Thursday, November 12, 2009

New York Times forum on Pfizer & Kelo

The other day I discussed some possible ramifications of the Pfizer pullout from New London.  Today, the New York times published a forum on the topic at the Room for Debate opinion blog: A Turning Point for Eminent Domain?

When Pfizer announced on Monday that it was closing its global research and development headquarters in New London, Conn., the news reverberated far beyond the struggling seaport city. The project, part of an urban renewal effort, was the basis for a much-debated 2005 Supreme Court decision upholding government’s eminent domain rights to take private property for public use.

But the New London redevelopment never got off the ground, even after the local and state governments spent more than $80 million to buy and demolish private property to pave the way. Now comes the blow from Pfizer: how will its withdrawal affect future eminent domain battles in redevelopment projects? What are the lessons learned for urban planners and local governments?

The forum features commentary from Albany Law professor Paul Finkelman; journalist Paul Bass; Institute for Justice attorney Dana Berliner (who represented the homeowners in Kelo); and yours truly. 

Prof. Finkelman agrees that the New London redevelopment plan was ill-conceived but defends economic development takings generally:

The cautionary tale in New London is that governments trying to stimulate economic development should be smarter and negotiate harder with private industry, not that cities or states should be handcuffed from using law and eminent domain for the vital public purpose of economic development.

Paul Bass says that Clarence Thomas was right, and that "It's a mistake for urban liberals to stand against the little guy."  One of the reasons that Kelo got such an amazing backlash from across the political spectrum (including many urban liberals) is that the property-rights cause was asserted not by a wealthy landowner but by a so-called "little guy" group of homeowners. 

Dana Berliner says "No Surprises Here":

Risky real estate deals are, well, risky. That means they often fail. And if a private company made a risky deal that failed, we wouldn’t even be discussing it. But when government uses eminent domain to remove people from their homes, while spending tens of millions of public dollars on a failed risky deal, that’s a travesty.

I wrote about how the Pfizer move may not change anything legally, but it undercuts the political rationale of economic development takings.  The Kelo Court was persuaded in part by the comprehensive nature of the New London redevelopment plan; that plan's ultimate failure gives eminent domain opponents an efficiency argument in addition to the property rights/fairness critique.  

All the contributions are posted at Room for Debate.  It was very cool to be asked to join in the discussion, and I'm glad that the New York Times noticed the Land Use Blog!

UPDATE: Ilya Somin (George Mason) has joined the discussion at the NYT.  He criticizes the outcome in Kelo and argues for a return to greater judicial scrutiny of takings under the Public Use Clause.  But it's not all bad news:

The impact of Kelo has not been entirely negative. Public awareness of eminent domain abuse has increased, and 43 states have enacted reform laws as a result. Unfortunately, the majority of the new laws only pretend to ban Kelo-style condemnations while actually allowing them to continue under other names. There is still a pressing need for stronger judicial protection of constitutional property rights.

I agree.  I do think the overall political impact of Kelo might even outweigh the legal loopholes that exist in the reform laws regarding eminent domain.

UPDATE 2: Thomas Merrill (Yale) has also joined in.  Prof. Merrill notes that both the economy and the eminent domain litigation itself played a role in the failure of the redevelopment.  He says the answer is to localize eminent domain:

I do not believe that this sad episode means we should overturn Kelo and ask federal judges to arbitrate questions about when eminent domain should be used. The solution is not to nationalize eminent domain, but to localize it. If a proposed project is one that will have primarily local benefits — like economic development — then local citizens should decide whether to pursue it, not some state redevelopment agency or the governor’s office.

Matt Festa

Eminent Domain, Planning, Property Rights, Redevelopment, Takings | Permalink

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I can't believe that we the consumer have less power than most government or even major cooperation's do over how we spend out money and what they can do to take our money it's just ridiculous and something should be done about the situation.

Posted by: Mike Bates | Nov 13, 2009 10:01:59 AM