Thanks to @benjaminengle for sending this to me. This is an article from May 9th and I don’t know too much about the subject but enjoy reading about it so I can learn more.
According to the state Parks Department, whenever parkland is leased, sold or discontinued, it is considered alienated. No statute stipulates that it must be replaced. Instead legal precedent called the Public Trust Doctrine often mandates that it should be replaced if the matter is taken to civil court.
The developers said they are not legally required to replace the roughly 32 acres of asphalt, technically part of Flushing Meadows Corona Park, that would be taken up by the mall.The reason behind this decision is a 1961 law that leased the parking lot area to the Mets and allows them to use the land for any purpose that benefits the team, the developers contend.
Since Sterling Equities is owned by the same people who own the Mets, the group maintains that the law holds water, although critics have argued the statute was never intended to allow such a large development on the land.
via First Willets plan called for parkland swap • TimesLedger.
The entire argument to allow it is then based on the idea that the Mets benefit directly because Sterling Equities is developing the new project and Sterling Equities also owns the Mets. There’s a slight problem with that.
Sterling Equities, like any real estate development group, keeps things highly compartmentalized. Each project is a separate holding company, so that a major problem at one project can be contained within that project. (For example, in a construction accident at one development, the liability rests with the holding company for that development, not with Sterling itself, so that someone suing after the accident can’t go after everything the Wilpons own.) It also means that if one of their projects gets over-leveraged and the banks step in to claim possession, the banks can’t touch their other projects.
Of course, the Mets are contained in one such holding company. The team owes a massive balloon payment next summer to JPMorgan, which has been rejecting any action that puts other creditors in line ahead of them. There is a chance, however small, that next year’s balloon payment will force the Wilpons out of Mets ownership. If that were to happen, Sterling would still be working on developing the new project next to Citi Field, and the project would no longer be directly benefitting the team.
Whatever happens, 2014 will be a very important year for the Mets. The financial rumblings off the field may be more important for the team’s long term prospects than anything that happens on the field or in the farm system.