between Jeff Baker, DDDB attorney, and the MTA (all pdf files):
July 25, 2005. Jeff
Baker letter to MTA
August 8, 2005. MTA
responds to Jeff Baker
August 15, 2005. Jeff
Baker responds to MTA
IMMEDIATE RELEASE: August 17, 2005
Don't Destroy Attorney, Jeffrey Baker
Reprimands the MTA on Atlantic Yards
Says MTA Has Set Forth on a Misbegotten Course
With Its Lack of Response to Eminent Domain Issue and Bad
Faith RFP Process
NY�Before the MTA made its inexplicable decision, on July
27th, to hold exclusive negotiations with low-ball bidder
Forest City Ratner (FCR), Develop Don't Destroy Brooklyn's
(DDDB) attorney, Jeffrey Baker, had warned the public agency
that they must consider the eminent domain contingencies of
Bruce Ratner's Atlantic Yards proposal. In Mr. Baker's letter
of July 26th he sought to make the MTA aware that his clients
have a strong legal defense against the use of eminent domain
which would jeopardize Mr. Ratner's development proposal,
and that if the MTA was seeking a relative quick and easy
transaction, the Ratner proposal would not provide that desired
The MTA's director of real estate Roco Krsulic responded twelve
days later with a form letter ignoring Mr. Baker's warning.
Mr. Baker responded to that tone deaf letter on Monday, August
Daniel Goldstein, DDDB spokesperson, said, "The MTA has
continued to act brazenly and without transparency. They have
acted as the worst real estate agency in the land. If they
continue this course of favoring low-ball bidders and acting
in bad faith, we will make every effort to hold them accountable,
and we expect our elected officials and public interest groups
to do the same."
The text of Mr. Baker's letter to the MTA follows
August 15, 2005
Dear Mr. Krsulic:
I am writing in response to your letter of August 8, 2005
which was in response to my earlier letter of July 27 to Chairman
Kalikow. While I was pleased that you responded, I was th
surprised by the content of the letter.
Initially, it is striking that you chose to ignore the primary
point of the letter � that MTA should not proceed to accept
the FCRC bid when it was premised upon the use of eminent
domain when the use of that power as envisioned by FCRC is
contrary to the Supreme Court's recent Kelo decision. Your
letter and the MTA Board action on July 27th completely failed
to address that important contingency.
I also take exception to your brazen characterization of MTA's
actions with respect to Vanderbilt Yards as "a full Request
for Proposal process, and a review of competing proposals".
While making a statement like that in a letter may appear
to make it true, the facts belie your position. As you know,
FCRC has been in discussions with MTA for at least a year,
has had privileged and unequaled access to the Vanderbilt
Yards and MTA's technical requirements and even entered into
a letter of agreement in February 2005 with FCRC which set
forth many of the terms of a formal agreement for the disposition
of Vanderbilt Yards. In contrast to those secretive negotiations,
the "full Request for Proposal process" consisted of only
two advertisements buried in the back of the New York Times
and Real Estate Weekly and a requirement for bidders to submit
responses in little over a month. Moreover, the technical
details of the RFP were daunting requiring significant investment
of engineering expertise associated with designing a platform
and relocating MTA facilities.
If you continue to insist the RFP process was legitimate and
properly advertised and if I am wrong that there were only
two advertisements for bids, please provide me with proofs
of publication in other newspapers or publications where potential
developers may have been informed of the RFP. If it was mailed
directly to potential developers, please provide of list of
While MTA did its best to avoid publicizing the RFP, my client,
a citizen's group, Develop Don't Destroy � Brooklyn, Inc.,
sent information mailings about the RFP to 96 potential developers
around the country. That effort resulted in the competing
bid from Extell Development Company.
Considering the enormous obstacles placed in its path with
respect to the RFP, after a tremendous effort Extell put in
a complete and responsive bid package. Not only did the Extell
proposal present a scale compatible with the community and
reflect community input, but it offered a price to MTA of
$100 million in excess of the bid from FCRC.
Rather than give Extell the consideration it was due, its
bid was summarily rejected as somehow incomplete. Any alleged
deficiencies were never identified and if there was a lack
of detail with respect to maintenance and relocation of MTA
facilities, it would seem prudent to provide Extell an opportunity
to undertake the further investigation and design to provide
those details. Obviously, FCRC was provided that opportunity
for many months prior to the release of the RFP.
I listened on the telephone to the July 27 Board meeting.
There was virtually no th discussion of the relative merits
of the two proposals and no staff evaluation or recommendation.
At one point, the Board took an unexplained recess and returned
about a half-hour later with a resolution authorizing the
Executive Director to negotiate exclusively with FCRC. That
was a striking move since that proposal was $100 million less
than the Extell bid and there was nothing else material in
the FCRC bid that warranted MTA's disregard of the Extell
proposal. Mr. Kalikow's statement that it would be "immoral"
to negotiate with two bidders at the same time was preposterous.
First, the MTA is a public authority whose fiduciary obligation
is to its riders and the taxpayers. Second, there is nothing
immoral or unethical when all the parties know there are multi-party
Instead of being improper, further consideration of both proposals
is mandated by law. MTA is bound by the State Environmental
Quality Review Act (SEQRA). MTA cannot choose a final proposal
on the basis of price alone but must also consider the environmental
impacts of the action and choose the alternative that avoids
or minimizes adverse impacts to the maximum extent practicable,
balanced by economic and social considerations. Therefore,
regardless of the negotiations with FCRC, MTA will have to
consider the Extell proposal in an Environmental Impact Statement
as an alternative. Thus, both proposals should remain under
consideration until the SEQRA process is complete.
Nevertheless, the MTA Board decided to continue to ignore
its legal obligations and work with its predetermined choice.
Thanks to several press reports we know what really occurred.
While the MTA had previously announced its intention of not
taking action at that meeting, and that it would consider
both proposals at least until its September meeting, Mr. Kalikow
took telephone calls from Mayor Bloomberg and Governor Pataki
during the meeting, and acting at their direction pushed through
the resolution to deal exclusively with FCRC.
We are dismayed by MTA's callous disregard for the basic elements
of due process, transparency and its fiduciary obligations.
Its actions do not promote trust in the system but rather
reinforce the prevailing perception of favoritism and cronyism.
You should be aware that recent similar actions by other authorities,
like the New York State Canal Corporation, have been overturned.
Should MTA continue on this misbegotten course, we expect
a similar fate will result.
Very truly yours,
Jeffrey S. Baker
P. Kalikow (fax and mail)
Hon. Elliot Spitzer
Hon. Alan Hevesi
Hon. Sheldon Silver
Hon. Joseph Bruno
Hon. Richard Brodsky
Hon. Betsy Gotbaum
Hon. Letitia James
G. Russianoff, NYPIRG Straphangers Campaign
D. Dadey, Citizens Union
R. Touissaint, Local 100 � TWA
T. Taro, Tri-State Transportation Campaign
B. Dolinsky, Permanent Citizens Advisory Committee
R. Yaro, RPA
J. Parrott, Fiscal Policy Institute
K. Barwick, Municipal Arts Society
J. Vitullo-Martin, Manhattan Institute
Develop Don't Destroy- Brooklyn