Here comes the Bloomberg steamroller

From the Wall Street Journal:

Seeking to kick-start a massive Queens real-estate development project conceived in the boom years, the Bloomberg administration is moving to seize a portion of the site from private property owners.

Next week, the city plans to initiate the eminent-domain process on holdout owners who own property in the first 20-acre phase of the 62-acre project. The city also is planning to solicit bids from developers in the spring, according to city officials.

Known as Willets Point, the development site by Citi Field is slated to ultimately contain more than eight million square feet, with more than 5,000 apartments, a hotel and more than 1.7 million square feet of retail space.

The site currently is filled with junkyards and auto-repair shops, along with some larger industrial properties. The City Council in 2008 approved the use of eminent domain to acquire parcels from holdouts.

The property owners are expected to litigate to block the city action, although New York state laws give the government broad powers to use eminent domain. Similar recent development projects, like the new basketball arena being built at Atlantic Yards in Brooklyn, have survived court challenges.

Seth Pinsky, president of the city's Economic Development Corp., said in an interview Wednesday that the city has purchase agreements with property owners for 88% of the first phase of the site.

There are nine holdouts whose land the city would seek to acquire, and others whose land would be acquired in later phases.

"We just can't wait any longer and need to know that if we can't reach those agreements, that we can still move forward," he said.

Opponents of the project have argued that the city isn't permitted to construct entrance ramps to the Van Wyck Expressway nearby that are called for as part of the project. Richard Lipsky, a lobbyist who represents business owners at the site, says that the eminent domain action was "an absolute disgrace."

"The city is going ahead with a project that no one knows what it will cost, with a developer that no one knows who it will be, and with ramps that no one knows whether they can be built," Mr. Lipsky says.

Mr. Pinsky said the city's position is that it isn't required to build the ramps—which would mitigate traffic congestion on the local streets—until later phases of the project.

The action comes as the city administration is making a bet that the real-estate development industry—in hibernation since 2008—has warmed enough that landlords are willing to take risks on giant construction projects. In April, city officials said, they plan to solicit bids from a set of developers who have previously showed interested in the site, including Related Cos., Muss Development and Sterling Equities.

Sterling Equities?