Hell's Kitchen Controversy Heats Up

(April 25, 2005, New York City)—A suit filed in New York Supreme Court today by the Hell’s Kitchen Neighborhood Association (HKNA), four Metropolitan Transit Authority (MTA) customers living near Hell’s Kitchen, and three New York State Assemblymen seeks to prevent the MTA from selling property interests above the Sen. John D. Caemmerer West Side Yards—known familiarly as “the yards”—to Jets Development LLC, owner of the NY Jets football team, for use as the team’s new stadium. The petition asks the Court to order MTA to re-do the bidding process “in a fair and open way.”

The legal team, including partners John D. Lovi and Evan T. Barr, and associate Lara E. Romansic from the New York office of Steptoe & Johnson LLP, an international law, filed the petition this morning on behalf of HKNA and the four MTA customers, Walter Mankoff, Anna Hayes Levin, Simone Sindin, and Joe Restuccia. 

According to Mr. Lovi, the MTA Board members violated their statutory and fiduciary duties and the public trust by awarding the bid to the Jets after a brief five-week bid process that was neither fair nor open.    As Mr. Lovi alleges in the lawsuit, “Any New Yorker can attest it takes longer than five weeks to get a city permit to install a garbage disposal in your apartment. The fact that it was accomplished so quickly calls into question the so-called ‘bid process’ on this extremely important and complex real estate deal.” 

This suit is among several legal actions filed in the wake of the March 31 unanimous decision of the MTA Board to accept the Jets' $250 million bid for the property, which team owners intend to use as the site of a new stadium. 

Mr. Barr notes, “At a time when every New Yorker knows that the quality of public transportation in the city is rapidly declining, we simply cannot afford to sit idly by while MTA sells us down the river.  All we are asking is that the MTA be ordered to put the people’s needs above those of the special interests,” he said. 

The petition details the MTA’s fiduciary obligation to dispose of its real property only if such disposal is in the interest of the Authority. Moreover, when disposing of property—such as the development rights to real estate above the yards—MTA is required to obtain terms “most beneficial to the public,” as well as to utilize a process that fosters fair and open competition, conducted under the highest ethical standards and enjoying the complete confidence of the public. 

“The process engaged in by the MTA met none of these standards,” said Mr. Barr.  “The Board was obligated to obtain a fair value for this property, but it did not do so.” 

The petition also details other issues associated with the stadium development  proposal, which the Hell’s Kitchen Neighborhood Association and the individual petitioners find problematic, including construction funding schemes involving a proposed multi-million dollar stadium bond issue.  “The stadium to be constructed above the yards would be the world’s most expensive sports venue,” said petitioner Mankoff.  “The Jets are trying to secure the real estate at less than fair value, and they intend to pass along the costs of building their new playground to New York city taxpayers. It’s hard to see how that is a good for anyone but the Jets.”

The suit asks for the court to rule that the MTA acted arbitrarily and capriciously in selecting the Jet’s bid and to grant a preliminary injunction that will keep the Authority from moving forward with the Jet’s offer, as well as a permanent injunction to prevent it from proceeding with the Jet’s bid without first conducting a new and proper bidding process.