HARLEM — The city recently launched eminent domain proceedings for a long-delayed six-acre East Harlem redevelopment zone where property owners say they are unfairly being squeezed off their land.
The city's Planning Commission approved the acquisition of the property via the use of eminent domain in August 2008 with the goal of building the $700 million East Harlem Media, Entertainment and Cultural Center, a 1.7 million-square-foot project that was supposed to include affordable housing, retail and cultural space, and create at least 1,500 permanent jobs.
But the developers have had struggles, with developer General Growth having gone bankrupt and Archstone being acquired by another company.
The delay left the land in limbo with rising property taxes but sapped the owners' ability to sell, develop or mortgage their land because of a blight designation, necessary for any eminent domain prococess.
The city would have lost the right to use eminent domain in the area on Feb. 16 without starting the proceedings, which they did on Feb. 12.
Officials with the city's Economic Development Corporation said the filing was made to preserve their right to use eminent domain in the area "only as a last resort," because they hope to negotiate sales agreements with the property owners.
"We have already begun the negotiation process with the remaining tenants, and would vastly prefer to reach a deal with them," said an EDC spokesman.
That was no consolation to Damon Bae, owner of Fancy Cleaners at 126th Street and Third Avenue, and two other parcels of land within the redevelopment zone.
"I'm very disappointed something like this can happen after all these years," Bae said when told by a reporter of the eminent domain filing. "It's taken the city years to do absolutely nothing."
Meanwhile, the taxes on Bae's properties have skyrocketed.
In 2008, a vacant lot he owns on Second Avenue between 125th and 126th streets had an annual tax bill of just over $4,000 per year, according to city tax records. Last year, Bae paid more than $60,000 in property taxes for the same parcel, which he rents out for use as a recycling center for $39,000 per year, he said.
"All of the rent I'm getting I give to the City of New York and then I turn around and write a check for an additional $20,000," said Bae who said he's had to borrow money to keep his cleaners afloat.
"I have no choice but to pay or the city will take my property with a tax lien and pay me nothing."
Another vacant lot Bae owns on 126th Street between Second and Third avenues cost more than $60,000 in taxes last year, up from about $4,500 per year in 2008. If not for the blight declaration, Bae said he had plans to develop the land and expand Fancy Cleaners.
Bae was a spokesman for the East Harlem Alliance of Responsible Merchants, a group of property owners and tenants in the area facing eminent domain who have criticized the city for not coming to an agreement with them more quickly. The group lost a lawsuit challenging the blight declaration in 2010.
"If they want to come back to me and deal fairly, that's fine," said Bae.
The area been designated as an Urban Renewal Area to remove blight since 1968. The blight study found almost two dozen vacant lots, buildings in poor condition and environmental conditions from soil contamination.
Little development has occurred since 2008 in the redevelopment zone that spans from East 125th to East 127th streets from Second to Third avenues.
One piece of the zone on Third Avenue and 125th street was successfully developed into 48 units of affordable housing and 5,600 square feet of retail space. The retail space is currently empty with "For Lease" signs in the window.
The planned Proton Center to treat cancer patients in conjunction with four area hospitals, including Mount Sinai and Memorial Sloan Kettering, is scheduled to take up 120,000 square feet of space at a city-owned site just off of Third Avenue between 126th and 127th streets.
EDC officials say they are in negotiations with a modified version of the original development team that completed the affordable housing on Third Avenue and 125th Street and plan for the new project to include many of the initial elements, including "thousands of jobs." No new request for proposals is anticipated.
"After facing challenges, a clear path forward is being re-established for the project," said EDC spokeswoman Kate Blumm.
Three of the four properties listed in this first stage eminent domain declaration are located on 125th Street between Second and Third avenue. The final property is on 126th Street between Second and Third avenues.
“This project will bring millions of square feet of affordable housing, commercial, community and cultural space and open areas to the neighborhood — all of which are priorities that were expressed by the surrounding community during a dedicated engagement and planning process," said Blumm.
But Bae questions whether the new project should have to go through a land use review process because the final development will be different from what was originally proposed. Either way, he said he plans to "fight like hell" for his property.
"This is like a mafia squeeze," said Bae. "But I'm not going to get stepped on."