They Paved Paradise and Put Up A Parking Lot

Not usually a big Joni Mitchell fan, but it seems appropriate in regards to this.

The Supreme Court today effectively expanded the right of local governments to seize private property under eminent domain, ruling that people's homes and businesses -- even those not considered blighted -- can be taken against their will for private development if the seizure serves a broadly defined "public use."

In a 5-4 decision, the court upheld the ability of New London, Conn., to seize people's homes to make way for an office, residential and retail complex supporting a new $300 million research facility of the Pfizer pharmaceutical company. The city had argued that the project served a public use within the meaning of the Takings Clause of the Fifth Amendment to the Constitution because it would increase tax revenues, create jobs and improve the local economy.

A group of homeowners in New London's Fort Trumbull area had fought the city's attempt to impose eminent domain, arguing that their property could be seized only to serve a clear public use such as building roads or schools or to eliminate blight. The homeowners, some of whom had lived in their house for decades, also argued that the public would benefit from the proposed project only if it turned out to be successful, making the "public use" requirement subject to the eventual performance of the private business venture.

The Fifth Amendment also requires "just compensation" for the owners, but that was not an issue in the case decided today because the homeowners did not want to give up their property at any price.

Writing for the majority, Justice John Paul Stevens said the case turned on the question of whether New London's development plan served a "public purpose." He added, "Without exception, our cases have defined that concept broadly, reflecting our longstanding policy of deference to legislative judgments in this field."{...}

And what is the intended purpose of the land in question now that it's been seized by the City of New London, Connecticut?

{...}During oral arguments before the court, it emerged that the land parcels at issue were earmarked for office space and "support" for the park or marina, possibly meaning a parking lot.

Nice.

This is going to make life even more hellish for those who are fighting eminent domain. We've had quite a bit of this sort of seizure going on here in the cities. The Minnesota DOT has a nasty habit of playing bait and switch with property appraisals. Best Buy recently relocated its corporate headquarters to Richfield, one nearby burb, from Eden Prairie, another nearby burb, and the City of Richfield pretty much gave away the store in an effort to get them over there. Lots of property was seized and then destroyed so that Best Buy could put up three office buildings that look just like the ones they had in Eden Prairie. Only they're closer to the freeway, which Best Buy coughed up a lot of coin to expand. The husband has business contacts with one of the businesses that was formerly located on the spot next to 494 where a parking lot now resides. This guy, to put it bluntly, got screwed. He fought it, but wound up having to move anyway, and he received about a tenth of what the land was worth. Last I heard the guy wasn't doing so well in his new location. Not enough traffic was the complaint, if I'm recalling things correctly.

Lileks took some photos if you're interested.

Currently, they're talking about expanding Light Rail. And, not so surprisingly, one of the new lines they're talking about building would shoot right down the street I live on, because it's one of the few in the area that actually goes straight through. Most of the other streets stop and start and have been designed with traffic barriers to keep people from cutting through residential neighborhoods at high rates of speed. Now, I don't know if this is going to happen, and it probably won't because it would be a mess, but, speaking strictly in hypothetical terms, the width of the light rail lines would decree that houses and businesses on either side of this street would need to be knocked down. Because light rail operates on city streets. Where car traffic is still allowed. And they apparently can't have just one set of tracks: they have to have two, one going in either direction. This could potentially mean that the Cake Eater Pad, freshly purchased by the new landlord, would now be easily siezed. Even if they elevated it, it would be awful and would be an utter mess. Property values for the surrounding area, which are very, very high, would plummet. And my neighbors are not ones you want to get in a pissing match with about property values. They're all Type A's. It would get ugly.

Or maybe not, because the Supreme Court says it doesn't have to be like that. Because, after all, all property owners are not created equal.

UPDATE: Nice quote from Robbo:

This is the equivalent of giving a teenager the keys to the biz-tax revenue liquor cabinet based on the promise that he'll only use them if he thinks a drink would be a good idea.

UPDATE II: Russ makes a very good point in the comments clicky and read.

Phoenix gives a rural example and touches on a point that I neglected to mention: how can the supremes say this is in the public interest when many of the corporations get HUGE tax breaks when they promise to build office parks, etc.

And as far as why someone would want to build an amusement park in the middle of nowhere? Well, tax shelters would be one idea. Another would be that this ruling might, conceivably, make commercial real estate ventures a much nicer place for money launderers to clean their cash. Right now the time turnaround due to litigation is huge on some developments. That's a natural hindrance to people who would like to invest money, but need a quicker rate of return, i.e. people who have dirty money that needs washing.

The more I think about it, the more I agree with Will Collier, who calls this ruling "a license for corruption and abuse."

Posted by Kathy at June 23, 2005 01:54 PM