I remember growing up learning about the Fifth Amendment and the government’s powers of eminent domain, and I have to admit I was fine with the concept.
After all, governments should be able to condemn private property and, with fair compensation, use that property for the public good. Of course, I was thinking about highways and hospitals and schools and police and fire stations.
I have to admit I wasn’t thinking about a private development involving upscale residences, a luxury hotel and office buildings.
| Most of our nation's downtown areas are in crisis, or darn close to it. Much of their tax base has evaporated as middle class residents continue to move to the suburbs. Businesses have done likewise ... projects like the Pfizer facility can go a long way toward revitalizing an urban area. |
Yet that’s exactly what “Kelo vs. New London,” which the U.S. Supreme Court will hear this session, is all about. The case centers on the ability of a government — in this case the city of New London, Conn. — to use its powers of eminent domain to take property from one private party and give it to another, all for the purpose of economic development.
The case comes out of an urban redevelopment agreement involving the New London Development Corp. and pharmaceutical giant Pfizer Corp. I’ll leave the emotional arguments to others and focus on the concept of economic development as a public good.
Let’s cut to the chase. The New London city government, like city governments all over the country, is strapped for cash. It found a giant corporation, Pfizer, that was willing to make a major capital investment in a section of town that, while not considered blighted, was also not producing much in the way of tax revenue. The new Pfizer facility would go a long way in reversing that situation.
So far, so good.
As part of the deal, a large parcel of land nearby was to be transferred to a private developer who would, in turn, build the upscale hotel and condos and shops. The New London EDC would lease the land to the developer for 99 years at $1 per year.
Here’s where it gets sticky, though, because on the “nearby land” were the private homes and businesses of the Fort Trumbull neighborhood. Some of the homeowners did not want to sell, so the city invoked its power of eminent domain to take (with compensation) their land and turn it over to the private developer.
If you’re like me, at this point you’re starting to feel a little queasy. Where do you draw the line?
On one hand, most of our nation’s downtown areas are in crisis, or darn close to it. Much of their tax base has evaporated as middle class residents continue to move to the suburbs. Businesses have done likewise. What remains is largely poverty and crime, and unless the situation is reversed, these downtown areas will almost certainly die.
Projects like the Pfizer facility can go a long way toward revitalizing an urban area, and economic development organizations around the country can only dream of landing such a prize.
I also like the idea of creating an upscale mixed-use development nearby. It provides a first installment on the promise of follow-on development from the Pfizer facility. And the infusion of tax revenue from this new development will go a long way toward righting the city’s financial ship.
All of this “public good” is made possible because of the use — or the threat of use — of the city’s powers of eminent domain. Perhaps this is a case of where the ends justify the means. After all, the only losers are Susette Kelo and her neighbors.
Or, in a nation built heavily upon property rights, don't we all lose a little, too?
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