MTA Uses Eminent Domain at Fulton St.

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The New York Sun

Crews had only begun clearing the debris from ground zero when legislators, neighbors, and loyal customers asked him to keep his store downtown. Harry Sutton, the owner of the New York Stocking Exchange, listened.


Almost four years later, after taking out loans to rebuild his lingerie store at 189 Broadway, the Metropolitan Transportation Authority has begun the legal paperwork to seize the unassuming two-story building at the corner of John Street where Mr. Sutton and eight other tenants have their small businesses. As a state authority, the MTA is using its powers of eminent domain to take the titles of six properties, including the historic Corbin Building, and evicting 120 tenants to construct the $825 million Fulton Street Transit Center. Another 27 buildings in the area will surrender some aspect of their property in service of the public facility, to be completed by 2008.


“On 9/11, we were bombed out of that store,” Mr. Sutton told The New York Sun, saying they could easily have given up. “If the MTA had said, ‘We’ll take your store’ on 9/12, we probably would have given it to them. Now things are getting better and they’re telling us to leave.”


Though the use of eminent domain must be in the service of “public use,” as defined by the Fifth Amendment, its casualties invariably include businesses that are forced to relocate after having weathered tougher times.


The 5-4 ruling by the Supreme Court late last month – against Connecticut property owners whose homes are slated to be razed to make room for an office complex – has made legal recourse for tenants like Mr. Sutton extremely doubtful, legal experts said. The high court rejected arguments that the office complex was a private venture, since its ultimate use was part of an overall economic development plan for the city of New London.


“It sounds like a classic taking: a subway station is pretty straightforward,” a professor at Columbia University’s law school, Thomas Merrill, said of the MTA’s claims to the property.


Property owners will receive “fair market value” for their properties, as determined by appraisers chosen by the MTA, though the agency is in negotiations with property owners over final prices. The 120 tenants, on the other hand, will not be compensated for the value of their business. Instead, they will receive money for the appraised value of fixtures, and as much as $25,000 for relocation costs. “We are looking to make a fair and reasonable compensation,” a spokesman for the MTA, Tom Kelly, said.


Tenants at 189 Broadway such as Geoff Fader have said the amount offered by the MTA is about 25% of what they need to salvage their businesses. Mr. Fader, a part owner of Cookie Island, a bakery, had intended to open his store on September 12, 2001.


“Instead, we were here giving cookies to the firefighters and the policemen,” he said. “All we’re asking is for a fair price and we haven’t gotten it yet. I’m not a Fortune 500 company, I’m just a little dude trying to pull it together.”


The MTA submitted papers to a New York County judge on July 14 to takeover the property at 189 Broadway and a hearing is scheduled for August 17, after which tenants and property owners have 120 days to file a lawsuit, though a lawyer representing 19 different claimants, including three at 189 Broadway, said he was unsure what legal strategy they would take. Unlike the Corbin Building, which as a landmark building cannot be altered, 189 Broadway will be razed to make way for a plaza on the corner of Dey Street and Broadway.


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