By: Benjamin Weingarten
As eminent legal scholar and takings expert Richard Epstein notes at National Review, June 23, 2015 marks the 10 year anniversary of one of the Supreme Court’s most controversial cases relating to private property, in Kelo v. City of New London.
For those unfamiliar with the case, in a five-to-four decision the Supreme Court ruled in Kelo that New London, Connecticut could use the power of eminent domain to seize private property from its owners and sell it to developers as part of a broader economic development plan.
Specifically, the Court ruled that the development of the property would qualify as a “public purpose,” constituting a “public use,” thereby representing a Constitutional taking pursuant to the Fifth Amendment, given the public benefits to be gained through the developer’s use of the seized land.
While government has a right to take private property for public use if it provides just compensation, the case proved highly controversial because the government was taking private property — specifically homes — from several parties, and not using it for say a public school or public transportation, but rather selling it to another private party that claimed it could generate greater economic activity from the property.
In particular, the homes seized by New London in a neighborhood known as Fort Trumbull were razed to make way for a development project that included among other things a $300 million research center for the pharmaceutical company Pfizer, along with a hotel, residential and office space.
Ilya Somin, Professor Law at George Mason University School of Law, adjunct scholar of the Cato Institute, and blogger at the essential Volokh Conspiracy has recently published the literal book on the Kelo case titled “The Grasping Hand: “Kelo v. City of New London” and the Limits of Eminent Domain.”
On this tenth anniversary of the Supreme Court ruling, it bears noting what has happened to the property seized by the City of New London. Somin writes in his book:
As of early 2015, almost ten years after the Supreme Court upheld the Kelo condemnations, the properties that were the focus of an epic legal battle remain empty and undeveloped. Several plans to redevelop these lots have fallen through. The only creatures making regular use of them in the intervening years have been a colony of feral cats.
Title: The Grasping Hand: “Kelo v. City of New London” and the Limits of Eminent Domain
Author: Ilya Somin
Purchase this book
These failures were not simply caused by adverse publicity resulting from the public backlash against the Supreme Court ruling or by the recession and financial crisis that began in 2008. As a 2005 New York Times article noted, the failure was a result of “contract disputes and financial uncertainty” and the unwillingness of investors to commit to a flawed project. As early as 2002, Pfizer had begun to lose interest in utilizing the new facilities expected to be built in the development area. In 2009, the firm announced plans to close down its New London facility and began to transfer the employees working there elsewhere. With Pfizer’s departure, the city lost 1,400 jobs that state officials had attracted to the area by committing to redevelop Fort Trumbull in a way that suited the firms’s needs.
The city has managed to successfully redevelop the portion of the Fort Trumbull land that was previously part of the Naval Undersea Warfare Center closed in 1995. It is now a leased research and development center. But that property already belonged to the city after the center had closed, and there was no need to use eminent domain to redevelop it.
Eventually, the condemned land will almost certainly be used for some productive purpose or other. In the meantime, however, it will have stood empty for a decade or even longer, depriving the community of economic benefits of a productive use of the land and the city of potential property tax revenue. Even from the standpoint of economic development, without reference to the constitutional considerations or the intrinsic value of property rights, the Fort Trumbull condemnations have done a lot more harm than good. Governor Rowland was right to predict that Pfizer’s move would “change the landscape of this community,” even if it is not yet clear whether he was also right to predict that the effects will really last “for the next 100 years.” So far, at least, the effects have been very different from those supporters of the project had hoped for.
For the definitive account of Kelo and its aftermath, be sure to check out Somin’s new book.
Note: The link to the book in this post will give you an option to elect to donate a percentage of the proceeds from the sale to a charity of your choice. Mercury One, the charity founded by TheBlaze’s Glenn Beck, is one of the options. Donations to Mercury One go towards efforts such as disaster relief, support for education, support for Israel and support for veterans and our military. You can read more about Amazon Smile and Mercury One here.