Dec. 20 (Bloomberg) -- A New York state board approved a $4 billion development project for downtown Brooklyn that would include a basketball arena for the National Basketball Association's Nets and thousands of units of housing and office space.

The Public Authorities Control Board, whose actions require unanimous approval by Governor George Pataki and the State Senate and Assembly leaders, approved the project in an Albany meeting after Assembly Speaker Sheldon Silver said he was satisfied the developer, Forest City Ratner Cos., had answered community concerns.

The project ``will create tens of thousands of construction jobs and thousands of permanent jobs, and bring professional sports back to Brooklyn for the first time since the departure of the Dodgers to Los Angeles nearly 50 years ago,'' Pataki said in a statement. The Nets now play in New Jersey.

The plan calls for razing buildings and redeveloping property atop a Long Island Rail Road hub and includes part of the Prospect Heights neighborhood. Architect Frank Gehry, best known for his sculptural approach to buildings such as the Guggenheim Museum in Bilbao, Spain, designed a 22-acre, 16- building site with 336,000 square feet of office space, 247,000 square feet of retail shops, 6,430 residential units including 4,500 rent-stabilized rental apartments and a 180-room hotel.

Scaled Down

Forest City Ratner spokesman Loren Riegelhaupt said the developer revised plans for the project's tallest building. It will be 511 feet, one foot shorter than the Williamsburgh Savings Bank Tower, the borough's biggest. A company press release said it has agreed to build another 1,000 units for low- and middle-income first-time homeowners in the vicinity.

Bruce Ratner, the company's president and chief executive office, said in a statement he expected to move the Nets to their new Brooklyn arena for the start of the 2009-2010 season.

Silver, in a statement, said ``I am pleased the developer is committed to addressing numerous community concerns through several specific actions that will result in significant neighborhood improvements.'' Those include affordable housing, open space, park upgrades and ``conforming building heights to those of existing structures in the surrounding area,'' he said.

Ratner and New York City were sued Oct. 26 by 10 tenants and landlords seeking to block the project because it would destroy their homes or businesses. The landlords and tenants said local and state authorities violated city laws by failing to conduct open and fair bidding on the project.

Court Action

The plaintiffs have asked a judge to block the city and state from using eminent domain, a law allowing government agencies to buy land forcibly and use it for public projects. The Empire State Development Corp., which helps decide on state funding for such plans, agreed Dec. 8 to allow the use of eminent domain if necessary.

Daniel Goldstein of the group Develop Don't Destroy Brooklyn, said the fate of the Atlantic Yards project will be determined in court. ``Except for a few courageous and principled elected officials, the fix has been in for a long time on Atlantic Yards,'' he said.

Patti Hagan, a member of the Prospect Heights Action Coalition, said the group had pleaded with Silver to delay action until after Governor-elect Eliot Spitzer took office on Jan. 1. ``The three men in the room today who voted this, they don't represent us,'' she said.

The city and state have each committed to provide $100 million to the project.

Record Investment

The Public Authorities Control Board also approved $650 million in financing for a new computer chip factory near Albany for Advanced Micro Devices Inc., based in Sunnyvale, California.

The factory would be the largest private investment in the state's history. The company also receives $256 million of tax benefits and is expected to spend about $2.9 billion of its own money.

Pataki and legislative leaders announced in June the aid package, which the state offered in competition with Dresden, Germany, where AMD has a large factory. The factory near Albany is supposed to employ about 1,200 workers directly and 3,000 indirectly, according to state officials.

The $650 million will be raised by the sale of bonds backed by state personal income tax revenue.

The board authorized $4 billion of bonds for other projects. The largest include $656 million for a multi-family housing development on West 42nd Street, near the Hudson River, and $636 million to be sold by the state Environmental Facilities Corp. on behalf of New York City's Water Finance Authority.

Surge in Approvals

Another $630 million of bonds were authorized for mental health services facilities and $515 million were for various projects not disclosed in the public agenda, and backed by the state personal income tax.

The end-of-year surge in bond approvals, just before Pataki leaves office Dec. 31, was criticized last month by state Comptroller Alan Hevesi. He said that the control board was rushing through projects that could tie Spitzer's hands.

The board didn't act on another pending project to convert the Farley Post Office building across the street from Pennsylvania Station into a new rail terminal. Silver has blocked the plan, calling for changes.

To contact the reporterS on this story: Michael Quint in Albany, New York, at mquint@bloomberg.net; Sharon L. Crenson in New York at screnson@bloomberg.net;

Last Updated: December 20, 2006 18:30 EST