5/10/2005

Eminent Domain Battle: New York Newsday, 5/8/05

When David Meets Goliath

By John Riley

When it all started in 1997, Claire Gaudiani was the president of Connecticut College, a specialist in French literature and philanthropy who had become a flamboyant and fabulously successful fund-raiser at the pricey school on a hill overlooking this economically depressed old whaling port.

She saw it as her social obligation to spearhead an ambitious redevelopment plan - a Pfizer pharmaceutical headquarters anchoring a waterfront hotel, upscale new housing, and retail and office space - that would revitalize the city's tax base and give hope to those less fortunate.

"It was a very idealistic vision," said Gaudiani, now a lecturer at New York University, in a recent interview.

But Susette Kelo was in the way. She had just bought an inexpensive little pink Victorian with views of Long Island Sound and the Thames River in Fort Trumbull, the peninsular low-income neighborhood with a smelly sewage plant in its midst that was the target of Gaudiani's idealistic raze-and-rebuild vision.

Kelo was no college president, just a nurse, a daughter of two factory workers who had grown up in the neighborhood. And her vision was that she, her disabled husband and her kids would continue to live where they wanted to live.

"Nobody ever pushed my mom around," Kelo said. "Nobody ever pushed my grandmother around. It's a long line. I've never liked being told what to do."

Eight years later, in the shadow of a gleaming new Pfizer research facility, Kelo's pink Victorian and the houses of six neighbors are still standing with defiant "Not For Sale" signs in the windows amid the rubble of an otherwise demolished neighborhood. And the clash between one woman's stalled civic vision and another's property rights has become the focus of a U.S. Supreme Court case that could change the face of American land use law and alter development projects from Brooklynto California. The issue: The Constitution allows government to seize private property for "public use" as long as it pays "just compensation," a power called "eminent domain" that has traditionally been used to clear the way for such projects as public roads, prisons and reservoirs. But in New London and many other cities and states, the power also has been used to take property and flip it to private, for-profit parties - companies with jobs, or developers of projects for the affluent that will enhance the tax base and thereby assist the public goal of economic development.

Nine states currently prohibit such takings under their state laws. But in Connecticut, New York and elsewhere, the approach has been used prolifically. From 1998 to 2002, according to a Washington institute helping the New London homeowners, there were more than 3,700 takings of homes and small businesses nationwide for the benefit of parties ranging from auto dealers, raceways and condominium developers to The New York Times, Costco and Nissan Motor Co.

Not a public use
Until now, most lawyers thought the Supreme Court had assented to that extension of the condemnation power. But Kelo and her fellow holdouts have challenged it, arguing that taking their homes to help attract Pfizer and create an upgraded, privately developed, tax-rich neighborhood was not a "public use." And the court's decision to hear the case, with a ruling expected in June, indicates at least some justices may be interested in reining in the power.

"There is no limit on eminent domain if that is permitted," said Scott Bullock, of the Institute for Justice, the Washington public-interest law firm representing the Fort Trumbull holdouts. "Every business produces more tax revenue than your home. Every larger business produces more tax revenue than a smaller business."

Indeed, in Supreme Court arguments last month, lawyers for New London were unabashed in telling the court that, hypothetically, they believed a city could condemn a Motel 6 and give it to Ritz-Carlton to increase tax revenues. The city and a panoply of supporters - including New York State, New York City, and backers of developer Bruce Ratner's proposed basketball arena in Brooklyn - warned the court in briefs that if it restricts the power, cranky property owners would be able to stall projects such as the original World Trade Center, and the redevelopment of Times Square and Baltimore's Inner Harbor.

"It would be a serious realignment of the way city and county governments do their economic development," said Edward O'Connell, the lawyer for New London's development authority. "A city like New London would not be able to rejuvenate itself despite its best efforts."

New London's project was designed as a lifeline for a city that for decades had suffered from shrinking population, high unemployment and a declining school system, and lost another 1,400 jobs in 1996 when the Naval Undersea Warfare Center in Fort Trumbull closed. Pfizer, which had run out of expansion space in Groton across the river, seemed like a golden opportunity.

The Pfizer Global Research headquarters, built on a city-owned site adjoining Fort Trumbull that was once the site of a linoleum plant, was opened in 2001, and has already boosted New London with 2,000 new jobs. But the hotel, upscale housing, offices and retail shops once imagined by the company and civic leaders remain a dream. The redevelopment authority controls more than 95 percent of Fort Trumbull's 90 acres and 100 of its 115 lots, but have accomplished little aside from demolition.

'Poster child' for effort
Gaudiani still defends her vision. "I understand the complaints, but I was looking at a city with no more developable land, no industry, and 75 percent of the kids on public assistance," she said. "It's a problem for me to keep raising millions of dollars for a swanky liberal arts college while doing nothing for all these low-income kids. There's a really deep moral issue here. Do you just say, 'Who cares if these kids get a break?' "

As residents fought to save their homes, one of Gaudiani's published comments - "Anything that's working in our great nation is working because somebody left skin on the sidewalk" - became a symbol of the alleged callousness of the effort. That, combined with a high-voltage personality and her marriage to a Pfizer executive, made her what she called "the poster child for the monster."

But three years after leaving New London, Gaudiani still makes the same point in different words. "There are circumstances in which the one gives to the many," she says. "E Pluribus Unum. We always want to protect the one. But the expectations for the one have to be looked at in terms of the many lives that will be helped."

A historic view
Kelo and her fellow holdouts in Fort Trumbull don't buy that logic. "They act like you should get out for the greater good of the community," said Bill von Winkle, who owns several rental properties that he bought with the profits from a lunch deli he ran for workers at the now-departed undersea warfare center. "I'm not sure why the homeowner has to do that."

They see the battle through the prism of class and history. Matt Dery, a circulation manager at New London's daily newspaper, said his family settled on their little corner lot in Fort Trumbull more than 100 years ago, when it was an enclave for new Italian immigrants. His parents, both in their 80s, live next door, and two adjoining properties are rented. They don't want money, he said, they just want to be left in peace.

Somehow, he said, government's grand civic visions always skip over the homes of millionaires, and target people of modest means as the ones who have to sacrifice for the many.

"They thought they could steamroll us because we're undereducated, lower-middle-class people," said Dery. "They looked at our view of the river and said, 'This isn't the highest and best use.' We're going to take it. . . . The only thing that protects anyone is being rich or politically well connected."

The history of the project provides at least some support for such bitterness. The smell from the sewage plant, for example, was long ignored by the city - until Pfizer came and insisted that it be fixed. The only structure in Fort Trumbull spared from condemnation was the squat, one-story Italian Dramatic Club, a hangout for local and state politicians.

And Kelo pointed to recently published remarks by lawyers for the city, acknowledging that they hope refurbished housing will attract young professionals from Pfizer to Fort Trumbull - people with "leadership qualities to remake the city."

Those comments, she said, reflect the social snobbery driving a plan that could more easily have been executed by renewing the neighborhood around the houses of those who didn't want to sell.

"They don't want us rubbing elbows with the bow-tie boys from Pfizer," she said. "It has been a class issue from the start - we're uneducated and poor, and it's OK to do that to the poor."


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