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The Goldstein family is the only family remaining at 636 Pacific Street, part of the site where the New Jersey Nets’ new arena is expected to be built.

The fight over property rights is getting ugly in Brooklyn. Homeowners living in the way of a new stadium projects say they’ll go on fighting despite losing a major court battle. CBS 2 met the central figure in the battle who has seen almost all of his neighbors move away.

Atlantic Yards is the site in Brooklyn where developer Bruce Ratner plans to build a massive construction project anchored by a brand new basketball stadium for the New Jersey Nets, even if has to force the last few unwilling residents to move out. At 636 Pacific Street, it’s coming down to high noon, a half-dozen years in the making.

“This’ll be the largest project in the history of Brooklyn. It’ll be larger than the footprint of the World Trade Center,” said Dan Goldstein, a condo owner on the site. “They’re stealing my property. My property is not for sale, but they’re going to make me sell it to them if we lose this next round of litigation.”

Six years ago all the apartments in Goldstein’s building were all occupied. There were 31 units in the building, but that was before Atlantic Yards was announced and everybody wound up moved out over the course of 18 months.

On Monday there is one hold-out: the Goldstein family. They are the only occupants on the floor, the only occupants in the building, and they say they’re not going anywhere.

“This about the principle – should a citizen of New York State have to the greatest powers of the state who want to take my property and hand it over to a billionaire,” said Goldstein.

Goldstein lives in the building with his wife and daughter. Some believe they are just getting in the way.

“Over a couple of hold-outs? I don’t know, I think for over a few people they should compromise,” said Brooklyn resident Robert Marion.

Matthew Brinkerhoff represents a total of 10 clients who are in the way and want to stay. He said the recession, among other things has made the project’s promise of affordable housing to go with stadium a bad bet.

“They are seeking to take their homes based on facts that existed three years ago and no longer exist and everyone knows they no longer exist,” he told CBS 2.

There are still four active lawsuits. Ratner predicts the Nets will be playing in their new stadium by the 2011 season in Brooklyn. A spokesman for Ratner Monday told CBS 2 the developer expects to sell $700 million in tax-free bonds that should be issued this week to help finance the project.

From Reason.com

Last month, New York’s highest court heard oral arguments in Goldstein v. New York State Urban Development Corporation, which centered on the state’s controversial use of eminent domain on behalf of real estate tycoon Bruce Ratner, who wants to build a basketball stadium, a hotel, and some office and apartment towers in central Brooklyn. As I’ve previously argued, it’s a blatant case of eminent domain abuse.

And as it turns out, Bruce Ratner himself agrees with that judgement. In a startling interview with Crain’s New York Business, Ratner finally admitted what his critics have maintained all along: “This isn’t a public project.” Here are the key paragraphs from Theresa Agovino’s article (emphasis added):

In light of a financial crisis that has hobbled many developers, Mr. Ratner refuses to discuss what the project will look like, whether or not it will include an office building and even who will design the first residential tower, which he’s slated to break ground on early next year.

Initially, the project called for four office towers, but by early this year, only one was on the drawing boards. Asked when it will go up, Mr. Ratner responds with a question: “Can you tell me when we are going to need a new office tower?”

He has no intention of sharing the designs for the complex. “Why should people get to see plans?” he demands. “This isn’t a public project. We will follow the guidelines.”

How dare those taxpayers ask to see how their money is being spent! Keep in mind that in addition to getting the state to forcibly seize private property on his behalf, Ratner has received at least $300 million in capital contributions from the city and state of New York, as well as a host of zoning overrides, low-cost financing, property and mortgage tax exemptions, and assorted taxpayer subsidies. As Daniel Goldstein, the lead plaintiff in the eminent domain lawsuit, aptly put it:

If Atlantic Yards ‘isn’t a public project,’ as Ratner now proudly claims, then he should return the public’s money and renounce his attempt to seize properties, like my home and my neighbors’ homes, that, until today’s sudden and uncharacteristic brush with honesty, Ratner always said he was taking for ‘public use.’

Go here for more on Ratner’s eminent domain abuse.

From The Real Estate Channel

NEW YORK CITY, NY) — Property owners, developers and legal experts are all monitoring activity in Albany, NY today where the New York Court of Appeals continues to hear a three-year-old eminent domain lawsuit filed by Brooklyn land owners.

The court’s decision is not expected before year end.

Hinging on that decision is a proposed $4.9 billion redevelopment of a 22-acre swath of dirt in a blighted area of downtown Brooklyn called Atlantic Yards. That is where a new arena is also planned for the National Basket Association’s New Jersey Nets.

New York City-based Forest City Ratner Cos., headed by chairman and president Bruce C. Ratner and a wholly owned subsidiary of Cleveland, OH-based Forest City Enterprises Inc. (NYSE: FCEA/FCEB), wants to build the arena and 16 other commercial and residential buildings on the site.

The so-called affordable housing would total 2,250 units surrounded by about eight acres of open space.

The developer maintains the project would benefit the entire community. The company argues it should be permitted to seize nearby individually-owned properties and pay for them at a court-approved sum.

The landowners, however, argue the state doesn’t have the right to use the powers of eminent domain to benefit a private developer.

That is the crux of the argument the appellate court is hearing.

Atlantic Yards would be developed in a transit center where several city subway lines meet the yards for the Long Island Rail Road. Middle class and row-house shelter now dot the site.

Linked to the property owners’ eminent domain complaint is a separate lawsuit against the Metropolitan Transportation Authority that sold the rail yard to Forest City Ratner. This suit seeks to annual the sale.

The state has condemned the property but hasn’t transferred title yet to Forest City Ratner. No buildings are under construction.

Critics of the project claim it will take the developer 20 years to fully complete the master plan, largely due to a current glut of high-end apartments in the area and generally tighter financing for real estate projects of this size.

Adding more drama to the controversy is an offer by Russian billionaire Mikhail Prokhorov to buy an 80 percent stake in the New Jersey Nets for $200 million and a 45 percent ownership stake in the planned arena. NBA franchise owners have to approve the deal.

Meanwhile, a bizarre statistical note also entered the fray. Brooklyn’s independent Budget Office maintains the arena would cost the city nearly $170 million or about $40 million more in spending then it would eventually generate in tax revenue.

From The Wall Street Journal

New York’s highest court is set to hear arguments Wednesday in a case that will decide whether the state government can lawfully seize private property for a development company.

The case pits the New York State Urban Development Corp., a government agency, against nearly a dozen land owners who say the state constitution bars the government from stripping the rights of private parties to benefit a developer that aims to build a new arena for the New Jersey Nets basketball team. The developer, Forest City Ratner Cos., is currently one of the owners of the Nets.

A New York court will hear arguments on whether the state can seize property for the proposed Atlantic Yards development in Brooklyn, shown above in 2008.

“The state is taking my home and other people’s homes, not for the public use, but to give an extraordinary benefit to the developer,” said the lead petitioner, Daniel Goldstein, one of the few remaining residents within the 22-acre site slated to be demolished. “It’s not a public use. For the government to take my home to enrich any developer…is wrong and I believe is illegal.”

A spokesman for Forest City Ratner declined to comment.

The case before the Court of Appeals in Albany is being watched closely by legal experts and property owners concerned about the power of governments to use eminent domain to further economic-development projects.

In 2005, the U.S. Supreme Court ruled in a 5-4 decision that the U.S. Constitution did not prohibit New London, Conn., from condemning private property to make way for a redevelopment project if the owners received “just compensation.” That ruling didn’t prevent states and cities from imposing additional limits on eminent domain.

The New York case may decide the future of the contested $4.9 billion project, called Atlantic Yards, slated to be built in downtown Brooklyn in a transit center where several city subway lines meet the yards for the Long Island Rail Road. The area abuts middle-class row-house neighborhoods.

The Brooklyn property owners allege that the state doesn’t have the right to use its powers of eminent domain to benefit a private developer.

The New York development corporation, meanwhile, argued in court filings that state law allowed it to take blighted property to make way for buildings that would benefit the public. Similar arguments raised in earlier eras led to housing being built, as well as the creation of office space in Times Square and the arts complex at Lincoln Center in Manhattan.

“The project has significant social, environmental, civic and economic benefits,” the state argues in its brief. In particular, the brief states, the Nets arena would provide an athletic facility for the city’s colleges and local academic institutions and “eliminate long-standing blight at the project site.”

The project calls for 16 commercial and residential buildings, including 2,250 units of so-called affordable housing and about eight acres of open space.

The project received millions of dollars from the state even while being hit by a wave of lawsuits since it was proposed, as property owners looked to block the development. Tuesday, a group of state legislators joined citizens’ groups in suing the state’s Metropolitan Transportation Authority, another government agency. The suit seeks to annul the MTA’s sale of a rail yard to Forest City Ratner. An MTA spokesman said the agency had no comment.

Critics have said the Atlantic Yards project was hindered by the current economic climate. In September, the Council of Brooklyn Neighborhoods, an opponent of the project, released a real-estate consultant’s analysis that said it would take 20 years for the developers to finish Atlantic Yards because of a glut of high-end apartments and tighter financing for real-estate projects.

The property has been condemned, but the state hasn’t transferred title to the development company and no buildings are under construction. A spokeswoman for the state development authority said: “We expect the entire project to be developed.”

The project got a potential shot in the arm last month when Mikhail Prokhorov, a Russian billionaire, offered to buy an 80% stake in the Nets for $200 million, and a 45% stake in the arena. The ownership deal awaits approval from at least 75% of National Basketball Association franchise owners.

The arena remains controversial. The city’s Independent Budget Office said in a report last month that the arena would cost the city nearly $170 million, nearly $40 million more in spending than it would generate in tax revenues.

Write to Suzanne Sataline at < a href="mailto:suzanne.sataline@wsj.com">suzanne.sataline@wsj.com