Kelo Redux

Check this out: http://www.nytimes.com/2009/11/13/nyregion/13pfizer.html?_r=1&sudsredirect=true
The big 2005 Supreme Court case – Kelo v. City of New London – that underscored a city’s right to use eminent domain to take private property and give it to another private owner has reached a perhaps inevitable denouement: the City of New London, CT, took Susette Kelo’s house, and a bunch of others, for a private “urban village” to be built next to a new Pfizer development. Now Pfizer is leaving, and taking 1400 jobs with it. Yowch.

The real lesson here has less to do with eminent domain and more to do with economic development. Conservative justices voted against the city, but in a sense the use of eminent domain for private redevelopment has been with us since Berman v. Parker in 1954, which paved the way for urban renewal and preservation. Memory refresher: urban renewal was a public program, but it basically worked like this: the government declared an area “slum and blighted,” bought up all the land and gave it to another private developer to achieve the renewal. Yes, there were housing projects that were completely public, but the biggest part of urban renewal involved the same sort of eminent domain and transfer of property to another private owner we saw in New London.

After Kelo in 2005, 43 states passed laws limiting how eminent domain could be used, which makes sense from a strict constructionist viewpoint – the Constitution provided for eminent domain and just compensation for “public use.” As a preservationist who sees the preservation impulse as an attempt by communities to assert control over their destiny, I see the utility of Berman v. Parker. I think safeguards after Kelo are fine, but the REAL lesson this week is Don’t Give Away The Store to Anybody for economic development. New London not only condemned land, they gave Pfizer a ginormous property tax break. And now all of the jobs are gone. In less than eight years.

You can cut deals to get jobs and investment, but you have to make those GOOD deals and you have to remember that businesses are loyal to only one location, and that location is Wall Street and the street is thin-skinned, short-tempered, monstrously myopic and given to more emotional breakdowns than a 13-year old girl. You tear everything down and build it new for Mr. Sugar Daddy and then he ditches you. But of course he ditches you: you had no self respect, no desire to stand up for yourself and your character.

Now, REAL economic development is all about a community defining itself and attracting the right kind of business to fit into its character, including its built character. You develop a town by using its existing building stock and you have a long-term development plan that KEEPS ON WORKING. Mr. Sugar Daddy leaves but you still have your town and its character. You have to find another user for your buildings, but if you look for one that fits – rather than one who asks YOU to change everything about you for him – well, then you get a marriage that lasts, and keeps on giving.

New London has lost over a thousand jobs, and they have a big useless new building and a lot of vacant land. This is not a failure of property rights, it is a failure of short-sighted, dim-witted development. Develop with what you got and it lasts. Pave paradise for Mr. Sugar Daddy and you deserve what you get when he leaves.

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Tags: economic development, eminent domain, historic preservation, Kelo, Kelo v. New London, preservation development