Taking Property

Bush's landgrab -- and the New York Times'

In The New York Times the other day, columnist Nicholas D. Kristof took George W. Bush to task for "grabbing land for a new baseball stadium in Arlington for his Texas Rangers baseball team." Actually, "took to task" is a bit of an understatement. Kristof described Bush's activities as "a sordid tale of cronyism, of misuse of power, of cozy backroom money-grubbing—a more pressing threat to American business than outright criminality." He called Bush's dealings appalling. "Even Kazakhstan," he said, "would blush at such practices."

What sort of offense, exactly, did Bush commit? "Mr. Bush and the Rangers' owners conspired with city officials to seize private property that would be handed over to the Bush group." The seized property included not only the stadium site but also nearby land that the Rangers planned to sell or develop at a tidy profit.

Such cronyism is indeed "a more pressing threat to American business than outright criminality" because it clouds the very concept of private property. It's a scandal, all right—the scandal being not that Bush and friends broke the rules but that they played by them. The scandal, in other words, is the rules.

From time immemorial, governments have wielded the power of eminent domain, by which they can take private property for public use, so long as they compensate the owners. Traditionally, "public use" has meant use for roads, airports, bridges, military bases, and other public facilities or services. Toward the middle decades of the last century, however, civic authorities won from the courts the power to condemn land that was "blighted": so rundown or neglected as to amount to a public nuisance. Cities used this power to designate old tenement neighborhoods as "slums," raze them, and build public housing—one of the great urban-policy blunders of the last century, but that's another story. The Bush-Rangers-Arlington type of landgrab represents a newer sort of phenomenon.

In the last decade or so, it has become common for city leaders to define "blighted" as: "Not developed as nicely as we'd prefer." Or: "Not developed by the people we'd prefer." With that as their rationale, state and local officials take from one owner to give to another. "The condemnation of people's property for the benefit of another private party is a major, nationwide problem," says Dana Berliner of the Institute for Justice, a public-interest law fim that contests what it regards as eminent-domain abuse.

State officials in Mississippi were understandably eager to attract jobs when they offered a variety of inducements and subsidies to Nissan for a big new truck factory. The state also offered Nissan 1,500 acres of rural land. The trouble was that two of the families who lived there—black families of modest means, who had been on the land for 60 years—refused to sell. When the state asserted eminent domain, officials offered what have recently become standard rationales.

"If you make a promise to a company like Nissan, you have to be able to follow through," an official with the Mississippi Development Authority told The Times last year. Are such promises necessary? Absolutely. "If we're going to improve the quality of life for Mississippians, we've got to bring good jobs that are meaningful jobs," Gov. Ronnie Musgrove told ABCNews.com in April. And are new jobs in the public interest? Of course. "Acquiring property for the use of economic development purposes is in fact a public use," a lawyer for the state told ABCNews.com. So if public officials are doing their job, using eminent domain to help developers shop for land isn't so much forbidden as required.

In New London—Connecticut's fourth-poorest city—authorities sought to condemn a long-established neighborhood and turn it over to developers. "No one contends that the Fort Trumbull neighborhood is blighted," The Times reported last year. "Rather, the city contends that the area, which had half a dozen residential streets and much bigger swaths of abandoned or vacant land, should support greater development." That was why Susette Kelo, a homeowner who turned down the city's offers to buy her house, came home the day before Thanksgiving two years ago and found a condemnation notice nailed to her front door. "She said she was told that for as long as she remained in the house, she would have to pay rent."

Officials who stretch the term "public use" to encompass "better private use" often mean well. Presumably the Arlington, Texas, officials who helped out George W. and his stadium pals thought they were doing the city a big favor. So, perhaps, do the officials in Mesa, Ariz., who seek to condemn Randy Bailey's brake shop as part of a deal to attract a bright new Ace Hardware store to the site. (Bailey, with the Institute for Justice's help, is fighting.)

In a better-planned world, something other than Bailey's 27-year-old shop might indeed be located on Mesa's busiest corner. But property is held sacrosanct in America not to protect the rich and powerful, who always make out all right, but to protect the poor from the predations of the rich and powerful: from people like George W. Bush, and also from businesses like… The New York Times.

The Times is planning to build a new corporate headquarters. The building will be a marvel of contemporary architecture, with 52 stories, dual skins of glass and white ceramic rods, and a small grove of maples outside a rooftop conference room at the summit. Casting about for a location, The Times and its partner, a developer called Forest City Ratner Companies, lit upon Eighth Avenue between 40th and 41st streets, in the somewhat grubby neighborhood of the Port Authority bus terminal. The Empire State Development Corp.—New York's economic-development agency—promptly condemned the whole site.

Various critics and outside observers say that The Times will get the property for substantially less than its market value. The Village Voice recently quoted a Massachusetts Institute of Technology professor of real estate finance as saying that the developers were getting "at least a 25 percent discount." The developers dispute the point. Not in dispute is that taxpayers will shoulder several tens of millions of dollars of the project's ultimate cost, and that dozens of businesses, firms, and other denizens will be displaced.

Why is the government stepping in? "This will be an important final piece of the puzzle to revitalize the entire Times Square area," a spokesman for the development corporation told me. A smaller puzzle piece is Sidney Orbach. He and his two brothers own a 16-story office building on the condemned block.

"I would have said this couldn't happen in the United States," Orbach told me recently in a phone interview. He said of his building, "It used to be a factory building, and we totally converted it to an office building. It became a very, very desirable place. We just want to keep the building. We've put a lot of money, energy, and sweat into this." Meanwhile, "I am now sitting with a tremendous amount of vacancy because no one wants to rent space that has a good chance of being condemned."

Around the corner, on Eighth Avenue, is Arnold Hatters. The shop has been on the block since 1960, when Arnold Rubin opened it. His 30-year-old son Mark grew up with the store and is now its general manager. "Having to move is scaring the hell out of me," Mark Rubin says. "This is a gold mine location," near the bus terminal, Pennsylvania Station, and the hat-intensive theatrical industry. Rubin doubts he could afford as large a store elsewhere, and he fears that many of his customers may not move with him.

"As far as I can remember, this has always been our family's breadbasket," Rubin says. "I think it's atrocious that for the sake of a private corporation like The New York Times, somebody has the right to take it away from us." He might understand if the block were being condemned for a city road or hospital. "But no one has explained to me why they have to do this so The New York Times can have a big new skyscraper here."

The Orbachs and two other groups of property owners are challenging the condemnation under both the U.S. Constitution and the New York state constitution. Their chances are considered slim. New York has a long tradition of using eminent domain aggressively (remember Robert Moses?), and in this case the landowners are arrayed against the combined forces of City Hall, a leading developer, and the country's most powerful newspaper.

It all looks like a sordid tale of cronyism, of misuse of power, of cozy backroom money-grubbing—a more pressing threat to American business than outright criminality. Even Kazakhstan would blush at such practices. Some crusading liberal newspaper in New York really ought to run an editorial. Or at least a column.