Eminently Dangerous

Posted Nov. 18, 2009, at 6:07 p.m.

The shocking 2005 United States Supreme Court ruling allowing the city of New London, Conn., to seize private residential property for redevelopment prompted many states, including Maine, to revise their laws to block such eminent domain abuses. A related case in New York, on which that state’s appeals court is expected to rule soon, bears watching to see if this worrisome trend continues.

The 2005 case — Kelo v. City of New London — was appalling in that for the first time, the government used as its justification for the seizure the potential for economic development. A working-class neighborhood occupied the city’s waterfront, and the city contracted with a private company to demolish the houses and redevelop the site for stores.

The argument in favor of the seizure was that the public would benefit through a broader tax base, increased economic activity and the jobs that would follow. In the past, most eminent domain seizures furthered public projects for transportation, utilities or public safety. The Supreme Court’s precedent-setting ruling was that projected economic growth is a public use.

In New York, as part of the Atlantic Yards Arena project proposed for Brooklyn, the city is prepared to seize and demolish much of the Prospect Heights neighborhood to make way for a basketball arena for the New Jersey Nets NBA team, 4,000 luxury apartments and 2,000 subsidized apartments.

Apparently seeking to avoid using the economic benefits argument of Kelo v. City of New London, which the public found so abhorrent, New York City officials instead argued that Prospect Heights is “blighted,” or essentially, a slum. Nicole Gelinas, in an OpEd piece in the Wall Street Journal, doesn’t agree. “Prospect Heights was thriving before Atlantic Yards construction began,” she writes. Six years ago, one of the plaintiffs in the court appeal purchased a three-bedroom condo for $590,000. In a bitter irony, if the court sides with the city, that condo owner would be paid $510,000, less than what he paid for it and less than half of what the private developer offered four years ago, Ms. Gelinas writes.

Another irony is that in New London, the demolished neighborhood remains undeveloped.

Protection from eminent domain is enshrined in the Fifth Amendment of the U.S. Constitution. It assumes the mechanism for government seizing property, but ensures that owners are compensated fairly, and that the eminent domain mechanism must be tied to a public good.

Without that power, a lot of public projects for the public’s good would fail to come to fruition. A good example is the construction of the interstate highway system during the 1950s; a few recalcitrant property owners could have forced I-95 to zigzag its way north through Maine.

But when government joins with private business, the road to prosperity could pave over middle class homes. That impulse must be resisted.

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