Kelo v. New London: Four years on

[Rogue 9]

Washington Examiner column

Pfizer deserts its monument to corporate welfare
By: Timothy P. Carney
Examiner Columnist
November 11, 2009

Susette Kelo's little, pink house in New London, Conn. -- like the houses of all her neighbors -- is now a pile of rubble, overgrown with weeds. But Pfizer, the company that called for the demolition in order to build a new research and development plant, announced Monday it is packing up and leaving town in order to cut costs after its merger with fellow drug-giant Wyeth.

New London now has a wasteland where a neighborhood once stood, and no jobs or business to show for it. It's another travesty of central planning.

In the late 1990s, New London's politicians were desperate to fix up their aging and ailing town. The city revved up a private, non-profit entity called the New London Development Corporation, which went to work drawing up a plan of a new New London.

The central planners decided that their white knight would be Pfizer, already operating a plant across the river in Groton, but looking to build a massive research and development facility. So, the politicians picked a 24-acre lot and sold it Pfizer for $10, adding on special tax breaks. Also, state and local governments promised $26 million to clean up contamination on the lot and a nearby junkyard.

But Pfizer executive David Burnett thought New London needed to do some more cleaning. "Pfizer wants a nice place to operate," the Hartford Courant quoted Burnett in 2001. "We don't want to be surrounded by tenements." The old Victorian houses in the Fort Trumbull neighborhood next door did not match Pfizer's vision - a high-rise hotel or luxury condominiums would be more fitting.

So, the development corporation, empowered with eminent domain by the city government, cleared out the Fort Trumbull neighborhood, condemning the homes of anyone who wouldn't sell at its appraised value. Kelo, and other residents who didn't want to move, sued to block the condemnation. They lost, but they fought all the way to the U.S. Supreme Court.

There, the four liberal justices joined with moderate Anthony Kennedy to rule in favor of the developers -- the takings were perfectly legal.

The Court cited the redevelopment plan's "comprehensive character" and the politicians' "thorough deliberation." Justice John Paul Stevens wrote, "The city has carefully formulated a development plan that it believes will provide appreciable benefits to the community, including, but not limited to, new jobs and increased tax revenue."

The New York Times, long a fan of eminent domain among other big-government tools (after all, the paper had recently scooped up its Times Square property through eminent domain), applauded the ruling as "a setback to the 'property rights' movement," (note the scare quotes) and explained: "New London's development plan may hurt a few small property owners, who will, in any case, be fully compensated. But many more residents are likely to benefit if the city can shore up its tax base and attract badly needed jobs."

Phrased that way by a liberal editorial page, and approved by the liberal arm of the Supreme Court, the takings in New London begin to sound like a great progressive victory: government, triumphing over the exploitive notion of "property rights," helps the many at the expense of a few.

But, New London was really another example of political cronyism and politicians using the might of government in order to benefit well-connected big business at the expense of those poorer and less influential.

Consider that the head of the New London Development Corporation was Claire Gaudiani, who was married to David Burnett, the Pfizer executive who wanted "a nice place to operate." Pfizer vice president George Milne also sat on the development corporation's board. In the courtroom, former development consultant Jimmy Hicks called Pfizer the "10,000-pound gorilla" in the planning process, and said "the entire municipal development plan -- it was related back to Pfizer."

So Pfizer got its loot - free land, special tax breaks, and government-funded clean-up of the neighborhood (including clearing out the unsightly neighbors) - and the area prepared for economic "rejuvenation," as Justice Stevens put it.

It didn't work out that way.

The Fort Trumbull neighborhood Pfizer had bulldozed today consists only of "weeds, glass, bricks, pieces of pipe and shingle splinters," according to the Associated Press. Nobody has built the high-rise hotel or the luxury condos the city's planners had envisioned. The credit crunch and housing collapse took the air of out of that grand plan.

And Pfizer's sparkling R&D facility that was supposed to anchor the city's "rejuvenation?" It's being shuttered as a cost-saving measure following Pfizer's merger with Wyeth. Some of the 1,400 jobs there will move across the river to Groton. Some will be terminated.

The best-laid plans of central planners, it seems, have once again gone awry-unless you look at it from Pfizer's perspective.

The Hartford Courant reports Pfizer may sell the building and the land, which it got for nearly nothing. Or it may lease it out. So, the drug giant still gets the profits from the government's taking. But for New London? No more R&D jobs. No development of Fort Trumbull. Just some rubble where families once lived.

What a bunch of fucktards. All of them, from Pfizer to the New London city government to every court involved. It was fucking bad enough for the travesty that was this flagrant abuse of eminent domain to stand in the first place, but for nothing to even come of it just boggles the mind.

[CaptainChewbacca]

Damn, that's just incredibly fucked-up. Not even an appology from Pfizer?

[Alerik the Fortunate]

The city lived up to its end of the deal. If they were going to give Pfizer such a benefit package they should have forced them to sign something that they would at least give the city first option to take the land back at the same token price if they did not go through with the development. Of course they could simply not have thought that Pfizer would back out, and it didn't occur to them to have contingency plans. Every new form that has to be signed in municipal works development permits came from some instance of a lawsuit or spectacular failure. Still, I find expanded eminent domain rights in a culture of corporate welfare to be unsettling.

[Molyneux]

Here's a thought...how about they give the people their fucking land back?

[The Spartan]

Here's a thought...how about they give the people their fucking land back?

That would be nice, in a way, but it wouldn't really help most of the people that got screwed if their home has been torn down.

[Guardsman Bass]

Here's a thought...how about they give the people their fucking land back?

That would be nice, in a way, but it wouldn't really help most of the people that got screwed if their home has been torn down.

Moreover, they were technically paid some form of compensation as part of the Eminent Domain process. Does the population have to pay back the amount they got? It would be generous of Pfizer, but not likely.

[Tanasinn]

Things like this make the incident of that guy making a concrete hybrid bulldozer/tank and going on a government-building-levelling rampage look less bizarre.

[Eulogy]

Here's a thought...how about they give the people their fucking land back?

That would be nice, in a way, but it wouldn't really help most of the people that got screwed if their home has been torn down.

Then they should sue the everloving shit out of the city, the courts, and Pfizer for this horseshit. Make them pay.

[Sea Skimmer]

Then they should sue the everloving shit out of the city, the courts, and Pfizer for this horseshit. Make them pay.

And how the will that work when they already sued to the supreme court and lost? The court only decided 5-4 as I recall so it will look at a case like this again, but not after just four years. More like ten to fifteen years.

[RedImperator]

I don't know why people are acting like this is somehow something new or even particularly shocking. Cities all over the country are full of vacant lots that were seized by eminent domain, cleared for some grand urban renewal project, and then abandoned. The problem isn't Kelo or Pfizer or the city of New London; the problem is the entire mentality that cities can be improved by razing existing neighborhoods to make room for master-planned developments. It doesn't matter if the development is a research park of a Costco or a ville radieuse.

[Guardsman Bass]

Here's a thought...how about they give the people their fucking land back?

That would be nice, in a way, but it wouldn't really help most of the people that got screwed if their home has been torn down.

Then they should sue the everloving shit out of the city, the courts, and Pfizer for this horseshit. Make them pay.

On what grounds? While it wasn't exactly nice of Pfizer to dump the city after all that it did for a potential plant, it's not as if they were under contractual obligation to either build the plant or give the land back to the city in case they decided not to. Moreover, they followed the legal process of eminent domain, and the challenge to it stood up in the Supreme Court.

Cities all over the country are full of vacant lots that were seized by eminent domain, cleared for some grand urban renewal project, and then abandoned.

Especially in a situation where credit and financing dries up, like what has happened.

[Vympel]

If New London had a lawyer worth a damn they would've made sure to draft a Deed of Agreement / Guarantee / Indemnity whatever stipulating that if Pfizer didn't complete its proposed development works by a certain date, they were liable to pay back every single tax break and other goodie they benefted from in the relevant period.

Needless to say, clearly that hypothetical lawyer was ignored, or didn't exist at all.

[Alyeska]

If New London had a lawyer worth a damn they would've made sure to draft a Deed of Agreement / Guarantee / Indemnity whatever stipulating that if Pfizer didn't complete its proposed development works by a certain date, they were liable to pay back every single tax break and other goodie they benefted from in the relevant period.

Needless to say, clearly that hypothetical lawyer was ignored, or didn't exist at all.

The big corporations often bully their way out of such stipulations. They will simply go to some other city that won't hold them to such standards. Some cities are so desperate for the tax revenue they take the gamble.

[CaptainChewbacca]

Things like this make the incident of that guy making a concrete hybrid bulldozer/tank and going on a government-building-levelling rampage look less bizarre.

That guy didn't attack government buildings, he just went and wrecked the businesses and homes of his personal enemies.

[Molyneux]

Here's a thought...how about they give the people their fucking land back?

That would be nice, in a way, but it wouldn't really help most of the people that got screwed if their home has been torn down.

Moreover, they were technically paid some form of compensation as part of the Eminent Domain process. Does the population have to pay back the amount they got? It would be generous of Pfizer, but not likely.

Forced compensation is no compensation at all...not to mention the fact that most of them were likely paid significantly less than market value for their property.

I know that nothing is going to happen to help the people whose homes were stolen - it's just something else to piss me off.

[Uraniun235]

Things like this make the incident of that guy making a concrete hybrid bulldozer/tank and going on a government-building-levelling rampage look less bizarre.

That guy didn't attack government buildings, he just went and wrecked the businesses and homes of his personal enemies.

No, Killdozer also hit the town hall. There was definitely a beef between that guy and the city government.

[Sea Skimmer]

The local government let someone build a building blocking the only dirt road to his car repair shop, then forbid him from building a new road around it. That’s why he bought the bulldozer in the first place. So it was financially completely fucked over by the place. It’s not really surprising he snapped after that though it’s a pretty damn unusual way to go.

[CaptainChewbacca]

Things like this make the incident of that guy making a concrete hybrid bulldozer/tank and going on a government-building-levelling rampage look less bizarre.

That guy didn't attack government buildings, he just went and wrecked the businesses and homes of his personal enemies.

No, Killdozer also hit the town hall. There was definitely a beef between that guy and the city government.

I confess I don't remember the whole ordeal, just that he got hung up while running over some guy's hardware store.

[Big Orange]

Western European communities are also not immune from the fair weather multinational companies, in the town of Conventry (the UK), Ericsson opened up a big R&D facility on October the 30th and scarcely weeks later they shut the place down on November the 12th, the better part of a thousand workes losing their jobs before they got into the groove. Another example of corporations not giving two shits about almost anything, although it was exacerbated by Ericsson being in trouble (it's owned by Sony, so go figure).

[Winston Blake]

The city lived up to its end of the deal. If they were going to give Pfizer such a benefit package they should have forced them to sign something that they would at least give the city first option to take the land back at the same token price if they did not go through with the development. Of course they could simply not have thought that Pfizer would back out, and it didn't occur to them to have contingency plans. Every new form that has to be signed in municipal works development permits came from some instance of a lawsuit or spectacular failure. Still, I find expanded eminent domain rights in a culture of corporate welfare to be unsettling.

Further, I think the local government should ideally build new houses (of appropriate quality) on that empty lot and give the original owners 'first dibs' on buying them. The price ought to be no more than the value of their forced compensation.

Interestingly, the article seems to be trying very hard to link this debacle with 'liberals', and 'central planning' (read: SOCIALISM). All urban planning is ultimately some kind of 'central planning'. Down with urban planning! If we plan lot construction, then the commies win! Also, this debacle reeks of corporate welfare and government obsequiousness. That's more Republican than Democrat.

[Mr Bean]

Further, I think the local government should ideally build new houses (of appropriate quality) on that empty lot and give the original owners 'first dibs' on buying them. The price ought to be no more than the value of their forced compensation.

Blake it's time for a Sanity check.
So you lived somewhere for a number of years and the local government came along and says move out now or we taking your house. And you tell them to @#$#@ you and tell them to take you to court. Which they do and several years later they win and get to take your house away from you minus all the legal bills to racked up and now with a house that's got next to no value because the market is tanked and all the other houses being seized will affect your own houses price.

And here that same local government who put you through these several years of heart-arch and expense come along and offer you the chance to buy back into your old neigherhood at lets say close to the same price they took your old house from you...

WHY THE FUCK WOULD YOU TRUST THEM?
They STOLE your FIRST frigging house out from under you in order to sell it a corporation so they could build an R&D lab and were dumb enough to take the company's word on the fact that they would in fact build that building they took your house for in the first place. So why in all that's intelligent would you trust these clowns not to pull the exact same shit two years down the road?

[Winston Blake]

Further, I think the local government should ideally build new houses (of appropriate quality) on that empty lot and give the original owners 'first dibs' on buying them. The price ought to be no more than the value of their forced compensation.

[snip]

So why in all that's intelligent would you trust these clowns not to pull the exact same shit two years down the road?

Further, I think the local government should ideally

should ideally

ideally

[Mr Bean]

Further, I think the local government should ideally build new houses (of appropriate quality) on that empty lot and give the original owners 'first dibs' on buying them. The price ought to be no more than the value of their forced compensation.

[snip]

So why in all that's intelligent would you trust these clowns not to pull the exact same shit two years down the road?

Further, I think the local government should ideally

should ideally

ideally

No that's not ideally. That's not an ideal situation. That's like saying "ideally" the guy who robbed you last Tuesday should be sent to your house to act as your personal butler for the length of his prison term. No that's not ideal world. That's fan-fucking fantastic fantasy world your talking about. Ideal world says that this entire situation never happened not that and even worse idea come out of it.

[ArmorPierce]

The Hartford Courant reports Pfizer may sell the building and the land, which it got for nearly nothing. Or it may lease it out. So, the drug giant still gets the profits from the government's taking. But for New London? No more R&D jobs. No development of Fort Trumbull. Just some rubble where families once lived.

What a bunch of fucktards. All of them, from Pfizer to the New London city government to every court involved. It was fucking bad enough for the travesty that was this flagrant abuse of eminent domain to stand in the first place, but for nothing to even come of it just boggles the mind.[/quote]

Talk about adding insult to injury.

[Rogue 9]

Interestingly, the article seems to be trying very hard to link this debacle with 'liberals', and 'central planning' (read: SOCIALISM). All urban planning is ultimately some kind of 'central planning'. Down with urban planning! If we plan lot construction, then the commies win! Also, this debacle reeks of corporate welfare and government obsequiousness. That's more Republican than Democrat.

First, it's an opinion column, but it's the best source I found in a hurry. (There was a news article in the thread I got it from on another board, but the source link was already gone; I hate short-duration news sites.) So that there's a viewpoint being pushed shouldn't be a surprise, but he's not lying; Pfizer really did renege on the deal and that's what I wanted to post about. Secondly, considering that "corporate welfare" is a negative-connotation term, that is used in the very title of the column, I somehow doubt the author's in favor of it.