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Environmental ruling may kill Columbus Center.

Environmental ruling may kill Columbus Center

In a decision which will affect many development projects in New York City, a Federal judge has ruled the construction of the Columbus Center could be halted should New York City fail to meet Federal Clean Air Act requirements for the entire city by November of 1992.

Robert E. Selsam, vice president of Boston Properties, the developer of the Coliseum Center, said "It's a very serious blow to the viability and future of the whole project."

The city, through Corporation Counsel Victor Kovner, has said it plans to appeal, while John T. Van Der Tuin, counsel for the plaintiffs, said he would then cross appeal.

"We would oppose the appeal and cross appeal on the issues that were decided against us," he said. "If the city does not appeal, it's a matter of monitoring their compliance with the judge's order and the statutory deadlines."

Boston Properties has an agreement to purchase the 4.5-acre site from the city which would bring in $338 million to the fiscally strained coffers. Under the provisions of the purchase contract, the developer does not have to close until the major litigation is resolved, Selsam said.

A Court of Appeals ruling only recently reaffirmed the right of the Triborough Bridge and Tunnel Authority (TBTA), the owners of the property, to have sold the site without competitive bidding. Selsam, formerly an employee of the MTA, was also named in the suit as having a possible conflict of interest. That claim was dismissed by the judge because no relief was cited by the plaintiffs.

Van Der Tuin, a partner with Stilts, Balber, Horton & Slotnik, who represented the various community groups and plaintiffs together with co-counsel Jerry H. Goldfeder, said he thinks the decision is an important one for environmental interests and the City of New York. "It will really force the city to take seriously the statutory deadlines in the Clean Air Act," he said. Although Judge Shirley Wohl Kram did not expressly enjoin commencement of construction on the project, Van Der Tuin said, it is exceedingly unlikely that the project will go forward. "I don't see how bonds could be sold or issued to finance the project or how the developer could invest the funds necessary to commence the project, with the threat of injunction and substantial fines hanging over his head," he said.

Judge Kram said the city and developers together will face fines beginning with $15 million in November, 1992, and have more fines imposed until statutory compliance is reached. New development projects must do their part in helping the city control air quality even if they do not cause or add to them, say rules put into effect by the Environmental Protection Agency last year.

Sources said the decision has implications for the entire city. Any project whose environmental impact statement shows problems with air quality could be subject to the same requirements and could also be held up.

The principal source of funding for the project was to be industrial revenue project bonds to be issued by the Industrial Development Agency, said Ven Der Tuin. The bonds were to be paid back, he said, by the rental stream or sale of units. "I don't see how you can sell bonds if the rental stream can be interrupted or be affected by millions of dollars of fines," he said.

If the developer could finance the project with a bank, Van Der Tuin added, he wouldn't need the agency's involvement. "The agency's participation is there because it provides about $50 million in tax abatements so it's a necessary player to the project," he said.

Selsan noted: "The bonds were only a part of the funding. In all likelihood we were going to arrange the funding and have our bank buy all the bonds," he added. "You cannot finance a project with the threat of litigation still present."

There is no dispute, Van Der Tuin said, that, if Columbus Center is built as planned, it would increase carbon monoxide levels because of the size of the garage and the number of people coming into the project either to park their cars to make their deliveries. Responding to a question, he said, if the developer eliminated the garage, they would have to do a new environmental impact statement. One claim regarding its possible enlargement was dismissed by the judge.

The air quality is also affected, Van Der Tuin said, by the size of the project, now slated to include two towers the highest which reaches 752 feet or the equivalent of 75 stories, as well as the number of people going to a certain location. "The idea in general is to induce people not to use their cars and to use public transportation," Van Der Tuin explained, "and for the city to come up with strategies to eliminate cars or cause the cars to run more efficiently."

"The judge looked at the history of this and saw that since 1972 the city has failed to meet every statutory deadline that has been imposed," Van Der Tuin continued. "They say they will meet the 1992 history. Given the history of the deadlines the city has missed over the last 19 years, there is no reason to believe they will meet the next deadline." There is no pointing to specific steps to meet the deadlines, either, he said. "The judge said one more chance and if you are not being truthful you will be heavily sanctioned."

It is unclear if Boston Properties will continue to pour millions of dollars and further planning time into a project which could be blocked due to no fault of its own at some point in the future.

Boston Properties' chairman, Mortimer Zuckerman told REW in May they were at that time continuing discussion with the opposing groups and in particular with regard to the secondary building. "People are willing to take lower," he said then adding, "we're still believers. Is there a tunnel at the end of the light? Yes."

Unfortunately for Zuckerman, this court decision could close that light forever, while ironically continuing to allow sunlight to keep shining over Central Park.
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Title Annotation:construction could be halted should NYC fail to meet federal clean air act standards by November, 1992
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Jul 17, 1991
Previous Article:Bill passes to restrict peddlers on Fifth Ave.
Next Article:Builders to feel cuts at NYC Planning Dept.

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