Since the City Council approved it in October, the controversy surrounding the Willets Point redevelopment plan has not only continued, it has increased.
With two lawsuits in the pipeline, a series of rallies held in Flushing Meadows Corona Park, frustrated community board members and business owners refusing to leave the Iron Triangle, it seems the development behemoth is becoming less and less popular each day.
Recently, the Sunrise Cooperative, a group of businesses located in Willets Point, filed a lawsuit against the Queens Development Group — a conglomerate of Sterling Equities and The Related Companies — and several city agencies.
The allegations are hefty. The Urban Justice Center, which provided an attorney for the group, alleges that not only did the city violate state law when it sold parkland for merely $1, but also that the entire Uniform Land Use Review Procedure was not done to protocol.
Specifically, the Sunrise Cooperative said the $42.6 million in tax subsidies the Industrial Development Agency — controlled by the Economic Development Corporation — granted the QDG should have been included in the application given to the Council in October as it may have altered members’ votes.
But the hearing to grant the QDG the tax breaks wasn’t held until December, a fact the lawsuit alleges was purposefully withheld.
According to the office of Councilwoman Julissa Ferreras (D-East Elmhurst), the QDG had every right to apply for the subsidy and it was not up to the Council to decide whether the project received these breaks.
Her office added that all relevant information was given to Council members for their review prior to voting.
However, sources close to the issue report never hearing about the developer’s intent to apply for tax breaks.
It was also reported that Council members did not receive the necessary information on the ULURP until half an hour or so before the voting was to commence. According to a source, it was impossible for the Council to properly review the information.
While the project has been talked about for years, the final regulations and stipulations were not available until the morning of the vote as Ferreras said she had been in talks with the developers late into the night before the Council convened.
During the vote, many Council members praised Ferreras for her perseverance in getting 35 percent of the residential units to be built at Willets Point to be affordable.
Still, there are doubts as to whether the IDA’s decision was even warranted.
According to the IDA, the tax subsidy is intended to “induce” developers.
Inducement is defined by the Tax Exemption Policy as:
“but for financial assistance [from IDA], a recipient would either not retain and/or attract a specified number of employees or business functions or unit for a specified period of time within the City, and/or the loss of a vital service to the City might occur, and/or a vital City-supported project or initiative may be delayed or otherwise adversely affected.”
According to the lawsuit, the QDG was in no need of inducement and therefore should not have been granted the $42.6 million.
Former Comptroller John Liu — a vocal critic of the entire Willets Point project — sent a representative, David Morris while he was still in office to a meeting held by the IDA where the board voted in favor of granting the QDG the tax break.
“Mr. Morris stated that the first concern was with respect to the cost benefit analysis to the City,” the meeting’s minutes reads. “Mr. Morris stated that the Comptroller’s Office felt that there were costs that have not really been included in the analysis in that the cost of land acquisition, which was originally intended to be recouped by the City, was no longer going to happen, so that the land was going to be gifted.”
Morris went on to say that the project site was originally conceived of as a new neighborhood district but with the changes made to the plan, there was no guarantee that affordable housing would be built, even though a large part of the Council voting in favor of the project was because of the amount of affordable housing.
Construction on the residential portion will not begin until 2025 at the earliest.
While the lawsuit makes these large allegations that could potentially void the entire ULURP, forcing the developers to start from the beginning, the Sunrise Cooperative has just signed a lease with a landlord in Hunts Point in the Bronx.
“We are happy that our clients have the ability to restart their lives and that they have been offered a lease,” a representative from the Urban Justice Center said.
The attorney “rejected the question” of whether they would pursue the lawsuit now that the businesses were offered a lease.
He did mention that there may be talks of settlement but the city’s Law Department denied the comment.
The attorney, when asked to expand on his comment on settling, denied saying such a thing and would not talk further on the matter.
Though the 50-plus businesses in the Sunrise Cooperative have been offered a lease, there are still at least a dozen or so owners who have not taken the city up on its relocation offer, saying the program is flawed and will put many of the existing business owners out of work.
The lease was given to the Sunrise Cooperative almost a month after the lawsuit was filed, but both the city and the Urban Justice Center denied that the lease was an attempt to get the Sunrise Cooperative to renege on their suit.