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With legal hurdles gone, is Coliseum plan a go?

Since the U.S. Circuit Court last week unanimously reversed a ruling that would have tied the Columbus Center project to the city's compliance with the Clean Air Act, both the city and the opponents have been trying to decide what to do next.

The litigants have three months to request a rehearing or apply to the U.S. Supreme Court, while the developer, Boston Properties, must close four months after the end of any litigation.

That presents a dilemma for both New York City, which has a real estate market that has declined steadily through the seven years of courtroom dramas, and the developer, which has no signed and sealed prime tenant and is facing a $303 million payment that could be due in four months. Any appeal by the coalition against Columbus Center, made up of area individuals and community groups, would have to be funded, as well.

Howard Goldman, a partner in Winthrop Stimson Putnam & Roberts, who represented the MTA in discussions with the developer and through the approvals process, said the whole situation is "a shame at this point." After seven years of litigation, he noted, all the lawsuits have been won by the MTA and the city who were the sellers.

"But they have yet to realize a penny - and, given the state of the real estate market, it's uncertain they ever will," Goldman said. "The people who have lost out are the public, since all the money was to go to improve the subway."

While the original Moshe Safdie 100-story-plus space-age design was to bring the city $450 million, lawsuits and compromise caused a change in architects to David Childs of Skidmore Owings Merrill, and reduced the size and shape of the project as well as the city's payment to $330 million. Past court actions have involved everything from the bidding process to environmental concerns.

John Van der Tuin, a partner in Stults Balber Horton & Slotnik, which represents the Coalition together with cocounsel Jerry H. Goldfeder, said they are discussing an appeal with their clients. He said there are several reasons why the building, as proposed, does not make sense, although he admitted that some development there would be appropriate.

"The most intense discussions," Van der Tuin predicted, "will be between the developer and the city as to whether the project can or must proceed. The city is taking the position they have an enforceable purchase agreement," he added.

Developer Mortimer B. Zuckerman, chairman of Boston Properties said, "We stared this is the spring of 1985 and we're still caught up in the courts. We'll have to read the decision and then figure out where we are."

"Tenants have not wanted to talk to us seriously until this litigation is resolved," added Robert L. Selsam, a Boston Properties vice president. "We still want to develop the site but there have to be more discussions."

Deputy Mayor Barbara J. Fife said the city will be reviewing the decision and the agreement to decide on the best options.

"There are realities about getting funding for this kind of project at this point in time," she noted. "Should we be in a holding action for a few more years and look at a different type of project?"

Van der Tuin said the city always took the position that no changes could be made without going back through the Uniform land Use Review Process. "Does it mean they are locked into doing this project or nothing?" he wondered.

Goldman said, in the building's current from, it is smaller than what would be allowed as-of-right under the zoning.

Robert P. LoBue, a partner in Patterson Belknap, Webb & Tyler, which represents the MTA and TBTA, explained the court saw it could not hold the project hostage to a pre-existing "hot spot," some blocks away, where exhaust levels violated the Clean Air Act standards. Columbus Center, he noted, is not predicated to violate the Clean Air Act.

The three-judge panel for the Federal Circuit U.S. Court of Appeals, in its unanimous decision, states "the city certainly has not repudiated or failed to fulfill its commitment to mitigate nonproject caused violations or exacerbations."

While the city is off the hook for the moment, further litigation is always possible. On the other hand the opponents could call everyone's bluff, back away and see if the city and the developer truly want to move forward with what is on the drawing board.
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Title Annotation:U.S. Circuit Court reverses ruling on Columbus Center project in New York, New York
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Jul 1, 1992
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