Monthly Archives: June 2009

Plow Under Detroit? – Part Deux

        

         We are beginning to wonder if we may have been just a tad hasty when we made fun of the notion of abandoning Detroit and letting it revert to woods and meadows. See Plow Under Detroit? June 6, 2009. Go to http://gideonstrumpet.info/?p=239

          Today’s Wall Street Journal  carries an article informing us that the businesses that had been hanging in there in Detroit are now heading out en masse leaving Detroit without significan retail stores sufficient to meet the needs of the remaining population. See  Andrew Grossman, Retailers Head for Exits in Detroit, Wall St. Jour., June 16, 2009, at p. A3. The people interviewed for this article tend to blame Detroit’s plight on the collapse of the car industry, but we don’t think that comes close to telling the whole story. The decline of Detroit got going in the 1960s (after the riots) when the car business was still riding high  and GM was the largest company in the world. It has been downhill from there all along.

         The decline of Detroit began and has always been stimulated by government policies that for all practical purposes bribed city dwellers with subsidies of all sorts to move out to the suburbs, where housing costs were lower and the quality of life generally higher, and where life was simply nicer (especially for kids) than in cities with their rising crime rates, declining law enforcement, traffic congestion, and their catastrophic decline in the quality and safety of urban schools. To say nothing of urban redevelopment that was destroying low and moderate cost city dwellings and displacing their erstwhile inhabitants in large numbers. Detroit wasn’t alone. The same thing was happening in many Eastern cities, notably Cleveland, Philadelphia, Baltimore, Buffalo, Bridgeport, Camden, Newark, etc., etc. Yet, none of these cities were relying on the car industry to sustain them.

         Since this blog is about eminent domain, we must note that symbolically,  Detroit was an early aggressive user of urban redevelopment that promised a revival of cities by taking “blighted” properties by eminent domain and turning them over to redevelopers who, it was said, would build new stuff and thereby revive the city. It didn’t happen. As we now know, it accomplished nothing of the sort. It only produced the notorious Cadillac plant in the Poletown case and a downtown cluster of high rise buildings occupied by day by commuting suburbanites who wouldn’t be caught dead living in the city, and  who at the end of the day go home to the suburbs where they live, shop and pay taxes.

          Detroit’s pursuit of redevelopment was abusive at times. See Foster v. City of Detroit, 254 F.Supp. 655 (E.D.Mich. 1966), affirmed, 405 F.2d 138 (6th Cir. 1968), but Detroit kept on trying, thus bringing to mind Einstein’s definition of insanity as a person’s repetition of the same act over and over again, expecting a different result each time. Thus, Detroit kept on trying to use mass condemnation and urban redevelopment in a forlorn effort to reverse the irreversible post-World War II mega-trends. It didn’t succeed because it couldn’t. Its effort was not unlike King Canute’s command to the tides to cease advancing on the beach.

        We doubt that all this talk about abandoning Detroit to its fate will go anywhere in the foreseeable future, at least not in our lifetime. But that it is being discussed seriously is a sad fact that puts into sharp focus the ineffectiveness of urban renewal as practiced in the United States for the past half century. Will it cause the powers that be to change their behavior? You tell us.

Update. As a follow-up to the above post, we recommend thay you read Gregory Rodriguez, Bulldozing Our Cities May Wreck Our Future, L.A. Times, June 22, 2009, at p. A19. Rodriguez argues that however appealing this back-to-nature movement may be, it has menacing long-term implications because studies indicate that it is the close proximity of large numbers of people (as in cities) that tends to foster human creativity. In other words, population density creates or at least promotes the flow of ideas that generate innovation and growth.

That sounds reasonable to us. You don’t see much creative progress in science and technology coming from bucolic areas, no matter how pretty they may be. It comes from cities. 

Another Bump in the Road for Atlantic Yards

        Today’s New York Times reports that what has been anticipated, has actually occurred. “Citing fiancial concerns, the developer of the long-delayed Atlantic Yards project in Brooklyn has scrapped plans fior a Frank Gehry-designed $1 billion glass-walled basketball arena for the Nets in favor of a less expensive arena.” Charles V. Bagli, Developer Scraps Gehry’s Design for New Arena, N.Y. Times, Jun. 5, 2009, at p. A17. The new design will cost “only” $200 million.

          Evidently, to take advantage of tax-free bond financing, the project must break ground by the end of the year, which means that there is some architectural hustling to be done to meet that deadline. The new design won’t accommodate a professional hockey team as well as the Nets, as was the case with the old one. So stay tuned on that one.

          So here we go again. Another project that is grandiose on paper and is sold as such to the courts in justification of the use of eminent domain for redevelopment. But what eventually comes out of the municipal sausage machine may be quite different than what was blessed by the courts. In other words, those municipal plans, just like the plans in the Kelo case, may turn out not to be worth the paper they are written on. You’d think that after a while the courts would recognize that, instead pretending that those plans are “well-nigh conclusive”

          Vin Cipolla, president of the New York Municipal Art Society, is quoted by the Times as saying “The current Atlantic Yards plan bears increasingly less resemblance to the project that was approved in 2006.”  Yeah, Vin. Welcome to the real world.

         And speaking of changing things, the Atlantic Yards developer is  supposed to pay the New York Metropolita Transit Authority $100 million for a nine-acre railyard that is part of the Atlantic Yards project. But guess what? The Times reports that the developer is asking the Authority to accept a $20 million down payment at this time, so he can delay payment of the rest “at least for several years.” The article says nothing about payment of interest on that $80 million balance. You don’t suppose this is an interest-free transaction, do you? Nah, couldn’t be. But then again, who knows?

          And so it goes.

Update. For a more detailed discussion of the ongoing problems of this project, see Rich Calder, Questions Hold Up Atlantic Yards Project, N.Y.Post, June 21, 2009.

Plow Under Detroit?

         No, we are not making this up. In the words of the Detroit Free Press article by John Gallagher, entitled Urban Villages in Detroit’s Future?, Freep.com, May 22, 2009,

“In a new vision of Detroit’s future, a team of visiting urban planners suggests that the city may one day resemble the English countryside with distinct urban villages surrounded by farms, fields and meadows.”

        One of the planners behind this caper is quoted as saying “In a way, think of it as a 21st-Century version of a traditional country pattern. You have high-density development on one side of the street and cows on the other, quite literally.” We rise above the temptation to comment on this vision, except to inquire whether the planner in question would be willing to live across the street from those moo-cows, especially downwind. Whoo boy!

         On the other hand, as the article points out, Detroit is already on its way to becoming vacant space as it is. Its population is down 50% from the peak of the 1950s, and 40 square miles of its 139 square mile area are already empty.

         Perhaps Detroiters will prove to be better at farming than they have been at car making. Perhaps. So if they want to try this thing, by all means, let them — just as long as they don’t divert more gazillions of dollars from the sorely beset federal treasury in pursuit of this oddball vision. And just as long as they leave the makers of Kowalski’s Sausage alone.

About Those Holdouts

          The standard redevelopment mantra is that in order to revive cities, eminent domain has to be used because otherwise land could not be assembled for the redevelopment. Any li’l old holdout could bring urban revival to a stop by irrationally refusing to sell to the would-be redevelopers. We always doubted that scenario. Why? Because for 200 years much urban land has been assembled privately, and great buildings and other private projects have been constructed without the use of eminent domain, the Rockefeller Center in New York being a proverbial “Exhibit A.”

          Now, the St.Louis Post-Dispatch (STLtoday.com) reports from St. Louis that developer Paul McKee has spent five years assembling land and — guess what? — he succeeded in asssembling some 500 acres in north St. Louis, which he now proposes to develop into 4.5 million square feet of office buildings and stores over the next 15 years at an estimated cost of billions. The price of the assemblage was $46 million.

         Of course, the economy being what it is, it will take some time to accomplish this feat, and to the extent this envisioned redevelopment provides for construction of urban residences, it will have to contend with the problem that most of the urban population has decamped for the suburbs and will have to be enticed to return to the city. Also, it will take considerable public funds to transform McKee’s vision into reality. But be that as it may, here is proof that large urban tracts can be assembled for redevelopment by voluntary transactions, without using the power of eminent domain.