High court set to hear eminent domain case
Along the Thames River in New London, Conn., at least seven home-owners and a handful of city officials are waiting for the U.S. Supreme Court to consider an eminent domain case. At issue in Kelo v. New London, scheduled for early 2005, are the scope of the Fifth Amendment and the ability of government to condemn private property for the purpose of economic development.
Looking for ways to reinvigorate New London’s economy after the closure of a Naval facility that left the city cash-strapped, local officials saw an opportunity to redevelop the waterfront neighborhood, Ft. Trumball. A working-class enclave, Ft. Trumball is situated next to pharmaceutical company Pfizer’s research facility. New London officials realized that a riverfront development featuring retail, a hotel and health spa could boost tax revenue and create new jobs. They also realized they would have to condemn the private homes that dot 90 acres of riverfront property.
The Fifth Amendment allows the government to take private property with “just compensation” for public use. And while many people have understood public use to be defined as infrastructure needs that directly benefit the public, a 1954 Supreme Court case, Berman v. Parker, expanded the use of eminent domain to include taking property for redevelopment in the case of blighted neighborhoods. New London, however, has not declared Ft. Trumball as blighted, and some of the homeowners do not agree that redevelopment is a public use.
“The main issue before the United States Supreme Court is whether economic development is a public use,” says Burt Gall, an attorney with the Washington-based Institute for Justice. “It’s not the Fifth Amendment.” The definition of “public use” is precisely what the Institute for Justice is focusing on as it represents New London home-owner Susette Kelo and six others against the city. Gall says that the town using its power of eminent domain to take property and then turning that property over to the non-profit it created — the New London Development Corporation (NLDC) — is akin to handing over its powers of eminent domain to the private sector.
Some public employees also are concerned with the potential misuse of eminent domain powers. David Hamilton, a city engineer in Little Rock, Ark., says he sees eminent domain used mainly for public right of ways and infrastructure needs. “Often in day-to-day city building we just purchase strips of land, but do not displace people,” he says.
Like other property owners in the Ft. Trumball area, Kelo was offered fair market value. In spite of the “just compensation,” she still sued New London in 2000 to keep her home. The case made its way to the Connecticut Supreme Court earlier this year, and in a 4-3 ruling the court sided with New London, that economic development justified a legitimate public use. The court said that the promise of additional tax revenue justified the condemnation.
Also siding with New London is the Washington-based National League of Cities (NLC). Legislative counsel for NLC, David Parkhurst, says the economic future of cities may rest with this case. “Cities have a responsibility to conduct economic development, because a healthy economy helps raise revenues necessary to provide the services and infrastructure needs demanded by the public,” he says.
If the Supreme Court decides against New London, far-reaching effects will be felt by cities and counties that use eminent domain in blighted areas as an economic development tool.