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30 Issues Day 6: Eminent Domain

Monday, September 28, 2009

It's New York Development Week on 30 Issues in 30 Days. Today: eminent domain and how it affects the shape of our city. Christopher Serkin, associate professor of law at Brooklyn Law School, explains what eminent domain is and how it's used. Dana Berliner, senior attorney at the Institute for Justice and Kathryn Wylde, president & CEO of the Partnership for New York City argue the ins and outs of the policy. Then, WNYC's Matthew Schuerman outlines the mayoral candidates' positions on eminent domain in NYC. Help Us Produce Development Week at the 30 Issues Wiki!

Guests:

Dana Berliner, Matthew Schuerman, Christopher Serkin and Kathryn Wylde

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Comments [23]

Raul from Brooklyn

The NYC Economic Development Corporation is using eminent domain extensively in Downtown Brooklyn. I know several businesses that have been shut down in the name of economic development, and while they have suffered due to government plans, they have gotten NO support from the government.

The most outrageous abuse of eminent domain is the condemnation of the Abolitionist homes on Duffield Street. These properties were owned by Abolitionists, and the historians and academics who have studied the issue have urged the city not to demolish the properties because of their connection to the Underground Railroad.

These properties could be a major attraction to Downtown Brooklyn, and the City is destroying an important asset, simply because they are rigidly adhering to their development plan.

The only blog that covers this issues exclusively is DuffieldSt.blogspot.com, which is out of date at the moment (sorry!).

I hope WNYC covers this issue more, especially since it is part of the Downtown Brooklyn rezoning, which would be covered nicely by tomorrow's segment.

Sep. 28 2009 11:59 AM
Michael D. D. White from Brooklyn

Regarding the William Safire comments at the end of the eminent domain segment:

William Safire said that by upholding the eminent domain takings in the Poletown case the court, “was ignoring a primary right of individual Americans.”

See:

http://books.google.com/books?id=NdJjRDKRqcIC&pg=PA35&lpg=PA35&dq=william+safire+%22eminent+domain%22&source=bl&ots=YLAg-QlnGi&sig=0grlBQs5g63qrWNgm80W9EHSETQ&hl=en&ei=xtbASsCZN8Wo8Aa5rqypAQ&sa=X&oi=book_result&ct=result&resnum=10#v=onepage&q=william%20safire%20%22eminent%20domain%22&f=false

Sep. 28 2009 11:58 AM
Daniel Goldstein from Brooklyn

All those listening interested in this issue, come on up to Court of Appeals argument on the Atlantic Yards eminent domain case.

The argument is on October 14, 2pm at the Court of Appeals in Albany.

more info at:
http://www.dddb.net/eminentdomain

Sep. 28 2009 11:58 AM
Chris Rosen from Putnam County

Blight!
I forgot to mention how arbitrary defining blight is. There was a good 60 Minutes story a few years ago on this which showed a beautiful neighborhood that had been labelled as blight. One person's blight is another's treasure. I'd be pretty sure anyone labeling an area as blight is looking to do large development under the guise of short term jobs and economic benefits when in reality it only causes destruction of communities and profits to developers. Blight means something different to every person.

Sep. 28 2009 11:57 AM
Rich Wyatt from Montclair, NJ

I'm surprised by the argument about how responsive the ED process is in NYC. I don't recall hearing of any ED projects being cancelled as a result of the process.

Of course, I don't think anyone would start the long and expensive ED process without a high degree of certainty of sucess.

Sep. 28 2009 11:53 AM
Telegram Sam from Staten Island

That was a horrible debate. Both people spoke in generalities -- no statistics or facts and virtually no specific examples were cited. We're talking about people's homes being taken by the government. How about a little moderating and challenging of the respective positions? I'm really disappointed in this show for handling this important issue so poorly.

Sep. 28 2009 11:47 AM
Daniel Goldstein from Brooklyn

Kathryn Wylde is a shill for the real estate industry. Dana is correct that NY State is the worst when it comes to eminent domain process.

If you wish to challenge the use of eminent domain in New York you can't use any evidence beyond the record created by the condemnor.

Also, NY uses blight to justify eminent domain all the time, yet NY state has such a flexible meaning that literally they can find anything they wish to call blighted, blighted.

It is a canard to say that you can't develop in NYC w/o eminent domain. It goes on all the time, everyday.

Sep. 28 2009 11:46 AM
Mike from Manhattan

What about all the developers, with cooperation with city officials in Asbury Park, taking away houses and business near the shore to put up luxury high rises for the rich who want to live by the shore?

Sep. 28 2009 11:46 AM
Chris Rosen from Putnam County

Amy, thank you for this important conversation but your premise is incorrect. You stated that perhaps commercial development brings economic benefit to communities via tax revenue. I am in Putnam county. It is easy to look at any town around that has put in large malls, big box stores, shopping centers, and large new residential developments. Choose any town that has done this, Their property taxes have gone up a lot and towns have been destroyed only for the purpose of developers profiting. There is no tax benefit. The costs, both economic and otherwise are rarely taken into account. There is a large effect on local taxes when infrastructure, security, and local school costs skyrocket.
It doesn't work, therefore this would not be a benefit for eminent domain.

Sep. 28 2009 11:42 AM
waf from Brooklyn

I'm very much in favor of using eminent domain to take property away from developers if it has been sitting for > 6 months without any progress, and if the developers cannot prove that it has the funding to complete construction (and plans to do so). Uncompleted projects bring down property values and cause blight to neighborhoods.

Sep. 28 2009 11:42 AM
Daniel Goldstein from Brooklyn

Fair market value is supposed to be based on comparables outside the project that has been determined blighted. It is not to be based on the depleted value of the property due to the state's and developer's heavy hand.

Sep. 28 2009 11:26 AM
Bob from Pelham from Pelham, NY

This professor is supposed to be an expert on the Kilo case, and he doesn't even know that Pfizer was NOT the recipient of the property (or even a party to the case)? Did he even read the case? There are big issues here regarding small homeowners rights versus local government power - don't make it into a Michael Moore rant against big corporations.

Sep. 28 2009 11:20 AM
Alexander from Morningside Heights

Could you please have someone comment on Columbia Universities abuse of Eminent Domain and the facilities they are building in west Harlem

Sep. 28 2009 11:14 AM
Michael D. D. White from Brooklyn

Private sector-driven condemnations are an abuse, but the abuse would be a lot less enticing to abusers if those whose property is condemned were fully compensated, including for all the transaction costs that are forced upon them. The federal and state constitutions require “just”compensation, this matter, but since this matter has not yet addressed by the U.S. Supreme Court it goes to the heart of what is equitable, especially when one private owner is being burdened to benefit another.

Why so many condemned businesses don’t continue should be looked at. Here are just some of the ways that condemnees are not adequately compensated. There is no compensation for a business’s good will or its advantageously negotiated (cheap) leases. The following transaction costs are not generally reimbursed: brokerage and lawyer fees to acquire new property, costs of changing employees or changing arrangements with employees, skittishness and lost business opportunities such as contracts and leases due to condemnation-caused uncertainty, defense lawyers and expert fees if it is judicially determined that the pre-litigation offer was higher, all sorts of extra internal administration costs. There is inadequate or incomplete compensation for: fixtures and investments which become worthless because the value was tied to the particular property, and interest (only 6-9%) on money that is not awarded until perhaps a decade later because of litigation. There is no compensation for the losses caused by eminent domain uncertainty such as investments made misanticipating a condemnation that doesn’t happen, or doesn’t happen when expected, investments that are not made optimally because of uncertainty, or investments not made because of illiquidity or not knowing when the balance of the condemnation award money will materialize.

Sep. 28 2009 11:11 AM
Nick from NYC

Can your guest bring us up to date and comment on:

- whether the US Supreme Court has upheld that eminent domain may be used to take property for private development, without it being "blighted" and

- comment on instances of where this has happened and nothing of benefit for the public has resulted

- comment on the Columbia/Manhattanville ongoing project

thank you!

Sep. 28 2009 11:06 AM
Darius from bklyn

eminent domain's "public use" should only apply to public projects. That's pretty simple. No so-called public-private partnerships, nor merely private projects.

Also, compensation calculations are somewhat misleading. Just as misleading as "affordable housing."

Sep. 28 2009 11:06 AM
Tonky from Brooklyn

Funny you should ask! At a party this weekend we wondered if we might apply eminent domain to the four person booth that other bar patrons were occupying.

They didn't appear to be having as much fun as we knew we could so we considered asking them to leave.

Another table opened up though so we took that one.

Sep. 28 2009 11:06 AM
Micahe D. D. White from Brooklyn

It is well known that eminent domain creates what has been referred to as “planner’s blight,” a depression of the economic function of the neighborhood where eminent domain is occurring while it occurs. It can go on for many years. For instance, most huge eminent domain projects like the Columbia University expansion and take over of West Harlem and Atlantic Yard are multi-decade affairs. Atlantic Yards has been in the works for more than 5 blight-inducing years already and is projected to take perhaps another 25 years. ESDC head Marisa Lago said it could be compared to Roosevelt Island, a 40 year project.

With developer-driven eminent domain, the developers driving the transaction consciously take advantage of “planner’s blight” to drive down prices for real estate in the area so as to pay less to the condemnees. For instance, one thing that Columbia does is refuse to be specific about when during these very extended periods it might be swooping down to actually exercise eminent domain. Columbia again being an example, there is a tendency to run developer-owned properties into the ground in order to induce blight, this could involve demolitions or it could be more insidious. Columbia has even been accused by the community of sending out people into the neighborhood to strew trash and graffiti buildings: That is hard to prove but the economic inducement to do these kinds of things is clearly there and strong.


Michael D. D. White
Noticing New York
http://noticingnewyork.blogspot.com/

Sep. 28 2009 11:01 AM
Micahe D. D. White from Brooklyn

It should be noted that New York style developer-drive eminent domain is typically accompanied by the developer coupling its use of eminent domain with a huge (say inflated) attempts at a simultaneous (FAR- “Floor-to-Area-Ratio”) upzonings. Some of that upzoning would like have happened anyway (see Columbia’s community plan as an example) but the coupling of these simultaneous land grabs via developer driven eminent domain and developer-driven upzonings makes for piling on of extreme extra density in limited areas that very likely do not represent good urban planning.

Michael D. D. White
Noticing New York
http://noticingnewyork.blogspot.com/

Sep. 28 2009 10:47 AM
Micahe D. D. White from Brooklyn

Comment Part II (Final)

Politicians, like City Council Speaker Quinn, who support the use of eminent domain to force private-to-private owner transfers in the name of economic development say that eminent domain “should be used carefully and cautiously and it should only be used when there is an overriding greater good in the interest of the city.” But scrutiny in the service of such care and caution is not possible when the transparency of the process and public oversight are prevented through the use of gag orders.

For more- See:

Saturday, September 20, 2008
Contrivance in the service of creating blight, real blight- Listen again- REAL blight
http://www.wnyc.org/shows/bl/episodes/2009/09/28/segments/141473

Michael D. D. White
Noticing New York
http://noticingnewyork.blogspot.com/

Sep. 28 2009 10:35 AM
Micahe D. D. White from Brooklyn

Comment Part II

Things are not like they were when condemnations were truly being done by the government and for a governmentally determined public purposes. In the new private-sector-propelled world of eminent domain, a new form of agreement has emerged. Private entities like Forest City Ratner and Columbia University, while obtaining property with the threat of eminent domain, now also obtain non-disclosure agreements known in the vernacular as “gag order” agreements. These agreements prohibit those selling property as they succumb to the eminent domain threat from criticizing the project and process. These agreements have been increasingly refined to disrupt the transparency of what should be a public process by including provisions that require the signers to speak in favor of the project, not come forward with facts for the public record and may designate people to speak for the signers of the agreements who will tout the project irrespective of what the signer would otherwise have said or testified about the project. In the old days when eminent domain was conducted through a government negotiation process had the government sought to get such gag orders they would more likely have been held to be unconstitutional and/or void as against public policy precisely because they would have been using government power to silence free speech and obscure a government process.

Politicians, like City Council Speaker Quinn, who support the use of eminent domain to force private-to-private owner transfers in the name of economic development say that eminent domain “should be used carefully and cautiously and it should only be used when there is an overriding greater good in the interest of the city.” But scrutiny in the service of such care and caution is not possible when the transparency of the process and public oversight are prevented through the use of gag orders.

Sep. 28 2009 10:34 AM
Micahe D. D. White from Brooklyn

Comment Part I

The advent in NYS of an state industry of developer-driven eminent domain has led to some strange new practices we have not seen before. One of them we need to prohibit is the use of so-called gag order, non-disclosure, and tout-for-the-project agreements.

Want to find out what is going on in the world of New York eminent domain. Well, you are faced with a problem in that regard? That’s going to be hard to do.

Michael D. D. White
Noticing New York
http://noticingnewyork.blogspot.com/

Sep. 28 2009 10:33 AM
Micahe D. D. White from Brooklyn

Kathy Wylde is a scheduled guest on the eminent domain segment.

Please note that there is a question about whether Kathy has done her homework with respect to
things she has previously said (and we have previously written about). Kathy has said, and we have contradicted, that those against whom eminent domain is used are fully compensated. Kathy has also advocated using eminent domain where there won’t be any net benefit to the public, in fact where there will be net loss, case in point being the (conservatively calculated) projected $220 million net loss to the city, according to the city’s Independent Budget Office. For starters to see what we have written about Kathy with links to more see:

Saturday, September 19, 2009
Really Wylde? New NY Federal Reserve Bank Director Supported Major NYC Net Loss ($220 Million) Megadevelopment
http://noticingnewyork.blogspot.com/2009/09/really-wylde-new-ny-federal-reserve.html

See also:
Monday, July 6, 2009
Wylde Ideas, Making For a Wrong Partnership
http://noticingnewyork.blogspot.com/2009/07/wylde-ideas-making-for-wrong.html

Michael D. D. White
Noticing New York
http://noticingnewyork.blogspot.com/

Sep. 28 2009 10:13 AM

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