The Trouble with Land Grabs

One of the most worrisome legal proceedings of local years came in 2005, when the Supreme Court ruled that the City of New London, Connecticut could use eminent domain to seize a large number of private homes and give the land to developers. The rationale for the original land-grab was that the developers would construct new high-end housing, shopping facilities and office space, which would bring a huge influx of business into New London. The city had to pay the homeowners for their property, of course, but the people who were evicted claimed that they were paid pennies on the dollar (as such people always do), and just about everyone who isn’t either ultraconservative or a real estate developer who stood to make money on such dealings condemned the entire action as being nothing more than “corporate welfare”. None of which would really have mattered, in the long run, if the project had lived up to its hype, or at least succeeded. Or, for that matter, gotten off the ground in the first place – which does not seem likely, now…

At the time, the seizure (and subsequent bulldozing) of an entire neighborhood did appear to make sense, at least if you held stock in Pfizer. The original real estate development project would have constructed facilities that would have been perfect for the use of personnel from the nearby Pfizer corporate facility, which was already one of the area’s largest employers. In fairness, we should note that Pfizer itself was not given any of the land or any other goodies by the city, and had no stake in the project other than being located nearby (and therefore being one of the potential key customers for all of the business units involved), but the concept of Pfizer employees buying the new condos, shopping in the new stores, staying in the new hotel when working at the facility temporarily, and so on figured heavily in the developers’ plans. Which just makes it that much more unfortunate that the company has decided to close its New London facility…

The announcement came a few days ago, and was recorded on the Wall Street Journal opinion page, among other places. But while the Journal ends the piece on an up note, crediting the New London debacle with inspiring the creation of laws limiting eminent domain and preventing this type of blatant corporate handout in 43 of the states, I have to admit that I’m not reassured by these events. We’re living in a country where the same people who will oppose any form of public subsidy for food, housing or healthcare (because that’s “Socialism!”) apparently see nothing wrong with a financially weak city (and State) spending $78 million to benefit a wealthy real estate developer or the country spending $700 billion to allow financial service companies to maintain their million-dollar annual bonus program. As incredible as it sounds, people on the Far Right are still arguing in favor of the New London land grab – and that means that it’s only a matter of time before somebody, somewhere tries this again…

Now, I’m not going to argue against government-backed development projects. I’m not even going to try to tell you that there is no place for eminent domain proceedings. I’m just pointing out that any government-sponsored program that takes money or property away from average citizens and gives it to well-heeled companies so that they can make even more money at taxpayer expense is not merely bad government; it is also, of necessity, bad business practice. And there’s definitely a limit to how much more of that the country can afford before something REALLY bad happens…