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  • Kelo Update

    Posted by Mitch Townsend on August 26th, 2006 (All posts by )

    It’s over.

    The state of Connecticut has come up with an extra $2.1 million for the last holdouts in the Fort Trumbull neighborhood in New London, including Suzette Kelo. The town also decided to drop claims of $1.1 million of back rent from the people who refused to turn over their property. The Kelo house will apparently be jacked up and moved.

    The intended beneficiary of this project is the Pfizer company. They are only a couple of hundred yards from the Kelo house, right on the water next to Ft. Trumbull (the Kelo house is directly behind Ft. Trubull). There is supposed to be a hotel, a small convention center, and the usual luxury condos. They had better hurry – Pfizer’s patent on Viagra expires in seven years, and there are no blockbusters in development.

    I drove through the redevelopment area last week, and the situation was largely unchanged since I took these pictures (2 views of the Kelo house, the Pfizer campus, office space for lease, and Fort Trumbull from the ferry) last year. All the “Not for Sale” signs are down. There is an office park (with lots of space for sale or lease) on the north side of the area, but it looks like it is the result of the adjoining redevelopment of Shaw’s Cove. There is a lot of raw land. Even with clear title to most of the area, it does not look like an Oklahoma-style land rush is in process.

     

    9 Responses to “Kelo Update”

    1. Robert Schwartz Says:

      So it’s a matter of principle until some more green hits the mahogany.

    2. Brett Bellmore Says:

      Considering that eminent domain is all about forcing somebody to sell at the government’s price, rather than a genuine “market” price, (The price at which the owner would voluntarilly sell.) getting them to finally offer enough money IS a victory for principle.

    3. Mitch Says:

      I’m thinking there should be some extra money involved if it isn’t for direct public use. If they had to pay 150% or 200% FMV for industrial parks and such, it might discourage this kind of nonsense on the one hand and take the sting out of it on the other. They would need some sort of holding period qualification so the pols don’t buy and flip properties.

    4. Jonathan Says:

      I think the only way to stop the extortion is to require govt officials to buy properties on the open mkt, without use of eminent domain. This would make all of the costs explicit, including the costs to owners whose property is confiscated by forced sales. There would probably still be corruption, but it would more likely be of the bid-rigging type rather than the shakedown type, which I think is worse. “What the market will bear” is a good concept here. Perhaps that new bike path or corporate park isn’t such a good idea after all.

    5. Anonymous Says:

      “…buy properties on the open mkt, without use of eminent domain…” Never happen. For good reason. Once it became clear that, say, a road was being build through a particular place, each of the property owners could demand the entire economic value of the road, or the cost of rerouting around them. There is an absolutist libertarian attitude which would say, too bad, property rights are absolute. The Founders who wrote the Constitution drew on a more reasonable and deeply rooted Anglospheric approach, recognizing that there is no “market price” in such situations, and requiring both “public use” and “just compensation”. The solution is to push back and limit the scope of so-called public use. We had this limited understanding once, and it could be regained. It is, as usual, the business community that is pushing for an expansive interpretation of government power, to line their pockets, without regard to the long term damage being inflicted. Fortunately, on this issue, the public seems to have noticed, and the politicians seem to be responding. So, the Kelo decision, as bad as it is, may have the salutary effect of state-by-state legislation to ameliorate this problem.

    6. Shannon Love Says:

      Jonathan,

      I think the only way to stop the extortion is to require govt officials to buy properties on the open mkt, without use of eminent domain.

      Respectfully, I don’t think this work because many if not most of the projects the use classical eminent domain had to be located in a specific location. You can’t build a damn just anywhere for example. Ditto for some military facilities and roads. Functionally, no freemarket exist for such land because no other piece of land can be traded for it.

      The problem we have with eminent domain today springs from the idea that managing the economy is a central function of government. That is a 20th century invention. Remove that idea from the equation and the entire rational for Kelo type seizures disappears.

    7. Jonathan Says:

      Perhaps the dam is unnecessary? Another way to put it might be: Perhaps the dam isn’t worth it if its true costs are revealed — as they are not with eminent domain, because then private property owners are forced to absorb substantial costs that should be borne by the community as a whole. Maybe this is another way to say what you said in your last paragraph.

    8. Anonymous Says:

      “Once it became clear that, say, a road was being build through a particular place, each of the property owners could demand the entire economic value of the road, or the cost of rerouting around them.”

      There’s the problem: “in a particular place”. It’s quite seldom that a road or government building actually has to be in a particular place, as opposed to a general area.

      So you lay out in advance a number of potential routes, and start obtaining options to buy along all of them, and then execute the options along the first route where you get all of them.

      Or you save a bit of money by building your expressway without a couple hundred feet of land down the median and to each side. I never drive down one of those pretty highways without thinking to myself, “People were kicked out of their homes, not to build this road, but to plant those trees down the median!”

      In most instances, eminent domain isn’t necessary, it’s merely a convenience, or a cost savings measure. The government decides it wants it’s new office building THERE. Even though anywhere within a half mile would work just fine, or they could have remodeled an existing office. But they don’t want to pay for the convenience.

      Believe me, take that power away, and they’d manage to get by without it.

    9. Brett Bellmore Says:

      Oops, that was me.