Taking sides on eminent domain: The Philadelphia (PA) Inquirer, 2/22/05

Foes see a loss of rights. Others say it is needed at times to secure redevelopment's benefits. U.S. justices are to hear a case today.

By Wendy Ruderman

Residents from three towns in the region took to the streets yesterday, rallying against what they call an unholy alliance between local governments and developers.

The protesters in Ardmore in Montgomery County and Westville and Haddon Township in South Jersey are upset at politicians using their power to seize private property and give it to developers seeking to profit from building condominiums, shopping centers or other projects.

"I was under the impression that the right of home ownership and the right to protect your property was granted to us in the Constitution, but I've since learned that it's not. It's a privilege granted to us by local government," said George Baker, whose Westville home on Big Timber Creek sits in the path of a potential waterfront development.

The battle over eminent domain, the government's long-held right to take private property in the interest of public good, is making headlines across the country.

Today, the U.S. Supreme Court is scheduled to hear arguments in a case pitting Connecticut residents against officials wanting to boost tax revenue with more upscale homes and shops.

Critics say politicians should not be in the real estate business - especially not when developers donate to political campaigns.

Public officials counter that most redevelopment does not involve hostile property takeovers, but that those that do are necessary for revitalization.

If developers profit in the process, so be it.

Collingswood Mayor M. James Maley, a redevelopment lawyer, said he wanted the developer "to make money, but I want him to make money in a way that improves the community of Collingswood."

Collingswood, once troubled by crime and neglected properties, has become a kind of poster child of redevelopment, with trendy shops and restaurants. So much so that mayors across the region want to duplicate its Cinderella story, which did involve some eminent domain.

Maley, with the Marlton law firm of Parker McCay, is a consultant on more than two dozen redevelopment projects in the region.

Elected officials said critics were overlooking dozens of redevelopment success stories in the region that had not involved taking people's homes.

"Redevelopment is not synonymous with eminent domain," said Louis Bezich, a former business administrator for Camden County whose Haddonfield consulting firm, Public Solutions, was hired to help drive redevelopment in economically depressed towns along the White Horse Pike, including Barrington.

A few years ago, Barrington obtained the 2.6-acre Custom Metal Arts site on Gloucester Pike through tax foreclosure and courted redevelopers using financial incentives. The vacant building was refurbished and is now occupied by SAR Automotive Equipment, a distributor and installer of garage lifts.

Once an area is declared a redevelopment zone, local officials can harness a variety of powerful tools, such as eminent domain. They also can select a developer without competitive bidding, grant long-term tax exemptions and abatements, issue bonds to pay for the project without a public referendum, and more.

In many cases, the developer provides the financial backing for a project that would otherwise fall to taxpayers. Under the Westville proposal, the developer, Fieldstone Associates of Doylestown, is expected to shoulder the estimated $40 million cost.

In Haddon Township, Fieldstone is proposing housing and retail space in the long-vacant Dy-Dee Diaper Service building on Haddon Avenue. The township would issue $5 million in bonds, and the developer would pick up the rest.

Without financial incentives to sweeten deals, many developers wouldn't look twice at most proposals, redevelopment supporters said.

"The government needs to be involved to help make it happen, because it is obvious that the private marketplace is not doing it," Maley said.

The problem is, town officials across the nation find themselves giving away more and more, said Dan Emerine of the Smart Growth Network, a federally funded coalition of organizations dedicated to tackling sprawl.

"A lot of times, jurisdictions compete against each other, and eventually everyone loses because it creates a race to the bottom in terms of providing tax incentives to encourage economic development," Emerine said.

While many experts agree that redevelopment is often a good thing, some say the system invites corruption and cronyism.

And too much redevelopment could create intense competition to attract a limited number of retailers and consumers, dooming some projects.

At the heart of the debate is who benefits most.

Among those making money from the redevelopment boom are politically connected consultants, bond counsels, bond underwriters, engineers and architects, union workers, and developers.

"I am making money. That's why I work," Maley said. "Some people will get financial benefits out of it, absolutely. The question is: Is there a greater public good that is served by accomplishing the redevelopment?"

Westville resident Alan Peters thinks so.

"We'll reap the benefit of it eventually," said Peters, who estimated that the value of his waterfront home, which is not part of the redevelopment proposal, would increase by as much as $50,000.

The Philadelphia Inquirer: www.philly.com