Tuesday, November 10, 2009

Kelo's next twist: Pfizer to close New London facility

This is going to get some serious attention among eminent domain watchers.  Pfizer just announced plans to close its R&D headquarters in New London, Connecticut.  You will recall that Pfizer's facility was a major factor in the redevelopment plan at issue in Kelo v. City of New LondonThe Hartford Courant has the story and video:

Pfizer Inc. will shut down its global research and development headquarters in New London within two years, transplanting most of the 1,400 employees working there to its vast laboratory complex in Groton, the most dramatic fallout yet from the pharmaceutical giant's recent merger with Wyeth.

Now, the Pfizer facility was not on the same land as Susette Kelo's condemned home.  But the announcement of Pfizer's plans was part and parcel of the overall redevelopment plan that the economic development corporation issued, which the U.S. Supreme Court found persuasive in justifying the "economic development" taking of property as within the meaning of the Public Use Clause.  From Part I of Justice Stevens' majority opinion:

In January 1998, the State authorized a $5.35 million bond issue to support the NLDC's planning activities and a $10 million bond issue toward the creation of a Fort Trumbull State Park. In February, the pharmaceutical company Pfizer Inc. announced that it would build a $300 million research facility on a site immediately adjacent to Fort Trumbull; local planners hoped that Pfizer would draw new business to the area, thereby serving as a catalyst to the area's rejuvenation.

It looks as though the rejuvenation hasn't materialized, and now the would-be catalyst is packing up and leaving.  The corporation's use of eminent domain in the Fort Trumbull area was intended to complement the jobs and taxes generated by Pfizer with a major redevelopment that was to include mixed-use projects, a marina, a waterfront conference center, and other good-sounding things.  But apparently very little if any of that development has taken place.  To be fair, the redevelopment was probably hindered by both the pending litigation and now by the economy.  Either way, it looks like Pfizer (which makes Viagra among other pharmaceuticals) will not be taking advantage of the government's use of "e.d." in New London to fight "e.d." everywhere.  [As Foghorn Leghorn would say, "that's a joke, son!"]

This news will probably become Exhibit A in any future fights against the use of eminent domain in redevelopment projects.  Exhibit B will be Poletown, the Detroit neighborhood that was condemned for economic development purposes in 1981 at the behest of General Motors; at its peak the plant delivered about half of the promised 6,000 jobs and much of the former neighborhood land is unused.  Some critics estimate that the Poletown effort cost $300 million.  The Michigan Supreme Court reversed the Poletown holding on economic development takings just prior to Kelo in County of Wayne v. Hathcock, 471 Mich. 445 (2004).

Ilya Somin has comments at the Volokh Conspiracy, and Jacob Sullum has a post at Reason's Hit and Run blog.  Here are some of my initial thoughts:

1)  This is one more nail in the coffin for economic development takings as a political issue.  The post-Kelo backlash was as profound as it was surprising to those already familiar with the Berman and Midkiff precedents.  With over forty states ostensibly renouncing the use of eminent domain for "economic development," the concept is anathema politically.  The backlash--with support from across the political spectrum--seemed to have resonance mostly in arguments about property rights and/or equity.  With the evident failure of New London's comprehensive redevelopment plan, opponents can add efficiency and effectiveness to their quivers. 

2)  That doesn't necessarily mean, however, that local governments won't be able to use eminent domain in redevelopment projects.  Some states don't have anti-Kelo laws, as the Atlantic Yards controversy shows, and others have reforms that have wide "blight" loopholes or otherwise lack teeth, as Somin discusses in The Limits of Backlash: Assessing the Political Response to Kelo.  While no one wants to say they are doing an "economic development taking" anymore, that doesn't mean that local governments won't be willing or able to justify condemnation as part of a project to revitalize an area.

3)  The persuasiveness of comprehensive redevelopment plans to justify eminent domain may be challenged in the future.  In takings litigation, courts are very deferential to legislative judgment and police powers, and the Kelo majority was obviously influenced by the comprehensive nature of the master plan.  I don't see any big changes in judicial review as a result--it's a longstanding corollary of rational-basis review that the government doesn't have to have the best plan, it just has to be . . . rational.  But the arguments will have more force in light of the New London story; perhaps more people will advocate for Justice Kennedy's concurring opinion argument for some sort of more "demanding" scrutiny.   

4)  Politicians and planners might be more cautious about hitching their redevelopment wagons to one big private entity.  I'm as enticed as anyone by the idea of revitalizing a downtown/waterfront/etc. with a grand scheme that involves jobs, tax revenues, public-private partnerships, mixed-use development, walkable urbanism, transit, and the creation or enhancement of public space.  But if the plan is based around promises from Pfizer, or GM, the incoming sports team, or any other single private entity or group, then the whole plan risks failure if the private actors decide to go elsewhere (even if it's because of litigation or the economy).  When these plans fail to deliver, both the eminent domain power and the public fiscal resources are wasted. 

UPDATE: Ilya Somin has some further analysis of the issue and of this post over at the Volokh Conspiracy.  I think he is right: economic development takings will probably continue as long as the balance of power favors government actors (with the legal power) and private corporations (with the money) over individual property owners.  I said above that politicans and planners "might" be more cautious, but I should have said that they should be more cautious; like Somin, I don't trust that they will do so.  On the politics of the issue, I'd suggest that at least in the face of informed opposition, proponents of economic development takings ought to be more circumspect in the future. 

Matt Festa

November 10, 2009 in Caselaw, Downtown, Eminent Domain, Local Government, Planning, Politics, Property Rights, Redevelopment, Takings | Permalink | Comments (0) | TrackBack (0)

Friday, November 6, 2009

In Local News...

Here in Athens, Georgia we didn't have a local election on Tuesday, but there is some interesting downtown development news.  The Athens-Clarke Commssion (we're a consolidated city/county) just voted to construct a new parking deck downtown, over the last minute objections of some Athens residents that the deck is too big and not needed.  However, there is a waiting list for the other parking deck downtown.  Also, the Commission must spend the money, as it has already been allocated by referendum as part of our Special Local Option Sales Tax. Also, the site currently houses a parking lot, so the aesthetic arguments didn't carry much weight with the commission.

This particular intersection is also of interest because it is the home of the historic Georgia Theater - at least, the shell of the Georgia Theater, much of which was destroyed by a fire earlier this year.  The rebuilt theater will be part of the mixed-use complex that will be built as part of the parking deck.  The theater is a much beloved landmark here in Athens, which has a vibrant local music scene.  Since it was built in 1889 the theater has been a YMCA, a Masonic lodge, a church, and a music venue hosting 100s of bands, including R.E.M., The Police and the B-52s.  The theater owner had just renovated the entire theater prior to the fire, and his casulty insurance won't cover the whole loss. Therefore the Georgia Trust for Historic Preservation has agreed to help the theater raise $1.5 million for restoration.  If you donate $100 your name goes on a brick in the new space - a cool way to be part of history remade.

Jamie Baker Roskie

November 6, 2009 in Development, Downtown, Georgia, Historic Preservation, Local Government | Permalink | Comments (0) | TrackBack (0)

Friday, October 23, 2009

Urban Problems in Rural Georgia

As promised earlier, today I report about our field visit Tuesday to Hawkinsville, Georgia.  Hawkinsville/Pulaski County is a small community (population 10,000) south of Macon.  Its primary industry is agriculture, and it has an award winning regional hospital. The people of Hawkinsville are hospitable, smart and creative.

Unfortunately, Hawkinsville has the very urban problem of declining housing stock in its core.  Actually, I should say that this is a pretty common problem in communities of all sizes. Hawkinsville is not the only town I know of in rural Georgia dealing with delapidated housing.  Fortunately, Hawkinsville is using some old urban redevelopment laws in a creative new way, and has established its own redevelopment authority. HURA, as it is popularly know, has already cleared many properties and is working on redeveloping an abandoned cotton mill into affordable lofts.  (View a blog about the history of Hawkinsville, including the cotton mill, here.)

Our little delegation to Hawkinsville included my colleague Matt Bishop of UGA's Archway Partnership, and my former student and current client Heather Benham of the Athens Land Trust.  Matt's background is in public administration.  As Coordinator of Operations at Archway, his job is to connect university resources to communities in need of expertise.  Heather was a student in the clinic six years ago, and is now an expert in her own right on community land trusts.  We had a great conversation with Hawkinsville local leaders about the possibility of HURA forming a land trust, and how that might help them in their redevelopment efforts.  We also ate good barbeque at Sow Bellies, which I highly recommend if you're ever in South Georgia.

These types of projects are great for my students to see, because it shows the interdisciplinary nature of land use law.  It also allows my clients to mentor each other to solve common community problems. We'll continue to work with Hawkinsville over semesters to come, so I'll likely report more about their interesting and innovative work as time progresses.

Jamie Baker Roskie

October 23, 2009 in Affordable Housing, Downtown, Georgia | Permalink | Comments (0) | TrackBack (0)

Monday, October 19, 2009

Small Improvements, not Grand Designs

Andrew M. Manshel (executive vice president, Greater Jamaica Development Corp.) has written A Place is Better than a Plan: Revitalizing Urban Areas is Best Done Through Small Improvements, not Grand Designs for the Autumn 2009 issue of City Journal.  The summary:

The importance of small ideas to urban revitalization isn’t widely appreciated. Particularly in the most recent real-estate cycle, many planners, design professionals, and developers produced grand schemes instead. But profound change is more likely to result from a deeply considered idea that alters an essential component of an urban environment than from an elaborate master plan that requires abundant resources and considerable political capital. While some large-scale plans, like Rockefeller Center, are successful, most become impersonal, overbearing failures—or, even more often, are stillborn, the victims of the long process of assemblage, environmental remediation, community participation, zoning adoption, and the securing of financing.

Manshel uses the example of putting movable chairs in several small New York parks beginning in the 1980s to convey a message of personal control over social arrangements, trust, and safety.  He seems to be telling a story that is sort of Jane Jacobs-meets-broken windows theory.  Plus there is a shout-out to Houston's new downtown urban park, Discovery Green

Matt Festa

October 19, 2009 in Downtown, Houston, Planning, Redevelopment | Permalink | Comments (0) | TrackBack (0)