In response to the Supreme Court’s ruling last month affirming the right of governments to take private property in the name of economic development, bills are gaining momentum in both the House of Representatives and U.S. Senate that would bar federal tax dollars from being used for projects that employ eminent domain.
The legislation could cut affordable housing subsidies to developer Bruce Ratner’s proposed Atlantic Yards plan, which proposes to build a 19,000-seat basketball arena and 17-tower office and residential complex at the intersection of Flatbush and Atlantic avenues, and which threatens the use of eminent domain for up to 13 acres of private property.
Ratner and his major supporters, who include the mayor and governor, have said the massive development would bring in new tax revenues for the public good, although Ratner executives have long claimed that the area of Prospect Heights where they want to build is blighted, and therefore qualifies for eminent domain regardless of the Supreme Court ruling.
On June 30, conservative-leaning Republicans in the House responded in force to the Supreme Court ruling, which was led by the high court’s liberal voices. Ninety-three congressmen thus far have co-sponsored the Private Property Rights Protection Act of 2005 — drafted by Republican F. James Sensenbrenner, Jr., of Wisconsin — which would forbid allocation of federal funds, many of which go to state and local municipalities for development incentives, to be used for any project employing eminent domain.
Both the House and Senate are considering nearly identical bills that would prevent funding, like the kind that has been committed in the form of tax-exemptions and subsidized mortgages to Ratner for development of affordable housing units, from use for economic development. Only the House has had a hearing, before its Judiciary Committee.
“No state or any political subdivision of a state shall use economic development as a reason for exercising its power of eminent domain if federal funds would contribute in any way,” the bill states, and further threatens to render any violating agency ineligible for federal funding.
The bill defines “economic development” as any activity “including increased tax revenue” that does not involve using the seized property in a “substantial part” for public use.
The bill could stifle federal funding for local and state development corporations seeking incentives such as tax breaks, tax abatements, subsidies and initiatives if those entities put forth projects that required the condemnation of private land.
As reported by The Brooklyn Papers following a May 19 commitment between the city and Ratner in a Memorandum of Understanding, officials from the Housing Development Corporation, a city housing fund that finances development projects, committed $67.5 million in subsidies. An article this week in the New York Sun estimated as much as $76 million in taxpayer-funded subsidies.
The Housing Development Corporation (HDC) would be offering Ratner 1-percent tax-exempt mortgages for the construction of the project’s moderate-income units, financing up to $45,000 a unit to subsidize their construction, said HPD’s commissioner, Shaun Donovan.
Forest City Ratner did not return calls seeking comment for this article.
At the Judiciary Committee’s June 30 hearing, Sensenbrenner, the bill’s sponsor, said that “any property may now be taken for the benefit of another private party.
“Government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result,” Sensenbrenner said.
“American taxpayers should not be forced to contribute in any way to the abuse of government power,” he said before asking members to co-sponsor the bill to “assure the American people that we will not allow churches, homes, farms and other private property to be bulldozed in abusive land grabs that solely benefit private individuals whose only claim to that land is that their greater wealth will increase tax revenues.”
Karen Johnson, a spokeswoman for Brooklyn Rep. Edolphus Towns, said that although the Democrat was opposed to the Supreme Court’s ruling, he hadn’t yet looked at the bill.
“He didn’t like what the Supreme Court justices did,” Johnson said, but mentioned the affinity of Sensenbrenner to far rightwing causes, and feared the bill might have ulterior motives. “There might be better bills that will be drafted [of the same ilk],” she added.
Rep. Vito Fossella, a Bay Ridge-Staten Island Republican who thus far is the lone member of New York City’s congressional delegation to co-sponsor the bill, this week told The Brooklyn Papers, “What the Supreme Court took away in our Constitutional rights, the Congress must now restore.
We must slam the brakes on any attempt by government to seize our homes and small businesses for private developers to build hotels, supermarkets or office buildings.”
Neither Rep. Nydia Velazquez nor Rep. Major Owens returned calls for comment by press time, but Owens has taken a strong position against the Ratner plan and its reliance on eminent domain.
“My thing is this — if the bill broadly talks about economic development, I would oppose it, because I don’t believe in doing a broad brush like that,” said Chris Owens, the congressman’s son and chief aide, who is expected to run for his retiring father’s seat in 2006.
“I don’t want to see the abuse of eminent domain either, but you have to be very careful on how you approach these things.
“You don’t want to be in a situation where you can’t do anything, but you don’t want to abuse eminent domain, either.”
The Brooklyn Papers: www.brooklynpapers.com