West Side Development Fight Continues With Legal Challenge

NEW YORK CITY-Less than one week after the Metropolitan Transit Authority gave the green light to the New York Jets’ bid to build the New York Sports and Convention Center on the West Side Rail Yards, Madison Square Garden filed a lawsuit in state Supreme Court in Manhattan alleging the MTA “violat[ed] its statutory duties and the public trust” when it chose the plan over MSG’s $760-million proposal. In addition to the MTA, the legal challenge also names the City of New York and the New York Jets.

The Jets’ $720-million plan is for the NYSCC to be built over rail yards located between 11th and 12th avenues and 30th and 33rd streets and is anticipated to cost upwards of $1.4 billion. The NYSCC will be able to operate as a 75,000-seat stadium or a plenary hall seating up to 45,000 people when used in combination with an expanded Jacob Javits Convention Center. MSG’s plan included adding nearly 6,000 new residential units for low- to moderate-income New Yorkers, a public school, library and a 750-room hotel.Jay Cross, president of the Jets, could not be reached for comment by GlobeSt.com’s deadline.MSG alleges in its suit that the “process was designed from its inception to steer this property to the Jets. The MTA’s selection of the Jets’ bid is a culmination of years of effort on the part of the MTA, the Jets, the state and the city, including city officials such as Mayor Michael Bloomberg and Deputy Mayor Daniel Doctoroff, to deliver this valuable asset to the Jets.”The MTA opened the bidding process for the site along the Hudson River last month after a year of negotiating with the Jets. In addition to these two bids, TransGas Energy also submitted a proposal. However, the lawsuit also alleges “this process was not designed to encourage competition and secure the highest price obtainable for the Authority. The MTA gave bidders only 27 days in which to submit full proposals, thereby denying any opportunity for effective due diligence.” In addition, the suit points out that the MTA made its decision “just 10 days after the submission of complex bid documents.”The challenge also alleges “the MTA breached its legal and fiduciary duties by rejecting MSG’s higher offer in favor of the Jets’ proposal, even though, as MTA board members acknowledged, ‘MSG’s proposal is worth at least $200 million more than the Jets’ proposal.’”Included in the court documents filed by MSG is an affidavit from former MTA chairman Richard Ravitch. Ravitch states that “it is my understanding and firm belief that the process the MTA conducted to dispose of the [the Rail Yard] was not appropriate, give that the MTA has a fiduciary obligation to sell real property only if ‘in the interest of the authority.’”He adds in his affidavit, “this disposition process that the MTA pursued here should have been designed to produce the highest price obtainable for the Authority. However, this process did not produce the highest price obtainable for the Authority.”