Beware the self-appointed peacemakers. An Israeli fellow, named Michael Steinhardt rushes in where angels fear to tread, and waxes eloquent in the pages of the Wall Street Journal (Refugees and Israeli-Palestinian Peace, March 12, 2010, at p. A19) on how to solve the Palestinian refugee problem. He calls, inter alia on Israel to apologize, even if he does not make clear what the apology should be for, and to “offer[ ] substantial, direct compensation to individuals for homes and land that have been lost.” If there is anything that gets our attention, it is the matter of providing compensation for takings of property, so it shouldn’t come as a surprise to the readers that we do favor compensation in such cases. But wait. Didn’t the Arabs who fled Israel during the 1948 War of Independence, already receive compensation for their lost homes? They surely did, even though you’d be hard put to discern that little item from reading news coverage of events in that region. We had occasion to blog about that back in 2008, see https://gideonstrumpet.info/?p=56 , but it looks like this subject needs repeating.

When six Arab armies invaded Israel in 1948, their leaders’ strategy was to encourage and pressure their Arab compatriots living within the British Palestine Mandate territory (that was being divided between Israel and the Arabs) to leave, so as to provide a clear field of fire for the invaders. The idea was that after the Israelis were duly “pushed into the sea,” as the Arabs used to put it, the departed Arabs could return, reclaim their own land and also glom on to the land of those pushed-out Jews. But as you already know, things did not work out that way. The Israelis won that war, and those poor, misguided Arabs who listened to their leaders and departed, became refugees. They were herded into squalid camps by their compatriots, where they and their progeny have been languishing ever since, as the Arab countries, for all their professed support for the Palestinians, do not allow them to resettle there. But this aspect of the 1948 war left Israel with a problem: what to do with the properties abandoned by their erstwhile Arab occupants who fled to other Arab countries.

To make a long story short, Israel created the office of Custodian of Absentee Property who took charge of the abandoned land, and under Israeli law became empowered to return individual holdings to their rightful owners who could establish title, or, to offer compensation. He could also take unclaimed land by eminent domain upon payment of fair market value to its erstwhile owners. As of 1994, according to the figures released by the Israel Land Administration, 14,692 Arab absentee owners claimed compensation under the Israeli Absentee Property Law and under the Validation and Compensation Law. As of 1993, a total of 9,956,828 Israeli shekels were paid as compensation, and 54,481 dunams of land had been granted to claimants as compensation in kind. For the 1988 figures, see David Kretzmer, The Legal Status of the Arabs In Israel, at 59-60 (Westview Press 1990). For a description of similar procedures in the territories captured by Israel in the 1967 war, see The Rule of Law in the Areas Administered by Israel (Israel Nat. Sec. of the International Comm’n. of Jurists, 1981), at 47-49. So it looks like Mr. Steinhardt is a half century late with his helpful suggestion.

Moreover, as is the invariable practice of folks like Steinhardt, he utters not a peep concerning the other side of this coin. What about the Jews who lived in Arab countries before 1948, some 800,000 of them, whose property was seized without cause and without compensation as they were expelled? If we are going to talk compensation, shouldn’t they be prime candidates for receiving it? They certainly are. But you won’t find the Steinhardts of this world shedding tears over that problem. It’s always exposition of supposed Israeli misdeeds, even where, as in this case, there aren’t any — the Israelis have already done what Steinhardt wants them to do.

A while back we blogged about the fate of the grandly-named Los Angeles Intercontinental Airport, located in Palmdale, some 60 miles north of Los Angeles  (If You Can’t Build It They Won’t Come, October 2, 2008, https://gideonstrumpet.info/?=127 ) It was created (mostly on paper) in the early 1970s when the City of Los Angeles blew some $100,000,000 acquiring 17,500 acres of high desert land for a new airport to supplement LAX. What actually happened was that in spite of several tries by various plucky airlines, that airport went nowhere, and Los Angeles eventually gave up on it. Those 17,500 are still out there, performing the vital function of holding the rest of the world together, and the public got hosed to the tune of $100,000,000 (in early 1970s dollars) and God knows how much more in carrying costs, to no avail. 

Today’s dispatches bring news of two more similar attempts. First at bat is the – ta,da! – Northwest Florida Beaches International airport near Panama City, in the Florida panhandle. Susan Stellin, Airport Built, It’s Time to see if the Traffic Comes, N.Y. Times, March 10, 2010, at p. B6. At least this one is being built with some $300 million in private funds by the St. Joe Company in an effort to develop the nearby area. It is evidently being build on the if-you-build-it-they-will-come theory – the hope is that tourism will grow once a convenient air service to the area is established. 

And over in Mito, Japan, the locals are building a new “no frills” Ibaraki airport. Hiroko Tabuchi, In Japan, No-Frills Airport Lures Bargain Players, N.Y. Times, March 11, 2010, at p. B8. No jetways, and possibly no baggage handling at this one. No tractors either; the planes will have to taxi to and from the gates on their own. Two flight per day; one to Seoul, South Korea, and the other to Kobe, Japan. Low cost landing fees. This airport is publicly financed to the tune of $243 million. At least the Japanese are up front about the fact that they expect this airport to be losing money at the outset — $221,000 in its first year. After that it’s a wing and a prayer. 

The remarkable feature of both these projects is that they do not appear to be using eminent domain to acquire land. The Panama City Airport appears to be built on land already owned by the St. Joe Company, and the one in Mito, … Well, that one is in Japan where eminent domain is simply not used except in rare cases of dire necessity. The Tokyo Narita airport was built on expropriated land, and the authorities have never heard the end of it – what with occasional riots by the descendants of the farmers whose land was taken, occurring sporadically until this day. Those folks take eminent domain very seriously. 

Will it all work out? Will they come if you build it? Stay tuned and find out.

Follow up. When we named this post “It’s the Same the Whole World Over,” we weren’t just whistling Dixie. The Los Angeles Times reports that the same thing is happening in China, only on a much larger scale. David Pierson, Airports Lack a Key Element: Passengers, L.A. Times, March 13, 2010, at p. A1. For example, the $57 million Libo airport built to accommodate 220,000 passengers annually is so underutilized that airport employees work part-time and lights are turned off some of the time. “Experts say up to two-thirds of the nation’s airports are losing money.”  

Follow up. To reinforce our point, there was an item in USA Today, March 9, 2010, under the heading Across the USA, one of those itty-bitty news briefs in a space of 2.5 by 2.125 inches on p. 6A. It reports that 174 remains of early Chinese immigrants from the 1800s are being disinterred and moved to facilitate the construction of a high-speed rail line. No lamentations in the Los Angeles Times, no handwringing, no op-eds, no nothin’. We may have missed it, but as far as we can tell this wasn’t even mentioned in the L.A. Times. And so it goes.

A while back we noted that there was a snake in paradise insofar as Florida’s highly touted deal to save the Everglades through a massive purchase of land was concerned (The Everglades — Your Tax Money at Work, see  https://gideonstrumpet.info/?p=301 )

Now, it turns out that the problem is much bigger than we could imagine. Today’s New York Times reports on the front page, above the fold, that the Evergaldes matter has grown more complex and messier. See Don Van Atta, Jr., and Damien Cave, Deal to Save Everglades May Help Sugar Firm,  N.Y. Times, March 8, 2010, at p. A1.

This is a huge article, taking up two pages, chock full of details involving everything from budgetary constraints to local politics, so it doesn’t lend itsef to concise abstracting, at least not at the moment — though we intend to go through it again, and add to this post as may be appropriate. But we recommend that if you have an interest in government land acquisition, whether by eminent domain or otherwise, you read this article for yourself in its entirety.

Suffice it to say for now that according to the New York Times, charges have been made that the appraisals for the state’s purchase of the subject land use erroneous figures based on comparable sales from 2004 to 2006, to update the appraisal down to 2009. The difference between those figures and the ones produced by another firm of (New York) appraisers comes to close to $400 million.

Then there is the matter of the cost of restoration. Quoth the Times:

“Paying for the land was only the beginning. A slide show prepared by the [South Florida Water Management] district on restoration projects and construction detailed one estimate that put the effort at $8.6 billion and another at $12.3 billion, according to records obtained by the New York Tines.”

And so it goes.

There is bound to be more on this one, so stay tuned.

Follow up. For a discussion of this topic on the Volokh Conspiracy blog, go to http://volokh.com/2010/03/08/saving-the-everglades-or-saving-us-sugar/comment-page-1/#comment-767580

For additional commentary on this news item see Holly Doremus, Conservation Deal Just a Sugar Fix?, Legal Planet, March 8, 2010; go to http://legalplanet.wordpress.com/2010/03/08/conservation-deal-just-a-sugar-fix/

Second Follow-up. A headline in today’s New York Times says it all: Board Extends Deadline For Everglades Land Deal, N.Y. Times, March 12, 2010, at p. A17. The reason (even if you put aside the controversial valuation reports): South Florida Water Management District’s tax revenues are down, from $553 million in 2007 to $460 million estimated for this year.

Today’s Los Angeles Times reports that in order to save money in the ongoing fiscal calamity, the state has furloughed a number of employees. So the employees still on the payroll (some evidently at reduced pay) are working overtime, and the cost of the overtime is offsetting the savings effected by the furloughs. See Patrick McGreavy, Overtime Pay May Be Putting a Dent In State’s Furlough Savings, L.A. Times, March 6, 2010, at p. A1. See http://www.latimes.com/news/local/la-me-overtime7-2010mar07,0,1578628.story 

Your tax money at work.

They say that confession is good for the soul, so we read with interest the confessions of William J. Stern, The Truth About Times Square, published by the Institute for Justice at http://www.ij.org/index.php?option=com_content&task=view&id=2676&Itemid=249  A good read, that. 

Mr Stern should know whereof he speaks. In the 1980s he was Chairman of the infamous New York State Urban Development Corporation, a public body originally created to eliminate slums and build low-income housing, that in the event turned out to be the rapacious, predatory entity behind New York’s notorious abuses of the power of eminent domain, taking private property for the benefit of favored, private [re]developers for their financial gain. By now, this may sound like old stuff that is familiar to all with an interest in the process of redevelopment. But Mr. Stern adds another dimension to this story by presenting it to us through the eyes of an insider. And quite a tale it is. 

To make a long story short, the original Times Square redevelopment project was a creature of government central planning, whose rationale was to eliminate the porn sleaze that afflicted 42nd Street between 7th and 8th Avenues, and through the use of eminent domain replace it with a grandiose complex of office towers. But it didn’t work out that way. Why? Two reasons: first, the area was crime-ridden with the NYPD in those days doing little or nothing to take the streets back from from the criminals, and second, the grandiose visions of government central planners did not match what the market wanted.

By 1992 the handwriting was in the wall. See David W. Dunlap, Long Delay Likely in Rebuilding Times Square, N.Y. Times, Aug. 3, 1992, at p. A1. Though the facile excuse was that the economy experienced problems, that was not the real reason for the project’s failure. Thomas J. Lueck, Miscalculation in Times Square: A Bulldoze-and-Build Plan Is not Enough, N.Y. Times, Aug. 10, 1992, at p. A15, noted the “real estate glut” but concluded that: 

“But the failure of the 15-year government campaign to redevelop Times Square may rest more squarely on the government’s attempt to use bulldoze-and-build urban renewal policies at a time when large-scale development has become a more intricate art.”

 In Mr. Stern’s words:  

“Despite all the posturing and scheming, planning and skullduggery, the [original redevelopment] plan withered, [the selected redeveloper] never started work on the four office towers, which never went up; the garment wholesale mart never opened, the hotel never appeared, the subway renovation never happened and the nonprofit theaters never materialized.” 

Translation: for all the brave talk about redevelopment planning, the central planners didn’t know what they were doing. The upshot of this ham-handed government effort was captured by the title of another New York Times article: James Bennett, Taking the Deuce: Midtown Gets a Ghost Town on 42nd Street, N.Y. Times, Aug. 9, 1992, at p. 20. And a ghost town it remained until the private market was permitted to take the initiative and build what the new entrepreneurs wanted, not what government planners thought they should build.

The Times Square area was eventually revived, but not because of the UDC plans, but rather because of a stepped up law enforcement effort by the NYPD that made the streets safe, and increased interest by individual entrepreneurs attracted to the area as a result.

To get the whole story, do read Mr. Stern’s article. Like we said, it’s a good read. 

And by the way, we learned from the Stern report what happened in the wake of the infamous Rosenthal & Rosenthal case (see 605 F.Supp. 612 (1985)). In that case, the owners challenged the taking of their land on the grounds that the boundaries of the Times Square redevelopment project were corruptly drawn to include their building, for the financial benefit of the favored redeveloper. The court was unimpressed and shrugged off those allegations by observing that even if true, the project still met the criteria of “public use,” and the motivation of the condemnor could not be considered. So what happened then? We learn from the Stern report that seven years later the Rosenthal & Rosenthal building was sitting empty and unoccupied. 

Your tax money at work

Frank Kottschade may not be a household name, but it should be. In 2001 he set out to build some townhouses in Rochester, Minnesota, only to run into the familiar municipal buzz saw. When he applied for the necessary permits to do so, the city decided to extort some goodies by imposing eight conditions whose impact was to transform a well designed project into an economic impossibility. They reduced the number of units from 104 to 26, and then, as an afterthought, added two more conditions, including a requirement that Kottschade dedicate two ponds to the city to create a 40-acre lake.

Kottschade sued in federal court, hoping to rectify the absurd rule of the Williamson County case in which the U.S. Supreme Court formulated a rule requiring property owners complaining of takings (and no one else) to “ripen” their inverse condemnation cases by suing in state courts first. Kottschade’s good fight is memorialized by the U.S. Court of Appeals opinion (319 F.3d 1038) which recognized the anomalous nature of the Williamson County rule, but reasoned that inasmuch as the Supreme Court created the intellectual mess, it was up to that court to clean it up. But notwithstanding that four Supreme Court Justices had earlier indicated in a concurring opinion in the San Remo Hotel case that Williamson County should be reconsidered, certiorari was denied.

So it was off to state court where the trial court found some cockamamie reason to rule against Kottschade. But at this point the Minnesota Court of Appeals reversed (see 760 N.W.2d 342) and remanded the case for a trial on the merits. Now, faced with the reality of having to defend its plainly confiscatory regulations in court, the city threw in the towel and settled, the Rochester Post-Bulletin reports. See Jeffrey Pieters, City, Developer Settle Dispute that Started in 2001, March 2, 2009.

The reported terms of the settlement are as follows: $3.06 millions in cash, a $600,000 payment from the League of Minnesota Cities (the city’s insurer), a waiver of the city’s sewer, water, storm water, park and building permit fees, estimated to be worth $1.28 million, and a city payment of up to $675,000 to help build a frontage road on Kottschade’s property. Kottschade will pay the city $1.72 million for a transportation assessment. Bottom line: Kottschade will receive $3.9 million in net damages.

And guess what? Several city officials are now reported as noting that Kottschade’s development “holds the potential to create jobs and expand the city’s tax base.”

We offer without comment the following passage from Christine O’Toole, Slumbering Pittsburgh Neighborhood Reawakens, New York Times, March 3, 2010, at p. B7:

“PITTSBURGH – In the 1950s, the East Liberty neighborhood five miles east of downtown was Pennsylvania’s third-largest shopping district, behind Center City Philadelphia and downtown Pittsburgh, with more than 500 local businesses and a population of 14,000.

“The suburbs began to draw residents from the densely populated area in the late 1950s, however, and urban renewal schemes like high-rise public housing and ring roads were enacted to stem the flight. Instead, they drove the area into a 40-year coma. By the 1980s East Liberty had lost more than one million square feet of commercial space and half its population.”

The New York Times has practically gone into mourning over the demise of the Clean Water Act. See Charlie Duhigg and Janet Roberts, Rulings Restrict Clean Water Act, Foiling E.P.A., N.Y. Times, February 28, 2010, www.nytimes.com/2010/03/01/us/01water.html?ref+us&pagewanted+print “Companies that have spilled oil, carcinogens and dangerous bacteria into lakes, rivers and other waters are not being prosecuted, according to the Environmental Protections Agency regulators working on those cases . . .” Goodness, gracious. Has the Act been repealed? Declared unconstitutional? No and no. The Clean Water Act is alive and well and the Times lamentations are not exactly accurate.

What the Times deplores is that in two relatively recent cases, Rapanos v. United States and Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Corps of Engineers, the U.S. Supreme Court held that the Act means what it says, namely, that its provisions apply to navigable water of the United States. Which means that the feds may not regulate non-navigable waters, streams, and assorted puddles that are not even connected to navigable waters.

This was a proper reaction to the Feds’ excesses such as the so-called “glancing goose” theory under which they claimed federal jurisdiction to regulate any non-navigable body of water that a migratory bird might pick as a place to rest or take a drink on its migration north. Or south. Voila, said the feds: interstate commerce – birds attract hunters and hunters may cross state lines to get ‘em and there you have a basis for federal jurisdiction. It didn’t fly, if you’ll pardon the pun, but it illustrated just how far the Feds were willing to push this stuff.

And it was not just the Feds. Your faithful servant was once involved in a case in Florida, in which a county doing the Feds’ bidding actually tried to argue to a court that growing citrus fruit in Florida was a nuisance. No, we are not making this up either. Fortunately their Lordships did not go for it.

Your faithful servant was also involved in another case in Florida where the Army Corps of Engineers invoked the Act and issued an order to our client to cease-and-desist “dredging and filling in waters of the United States” and to refrain from all other activities on the subject land. And what, do you suppose, was that rapscallion doing? He – actually it, it was a corporation – was plowing dry land in order to plant a new citrus grove. In other words, the Act was sought to be applied in absurd ways that would constitute an inverse condemnation taking of private land by denying all reasonable use of it. And by the way, in that Florida case the Feds never did explain how planting a citrus grove on bone-dry land is “dredging and filling in waters of the United States.” When it comes to dealing with natural water resources it is sometimes difficult to know what is federal land or what is private land. However, no matter who owns the source there is a possibility of it leading to and effecting the surrounding areas and its population. Some of the natural water sources often lead to homes within the surrounding towns and cities. To ensure that these waters are abiding by environmental regulations, most systems are fitted with electronic flow meters in order to monitor and measure the amount of water that ventures through our pipes and into our homes.

And in other cases, the feds actually argued that when you ride a bicycle through a wetland and its wheels kick up some dirt, which as dirt is wont to do, falls back onto the ground, that’s a case of pollution. No we are not making these things up. We couldn’t if we tried.

Regulations were at times applied so unreasonably that the feds claimed jurisdiction over activities involving virtually anything whether or not it had anything to do with “navigable waters of the United States.” For a discussion of some of these problems, see our article (co-authored with Michael M. Berger) entitled The Need for Takings Law Reform, etc., 38 Santa Clara Law Review at 846-853 (1998). So if the SWANCC and Rapanos decisions put a crimp into excesses of this sort, that may not be such a bad thing.

Besides, even if you assume for the sake of argument that the Times is right, and that SWANCC and Rapanos have hampered the enforcement of the Clean Water Act insofar as its enforcement by the Feds is concerned, what’s to prevent the states from regulating non-navigable waters within their borders? Nothing, as far as we can tell, so if the situation is nearly as dire as contended by the Times, that only means that the states are shirking their duty. So why isn’t the Times criticising them?

 Hang on to your hats, folks. Here comes another doozy out of – where else? – California. With that state on verge of bankruptcy, and its bonds just downgraded dangerously close to junk status, what, do you suppose, is the latest trendy thing around here by way of urban design, that according to the Architects Newspaper (Greg Townsend, Driving Green, Feb. 24, 2010) is in a state of “frenzy,” and is estimated to cost a trillion dollars? That’s right, not a billion, a trillion (which we hope is a typographical error, but then again what do we know?). See for yourself at  www.archpaper.com/e-board_rev.asp?News_ID+4275   

It appears that a local investment banker and planning poo-bah has come up with a brilliant idea: Develop so-called freeway cap parks which are essentially covers on parts of below-grade freeways. Concrete lids on freeways, so to speak, on which parks would be constructed.

The inspiration for this brainstorm comes “from an article he read about Boston’s Big Dig.” Alas, the article fails to note that the Big Dig – without a doubt the champion of Congressional pork-barreling, and a tribute to the clout of the late House Speaker Tip O’Neill — was originally estimated to cost somewhere north of $2 billion, but wound up costing over $16 billion.

Just what we need in California right now.  So the state and possibly the country may be sliding toward a fiscal cliff, but for the politicians it’s business as usual. According to the Architect’s Paper article, “heavy hitters like [California] Senator Dianne Feinstein have pledged support.” And why not? After all, it isn’t their own money. 

So here we are, folks. California, the state whose Supreme Court is on the record as limiting compensation for property owners whose land is taken by eminent domain, lest “an embargo” be declared on public projects, is calmly proposing a trillion-dollar boondoggle in the form of “freeway parks” that like so many other urban public spaces favored by modern architects, are likely to go largely unused.