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May 22, 2003
Appellate Division Upholds $180 Million Contract for Brooklyn Homeless Shelter

by Deepti Hajela
NEW YORK -- A $180 million, 22-year contract between the city and a service provider for a homeless shelter in Brooklyn is not subject to the city's public review process, an appellate court has upheld.

Plaintiffs, including residents in the area where the shelter is being built, had filed a lawsuit saying the city had not followed its own regulations in connection with the contract because there had been no public hearings or reviews of the impact of the shelter. They lost their case in state Supreme Court and appealed.

The Second Department of the Appellate Division of state Supreme Court, which covers Brooklyn, upheld the lower court's ruling in a decision made Monday.

Marty Needelman, a lawyer for the plaintiffs, said the decision set a dangerous precedent because it allowed the city to avoid public scrutiny in its land-use deals. The court had ruled that because the agreement between the city and the nonprofit service provider was not a lease but a contract under which the nonprofit owned the facility and ran a program for the city, it was not subject to the Uniform Land Use Review Procedure.

"We think it's a disaster ... in terms of the rights of communities to be heard in city decisions involving land use," Needelman said.

Leonard Koerner, chief of the appeals division for the city law department, said, "We are pleased that the Appellate Division Second Department recognized the city had followed proper procedure in contracting with a group to run this facility for the homeless."

Needelman also said the site of the facility, in an industrial part of Brooklyn, was not conducive for helping homeless people.

"It's terrible for the homeless," he said. "It's a warehouse; it's not a well-thought-out facility. It's a place to hide them."

George McDonald, president and founder of the nonprofit, the Doe Fund, adamantly refuted that.

"We run excellent programs," he said.

He also said the plaintiffs just didn't want to have a homeless shelter in that area.

"They don't want to be persuaded by any of the facts," he said. "They don't want homeless facilities anyplace."

McDonald said the facility would be finished in December.

The contract between the city and the Doe Fund was made in early 2000, under the Giuliani administration. The agreement had the Doe Fund buying the former factory building in the East Williamsburg section, renovating it and operating the new 400-bed shelter. The beds would partially replace the 850-bed 30th Street Men's Shelter in Manhattan.

After the contract was made, other shelter operators said they had not been given a fair chance to apply for it, which McDonald refuted. Controversy also surfaced when it became known that the owner of the building before the Doe Fund's purchase was a man who had pleaded guilty in federal court in June 1999 to rigging bids at land foreclosure auctions.

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