Making money off eminent domain at AY

Renters, owners and businesses may face condemnation proceedings
By Gabby Warshawer | October 05, 2009 10:27AM

Four buildings that may face condemnation, clockwise from top left: 479 Dean Street, 485 Dean Street, 636 Pacific Street, 491 Dean Street

The last remaining legal hurdle Atlantic Yards faces is a Court of Appeals hearing later this month on the project’s proposed use of eminent domain. If the court finds in favor of the defendant, the Empire State Development Corporation, the properties of several renters and owners are likely to be seized to make way for the development.

Renters, owners and businesses in buildings such as 479 Dean Street, 485 Dean Street, and 636 Pacific Street in the Prospect Heights area of Brooklyn will face condemnation proceedings under eminent domain. A second phase of condemnation would include buildings like 491 Dean Street.

If that happens, a firm called the Cornerstone Group will spearhead relocation efforts on behalf of a legal team the ESDC has contracted with. As The Real Deal examined in a story a few months ago, the city and state often use the Cornerstone Group in projects involving eminent domain, but the efficacy of the firm in helping residents and businesses find new places to live or work has often been questioned.

A contract obtained by The Real Deal via a Freedom of Information Law request from the Empire State Development Corporation lays bear how much money Cornerstone is poised to make as the relocation point team on Atlantic Yards, as well as exactly how the firm is contractually obligated to help residents and businesses that need to be relocated.

The Cornerstone Group, as a consultant of the law firm Berger & Webb — which the ESDC contracted with in 2005 to provide legal services related to Atlantic Yards condemnation proceedings — signed a contract last year that entitles the company to make a maximum of $40,000 a month for its work.

The firm’s Atlantic Yards contract stipulates, among other things, that it must “contact, meet with and interview each occupant that needs to be relocated to determine individual needs and relocation preferences” and “provide a comprehensive database of available apartments either through its own resources or by working with a residential real estate brokerage firm.” Cornerstone is similarly expected to help displaced commercial occupants find adequate places to move to.

The relocation company also has an 18-month, $750,000 contract with the city’s Economic Development Corporation to aid property owners in Willets Point who will be displaced if plans to redevelop the area are ultimately successful.

In 2006, Cornerstone’s work in conjunction with the Fulton Street Transit Center was criticized by Manhattan Borough President Scott Stringer and Congressman Jerrold Nadler, who put out a press release that said, in part, “the Cornerstone Group, an MTA subcontractor charged with assisting in relocation, has continuously failed to provide helpful rental listings for those forced to relocate.”