| Releases & Statements
Gotbaum Sues MTA over Jets Stadium Deal
New York City Public Advocate Betsy
Gotbaum filed suit against the Metropolitan Transit Authority
(MTA) over its handling of the bidding process for the Hudson
Rail Yards. Gotbaum seeks to stop the MTA from selling the right
to build over the rail yards to the Jets on the grounds that the
process was unfair and the deal is not in the best interests of
New Yorkers.
“The MTA failed to fulfill its
legal responsibility to transit riders and New York City residents,”
Gotbaum said. “The Board of Directors apparently doesn’t
get it: subway service is a disaster. It’s time for them
to stop playing back room politics and start worrying about the
deteriorating state of our public transportation system.”
Gotbaum’s suit, which was filed
in Supreme Court late yesterday, asserts that by accepting the
Jets’ bid, the MTA is in breach of its fiduciary duty to
make the deal “most beneficial” to the public and
to ensure a process “that fosters fair and open competition,
is conducted under the highest ethical standards, and enjoys the
complete confidence of the public.” It details a series
of statements and actions on the part of the MTA that suggest
the process was manipulated to favor the Jets.
“Let’s not forget that
the MTA didn’t want to have an open bidding process at all
until there was a public outcry,” Gotbaum said. “It
bent its own rules so the Jets could win. The decision was made
before the process began.”
The suit, a petition filed under article
78 of the State’s Civil Practice Law and Rules, was prepared
with the pro bono assistance of Stewart Occhipinti, LLP. An Article
78 proceeding is generally used to challenge a determination by
a local or State agency or its officers. In considering the Public
Advocate’s petition, the court will determine whether the
MTA’s decision to accept the Jets’ bid was “arbitrary
and capricious” and whether to grant injunctive relief.
“The redevelopment of the West
Side is under a cloud of intimidation and bad faith,” Gotbaum
said. “I’m confident the judge will see this deal
for what it is: an abuse of public trust.”
About the Petition
What:
Public Advocate Betsy Gotbaum filed
a lawsuit yesterday in Supreme Court against the MTA for not fulfilling
their legal responsibility to transit riders and New York City
residents.
Gotbaum wants the court to grant a
preliminary injunction to prohibit the MTA from entering into
a contract with the Jets during the lawsuit and compel the MTA
to follow a fair bidding process.
Why the MTA?
MTA violated Public Authorities Law
by accepting the Jets’ bid.
The MTA is required by law to obtain
the most beneficial terms. In this case the MTA should have obtained
the highest price for sale of the development rights: they purposely
failed to do so.
City transit riders need and deserve
more from the cash-strapped MTA. Instead, the MTA is willing,
and in fact seems eager, to settle for tens-of-millions of dollars
less by entering into a contract with the Jets.
The MTA expects huge deficits in
future years; has announced potential fare increases every two
years; and has contemplated eliminating 33 bus routes and suspended
service on an additional 95 bus routes, closing three branches
of the LIRR, and reducing G line service by 10 percent. Additionally,
chronic subway and bus breakdowns have become a nearly daily occurrence,
causing hours of delays for commuters.
The MTA is required by law to have
a bidding process that fosters fair and open competition. Instead
the MTA tried to avoid competition, and when they were eventually
forced to open up the process, they rigged the bid.
What Actions did the MTA take?
They initially appeared willing to
accept any offer made by the Jets
When forced under public pressure
to determine a fair market value, they did hire an appraiser,
but then ignored the appraiser’s conclusions that the land
was worth more than $923 million and that the BEST use of the
land was mixed use with residential.
Chairman Kalikow was ready to accept
anywhere between $100 and $300 million, based on an arbitration
decision – that’s between only 10 and 30 percent of
the value of the land.
When another offer for $600 million
was made, the MTA ignored it.
Again under public pressure, the MTA
agreed to open up the bidding process – but the bid was
rigged.
MTA gave bidders less than 30 days
to file a complicated proposal.
The RFP required bidders to assume
no zoning changes would be made: this step alone may have discouraged
many bidders who would have wanted to build commercial and residential
space. The current zoning is right for the Jets.
The Regional Plan Association said
that this requirement “undermines proposals for the site
to achieve its ‘highest and best’ use or for the MTA
to receive fair market value
The MTA hired Newmark and Co. to review
the bids. This company had clear ties to the stadium, giving 2012
committee – which is relying on the west side stadium deal
- a $100,000 donation.
What Laws did the MTA Violate?
MTA violated NY Public Authorities
Law 1264 which states that the MTA’s purpose is to benefit
the people of the state of New York, and specifically the riding
public.
The MTA also violated Public Authorities
Law 1267 which requires the Authority to enter into contracts
to dispose property that are first and foremost “in the
best interest of the authority”.
MTA violated its own mission to “further
development and improvement of commuter transportation”.
Pursuant to what laws is Public Advocate
Betsy Gotbaum Filing?
Public Advocate Betsy Gotbaum is filing
under Article 78 of the State’s Civil Practice Law and Rules.
An Article 78 proceeding is generally used to challenge a determination
by a local or State agency or its officers. In considering the
Public Advocate’s petition, the court will determine whether
the MTA’s decision to accept the Jets’ bid was “arbitrary
and capricious” and whether to grant injunctive relief.
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