Post Kelo. Whatever happened to the New London, CT redevelopment project?

As a long time supporter of private property rights, and having met Susette Kelo and the Cristofaro’s whose names are known around the globe, I try to stay up to date with the redevelopment project for which they lost their homes based on the disastrous June 2005 US Supreme Court’s 5-4 decision in Kelo Vs. New London.

“The following story comes from Gideon Kanner’s blog

Gideon Kanner, Professor of Law Emeritus at the Loyola School in Los Angeles, is a colleague with extensive years of experience fighting “eminent domain” takings. He is a well regarded expert in this area of law.

LG. In the majority court opinion of Kelo Vs. the city of New London they avoid the question of economic performance of the project in stating:

“A constitutional rule that required postponement of the judicial approval of every condemnation until the likelihood of success of the plan had been assured would unquestionably impose a significant impediment to the successful consummation of many such plans.    Just as we decline to second-guess the City’s considered judgments about the efficacy of its development plan, we also decline to second-guess the City’s determinations as to what lands it needs to acquire in order to effectuate the project. “It is not for the courts to oversee the choice of the boundary line nor to sit in review on the size of a particular project area.”

Professor Kanner’s Op-ed on the current status of New London follows.

Yes, Virginia, There is Redevelopment in New London, Connecticut, But It’s Downtown, Not on the Site of the Wretched Kelo Redevelopment Project, and It’s Pursued by Private Enterprise.

It shouldn’t be news to the readers of this

 blog that the vaunted redevelopment plan for New London, Connecticut, the one that gave us the infamous Kelo case, has been a civic and economic disaster. Using the power of eminent domain, an entire lower middle class neighborhood was taken by the city and razed to the ground in order to . . . what? Maybe we better take a look at the Supreme Court’s Kelo opinion and see what the city had in mind. After all, the project, according to the Supreme Court, was evaluated by a team of consultants who considered six alternative development proposals for the Fort Trumbull redevelopment area.

The reader of the Kelo opinion is struck by two things. First, a lamentation over the city’s declining condition brought about by the shutdown of local U.S. Navy facilities and consequent above-average unemployment, and second, the need for urban revitalization through redevelopment. Though couched in restrained judicial prose, Justice Stevens’ majority opinion ultimately depends on the assertedly thorough, carefully vetted redevelopment plan produced by the city, that the court’s majority accepted at face value in justification of the city’s proposed redevelopment project. In the end those city plans were used by the court as a justification for its refusal to provide meaningful review of the issue whether or not the city’s redevelopment plans were really in the nature of “public use,” as required by the Constitution, or whether the city’s own self-serving say-so that they were, was sufficient to deem a purely private, profit-making enterprise to be a “public use.” The court’s (5 to 4) majority concluded that the latter was the case.

But guess what? After all the foofaraw and a Supreme Court opinion that roiled the country, brought a storm of criticism upon the court, and made the phrase “eminent domain” a dirty word, the New London redevelopment project went nowhere. We blogged about these things repeatedly, and if you are interested see our posts of July 13, 2007, Nov. 27, 2007, Mar. 25, 2008, and May 29, 2008, telling the story of how New London’s vaunted redevelopment plans for Fort Trumbul did not get off the ground and how its redeveloper could not even get financing for the project.

But all this leaves an open a question that until now has not been reported in the national press. What has happened in New London after its Supreme Court victory, given that  the Fort Trumbull redevelopment project proved to be a failure? We now have a fascinating answer. While the vaunted redevelopment project has gone nowhere, there has been some revival in New London by – are you ready? – private enterprise. The New York Times (Lisa Prevost, In Connecticut, Developers Change Tack, N.Y. Times, Nov. 9, 2008, p. 13 (Bus.Sec.)) informs us that in contrast with all the gloom about its future, that was successfully peddled by the city to the U.S. Supreme Court in the Kelo case, there are signs of revival in New London – not in the area that had been chosen by the city for the Fort Trumbull redevelopment project (so much for all those fancy, expensive studies), but largely in the downtown area.

It turns out that several downtown and waterfront buildings are being privately renovated and converted to condominiums with some success. What this article makes clear is that New London’s problem is that it is, well, New London – an old, tired city, much of whose population has moved out over the years, and not some sort of hip place with a scenic, historical, or commercial cachet that is likely to draw visitors and trendy, affluent would-be residents. The city boasts that it is located mid-way between Boston and New York. Which comes close to a definition of the proverbial middle of nowhere, where these days it’s hard to make a living and even harder to make a municipal silk purse out of that sow’s ear. Those charming sidewalk cafes in yuppified areas of hip cities that boast of successful redevelopment projects can be fun, but you won’t enjoy one on the Connecticut waterfront in, say, February.

But there is life in New London. Condominiums are being promoted by their developers with varying degrees of success. “Downtown rentals, on the other hand, have done well,” says an owner of 65 rental apartments in six renovated buildings in the center of city. And here you thought that without that Fort Trumbull redevelopment project, New London was about to roll up its sidewalks and shrivel up.

So while urban prosperitywise things may nor be beer and skittles in New London, neither are they as dire as the city represented to the Supreme Court. The important part is that progress is being made in New London, and it is being made by private enterprise — the people best qualified to make it: locals whose lives and fortunes have been invested in their city, not an out-of-state redeveloper who moves in, pockets a generous municipal subsidy, wreaks havoc on a community targeted for redevelopment, cleans up (or tries to), and then moves on to wreak havoc on some other community.

So are those New Londoners going to live happily ever after? A definite maybe. It appears that along with the moderately good news there is also a cloud on the horizon. The state of Connecticut is blowing $750,000 on a study of how to maximize the economic potential of New London’s downtown transit facilities. Uh-oh. Will it be another case of “We are from the government and we are here to help you”? We shall see. Stay tuned.

Oh yes, we almost forgot. What about Pfizer pharmaceutical company, the industrial giant that had built a $300 million research facility across the Thames River from Fort Trumbull. The one whose presence in the community was going to vitalize this redevelopment effort on account of all those well-paid Pfizer employees moving into the community and freely spending their money on upscale housing and merchandise that would become available on the site of the taken lower middle-class homes?

Actually, nothing happened. Pfizer has suffered some business reverses and laid off 10,000 employees. The investors who “rushed in to buy many of the brick buildings that line Bank Street, parallel to the riverfront” didn’t make out too well either — according to the New York Times report, “unfortunately, they didn’t always renovate them.” So much for city-sparked redevelopment.

Gilbert note. Gideon successfully defended the owner of the 99 Cents Only store in Lancaster, CA. He has also appeared at our MORR/CURE conferences and joined a group of us in a 2006 meeting with representatives of the U.S. Government Accountability Office discussing eminent domain in Los Angeles.

About Larry Gilbert