By: Robbie Whelan

News reports indicate that one of the highest-profile eminent domain lawsuits in the country will go all the way to New York’s highest court, where it will be argued in October.

Developer Bruce Ratner, of Forest City Ratner, wants the Empire State Development Corp.  to condemn and seize dozens of properties in a low-density neighborhood near an old rail yard in Prospect Heights, Brooklyn, so that he can build a new arena for the  relocation of the New Jersey Nets basketball team, plus 16 high-rise apartment towers. He already has a $200 million-a-year sponsorship deal for the arena with investment bank Barclays. The project is called Atlantic Yards (and Barclays Arena), named for the disused rail yards on the western edge of Brooklyn where it is proposed.

Although about half of the buildings needed for the more-than-$1-billion project have already been demolished, in August of last year, nine property owners sued the ESDC, saying that the grounds for eminent domain were not valid. That suit was dismissed, then appealed, which brings us to today.

Forest City Enterprises, the developer’s parent company, is controlled by the Ratner family, and is also running the show over in East Baltimore, where so far more than 800 families have been displaced by Forest City Science + Technology Group’s East Baltimore Science + Technology Park. In this case, Forest City has leveraged the support of Baltimore’s housing department to condemn and seize hundreds of properties, many of them using the controversial “quick-take” method of eminent domain. We published a series about this type of thing last year.

One of the main arguments made by the anti-Ratner camp is that the benefits of the whatever Ratner could bring to Atlantic Yards are negligible compared to the destruction of the neighborhood. A number of similar cases (.pdf), even in Maryland, have used the same rationale, and it really gets to the heart of the matter as far as eminent domain is concerned: According the landmark Kelo vs. City of New London, if the economic benefits of a project are not so great that they’re in the “public interest,” then an eminent domain taking is unconstitutional.

Every developer has a business model, I guess, but when you really think about it, I wonder just how many companies there are in the country, aside from Forest City, that make a living out of seizing large swaths of property that they’ve convinced local authorities are “blighted” and redeveloping them as mega-projects like this. Are they so few and far between that there’s no consensus on the pros and cons of such a model? A cost-benefit analysis of property taxes versus incentives dangled? A comprehensive look into the profitability of the sorts of projects that come and replace the so-called blight?

Yeah, it sounds like a book idea, I know, but I’m going to look into this.