Last month, by a 5 to 4 margin, the United States Supreme Court upheld the broad use of eminent domain (In PDF format) -- the power of government to take people's property in exchange for just compensation – to promote economic development, even where property will be transferred from one private owner to another. The court allowed the City of New London, Connecticut, to proceed with its plans to take the property of 15 homeowners who did not wish to sell them, in hopes of revitalizing their city’s moribund economy. New London plans to transfer the property to developers who will build office space (including research and development space related to a new Pfizer research center nearby), a hotel and conference center, new housing, and a riverfront esplanade.

What does this mean for New York City?

New Yorkers interested in several recent and proposed development projects were watching the case closely.

• Forest City Ratner Companies is proposing to take dozens of homes and businesses near the MTA railyards in Prospect Heights, Brooklyn (they have already acquired many through private acquisition), in order to build Brooklyn Atlantic Yards (designed by Frank Gehry), a basketball arena for Ratner’s (now New Jersey) Nets and 6,000 units of housing (at least 2,250 affordable) in a series of towers as high as 60 stories.
• Columbia University wrote the Empire State Development Corporation last summer, seeking to begin the process of taking a series of industrial buildings to build a new campus in Manhattanville, about 15 blocks north of its current one (designed in part by architect Renzo Piano).
• And the New York Times’ new headquarters (developed with partner Forest City Ratner and also designed by Renzo Piano) is already going up on land taken from unwilling sellers who took their case to the New York State Court of Appeals.

In each case, existing owners (and neighbors) have fought against the takings, and were looking to the Kelo vs. New London case to restrain eminent domain for private development.

At least on first glance, opponents of these projects found little to cheer. The court upheld the broad power of cities and states to use eminent domain. Despite the arguments of Susette Kelo and the other owners that this taking was in violation of the Fifth Amendment because it was not narrowly for “public use” – a park, a school, or other municipal facility – Justice Stevens wrote for the majority of justices that since the 19th century, the court has “embraced the broader and more natural interpretation of public use as a ‘public purpose,’” and that a carefully considered plan by local government to promote economic development meets that test.

Furthermore, the eminent domain sought on all three New York City projects rely on the slightly different claim (under New York law) that the areas in question are “blighted” – although it stretches credulity to make that claim: $1 million condos in Prospect Heights hardly constitute blight; Times Square is booming; several new businesses have opened recently in Manhattanville. Once an area has been declared blighted by a public agency, it can be taken through eminent domain, even if what will follow is exclusively private development, on the argument that the removal of blight serves a broader public purpose.

So Bruce Ratner, the New York Times, and Columbia don’t have too much reason for concern. And we can expect more eminent domain in New York City’s future economic development plans. The Department of City Planning’s recent Downtown Brooklyn Rezoning laid the groundwork for future takings there, and the city is now moving toward an economic development project at the corner of Boerum Place and Fulton Mall. The NYC Economic Development Corporation recently collected responses from developers for Requests for Expressions of Interest to redevelop the Willets Point area on the Flushing River (near the site for the new Mets Stadium in Queens), despite the fact that the entire area is privately-owned.

Taking(s) Sides

Still, Daniel Goldstein of Develop Don’t Destroy Brooklyn – which opposes Forest City Ratner’s proposal for Brooklyn Atlantic Yards, and who recruited lawyer/civil rights activist Norman Siegel to write a brief siding with Kelo against eminent domain – sees some hope in the concurring opinion of Supreme Court Justice Anthony Kennedy. Kennedy wrote to emphasize that while there was no suggestion in New London that the plan was intended to favor any individual developer, ''a court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see it if has merit.'' Develop Don’t Destroy plans to argue that the Brooklyn Atlantic Yards site presents a case of the “impermissible favoritism” that Justice Kennedy was warning about. (This is assuming that the MTA awards the site to Ratner, rather than to their preferred developer, Extell Development Corporation, who recently submitted a bid that would build fewer and smaller towers, have no arena, include less overall and affordable housing, and involve no eminent domain.)

However, Paul Sonn of the Brennan Center for Justice, says that because Kennedy also signed on to the broader majority opinion, his concurring opinion will likely have little effect. Sonn also notes the unusual political alliance that emerged on this case. Norman Siegel and opponents of the projects in question (his brief was not only for Develop Don’t Destroy, but also for businesses in West Harlem opposing Columbia’s proposal) present a politically progressive case against corporate developers, but their champions on the Supreme Court were conservative Justices Thomas, Rehnquist, Scalia, and O’Connor. Much of the support for Kelo’s side of the case came from conservative property-rights advocates. Writing for Reason Magazine Online, Jason Sullum criticized the New York Times’ praise for the Supreme Court’s decision, writing that “property rights are human rights,” and in fact that “all rights are property rights.” And closer to home, Julia Vitulo-Martin of the market-oriented Manhattan Institute has blasted both the Supreme Court and Ratner, calling eminent domain for economic development “government theft.”

Is this an alliance of the political left and right? David Goldberg, formerly counsel to the NAACP Legal Defense and Education Fund, says no. Goldberg has been collaborating with Community Rights Counsel, a DC-based group which works with community groups and municipalities seeking to preserve the power of the government to regulate development; for example, to require affordable housing or land conservation. They were concerned that the Kelo case was one more effort by right-wingers to weaken the ability of cities and states to guide development for public purposes. So Goldberg prepared an amicus brief for supporters of the Ratner project (the Carpenter’s union, Rev. Herbert Daughtry, and BUILD). Goldberg challenges the claims of Norman Siegel and others that these cases involve “differential impact” on low-income people. While the Robert Moses-style urban renewal of the 1950s and 1960s often displaced low-income tenants – rendering “just compensation” meaningless since they did not own the property and usually received very little for their displacement – in these cases it is primarily middle-class homeowners and businesspeople, who are being paid fair market price for their property.

Steps Toward More Accountable Development

We do need local governments to have the power to promote planning and development that serves public purposes, beyond the vicissitudes of the market. If the highest value in the marketplace always determines what we get, we will lose an enormous amount of what we want and need in our (or any) city: universities, affordable housing, manufacturing jobs, even sports stadiums and the paper of record. Sometimes this will mean applying smart regulation (like inclusionary zoning or zoning that protects industrial jobs), and sometimes it will mean eminent domain. It will be better when the eminent domain begins with public planning, rather than behind-the-scenes moves by private developers; but even then, affected owners will often, of course, be opposed.

Now that the Supreme Court has reaffirmed that states and localities can decide what public purposes are good enough, we need a more robust debate in New York about what standards we want to place on publicly-supported development. Far too often, we give away the store to developers – applying eminent domain, and offering subsidies and tax breaks with too little public scrutiny or requirements. The public benefits in Ratner’s proposal come from the developer’s smart moves to gain support for the project, not from meaningful public process or standards.

New York City and State each took a half-step forward toward more accountable development last month. The City Council and Mayor Bloomberg agreed to increase reporting requirements for developers using subsidies from the city’s Industrial Development Agency, or IDA. And in Albany legislators agreed to a one-year extension of IDAs and public authorities statewide, rather than a full reauthorization, to give time to consider broader reforms that would better promote both accountability and minimum standards for subsidized development.

But we are still behind other cities and states seeking to insure that publicly-supported developments meet a minimum set of standards – living wages and benefits for the jobs, affordable housing, and broader community benefits. The plans for Willets Point and the site on Fulton Mall in downtown Brooklyn include no reference to job quality or affordable housing. Growth and development for their own sake are not an adequate public purpose in a city where development too often increases inequality and segregation, where too many of the new jobs pay poverty wages and offer no benefits, and where too many of the environmental burdens of development (solid waste, power plants) are borne by low-income communities. We need a better, more consistent process to insure that publicly-supported private development

• helps to reduce income inequality
• creates jobs that enable people to support their families and move toward the middle class
• creates affordable housing
• lives better within its “environmental footprint”
• addresses the challenges of traffic and transit
• helps create better neighborhoods
• and makes those neighborhoods places of opportunity.

This is a lot to ask, but it is a fair trade for hundreds of millions of taxpayer dollars in subsidy and the power to take people’s homes.

Brad Lander is the director of the Pratt Institute Center for Community and Environmental Development

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