Corruption

New York's Shameful Eminent Domain Abuse

|

In the wake of last week's big news that the Pfizer Corporation is pulling out of New London, Connecticut just four years after that municipality received Supreme Court approval to seize private property on Pfizer's behalf, the Atlantic Yards eminent domain case in Brooklyn is receiving lots of well-deserved attention. In a superb article from Saturday's Wall Street Journal, Nicole Gelinas outlines New York's shameful behavior:

So to push the Atlantic Yards project through the courts, New York state isn't arguing that it needs to take Mr. [Daniel] Goldstein's property for economic development. Instead, it has declared that Mr. Goldstein's neighborhood is "blighted." This allows the state to condemn property on the theory that clearing unsanitary and unsafe slums constitutes a public benefit.

In fact, the Prospect Heights neighborhood that Mr. Goldstein and his wife have made their home is hardly a slum. Prospect Heights was thriving before Atlantic Yards construction began. It's a hip neighborhood that's a short hop on the subway from Manhattan….

To discover blight in all this, Albany hired consultants. Their 2006 report pointed to below-grade railyards for the Metropolitan Transportation Authority (MTA), which make up less than half the condemned area, and noted weeds growing and graffiti on some properties. All of this could be remedied without demolishing a large swath of urban landscape if the state compelled the MTA to sell the development rights above its underground tracks at a market rate.

Mainly, however, the report pointed to "underutilization" of the land, concluding that the area wasn't being used to the maximum economic benefit allowed by law. But that means the Atlantic Yards is really an economic-development project—and that the politicians along with Mr. Ratner want to manage Brooklyn's economy rather than let competitive forces continue to improve the neighborhood.

It's also worth noting that New York didn't even start talking about blight until two years after the project was first announced. By that point, Ratner had already acquired many of the properties in the neighborhood (thanks to the state's threat of eminent domain) and then left them empty, thus creating much of the unsightly neglect visible today.

Here's another depressing fact: The MTA quietly struck a deal with Ratner for that below-grade railyard (the Vanderbilt Yards) as early as February 2005—without first opening the property up for competitive bidding. This prompted a public outcry, so the MTA offered prospective buyers a mere 42 days to put up their own bids. This was hardly "competitive," however, since Ratner's plans had been in the works for years and everybody else had to scramble to meet the deadline. Still, the Extell firm successfully submitted a $150 million offer for the property, which has been appraised at over $200 million. But then Ratner bid just $50 million and won, with that figure later negotiated to a lump-sum payment of $100 million. Finally, the MTA sweetened the deal even further this past June by allowing Ratner to pay just $20 million up front, with the remaining $80 million due over the next 22 years. Now that's a bailout!

As Genilas notes, New York's highest court will rule any day now on whether this despicable land grab will stand. Here's what the court should do. Here's lead plaintiff Daniel Goldstein on why private developers like Ratner have no right to his home. And here's the trailer for Battle of Brooklyn, a forthcoming documentary on the case (help the filmmakers out via this fundraiser):

Advertisement

NEXT: Why You Should Support Reason: Al Sharpton Edition

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Hey, some of the money is going to ACORN, so the project must be okay right?

    http://www.nypost.com/p/news/l…..rSJ9kV1kRJ

    Don’t forget as Joe the Boyle told us, ACORN is out doing God’s work.

    1. ACORN and its affiliates are content to impose crippling big-government laws, regulations, and taxes on Americans, but when called upon to obey those same rules, ACORN’s network of scofflaws and deadbeats simply refuses to comply.

      ACORN and its affiliates currently owe more than $2.3 million in long overdue back taxes to all levels of government.

      As of Nov. 11 the exact figure was $2,328,596.95.

      ACORN owes money to the IRS, Arkansas, California, Delaware, District of Columbia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Mississippi, New Mexico, New York, New Jersey, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, Washington, Wisconsin, and to the cities of New York and Philadelphia.

      http://biggovernment.com/2009/…..more-31606

  2. So to push the Atlantic Yards project through the courts, New York state isn’t arguing that it needs to take Mr. Goldstein’s property for economic development. Instead, it has declared that Mr. Goldstein’s neighborhood is “blighted.”

    For an honest judge, the word “blighted” should have exactly the same, subjective meaning as if saying the neighborhood is “ugly”.

    The problem everybody faces is that honest judges are now doing TV court shows, or Online TV Shows on Fox, instead of working the bench – so, we’re screwed.

  3. joe | October 17, 2008, 2:47pm | #

    God bless ACORN, out there registering 13 million new voters. They’re doing God’s work in some of the toughest neighborhoods in America.

    10/17/08 NEVER FORGET

    1. [eagle tear]

    2. If you tell me what not to forget, I promise that I’ll remember it.

  4. Seriously, death by impalement is too good for Ratner and his enablers.

  5. It amazes me how brian dead liberals are on Kelo. They are fucking suprised that sleazebag developers will buy off local governments and take people’s land to support sham developments? Buying off a city government is pretty damned easy. Once you no longer require the project to be a public use project, you pretty much make everyone’s property subject to the whims of whatever roving band of eurotrash wants to roll into town with a “development project”.

    1. Could we all agree to put “liberal” in quotation marks whenever referring to matters such as this from now on? It’s beyond chilling just how newspeak-y that term seems sometimes. Seriously, I want our word back.

  6. Liberals love Eurotrash, John. It’s from Europe so it must be teh awesome.

  7. Why do you Libernazis hate dusky welfare leeches like Bruce Ratner so much? Where is your empathy for Atlantic Yards’ investors?

  8. From the Limousine Liberal’s Dictionary:

    Blight
    “Well I certainly wouldn’t want to live in that neighborhood.”

  9. I understand that in bids for large projects there are factors other than price, so the highest bid may not always win. But a losing bid 300% higher than the winning bid? Is there an explanation other than corruption?

    1. But a losing bid 300% higher than the winning bid? Is there an explanation other than corruption?

      The lower bidder had a more friendly wife.

    2. But Rattner was bringing the Nets to Brooklyn. And you can’t underestimate the value of a money losing basketball team that is currently winless and hasn’t had a single interesting player since Julius Irving in the 1970s can you?

    3. That losing bid would have resulted in windfall profits to the seller, so it represented market failure and it is only Right and Proper that it be ashcanned by Our Masters.

    4. This wasnt a “project” this was selling land.

      When I sold my condo, I took the highest offer. Period. I didnt give a damn what color they were going to repaint the rooms.

  10. does Pfizer still have its plant across the river in Groton? I used to live in Groton and was born in New London, my dad worked for Electric Boat-General Dynamics. I remember seeing the Pfizer plant as a real little kid.

    1. oops, nevermind. guess the reason they aren’t using the New London property is because they decided to relocate to the Groton plant. that eminent domain seizure was such bullshit, I can’t believe the courts let that shit go on.

  11. Ratner had already acquired many of the properties in the neighborhood (thanks to the state’s threat of eminent domain) and then left them empty, thus creating much of the unsightly neglect visible today.

    When things were booming in Bozeman, a couple of years ago, a group of investors bought a piece of property which had a trailer park on it. They kicked everybody out (so much for “affordable housing”) so they could build shiny new homes and sell them for lots of money. Then the market tanked; now the place is sitting there abandoned and decrepit, and people are whining about “teh blight”.

    Some genius, or consortium of geniuses, now wants the city to require any project application to require a substantial bond to ensure completion. That’ll get the economy humming again.

  12. All the liberals cared about was that the ruling be that your land isn’t yours and can be confiscated by the govt whenever they want. The rest is detail.

  13. I mean, friggin duh! Is anyone really surprised that government exists to serve the interests of a relative handful of powerful people? It has always been that way and always will be. Get this straight – the only reason that you are not being screwed in the same way these victims of eminent domain are being screwed is that you have nothing that some powerful/influential person is interested in at the moment. For now all they are interested in is draining you dry financially, but the minute they decide you have something they want beyond your cash, don’t doubt for a minute they will take it.

  14. Wonder if the blight inspectors ever bothered to get out of their cars, or if they followed the lead of the infamous San Jose Redevelopment Agency “drive-by blighting” of whole sections of the city.

  15. Mike, I suspect the blight designation was done by “desk review”:

    Scene: Poshy restaurant, after the remains of a fine meal have been cleared.

    Developer: This is the land I want (shows plat map).

    Inspector: By jove, its all blighted.

    1. You know it. I’ll bet I can even tell you which restaurant it was, and who was at the dinner. Of course, the redevelopment director at the time disappeared to Florida shortly after that meal with questions about a few million bucks missing from the redevelopment budget. Seriously.

    2. How cynical of you! You don’t think they don’t consult the property tax receipts for which districts are “underperforming” before deciding?

  16. “It’s Brooklyn, for crying out loud. Of course it’s blighted!”

  17. When things were booming in Bozeman a group of investors bought a piece of property which had a trailer park on it. They kicked everybody out …so they could build shiny new homes…

    Wow. This is Montana, right? There isn’t enough undeveloped land in Montana?

    1. Boseman is close to the Bridger Bowl Ski Resort.

  18. …noted weeds growing…

    Urban green zone! Biodiversity!

    …and graffiti on some properties…

    Folk Art! Art of the Masses!

  19. I have to finally speak on the Atlantic Yards thing. This isn’t to say that
    Ratner is doing the right thing on this project…he isn’t. However, the problem I have with the standard libertarian critique of eminent domain in this context is that it neglects how zoning laws in NYC make it so only people willing to flout eminent domain laws can develop anything.

    Let’s say, for example, that Ratner was able to get every piece of property he needed honestly through free negotiation. Do you think no one could have stopped him? Fat chance. The way zoning laws are in NYC, anyone with a megaphone and enough people to jam a sparsely-attended planning board meeting can control anything. The city is rife with example of “illegal” development…which usually means the property developer didn’t buy off the right community groups to start, not any legit violations of, say, the fire code.

    The saying with gun control is that if guns are outlawed, only outlaws will have guns. Unfortunately, the same is with property rights.

    1. is that it neglects how zoning laws in NYC make it so only people willing to flout eminent domain laws can develop anything.

      Stop right there. Ratner isn’t ‘flouting’ any E.D. law. The Supreme Court of the United States said any municipality can take any land whatsoever and hand it over to another private party if there’s any perceived economic gain by the state. Period. The End. No Mas.

      The only ‘requirement’ is that there be a comprehensive plan, and that plan doesn’t have to be well thought out, effective, or even come to fruition and result in the outcomes claimed in the plan. (See New London, Connecticut)

      And again, Ratner doesn’t flout the law, he merely asks New York, and the duly elected politicians of New York are willing and receptive to his request, or they’re not.

      We don’t ‘solve’ questionable or onerous zoning laws by (legally) stealing the land of private citizens.

      1. I’m not saying that the land should be taken. I’m agreeing with you. My problem is the tendency not to see the forest for the trees. Yes, it is bad that all Bruce Ratner has to do is ask some politicians assent to his development plan to take land from others. My thing is to deal with the problem whole-cloth, instead of dealing with it piecemeal. Otherwise, all you’ll end up with are smarter crookers.

    2. BS. Name one developer in the past ten years who was thwarted by “anyone with a megaphone and enough people to jam a sparsely-attended planning board meeting can control anything”

      1. Big-box stores in the CA Bay area. I could look for links if you wish, but they’ll all be abough how the “enlightened” would rather that the poor have fewer options than a big-box chain in the poor folk’s neighborhood.

      2. BS. Name one developer in the past ten years who was thwarted by “anyone with a megaphone and enough people to jam a sparsely-attended planning board meeting can control anything”

        Welcome to Seattle.

        http://www.thestranger.com/sea…..id=1572221

        The western red cedar next to Roosevelt High School was nameless until a property owner announced plans to build apartments in its place. But Tom Walton, 59, who has rented a house in its shade for 22 years, wanted to protect the 90-foot-tall evergreen. So Walton and a posse of half a dozen neighbors filed an appeal with the city in January, sending plans for the apartment building back to the drawing board.

        1. And I should have bolded “Walton and a posse of half a dozen neighbors filed an appeal “

          So by ‘enough people’ we’re talking approximately six.

        2. Using the government to protect a tree that is not on property you own and therefore preventing the owner from utilising his land is eminent domain of a different sort.

      3. I’m sorry I don’t have handy links, but it happens in a regular basis, especially in Queens, where the (relatively-speaking compared to Manhattan) sparsely developed land is prime for small-time developers for teardowns to build 2 and 3 family houses…and suspicious downzoning from 3-family houses to 1-family houses. Then there’s the case of St. Savior’s Church in Maspeth, which sold out to developers…and neighborhood activists are desperately trying to get turned into a park because they don’t like the idea of apartments in the neighborhood. Welcome to New York people!

  20. There isn’t enough undeveloped land in Montana?

    “Sprawl is bad, children. Mmmmm’kay?”

    And besides- the property I referred to up there is on the road to Bridger Canyon, and Bridger Bowl; the views are much too nice to be wasted on a lot of trailer-trash peasants.

  21. Atlantic Yards is yet another illustration of how the notion of “public good” is corrupted in today’s interpretation of eminent domain; and the fact that there is a lot of play in the “just” of just compensation.

    Buckle your seat belts, because New York, Pennsylvania, and many other states, will see more eminent domain “takings” thanks to the rising interest in natural gas drilling in the gas-rich Marcellus Shale. With more drilling comes more pipelines and more underground gas storage fields — and that (pipelines & storage fields) always means eminent domain.

    The excellent Institute for Justice (of Kelo fame) declines to intervene in energy/utility “takings” because, they told me, of the “public good” premise.

    But property owners can fight back. Our two-year battle against Houston-based Spectra Energy which seized our property rights for an underground gas storage field led to the development of a website which has begun to attract whistle blowers inside the energy industry. We are collaborating and helping property owners in many states. For info, visit the site:
    http://www.spectraenergywatch.com/blog/

    By the way, our new neighbor, Spectra Energy, has received two Notice of Violations for “unlawful conduct” over the past two months related to emergency shutdowns and emissions at its storage field in Bedford County, PA. Reports of contaminated water supplies are on the rise since they began operations.

    Like Kelo, the ripple effects of eminent domain are never over.

Please to post comments

Comments are closed.