Forest City Ratner’s Atlantic Yards may be facing serious legal trouble, as the state’s move to dismiss the case was denied by a State Appellate Court. A group of nine property owners near the Atlantic Yards in Prospect Heights development filed a complaint against the Empire State Development Court, saying that their land is being unfairly seized through eminent domain.

The ESDC tried to dismiss the property owners’ case, but was unsuccessful in their attempts, and will have until October 15 to file their response. Oral arguments are expected to begin in the spring of 2009, but developer Bruce Ratner has indicated his anticipation of a December 2008 groundbreaking for the project, which includes a sports arena and several residential towers.

“Though Ratner claims he’ll break ground for his Atlantic Yards proposal in December, he cannot do so unless New York State uses eminent domain to seize the owners’ and tenants’ properties as planned. But the plan is now in doubt,” said Candace Carponter, Legal Director for Develop Don’t Destroy Brooklyn.