Kelo v. New London / eminent domain update

[cannon_fodder]

In Kelo v. The City of New London, a collection of water front properties were being foreclosed on via eminent domain by the City of New Londong, CT.  The reason for the demolition was because Pfizer had a development plan for that property - which was essentially to bulldoze a neighborhood and put in high rise condos, top end retail, and exclusive office space, a new research lab, and a hotel convention center in a nearly $1,000,000,000 transaction.  All the city had to do was buy the property, evict the residents, bulldoze it all, rezone it, and green light all development applications/zoning changes, etc.

The residents sued, saying the government can not take their property for the sole stated purpose of enhancing private for-profit development (it has long been held that a hospital, University, or similar institution can be served in this way, this was the first affirmation of a for-profit venture).  It bounced around up to the Supreme Court who famously decided that the overriding concern of the City was in fact served by taking and demolishing private homes in order to allow "better" private development.  Thus, a City has the right to decide what kind of private development is for the "good of the community".   [the taking served a "rational relation" of a legitimate government interest]

By way of a followup, some 4 years later:
http://online.wsj.com/article/SB10001424052748704402404574527513453636326.html

The city spent ~$100,000,000 in legal fees, property acquisitions, and costs to bulldoze the property.   Pfizer has failed to do anything with the property and recently announced plans to close down their operation in New  London, transferring/eliminating 1400 jobs, and abandoning their large office complex (160 acres) there.

Why are they leaving?  Their tax incentives run out.  Their tax bill would increase from $1.3iml to $6+mil a year.  In other words, they'd have to pay property taxes like everyone else.  They have a better incentive across the waterway in Groton - so they're moving for the time being (they wouldn't say what their long terms plans were).

The moral of the story:  incentives for companies are fleeting and promised development counts for nothing without some sort of backing.  Ignoring the private property debate, this was city mismanagement at its worst.  Scuttling existing and less glamorous planned development for promised development from elite community members. The result:  nothing got done.

I hope Tulsa pays attention and learns.


View of the land in question:
http://www.bing.com/maps/default.aspx?v=2&cp=qwqvsw8zrtkh&scene=15268562&lvl=1&sty=b&where1=50%20Pequot%20Ave%2C%20New%20London%2C%20CT%2006320-5410

[Conan71]

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[cannon_fodder]

There was a story about this in the WSJ yesterday. 

http://online.wsj.com/article/SB10001424052748704402404574527513453636326.html

Wow, really?   

By way of a followup, some 4 years later:
http://online.wsj.com/article/SB10001424052748704402404574527513453636326.html

[stageidea]

Sorry, I don't know how I missed that..

[cannon_fodder]

Np.  Just had to be snarky.   

[we vs us]

I guess it's predictable that the WSJ would take the tack that government powers are solely culpable here.  Aside from a throwaway line about corporate welfare, nary a word is said about Pfizer.  

The land grab didn't occur in a vacuum.  There's a context for this, and the context is that large corporations routinely demand -- and routinely receive -- huge concessions for their investment. New London was playing the game as expected. And according to the SC ruling, the city did its due diligence.  Their development plan was the centerpiece of the court's reasoning:  it was so well put together that it convinced the court that expansion of eminent domain was warranted.

But the plan relied on Pfizer, and Pfizer didn't hold up their end of the bargain.  

So I'm not sure why we need to put this all on New London's doorstep.  New London did exactly what we would demand of it, if we lived there:  it worked hard to get one of its major corporations to expand its base.  The plan was obviously not foolproof, but it was complete enough to impress the SC.   All they needed was for the corporate partner to follow through.  It not only didn't follow through, the relationship collapsed entirely.