RAY SUAREZ: Brooklyn, New York. Americans have long had a sentimental affection for the place; it plays the earthy, working-class cousin, to powerful, glamorous Manhattan, just over the bridge. In movies and on TV, Brooklyn's home to a young crooner -
FRANK SINATRA SINGING: -- nicest bridge that I have ever seen.
RAY SUAREZ: Home to a strutting John Travolta. And an agitated Jackie Gleason -
JACKIE GLEASON: Once of these days ---
RAY SUAREZ: The borough has an accent and gutsiness all its own. Maybe Brooklyn has always seemed like small fry next to its neighbor's soaring skyscrapers and world-class economy, but the borough of neighborhoods now has big city growing pains.
Developer Bruce Ratner has proposed a $1.2 billion residential and commercial center built over the Atlantic Avenue Rail Yards in downtown Brooklyn. The Atlantic Yards project would tear down a mix of derelict storefronts and empty lots, so-called blight, tear down mom and pop businesses, and gentrified blocks of stylish lofts and brownstones selling for over $1 million.
Atlantic Yards manager Jim Stuckey showed off the latest model of the massive development designed by Frank Gehry. It will cover 24 acres and feature 17 high rise buildings; one may rise 60 stories to become Brooklyn's tallest.
JIM STUCKEY: Most estimates right now in New York is that there's a need for over 65,000 units of housing, housing at all levels,
RAY SUAREZ: The centerpiece of the development is a $435 million 18,000-seat sports arena, new home for the NBA's New Jersey Nets. Brooklyn hasn't had a major league team of its own since the beloved Dodgers left in 1957.
Borough president Marty Markowitz is a nonstop Brooklyn booster. He's put up signs like "How sweet it is" and "Name it, we got it!" at entrances to the borough.
He recalls how he pestered Ratner to bring the Nets over from Jersey.
MARTY MARKOWITZ: I would call him twice a week. I said, "Bruce" and a lot of times he won't come to the phone. He would just blow me off. Finally he said "Marty, get off of my whatever and let me look into it."
Sports have a way of infusing the municipality in which it's in with that pride, that spirit. And we have lots of spirit in Brooklyn, you know that. I mean my attitude is if you don't live in Brooklyn, forget about it.
RAY SUAREZ: Even with the new arena and team, Ratner's plan has split the Brooklyn community in two. Critics say neighborhoods here were already rehabbed and became prosperous without mega-projects and demolition.
Supporters like New York Gov. George Pataki and Mayor Bloomberg argue that old-time, low-rise Brooklyn can't keep up with 21st century demand, that Atlantic Yards will provide desperately needed housing and jobs.
Stuckey told us the people who give up their homes will be amply compensated.
JIM STUCKEY: We have said to people if you live in the project area today, we will bring you back into a unit that's the same size as what you have both in terms of square footage and size of the apartment. If you have a two bedroom, you come back into a two bedroom unit, and we'll bring you back at the exact same rent that you're paying today.
RAY SUAREZ: Another major supporter is Bertha Lewis, the executive director of ACORN. ACORN is a national housing organization, more often battling big-time developers like Ratner. But last May, ACORN signed an agreement with Ratner that stipulated 50 percent of the new housing would be affordable.
BERTHA LEWIS, ACORN: It's pretty amazing. It is ground breaking. It's the most far-reaching housing agreement that's ever been reached in this country. No one else has 50-50 -- no one. It's exhilarating and it is scary. It absolutely is.
RAY SUAREZ: But Candace Carpenter from opposition group Develop Don't Destroy Brooklyn says the numbers are deceptive.
CANDACE CARPENTER: Presuming that they get the funding that they anticipate, the split in the affordable housing requires that approximately 60 percent of the people who get affordable housing are making over $65,000 a year. You're talking about far above the median income of Brooklyn.
RAY SUAREZ: Councilwoman Letitia James, a former ACORN ally, says Ratner's history indicates he can't be trusted -- that there's nothing in ACORN's agreement which holds him accountable for all the community benefits he's agreed to, like a new daycare center.
LETITIA JAMES: It basically says things like good faith effort. It says things like, "we will try." It says things like "we will consider." It says things like "we will work with the government." That's not an ironclad agreement.
JIM STUCKEY: Well the enforcement teeth is many-fold, but primarily there's real dollars and cents, real serious dollars and cents, so that if we don't do what we say that we do, there's financial penalties.
RAY SUAREZ: Candace Carpenter says taxpayers, far from getting any return, are only making Ratner richer.
CANDACE CARPENTER: They are asking for $2 billion in subsidies, which are taxpayers' money, that will be utilized to line Ratner's pockets. And we don't have any input. It will destroy, from our perspective, the neighborhoods in Brooklyn.
RAY SUAREZ: Customers at Freddy's Bar which sits right on the line between the existing neighborhood and the proposed Atlantic Yards agree with Carpenter.
ROGER PAZ: I'm not against development at all but the scale of this is a real, you know, just slap in the face to what Brooklyn is, what this neighborhood is.
RAY SUAREZ: Many of Freddy's customers brought up the hotly contested issue of eminent domain, the right of government to condemn private property for public use.
In a recent Supreme Court case, Kelo versus the City of New London the justices ruled that local governments have more on less unlimited authority to seize homes and businesses.
JIM STUCKEY: There might be a need for eminent domain; there might be a need for condemnation; that is something that the state will decide. There will be a process that goes through. People have a right to content that process. I think the state will make its decision, unlike "Kelo," based on whether or not they believe this is a blighted area.
RAY SUAREZ: One person contesting the process is Vince Burns, one of two holdouts in his building who has sign hanging from his window "I love my home and my neighborhood, I intend to stay here."
VINCE BURNS: If they wanted to take down my building to put in a police station or school - I'd had to leave where I am because I love the place -- but I'd understand that - I mean, that's fine -- but this project is about one very wealthy man who wants to become wealthier by, you know, kicking me out.
RAY SUAREZ: Brooklyn activist Patti Hagan said the "Kelo" case, while appearing to help Ratner will actually help defeat him.
So you think you can hold him off indefinitely?
PATTI HAGAN: Absolutely. Holding off using the U.S. Constitution, I mean, using Justice Kennedy's ruling in the "Kelo" case in June which said that if it can be shown that the eminent domain is being used for one developer, one person, or one corporation, identifiable corporation, that's unconstitutional.
RAY SUAREZ: Acorn's Bertha Lewis sees the agreement with Ratner creating new limitations on major developers, and giving taxpayers a clear victory.
BERTHA LEWIS: It's a new day, corporate America. It's a new day, developers. You can't keep feeding at the public trough and expect that the public doesn't get a return on its investment.
RAY SUAREZ: Anti-arena Brooklynites say the debate over Atlantic Yards is not about money. It's about preserving the Brooklyn of Ebbets Field, Coney Island and Juniors Restaurant, home of legendary cheesecake.
LETITIA JAMES: There's nothing wrong with fighting for the soul of Brooklyn. There's nothing with fighting for Brooklyn. We don't want to Manhattanize Brooklyn. I'm standing up for Brooklyn.
RAY SUAREZ: Forest City Ratner says it wants to break ground so that the Brooklyn Nets can tip off their 2008 season in the new arena. Critics say it will never happen, all they can agree on is this is one valuable piece of real estate; they just can't agree on what 21st century Brooklyn will look like.