MTA Requests $250M Bond From Plaintiffs in Jets Suit

The Metropolitan Transportation Authority has asked for a $250 million bond from the four plaintiffs who sued the authority after it awarded development rights of the West Side rail yards to the New York Jets. The bond is to compensate the MTA should its deal with the Jets, calling for the construction of a 75,000-seat stadium at the site, fall through.“Requesting that we post a $250 million bond is a cheap shot,” Public Advocate Betsy Gotbaum said. Ms. Gotbaum, Madison Square Garden, the Hell’s Kitchen Neighborhood Association, and the Straphangers Campaign have filed suits charging that the process leading up to this spring’s decision to award the Jets air rights for the 13-acre site was rigged and that the bidding should be repeated.The court has consolidated the plaintiffs’ cases to expedite the hearings, and Justice Herman Cahn of New York State Supreme Court, who is to hear the case this week, said at an earlier hearing that he would try to make a decision within a week.“The MTA is ducking the main issue identified in the court petition: that it can and should get much more than the $250 million offered by the Jets,” Ms. Gotbaum said in a written statement. “If the process wasn’t flawed and the outcome wasn’t predetermined, then the MTA, the riders, and New York City residents would all get their due, which is a lot more than $250 million.”A spokesman for the MTA, Tom Kelly, said requesting a bond during an injunction hearing was “normal procedure.”In a letter to the plaintiffs, the MTA wrote: “If an injunction is granted, there is a very real possibility that the injunction will prevent the MTA from realizing substantial value offered by the Jets to the MTA for developing the property. As such, before an injunction is granted, the Court should order Petitioner to post a bond of $250 million.” An unusual aspect of the MTA’s request, however, is that the $250 million that the agency says it would lose if the Jets’ deal is blocked is less than Madison Square Garden’s bid, valued at $400 million, for the development rights.The lawyer representing the Hell’s Kitchen community group, John Lovi, said that if the court ordered the bond, it is most likely that the Garden would put up the money.“In today’s New York City real estate boom, when the average price of a Manhattan apartment exceeds $1 million, to sell the development rights to 13 acres of prime Midtown real estate for about what it would cost to purchase 13 apartments in the Time Warner Center is on its face an affront to the intelligence of every New Yorker and evidence enough that the MTA has struck a bad deal,” the Hell’s Kitchen suit says.An appraisal by the MTA found that the rail-yard site was worth more than $900 million, and an appraisal by MSG put the value at $1 billion. The Jets had negotiated a $100 million deal with the city and state to build the stadium, which will double as an Olympic Stadium should New York be awarded the 2012 Summer Games. Officially known as the New York Sports and Convention Center, it will also serve as a convention hall for the Jacob K. Javits Convention Center.The suits allege that the 27 days between when the bids were requested and when the MTA’s board voted unanimously to accept the Jets’ offer was insufficient to allow for competitive bids to be formulated. Filed under article 78 of the state’s Civil Practice Law and Rules, the suits ask that bidders be given more time and information under a new bidding process.In its suit, MSG goes farther than the other plaintiffs to request that if the court finds that the bidding process held by the MTA was legitimate, then MSG, rather than the Jets, should be awarded the rights to develop the site. While the cases have been consolidated, each plaintiff has its own lawyer and will argue its suit separately.

MTA Requests $250M Bond From Plaintiffs in Jets Suit

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