Thinking about eminent domain: economist suggests property owners should get a share of future profits
“New York State is going to court today to condemn the last seven properties needed for the Atlantic Yards project, and the big question is not whether the condemnation will be successful but how much developer Forest City Ratner–actually, Greenland Forest City Partners–will have to pay.
The tremendous gain in development rights, thanks to the state’s override of New York City zoning, is a boon for the developer, which often but not always compensates the property owner for replacement value (plus a premium for speed of departure, attorneys’ fees, and other costs), not the new value of the site.
Then again, as I reported in May, the state condemnation judge, Wayne Saitta, did find for the property owner in one case, declaring that evidence “demonstrates that there is a reasonable probability that absent the project, the subject property would have been upzoned.”
Thus he rejected the state’s claim that an Atlantic Avenue property was barely worth $2 million, and instead valued it at nearly $9.2 million, far less than the $20.6 million that the owner sought but still a major gain. “
Atlantic Yards Report 18 September 2014.