Lawsuits Diminish Odds Stadium Will Be Approved

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

At a hearing yesterday, a state Supreme Court judge announced he would decide by June 2 on the four pending lawsuits against the Metropolitan Transportation Authority and the Jets. That weakens chances that the state’s Public Authorities Control Board will approve a Jets stadium before the International Olympic Committee picks a host city July 6 for the 2012 Summer Games.


The Bloomberg administration has said that if the board does not approve the stadium, officially called the New York Sports and Convention Center, before the Olympic committee vote, then New York’s prospects will be very dim.


Governor Pataki, state Senator Joseph Bruno, and Assembly Speaker Sheldon Silver control the three-member board, whose unanimous approval is needed for the 75,000-seat domed stadium to be approved. Mr. Pataki’s office said the agenda for the board’s May 18 meeting had not been made final. Both Mr. Silver, a Democrat of Manhattan, and Mr. Bruno, a Republican of Rensselaer who is the Senate majority leader, have said pending litigation could delay a board vote.


At yesterday’s hearing in Manhattan, the MTA, which owns the 13-acre West Side rail yards, and the Jets agreed not to close their deal before June 2. The Jets also agreed to buy the development rights from the MTA for $250 million even if the Public Authorities Control Board does not approve the stadium.


“We will get the property, and then we will work to get the proper approvals – both the state and city support the plan,” the lawyer for the Jets, Louis Solomon of the Proskauer Rose firm, said.


Madison Square Garden, Public Advocate Betsy Gotbaum, the Straphangers Campaign, and the Hell’s Kitchen Neighborhood Alliance are alleging in their suits that the MTA bidding process for the rail yards was flawed because it offered too little time – 27 days – for potential bidders to put together comprehensive proposals. The process was rigged toward the Jets, who had been working on their proposal for several years, the lawsuits allege. The suits ask that the bidding process be repeated, although Madison Square Garden maintains that if the bidding process is not repeated, then it should be awarded the development rights because it offered a bid with an up-front payment of $400 million compared with the Jets’ offer of $250 million.


The MTA argued the case should be dismissed because it had several rationales behind its decision and was within its rights to choose the Jets’ bid. The Jets’ bid, including the transferable “air rights” that the MTA retains, is actually $1.2 billion, a lawyer for the MTA argued.


The four cases have been consolidated, though different lawyers argued the suits separately.


Madison Square Garden was ordered yesterday to post a bond of $35 million to cover any losses the MTA may suffer as a result of the lawsuits. The MTA had requested a bond of $250 million, based on the amount the Jets are to pay for the air rights. The bond must be posted before May 16 or the injunction that prevents the MTA and the Jets from closing their deal will be void.


Justice Cahn, who spent the three-hour hearing standing, with his elbows leaning against the back of his leather chair, prodded the Jets and the MTA about any contingencies in their agreement and expressed support for the 2012 Olympic Games.


“The agreement with the Jets, how binding is that?” Mr. Cahn said.


“My understanding is that there are not contingencies,” a lawyer for the MTA, James Quinn said. The MTA has not handed over its nonbinding term sheet with the Jets, and Madison Square Garden lawyer Randy Mastro has maintained there is a contingency in the term sheet that the state board must approve the stadium for the deal to continue. Mr. Quinn denied that.


“The city of New York just told me it is important that we have this stadium in place when they decide who gets the Olympics, and we want to get it,” Justice Cahn said after a lawyer for the city argued that the Olympics in 2012 and a Super Bowl in 2010 will generate money for the city. “So rushing a decision, doesn’t it make sense?”


June 2 will not be the end of the legal wrangling, legal experts said. They expect appeals to be filed as soon as a decision is made.


The New York Sun

© 2025 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  Create a free account

or
By continuing you agree to our Privacy Policy and Terms of Use