have arrived
at its current valuation estimate (of $257 per square foot) if it relied, as it should have, upon the
actual leases that have been signed to date by tenants at Empire Stores and market values for the
remaining spaces.
207.

An independent New York City real estate appraisal expert retained by a

community group, Rosin & Associates, has estimated in a written report submitted to BBPC
(Rosin Report) that, based on the methodology applied by DOF, Empire Stores will be valued
at about $411 a square foot, or about 60% higher than BBPCs prediction. The Rosin Report
discloses that it arrives at that value by assuming an average rental income for the office space at
Empire Stores of $49 a square foot and for the retail space of $120 a square foot, notably
conservative assumptions in light of the far higher rent levels reported in the press and described
above. Ex. 46 (Rosin Report) at 22. The Report explains that those estimates are firmly
grounded in public information about rents paid at other neighborhood office and retail locations,
as well as published data about actual leases signed by the developers of Empire Stores.
208.

On information and belief, BBPCs valuation estimate for Empire Stores assumes

that the office and retail spaces will be rented for substantially less than $49 and $120 per square
foot respectively, or perhaps treats Empire Stores as if it is solely office space. Any such
estimates would necessarily disregard material facts and be irrational with respect to Empire
Stores uniquely desirable combination of new office space with breathtaking views combined in
an historic building with a ground-floor retail marketplace with substantial outdoor space
overlooking lower Manhattan and the two bridges.

52

2.

The Multiple Flaws in the Report of BBPCs Consultant

209.

BBPC attempted to substantiate the validity of its undisclosed financial model by

publicly releasing a report of an outside economist, Barbara Denham, described above. Ex. 26.
The Denham Report concludes that the BBPC model is valid, but it does not report anything
about the data, assumptions, or methodology applied by the model or opine that the assumptions
and methodology are appropriate; instead, the report contents itself with supporting the models
conclusions with a combination of macro-economic analysis and by comparing BBPCs
predicted PILOT receipts from John Street and Pierhouse to property taxes paid by other
residential properties that the Denham Report identifies as comparable.
210.

The Denham Reports discussion of the taxes paid by comparable properties is

fundamentally flawed. Her report claims that the 14 residential properties she selected to
compare to Pierhouse and John Street are high-end residential buildings, but her selection
disregarded that many of the 14 buildings she selected enjoy low DOF valuations because of a
known artifact of DOFs assessment practices that undervalues certain co-ops and condominium
properties. That artifact applies to many of the buildings that Ms. Denham selected as
comparable, but should not apply to the newly-built Pierhouse and John Street properties.
211.

A report issued in 2013 by the independent Citizens Budget Commission makes

the flaw in Ms. Denhams selections clear. That report notes that DOF often undervalues
buildings built before 1974 by comparing them to rental buildings that include rent-stabilized
apartments. The report states: This process severely undervalues condo or co-op buildings
constructed before 1974. For these properties, the comparable rental buildings chosen by DOF
often contain units subject to rent regulation. Rent regulated buildings typically generate less
income than unregulated buildings and serve as a poor basis for estimating potential income for
pre-war coops. Ex. 47 (Citizens Budget Commission Report) at 7.

53

212.

Despite this known issue with DOFs valuation practices, however, the Denham

Report selects as comparables to the newly-built (and therefore post-1974) Pierhouse and John
Street condominiums both co-op and rental buildings that pre-date 1974. Of the four co-ops Ms.
Denham selected, publicly-disclosed DOF data show that, for at least two of them, DOF applied
the very practice identified in the Citizens Budget Commission report: it valued them by
comparing them to rent-regulated apartment buildings. The other 10 comparables that Ms.
Denham relied upon are all rental buildings and at least four of them include rent-regulated
apartments.
213.

DOF has not included on its website information about the comparable rental

buildings it relied upon in valuing all of the co-op properties on Ms. Denhams list, but the
readily-available data made public by DOF show that DOFs valuations of at least six of the
fourteen properties she selected either relied upon rent-regulated comparables or included rentstabilized apartments. Purdy Aff. 6-18. As the Citizens Budget Commission report states,
such comparables undervalue the properties to which they are compared.
214.

This material flaw in the Denham Reports selection of comparable properties is

underscored by the following observation in the Citizens Budget Commission report: While
older buildings are especially undervalued for the reasons described, it is easier to identify rental
buildings that are truly comparable to newly constructed condos and therefore, valuations for
these newer buildings tend to be more accurate. This generates substantially higher tax bills for
the newly constructed units. Ex. 47 at 7-8.
215.

Ms. Denhams report also ignores the fact that one of the handful of rental

buildings that her list includes, 220 Water Street, a post-1974 building, was assessed by DOF
with a value that is 75% higher than BBPCs prediction for Pierhouse and John Street.

54

216.

The Denham Report also fails to include in its list of comparable properties the

two newly built, high-end condos in Brooklyn Heights and downtown Brooklyn: 9 College Place
and 384 Bridge Street that, as noted above, are valued by DOF at, respectively, more than 175%
and 150% more than BBPCs prediction for its new condominium buildings.
217.

For these reasons, the Denham Reports conclusion that BBPCs predicted PILOT

revenues from its condominium properties at the Park are slightly higher than most of the highend properties in the area, Ex. 26, at 15, is unsupportable and was made in disregard of known
material facts.
218.

BBPC management provided the Denham Report to its Board in advance of its

vote on June 7, 2016. At no time did management bring to the attention of the Board the
material flaws in the report described above and the resulting unreliability of its conclusions.
3.

BBPCs Inaccurate Disparagement of the Report by the Communitys

Independent Appraiser

219.

The Rosin Report described above concludes that the BBPC has dramatically

understatedby an estimated 66%the future revenues BBPC will enjoy from the residential,
hotel, and commercial developments that are about to begin operations at the Park. Ex. 46.
220.

BBPC has disparaged the reliability of the Rosin Report on the ground that it does

not apply DOFs rental building methodology in determining the likely assessments that DOF
will make of the condominium properties, despite the fact that BBPCs own model apparently
does not value Pierhouse or John Street as rental buildings. BBPC Vice President David Lowin
went so far as to tell BBPCs Directors at their meeting on June 7 before they voted on the Pier 6
development proposal that the Rosin Report is demonstrably false. This was the statement of
an advocate, not a professional seeking to provide dispassionate and reliable information to a
Board of Directors that was about to make a very important decision.

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221.

BBPCs criticism is incorrect: the Rosin Report explicitly recites DOFs rental

building methodology and plainly calculates the future assessment of both Pierhouse and John
Street by treating them as rental buildings, calculating their net operating income by first
determining, on the basis of market comparables, the rents that each building would achieve if its
apartments were rented and then subtracting expenses based on rental building expense ratios.
The Rosin Report then applies a capitalization rate at a level consistent with DOF rates for rental
buildings to determine DOFs likely valuation. All of this is entirely consistent with the
applicable state law, which prohibits DOF from assessing condominium properties by adding up
the potential sales value (current market values) of each individual condominium unit within the
building, and instead mandates that condominium buildings be valued as if they were incomeproducing rental properties.
222.

BBPC has argued that the Rosin Reports determination of rental building value is

flawed because it determined the rental revenue component of each buildings net operating
income calculation by determining the likely rental value of the apartments in those buildings on
the basis of market data concerning the rents paid for individual apartment units in other,
comparable buildings; BBPC reported to its Directors at the June 7 meeting that DOF determines
the revenue component of the net operating income calculation by reviewing the entire rental
stream achieved at the rental buildings that are comparable to the condominium building it is
assessing. It read a letter it had solicited from DOF, dated May 11, 2016, that suggests that the
Rosin Reports use of market rental information for comparable individual apartments differs
from DOFs full rental building approach.
223.

Nothing in the state RPTL suggests that the Rosin Reports method of valuing a

rental building is incorrect, and its method is both logical and practicable, particularly in the

56

absence of a meaningful number of luxury rental buildings in the vicinity that are at all
comparable to Pierhouse and John Street.
224.

The Rosin Reports use of market information about individual apartment rents is

consistent with the Uniform Assessment Standards adopted in 2010 by the New York State
Board of Real Property Services to guide assessment practices by municipal authorities in New
York State. Those standards expressly contemplate that, in applying the valuation approach of
capitalizing the rental income potential of a residential property, it is essential to the income
approach for the municipal assessor to obtain market income information, such as recent
income and expense statements or current market lease data. Ex. 48 (2010 Uniform
Assessment Standards) 1.4.2 (emphasis added).
225.

Mr. Rosins report obtained and applied current market lease data to ascertain

the rental income potential for each of the Pierhouse and John Street properties as a whole. His
methodology complied with state law and the states Uniform Assessment Standards.
226.

Moreover, Mr. Rosin is an experienced independent appraiser who has repeatedly

been retained by the New York City Law Department as an expert in contested real estate tax
assessment proceedings, including very significant ones.
227.

In these circumstances, it is irrational for BBPC to have rejected the Rosin Report

in its entirety instead of addressing the significant questions it raises about the validity of
BBPCs own projections of DOFs future valuations. The disparagement of the Rosin Report as
demonstrably false is unwarranted by the facts.
228.

Moreover, the distinction that DOF identified in its May 11 letter is a distinction

that should make no difference: both the Rosin approach and the purported DOF approach rely
on comparable market data to value the revenue stream that Pierhouse and John Street would

57

receive if their apartment units were rented. Mr. Rosin reviewed actual rents achieved at
apartments in comparable buildings (including apartments rented in condominium buildings),
whereas DOF reviews actual rents achieved in the aggregate at comparable rental buildings.
Significantly, both DOF and Mr. Rosin then convert those market rents into a revenue per square
foot, and then use that per-square-foot revenue amount to determine the revenue that would be
achieved at the condominium building by multiplying it by the number of square feet at the
condominium building. If Mr. Rosin fairly selects comparable apartment units and DOF fairly
selects comparable rental buildings and makes appropriate adjustments to reflect the differences
between properties, there will be no material difference in the rental income they will each
attribute for the same property. As a result, the reliability of the Rosin Report, as with any real
estate appraisal, turns largely on the validity of its choice of comparable apartment units, not on
its methodology. Significantly, BBPC did not criticize the Rosin Reports choice of
comparables, and for good reason.
229.

BBPC management compounded its distortion of the Rosin Report by also

claiming, inaccurately, that the Rosin Report reached excessive values because it determined the
market values of other apartment units on a per-net-square-foot basis but then multiplied that
amount by the total gross square feet at each of the Park properties. It made this claim in both its
May 11, 2016 public memorandum and in oral remarks made to the Directors at the June 7, 2016
meeting before their vote.
230.

The claim that the Rosin Report multiplied net-square-foot values by area

measured in gross square feet area, if accurate, would inflate the resulting value by the
percentage difference between a condominiums gross square feet (which includes hallways,
lobbies, and other non-rentable areas) and net square feet (which is limited to the dimensions of

58

each apartment), which on information and belief is no more than about 15 % for newlyconstructed buildings, a relatively small fraction of the difference between the Rosin Reports
valuation and BBPCs assumed values.
231.

But Mr. Rosin did not make that error: he applied the square footage numbers that

BBPC has made publicly available for its properties, and such quantities appear to be net square
feet. For the residential property at One Brooklyn Bridge Park, for example, Mr. Rosins report
identified its pertinent area as 628,669 square feet when, as BBPC knows, the gross square
footage of that buildings residential portion is 846,652 square feet. BBPC management did not
disclose any of this to the BBPC Directors and instead falsely criticized the Rosin Report for
reaching artificially inflated values by mistakenly multiplying by gross, rather than net, square
feet.
232.

BBPC also unfairly criticized Mr. Rosins estimated valuation of the Parks

Empire Stores mixed-use retail and office development. In the Financial Model Update BBPC
management displayed to the Board of Directors at its June 7, 2016 meeting, shortly before the
Directors voted to approve the development at Pier 6, BBPC management made it appear that
Mr. Rosins estimate of DOFs likely valuation of Empire Stores of slightly over $400 per square
foot was highly implausible because it exceeded DOFs valuation of selected office buildings in
Manhattan, such as 7 World Trade Center, and was about the same as 4 Times Square. Ex. 20 at
9.
233.

BBPCs comparison of Mr. Rosins valuation of Empire Stores to office buildings

is improper, because, in contrast to such office buildings, Empire Stores is a mixed-use complex
of which more than 30% will be devoted to retail tenants. It is indisputable that retail space
generally commands far higher rents than office space. That is particularly the case for Empire

59

Stores, which features a ground floor marketplace with cafes, restaurants, and retail shops from
local and global brands, many with outdoor patio space with breathtaking views of the
Manhattan and Brooklyn Bridges. The value of Empire Stores on a per-square-foot basis cannot
reasonably be compared to values of office buildings that have only an immaterial percentage of
retail space. Yet, BBPC management made just such an inaccurate and unreliable comparison of
Empire Stores to office buildings in its presentation to the BBPC Board on June 7, 2016.
234.

The Rosin Report provides sufficient information supporting its overall valuation

of Empire Stores to show that its valuation of the office space within Empire Stores, standing
alone, is about 30% less than the amount attributed to Mr. Rosins valuation on the Financial
Model Update that BBPC management displayed to the Directors when it compared Mr.
Rosins valuation to other office buildings. An accurate depiction of Mr. Rosins valuation of
Empire Stores would not have supported BBPC managements disparaging assessment of the
Rosin Reports valuation as not credible.
235.

BBPC made an additional fundamental mistake in its attack on the credibility of

the Rosin Report. In a memorandum that BBPC management made available to its Directors and
the public on May 11, 2016, BBPC accused Mr. Rosin of departing from DOFs approach in
another important respect that purportedly greatly distorts [the] projected value of the Parks
properties. Its May 11, 2016 memorandum states that the Rosin Report uses a cap[italization]
rate that is nearly 20% higher than the rate used by the DOF in converting operating income to
market value. Ex. 44 at 2. It is a fundamental and indisputable aspect of economic analysis that
the higher the capitalization rate, the lower the resulting value. As a resultand as the Rosin
Report expressly statesits choice of a capitalization rate somewhat higher than DOFs was a

60

conservative assumption that served to lower the value the report estimated, not to raise it.
BBPCs May 11, 2016 written criticism is unquestionably and materially inaccurate.
236.

The Financial Model Update that BBPC management shared with the Directors

prior to their vote at the June 7, 2016 meeting also unfairly compared the Rosin Reports
estimate of the condominiums values to selected other condominium buildings, several of which
suffered from the same DOF undervaluation artifact that taints the Denham Reports choice of
comparables, as described above. The Update was also inaccurate by comparing Mr. Rosins
prediction of future DOF valuations to outdated actual DOF valuations of the selected
comparison buildings; instead of using the most recent publicly available DOF data, BBPC chose
to display the DOF valuations released a year earlier. In almost every case, the current
valuations exceed those reported on the BBPC slide, in one case by as much as 25%.
237.

BBPC management did not disclose to the Directors any of the errors and flaws in

its criticisms of the Rosin Report identified above.

238.

On June 7, after receiving the forgoing inaccurate and unreliable information that

was material to its decision, the Board voted 12-4 to approve the plan proposed by BBPC
management.
239.

The resolutions approved by the BBPC Board that authorize the development at

Pier 6 do not include any factual determination or finding that the proposed development is
necessary to support annual maintenance and operations of the Park, as required by the GPP.
Ex. 7 at 12.

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FIRST CAUSE OF ACTION: AGAINST BBPC

FOR VIOLATION OF THE GPP AND UDCA
(Violation of Financial Need Requirement)
240.

Petitioner reasserts and realleges the allegations set forth in paragraphs 1 through

239 as if fully set forth herein.

241.

According to 16(2) of the UDCA, a general project plan is necessary in order to

commence the acquisition, construction, reconstruction, rehabilitation, alteration or

improvement of any project. McKinneys Uncons. Laws of N.Y. 6266(2).
242.

A project is defined as a specific work or improvement including lands,

buildings, improvements, real and personal properties or any interest therein, acquired, owned,
constructed, reconstructed, rehabilitated or improved by [ESD] or any subsidiary thereof. Id.
6253(6). Projects are permitted to comply with a general project plan instead of otherwise
applicable municipal zoning laws and regulations, when, in the discretion of ESD,
compliance with local laws, ordinances, codes, charters or regulations is not feasible or
practicable in constructing, reconstructing, rehabilitating, altering, or improving a project. Id.
6266(3).
243.

The term project includes a civic project. Id. 6253(6)(d). The Brooklyn

bridge park civic project was established by statute, and, pursuant to the UDCA, is governed by
a general project plan. Id. 6266-n*(1)(g).
244.

Article 78 of the CPLR authorizes this Court to annul actions of governmental

bodies and officers that are made in violation of lawful procedure, that are affected by an
error of law, or that are arbitrary and capricious. CPLR 7803(3), 7806.
245.

As pleaded above, BBPC is legally bound by the commitments made by it and the

other Respondents in the GPP, the FEIS, the SEQRA findings, and in representations to courts to

62

limit any real estate development at Pier 6 solely to the amount required to fund the Parks
ongoing operations and maintenance and to reduce the scope of future development at Pier 6
from the maximum build-out described in early 2006 in the GPP should BBPCs financial
conditions change for the better before the development has taken place.
246.

BBPCs action in approving massive, mostly luxury residential development at

Pier 6 violates the clear terms of the GPP (as well as its commitments to the community and the
courts), because BBPCs financial condition does not require the real estate development at Pier
6 that it has approved.
247.

As pleaded above, BBPCs financial condition and prospects in 2016 far outstrip

those that were envisioned at the time the GPP was adopted in January 2006 because real estate
values in Brooklyn, and at the Park in particular, have skyrocketed in recent years. Common
sense alone suggests that BBPC no longer requires the same amount of revenue from the
development of Pier 6 as it estimated in the FEIS in 2005 in light of the far higher revenues
BBPC will achieve from its five other commercial developments, as well as increased revenues
from the restaurants and other commercial concessions at the Park.
248.

BBPCs apparent justification for its action is based on the financial model that it

has refused to disclose to the community despite the repeated requests for such disclosure by the
BHA, the CAC, and local elected officials. Instead, BBPC has released only certain conclusions
that it claims are supported by the undisclosed data, assumptions, and methodology that underlie
its financial model. Those conclusions disregard important facts and are irrational for the
reasons pleaded above. As a result, the Boards decision to approve the Pier 6 development on
June 7, 2016 was arbitrary and capricious.

63

249.

In addition, the final action taken by BBPCs Board of Directors on June 7, 2016

was affected by an error of law and was arbitrary and capricious because the Board did not make
any factual determination or finding, as required by the GPP, that the Pier 6 development is
necessary to support annual maintenance and operations of the Park. Ex. 7 at 12.
250.

The decision of BBPCs Board of Directors was also arbitrary and capricious

because it was made on the basis of material information supplied by BBPC management that
was inaccurate and unreliable, as pleaded above.
251.

Further, BBPCs inclusion of a substantial amount of non-remunerative affordable

housing in the Pier 6 development it has just approved constitutes an outright admission that it
lacks financial need for all of the 400,000 square feet of development, because about a quarter of
that total will be allocated to housing that will not generate funds to support the Park.
252.

At a minimum, it is irrational for BBPC to commit now to develop Pier 6 when,

starting in January 2017, it will obtain reliable data concerning its future PILOT revenues.
Because BBPC has no immediate need for the funds to be generated by the Pier 6 development,
it lacks a sound basis in reason to make an irreparable choice to deface Pier 6 with more than
400,000 square feet of real estate development on the basis of flawed and challenged predictions
of its future revenues, especially when a relatively short deferral of that decision would enable it
to make a rational judgment on the basis of far more reliable financial information.
253.

The Rosin Report stands squarely for the proposition that if DOF next year

faithfully applies the legal criteria that govern its assessments of condominiums and does so in a
fair and sensible manner, as the Rosin Report has done, it will value Pierhouse, John Street and
Empire Stores at levels that will generate materially more PILOT revenue for the Park than the
predictions of below-neighborhood-average valuations that BBPC has just relied upon. Now that

64

DOFs actual valuations will become known in a matter of months, the concerns expressed in the
Denham Report that DOFs valuations are erratic and unpredictable make it all the more
irrational for BBPC to make an irreversible decision now.
254.

BBPCs action should be annulled and BBPC should be enjoined from proceeding

with its proposed development and construction at Pier 6.

SECOND CAUSE OF ACTION: AGAINST BBPC, BBPDC, AND ESD
FOR VIOLATION OF THE GPP AND UDCA
(BBPCs Taking Action Despite Failure to Obtain Requested
Modification to GPP, and ESDs and BBPDCs Failure to Enforce GPP)
255.

Petitioner reasserts and realleges the allegations set forth in paragraphs 1 through

254 as if fully set forth herein.

256.

ESD has the power to prepare and to modify plans for construction,

reconstruction, rehabilitation, improvement, alteration, or repair of any project. McKinneys

Uncons. Laws of N.Y. 6255(13).
257.

Importantly, [n]o municipality shall have power to modify or change the . . .

plans . . . for the construction, reconstruction, rehabilitation, alteration or improvement of any

project of [ESD] or of any subsidiary thereof, . . . nor to require that any person, firm or
corporation employed on any such work shall perform any such work in any other or different
manner than that provided by such plans and specifications. Id. 6266(3).
258.

According to the 2014 Subsidiary Report of BBPDC, prepared in furtherance of

the Public Authority Accountability Act, BBPDC must continue to exist [following its 2010
delegation of responsibilities to BBPC] in order to maintain and to enforce the [GPP] for the
project, including zoning overrides and the projects collection of payments in lieu of taxes that
fund construction, operation, and maintenance of the project. Ex. 49 (2014 BBPDC Subsidiary
Report) at 2.

65

259.

As described above, Respondents have consistently committed to the community

in legally binding documents, including the GPP, the FEIS, and in written representations to
courts, that BBPC would not authorize any real estate development at Pier 6 larger than the
amount required to fund the Parks ongoing operations and maintenance. By including nonremunerative affordable housing in the plan for Pier 6, BBPCs project violates the GPPs
requirement that BBPC will build only what is necessary to support annual maintenance and
operations. Ex. 7 at 12. Accordingly, the approved development violates the GPP.
260.

BBPC has acknowledged as much.

261.

As pleaded above, prior to May 2016, Respondents consistently admitted that

inclusion of affordable housing at Pier 6 would require modification to the GPP.

262.

Indeed, following settlement of the People for Green Space litigation, BBPC

began a yearlong effort to obtain approval for a modification from ESD. ESD provided no such
authorization.
263.

Because ESD and BBPDC have not approved any modification that would permit

the project that BBPC has approved, BBPC has no legal authority to move forward with the Pier
6 development plan.
264.

In a letter from ESD President Howard Zemsky to BBPC President Myer, dated

June 6, 2016, that was referenced by BBPC management at the June 7 Board meeting, Mr.
Zemsky confirmed that BBPC had requested approval for the modification from both ESD and
BBPDC and that both ESD and BBPDC have not affirmed that modification. Ex. 50 (June 6,
2016 Zemsky Letter to Myer) .
265.

Mr. Zemsky also reported that, in view of the delegation several years earlier of

operational control and financial responsibility to BBPC, ESD and BBPDC no longer have

66

any role in the development and maintenance of the park, including the selection of a developer
or whether and when to build any additional buildings. Mr. Zemsky acknowledged that the
only role ESD and BBPDC have retained is to ensur[e] compliance with the Modified General
Project Plan, (referring to the current GPP as modified, most recently in 2013). Ex. 50.
266.

Mr. Zemskys letter also concluded that the current GPP does authorize

residential buildings and does not prohibit the inclusion of affordable residential units and that
as a matter of policy the State supports affordable housing. Ex. 50.
267.

Mr. Zemskys statement concerning the text of the GPP is accurate to the extent it

states that the GPP does not explicitly prohibit affordable housing. But it is equally true that
nothing in the GPP explicitly prohibits other possible projects, such as a hospital, an airport, or a
police car repair shop, but such projects are plainly not authorized by the GPP and BBPC could
not include them without acting contrary to law.
268.

Since the inclusion of affordable housing in the Pier 6 development necessarily

and indisputably increased the size of the proposed buildings beyond the commitment in the GPP
to limit such development to what is necessary to support annual maintenance and operations,
(assuming arguendo that any additional market-rate housing is necessary for that purpose), Mr.
Zemskys letter is ineffective to rescind that provision of the GPP.
269.

Mr. Zemsky had no authority as an officer of ESD to modify the GPP without the

approval of ESDs Board of Directors.

270.

Mr. Zemskys letter of June 6, 2016 does not supply the legal authorization BBPC

requires to move forward with the Pier 6 project it approved on June 7.

271.

BBPCs decision to approve development at Pier 6 that includes affordable

housing without having obtained a modification of the GPP to permit such non-remunerative

67

housing development, is, therefore, made in violation of lawful procedure, affected by an

error of law, and arbitrary and capricious. CPLR 7803(3).
272.

BBPCs action should be annulled and BBPC should be enjoined from proceeding

with its proposed development and construction at Pier 6.

273.

Article 78 authorizes judicial relief where a body or officer failed to perform a

duty enjoined upon it by law. Id. 7803(1), 7806.

274.

ESD was aware of BBPCs plan to approve the unlawful Pier 6 development

before the June 7 vote, as is demonstrated by Mr. Zemskys letter of June 6. On information and
belief, BBPDC was also aware of BBPCs plan and of the June 7 Board vote. ESDs and
BBPDCs failure to enforce the requirements of the GPP against BBPC constitutes a failure on
their part to perform a duty enjoined upon each of them by law. Id. 7803(1). ESD and
BBPDC should be directed to enforce the requirements of the GPP.
THIRD CAUSE OF ACTION: AGAINST BBPC
FOR VIOLATION OF THE GPP AND UDCA
(Violation of GPPs Height Limit at Parcel B)
275.

Petitioner reasserts and realleges the allegations set forth in paragraphs 1 through

274 as if fully set forth herein.

276.

BBPCs decision to proceed with the proposed Pier 6 project also violates the

GPP because the proposed building on Parcel B exceeds the 155-foot maximum height limitation
for the building on that parcel, as outlined in the GPP. The GPP authorizes the development of
two buildings at Pier 6: a taller building on Parcel A of approximately 315 feet in height and a
shorter building on Parcel B of approximately 155 feet in height. Ex. 7 at 12. The GPPs height
specifications for the Pier 6 buildings make no allowance for additional structure above the

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maximum heights to accommodate three stories worth of mechanical equipment, bulkheads, and
other such structures.
277.

Notably, with respect to the existing building at 360 Furman Street, the GPP

expressly states that the height limit of 169 feet (applicable to the addition of two stories above
the current roof) shall be 230 feet to the mechanicals. Ex. 7 at 12. No comparable allowance
for additional height for mechanicals appears in the GPP for the Pier 6 development.
278.

Nevertheless, as reported in a document, titled Brooklyn Bridge Park Pier 6

Upland Technical Memorandum Update, that BBPC made public on June 6, 2016, Ex. 51
(Technical Memorandum Update), the proposed building will be 182 feet tall, including about
three stories of mechanical structures. The Technical Memorandum Update also effectively
acknowledges that in 2005 the Parcel B building was understood to top out at 155 feet inclusive
of mechanicals, because the FEIS addressed solely a building with that total height; indeed, the
Technical Memorandum Update concludes that the proposed Parcel B building will cast longer
shadows than the one studied in 2005.
279.

Consequently, BBPCs proposed tower at Parcel B violates the GPP and cannot

be built as it has been proposed and approved.

280.

BBPCs action should be annulled and BBPC should be enjoined from proceeding

with its proposed development and construction at Pier 6.

FOURTH CAUSE OF ACTION: AGAINST BBPC FOR
VIOLATION OF BBPC RFP PROCEDURE AND CITY PROCUREMENT RULES
(Consideration and Award of Contract to Developers Without Required Disclosure)
281.

Petitioner reasserts and realleges the allegations set forth in paragraphs 1 through

280 as if fully set forth herein.

69

282.

New York law is clear that, after an agency establishes rules and procedures for

making a decision, it must comply with those rules and procedures. A decision made contrary to
established agency rules and procedures has been made in violation of lawful procedures.
Moreover, if an agency fails to follow its own rules or regulations in rendering a determination,
that determination is arbitrary and capricious.
283.

In May 2014, BBPC established as a rule for the Pier 6 RFP process that

developers were required to submit Doing Business disclosure forms before BBPC could
consider their proposals or award them any contract.
284.

This requirement was included to comply with both Local Law 34 and City

guidance. Local Law 34 obligates entities and individuals who engage in business dealings with
the City to register with the Citys Doing Business registration database. N.Y.C. Admin. Code
3-702(18)(b), (20). Pursuant to City guidance, entities register for the Doing Business database
by submitting a Doing Business Data form to the City, which they are required to submit before
any proposal or bid for City business will be considered or accepted.
285.

Yet, BBPC awarded the Pier 6 development to developers who had not submitted

their Doing Business disclosure forms. A review of the Doing Business Database reveals that
RAL and its principals did not submit that form for almost a year after BBPC selected them for
the Pier 6 development, and Olivers and its principals have never submitted the required form.
286.

What is more, RAL and its lobbyist made donations to a now-disbanded and

controversial fundraising vehicle that promotes the Mayors agenda only weeks after BBPC
management selected it and its partner Olivers as the developer for Pier 6, only weeks before
that selection was publicly disclosed, and while the selection was awaiting approval by the
BBPC Board of Directors, a majority of whom are appointed by the Mayor.

70

287.

These factsBBPCs selection of RAL and Olivers in disregard of its

established procedures and under circumstances that raise at least the appearance of a conflict of
interestdemonstrate that BBPCs decision to select RAL and Olivers for the Pier 6
development was made in violation of lawful procedure (both that stated in its RFP and as
provided in Local Law 34) and that its decision was arbitrary and capricious. CPLR
7803(3).
288.

BBPCs action should, therefore, be annulled and BBPC should be enjoined from

proceeding with its proposed development and construction at Pier 6.

FIFTH CAUSE OF ACTION: AGAINST BBPC
FOR VIOLATION OF BBPC AND CAC BYLAWS
(Failure to Provide Information to the CAC)
289.

Petitioner reasserts and realleges the allegations set forth in paragraphs 1 through

288 as if fully set forth herein.

290.

BBPCs approval of its Pier 6 project on June 7, 2016 also violated its own

procedures because BBPC failed to comply with its bylaws and those of the CAC. Article 12.01
of BBPCs most recent amended and restated bylaws, adopted May 22, 2015, require the BBPC
Board of Directors to establish the CAC. Article 12.02 provides that the CAC shall establish its
own bylaws but they shall become effective only upon [adoption by a majority of CAC
members] . . . and subsequent approval by vote of the Corporation. Ex. 52 (BBPC Bylaws) at
19 12.01-12.02. The CACs By-Laws, as of December 5, 2011, provide in Article I, entitled
Purpose, the following:
It is anticipated that the Corporation will provide the Advisory
Council with information on a timely basis on major aspects of its
policies and operations affecting Brooklyn Bridge Park to enable
the Advisory Council to properly fulfill its advisory role to the
Corporation. The Advisory Council will invite and consider
commentary from the public and the Corporation and provide

71

recommendations to the Board of Directors and staff of the

Corporation on such major aspects of its policies and operations
affecting the Park.
Ex. 3 at 1 (definitions omitted).
291.

BBPC did not at any time provide the CAC with information about the specific

project that it presented for approval by the BBPC Board of Directors on June 7, 2016 or the
data, assumptions, and methodology that underlie BBPCs financial model and that the CAC
repeatedly requested.
292.

As a result of BBPCs violation of the CAC bylaws by failing timely to provide

information about major aspects of its operations, BBPC prevented the CAC from fulfilling its
role to advise BBPC concerning its proposed Pier 6 development.
293.

For these reasons, BBPCs decision to approve the Pier 6 development was made

in violation of lawful procedure, was affected by an error of law, and was arbitrary and
capricious. CPLR 7803(3).
294.

BBPCs action should be annulled and BBPC should be enjoined from proceeding

with its proposed development and construction at Pier 6.

SIXTH CAUSE OF ACTION: AGAINST ESD
FOR VIOLATION OF SEQRA
(Failure To Consider Plausible Alternatives in 2016 that were Not Available or Feasible at
Time of 2005 FEIS)
295.

Petitioner reasserts and realleges the allegations set forth in paragraphs 1 through

294 as if fully set forth herein.

296.

SEQRAs animating principle is that all agencies of the State have a duty to act as

stewards of the air, water, land, and living resources. ECL 8-0103(8).

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297.

ESD was designated as the lead agency for the environmental review of the

development of the Park, and accepted and acted upon that responsibility by supervising the
environmental review process in 2004 and 2005 that culminated in the FEIS.
298.

A core component of the environmental impact assessment that ESD was required

to perform under SEQRA is the identification and comparative analysis of other feasible projects
or plans that are alternatives to the project at issue. ECL 8-0109(2)(d); 6 N.Y.C.R.R.
617.9(b)(5)(iv), (v) (mandating that all draft EISs must include . . . mitigation measures [and]
a description and evaluation of the range of reasonable alternatives to the action that are feasible,
considering the objectives and capabilities of the project sponsor).
299.

The obligation to evaluate the environmental impact of a project did not cease

once ESD issued its FEIS and set on a particular course of action. Rather, it, like all agencies,
had a continuing duty to monitor the environmental consequences of its project and to address
environmentally significant changes as they arise. 6 N.Y.C.R.R. 617.9(a)(7).
300.

The pertinent regulations provide that a lead agency may require a supplemental

EIS, limited to the specific significant adverse environmental impacts not addressed or
inadequately addressed in the EIS that arise from: (a) changes proposed for the project; (b) newly
discovered information; or (c) a change in circumstances related to the project. Id.
617.9(a)(7)(i).
301.

A lead agencys decision not to prepare an SEIS must have a rational basis.

When considering whether an SEIS is necessary, the lead agency must take stock of relevant
areas of environmental concern, take a hard look at those issues, and provide a reasoned basis
not to move forward with an SEIS.

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302.

As the regulatory language makes plain, a change in circumstances related to the

project refers to an area of potential environmental concern, and changed circumstances can
render inadequate[] a previously adequate review of environmental issues in the FEIS.
303.

Alternatives that were once impracticable can, based on changed circumstances,

become feasible, necessitating a renewed look at the environmental impact of a project. The
essential purpose of an SEIS is to account for new information bearing on matters of
environmental concern not available at the time of the original environmental review.
304.

Respondents are required to engage in a supplemental environmental analysis of

the Park project and create an SEIS because of the changed circumstances created by the
dramatic improvement in BBPCs financial resources since the FEIS was issued in 2005 and
because of new information that has become available since that time.
305.

That improved financial condition now makes feasible several alternatives to the

decade-old proposal for massive Pier 6 residential development. Alternatives not identified or
considered in the FEIS are now able to be identified because of BBPCs changed financial
circumstances and newly available information and appear to be financially feasible. For
example, having chosen not to proceed with Pier 6 development until 2016 and with the nearlycompleted developments at John Street, Empire Stores, and Pierhouse coming to market in the
near future, BBPC could and should choose to defer any final decision concerning the scope of
any development that its financial circumstances require to take place at Pier 6 until DOF has
had the opportunity to value the developments at John Street, Empire Stores, and Pierhouse for
purposes of setting the PILOTs to be derived from those developments. That information will
become available beginning in January 2017 according to DOFs regular practice. ESD must
prepare an SEIS that, among other things, assesses the financial feasibility of such a relatively

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brief deferral, so that BBPC can make a judgment of whether, and to what extent, development is
needed at Pier 6 on the basis of actual, reliable DOF valuation data rather than the irrationally
flawed predictions of such valuations that BBPCs Board relied upon in its June 7 action.
306.

The development at Pier 6 will have adverse environmental impacts, as the FEIS

determined, in such areas as air quality, impact on potential archaeological resources, urban
design, and shadows, as well as on community facilities and services (e.g., schools). The
deferral alternative could reduce such adverse impacts because Respondents may conclude, upon
review of the actual DOF valuations, that BBPC does not require any development at Pier 6 to
support its ongoing financial needs, or that its needs can be satisfied with a significantly reduced
scale of development. An SEIS is needed to assess the feasibility of the deferral alternative.
307.

This deferral alternative is particularly reasonable because BBPC management

conceded at the June 7 meeting that the key driver for its Pier 6 development planits desire to
move forward with its preventative maintenance plan that requires about $100 million at the
outsetcould be deferred until after the actual DOF valuation information has become available.
As a result, the deferral alternative would not prejudice BBPC even if it ultimately were to
conclude that some Pier 6 development is warranted. A supplemental environmental review of
the deferral alternative is also warranted due to BBPCs obligation to limit the scope of any Pier
6 development to that necessary to support its financial needs.
308.

Another alternative that was not considered in the FEIS was the possibility of

avoiding the need for immediate and full development at Pier 6 by engaging in debt financing of
some or all of the capital expenditures required to maintain the timber piles that support the
piers. The responsible use of debt can be used to manage short-term cash needs and spread the
cost of the needed infrastructure repairs over the time such repairs will provide benefits to the

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community; in contrast, the immediate development of 43 stories of buildings at Pier 6 to address

short-term cash flows, in light of the large cash surpluses BBPC projects in the future, would
impose an irreversible choice on the Park and the community for no apparent reason. A
supplemental environmental review of the debt financing alternative is required, based on the
changed circumstances and newly available information of BBPCs future revenue stream and
the costs of repair. Such a review, in determining the amount of debt required, must necessarily
review the anticipated repair costs not only from BBPCs proposed preventative and reactive
repair approaches but also of the phased-in epoxy approach discussed above.
309.

Also, the FEIS expressly considered a reduced density alternative to potential

development throughout the Park, which involved 237 fewer residential units and 55 fewer hotel
rooms than the proposed project. Ex. 53 (2005 FEIS, Chapter 20) at 4. The largest development
reduction was planned for Pier 6. The reduced density alternative contemplated development of
a single 15-story building with 163 units at Pier 6 (rather than two towers of nearly 40 combined
stories and 430 units). But the FEIS concluded that this reduced density alternative was not
feasible because it was thought not to provide sufficient cash flow to maintain the Park;
Respondents estimated that the Park would run out of funds about 10 years after the 2012 buildyear of the reduced density option.
310.

The FEIS simply did not envision the dramatic increases in Brooklyn real estate

values since 2005 and the consequently greatly increased financial support BBPC will achieve
from its completed developments at John Street, Empire Stores, the Pierhouse condominiums
and hotel, and One Brooklyn Bridge Park. As a result, the reduced density alternative at Pier 6
that the FEIS identified in 2005 but rejected as not feasible for financial reasons appears to be
feasible in 2016.

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311.

Neither the 2014 Technical Memorandum nor the Technical Memorandum

Update addresses any alternatives to the Pier 6 development. Instead, by their own terms they
describe a review that is limited solely to whether the Pier 6 development would have the
potential for any significant adverse environmental impacts not previously identified in the
[FEIS]. Ex. 40 at 1. By failing to consider whether BBPCs current financial circumstances
and newly available information may make feasible alternatives that were not considered or
financially available in 2005, the 2014 Technical Memorandum and Technical Memorandum
Update cannot support any determination by ESD that an SEIS is not required here.
312.

ESDs failure to undertake an SEIS, as required by SEQRA, constitutes a failure

to perform a duty enjoined upon it by law and is arbitrary and capricious. CPLR 7803(1),
(3).
313.

As lead agency for the FEIS, ESD should be compelled to issue an SEIS,

evaluating alternatives to immediate residential development at Pier 6.

SEVENTH CAUSE OF ACTION: AGAINST ESD
FOR VIOLATION OF SEQRA
(Failure To Consider Post-2005 Change in
Adverse Effects On Elementary Schools)
314.

Petitioner reasserts and realleges the allegations set forth in paragraphs 1 through

313 as if fully set forth herein.

315.

The Technical Memorandum Update and Technical Memorandum irrationally

concluded that development of two residential towers at Pier 6 would not have a significant
additional adverse environmental impact on local public elementary schools.
316.

Both at the time of the FEIS and today, residential development at the Park is

zoned to be served by the public schools of sub-district 2 of Community School District 13

(Sub-District 2).

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317.

The FEIS projected impact on elementary schools in Sub-District 2 only through

the build year of 2012. For that school year, the FEIS projected that the impact of all
residential development at the Park would cause the utilization rate for Sub-District 2 elementary
schools to rise from 70%, assuming no residential development at the Park, to 75%, assuming
residential development at the Park. Based on that projection, the FEIS concluded that
residential development at the Park would have an acceptable environmental impact on SubDistrict 2.
318.

Analyses of the environmental impact of an action on area public schools in New

York City are guided by the CEQR Technical Manual (Technical Manual).
319.

The Technical Manual identifies as an important concern development projects

that will funnel students into schools that lack capacity to provide an adequate education, and
recommends that mitigating action be taken in such circumstances.
320.

According to Technical Manual formulas, Sub-District 2s elementary schools

are already operating above capacity with a utilization rate of 108.34%a much higher
utilization rate than the FEIS projected for 2012, which is the most recent year assessed in the
FEIS. Ex. 51 at 5.
321.

By the revised completion year of 2019 for the Pier 6 development, the

elementary population of Sub-District 2 as a whole is expected to be at 135.01% capacity

without taking any of the 87 new students from Pier 6 into account. Ex. 51 at 5.
322.

Moreover, when viewed more realistically, rather than theoretically, the increased

number of elementary school-aged children is even more stark. All of the students from the Pier
6 residential development will be zoned for the P.S. 8 elementary school in Brooklyn Heights.

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323.

For each of the two most recent school years, P.S. 8s enrollment has been at least

130% of capacity (this year reaching between 135% and 142% of capacity), resulting in a loss of
dedicated arts space and significant overcrowding in common areas such as the cafeteria and
schoolyard. Moreover, the severe existing overcrowding at P.S. 8 forced the school to
discontinue its pre-kindergarten program to create additional rooms for regular classes.
324.

Yet, as assessed in the Technical Memorandum Update, BBPC proposes to add at

Pier 6 300 new residential apartment units that, according to traditional City formula, will
generate an additional 87 schoolchildren eligible to attend P.S. 8 without any mitigating actions.
325.

The increase in the elementary population of Sub-District 2 and the utilization rate

for elementary schools in Sub-District 2 above 100% constitute newly discovered information
and a change in circumstances related to the project that necessitate an SEIS focused on the
environmental impacts that the FEIS necessarily inadequately addressed because it was
prepared without such information.
326.

The 2014 Technical Memorandum and the Technical Memorandum Update failed

to apply in a rational manner the Technical Manuals criteria for determining adverse effects in
the context of school overcrowding. They both concluded that development of Pier 6 would
result in no significant adverse environmental impact on Sub-District 2s elementary schools
because they erroneously interpreted the Technical Manual to mean that a significant adverse
environmental impact on elementary schools can occur only if both (1) an action causes a local
elementary school utilization rate to increase by at least 5%, and (2) the resulting utilization rate
is above 100% under the with-action scenario.
327.

The interpretation of the Technical Manual in the 2014 Technical Memorandum

and Technical Memorandum Update to disregard the overcrowding that will be exacerbated by

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the Pier 6 development because the local schools are already grievously overcrowded defies
common sense. It is irrationalindeed, bizarreand therefore arbitrary and capricious for a
government agency to assert the position that no SEIS is required (and no mitigating steps need
be considered) where government action will add students to a school sub-district that is already
at, for example, 150% of capacity because the action will increase the unacceptable
overcrowding condition by less than 5%.
328.

The conclusion in the 2014 Technical Memorandum and the Technical

Memorandum Update with respect to elementary schools is, in any event, unlawful, lacking a
rational basis, arbitrary, and capricious, because it calculates an increase in overcrowding of less
than 5% only by resorting to an improperly segmented review of the environmental impact of all
residential development at the Park.
329.

Segmentation occurs when various activities or stages [of an environmental

review] are addressed . . . as though they were independent, unrelated activities, needing
individual determinations of significance. 6 N.Y.C.R.R. 617.2(ag).
330.

The FEIS called for, and correctly performed, a collective assessment of the

elementary schools impacted by all four residential developments at the Park: One Brooklyn
Bridge Park; Pierhouse; One John Street; and Pier 6. Based on a collective assessment of those
four developments, as noted, the FEIS concluded that the collective impact of those residential
developments would result in an elementary school utilization rate of 75% in 2012. Ex. 54 (2005
FEIS, Chapter 4) at 7.
331.

The 2014 Technical Memorandum and the Technical Memorandum Update

assessed the impact on local elementary schools only from residential development at Pier 6,
rather than from all residential development at the Park.

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332.

As assessed in the Technical Memorandum Update, the actions taken by BBPC

will create 300 units of housing at Pier 6. Applying student generation rates provided in the
Technical Manual (0.29 elementary school students per 1 unit of housing), the Technical
Memorandum Update concluded that the residential development at Pier 6 will generate 87
elementary school students. An increase to Sub-District 2s elementary school population by 87
students will result in a 2.5 percentage point increase in Sub-District 2s utilization rate, from
135.01% to 137.51%.
333.

Of the four residential sites assessed in the FEIS, BBPC has completed

development at only one of them, One Brooklyn Bridge Park. According to the Real Estate
Finance Bureau of the Office of the New York State Attorney General, One Brooklyn Bridge
Park comprises 441 residential units, and Pierhouse and John Street will comprise 122 and 42
residential units, respectively. Combined with the Technical Memorandum Updates predicted
number of housing units from development at Pier 6 (i.e., 300 units), all four sets of residential
buildings considered by the FEIS will account for 905 units of housing.
334.

Applying student generation rates provided in the Technical Manual (0.29

elementary school students per 1 unit of housing), all residential housing developed at the Park
will generate 263 (262.45) elementary school students.
335.

Based on the data included in the Technical Memorandum Update, the capacity

for elementary school students in Sub-District 2 is 3,479 for the completion year of 2019.
336.

Without any residential development at the Park, future enrollment in Sub-District

2s elementary schools would be 4,521 students rather than the 4,697 students reported in the
Technical Memorandum Update, a statistic that the BHA understands included students from
One Brooklyn Bridge Park, Pierhouse, and John Street.

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337.

When properly excluding students from development at the Park, the utilization

rate in Sub-District 2 for the build year of 2019 is 129.95% (4,521/3,479).

338.

By contrast, with the BBPC residential developments, future enrollment in Sub-

District 2s elementary schools is projected to be 4,783 students, resulting in a utilization rate of

137.51% (4,784/3,479): an increase in utilization rate of 7.56 percentage points.
339.

Accordingly, without improper segmentation of residential development at the

Park, the environmental impact of all BBPC residential development results in a school
utilization rate above 100% and a change in the utilization rate of greater than 5%, which would
mandate preparation of an SEIS even under the irresponsible interpretation of the Technical
Manual undertaken in the 2014 Technical Memorandum and the Technical Memorandum
Update.
340.

ESDs failure to undertake an SEIS, as required by SEQRA, constitutes a failure

to perform a duty enjoined upon it by law and its determination that no SEIS is required,
notwithstanding the compelling changes in circumstances discussed above, is arbitrary and
capricious. CPLR 7803(1), (3).
341.

As lead agency for the FEIS, ESD should be compelled to issue an SEIS,

evaluating the impact and alternatives for residential development at Pier 6.

EIGHTH CAUSE OF ACTION: AGAINST BBPC FOR
VIOLATION OF SEQRA
(Final Action to Proceed without Required Environmental Review)
342.

Petitioner reasserts and realleges the allegations set forth in paragraphs 1 through

341 as if fully set forth herein.

343.

SEQRA defines an action broadly to include:

(1) projects or physical activities, such as construction or other
activities that may affect the environment by changing the use,

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appearance or condition of any natural resource or structure, that

. . . require one or more . . . approvals from an agency or agencies;
(2) agency planning and policy making activities that may affect
the environment and commit the agency to a definite course of
future decisions;
(3) adoption of agency rules, regulations and procedures, including
local laws, codes, ordinates, executive orders and resolutions that
may affect the environment; and
(4) any combinations of the above.
6 N.Y.C.R.R. 617.2(b).
344.

BBPCs final action in approving a lease and development contract with

RAL/Olivers to erect residential towers at Pier 6 was an action subject to SEQRA. See id.
617.3.
345.

As a result, BBPC was not permitted to approve the Pier 6 development until it

complied with the provisions of SEQRA. Id. 617.3(a).

346.

Because ESD is the lead agency under SEQRA for the purpose of reviewing

development at Pier 6, only ESD could fulfill its obligation under SEQRA to assess the
environmental impact of the Pier 6 development.
347.

ESD has not prepared an SEIS, which is required, as pleaded in the Sixth and

Seventh Causes of Action Against ESD above.

348.

Although ESD remains the lead agency under SEQRA for the purpose of

reviewing the environmental impact of development plans at the Park, on information and belief,
ESD did not release the Technical Memorandum Update, and that document makes no reference
to ESD and does not appear on the ESD website, as the 2014 Technical Memorandum does.
349.

Nor has ESD made any determination as to whether the Technical Memorandum

Update shows that an SEIS is not necessary under the circumstances.

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350.

Because BBPCs final action to develop Pier 6, therefore, did not take into

account an assessment of the environmental impacts of that project by ESD, BBPCs final action
was unlawful and arbitrary and capricious.
351.

BBPC should be enjoined from taking any steps in furtherance of its Pier 6

development until the SEIS process has been acceptably completed.

NINTH CAUSE OF ACTION: AGAINST RESPONDENTS FOR
DAMAGES AND ATTORNEYS FEES
352.

Pursuant to CPLR 7806, the BHA seeks an award of damages that it has

incurred incidental to the primary relief identified above, including for the expenses incurred and
the time that it and its members devoted to the public hearing and comment process with respect
to BBPCs request that BBPDC and ESD approve its proposed modification to the GPP that
BBPC now claims was unnecessary.
353.

The BHA also seeks an award of attorneys fees from Respondents ESD and

BBPDC pursuant to CPLR 8601(a).

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WHEREFORE, Petitioner demands judgment:

1.

Annulling the June 7, 2016 decision by BBPC to approve the development and

construction of two residential towers at Pier 6 because (a) BBPC made no determination that
the financial need requirement of the GPP is satisfied; (b) BBPCs informal assertions of
financial need for the development lack a sound basis in reason and disregard the facts and,
therefore, its decision is arbitrary and capricious and violates the financial need requirement of
the GPP; (c) it is affected by an error of law for failure to obtain the necessary modification of
the current GPP; (d) it violates the height restriction for the building at Parcel B as set out in the
GPP; (e) it results from a materially flawed bidding process in which BBPC did not comply with
its own requirements in violation of lawful procedure; and/or (f) it results from a materially
flawed process in which BBPC failed to provide key information to and thereby obtain input and
recommendations from its Community Advisory Council in breach of its bylaws;
2.

Enjoining Respondents from proceeding with any development at Pier 6;

3.

Directing ESD and BBPDC to enforce the GPPs financial need requirement and

height limitation against BBPC;

4.

Directing ESD to prepare an acceptable SEIS with respect to any future plan for

real estate development at Pier 6 that, among other things, considers potentially feasible
alternatives to that development, including deferring any decision until actual DOF valuations
become available in 2017, and enjoining BBPC from taking any steps in furtherance of such
development until such time as an acceptable SEIS has been prepared;
5.

Awarding Petitioner damages in an amount to be established in additional

proceedings;
6.

Awarding Petitioner its attorneys fees, costs, and disbursements in this action;

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and
7.

Granting such other and further relief that the Court deems just and proper.

86