Monthly Archives: November 2011

Are California Redevelopment Agencies Circling the Drain?

The Los Angeles Times brings us a report on yesterday’s oral arguments before the California Supreme Court in the matter of the latest legislation on redevelopment agencies. (Maura Dolan and Jessica Garrison, Court Leans Toward Allowing Abolition of Redevelopment Agencies, L.A. Times, November 11, 2011 – click here). To the extent one may be so foolish as to draw any conclusions as to the outcome, based on oral arguments before the state Supreme Court, things look rocky for California redevelopment agencies.

The issue is whether the recent legislation giving a choice to the redevelopment agencies to share their funds with the cities in which they are located is constitutional in light of  Proposition 22, a 2010 state constitutional amendment forbidding such revenue sharing. So if the state constitution forbids it, what’s the problem? Well, the problem is that there is also a newly-enacted statute which provides that redevelopment agencies that refuse to engage in such revenue sharing have to go out of business. But inasmuch as redevelopment agencies are creatures of state law, there is nothing to prevent the legislature that created them from abolishing them.

What the Times report indicates is that during oral argument several justices appeared to be accepting this analysis, giving rise to the possibility that the court may invalidate the revenue-sharing law (as violative of Proposition 22), but also hold that the statute abolishing redevelopment agencies in California is hunky dory because it does not transfer funds from redevelopment agencies. The court is also faced with arguments by some California counties complaining that redevelopment agencies are syphoning off gazillions of dollars from their property tax revenues which they would like to use for purposes of governance rather than filling the pockets of redevelopers and holders of tax-free redevelopment bonds. Given the threadbare condition of the public purse in California, that is an argument to be reckoned with.

So we’ll just have to sit tight and see how all that plays out. The decision will come down within 90 days – California law requires that. So stay tuned, folks.

Lowball Watch – New Jersey

The moral of this story is that when you set out to buy a high-priced car you’ll need more than a golf cart budget. This is the lesson being learned the hard way by the Borough of Harvey Cedars which set out to take by eminent domain a bunch of easements over ocean front land in order to build artificial dunes. The problem, however, was two-fold. First, the dunes would block the view of beachfront homes thus lowering their value substantially, and second, the Borough budgeted only $300 for each easement acquisition. Bad idea!

The Borough has since learned that beachfront land is expensive. The per-home verdicts rendered so far have come in as follows: $282,000, $265,000, $480,ooo (that one settled for $150,000), and $400,000. On top of that, the Borough had to spend $650,000 in attorneys’ fees (the last figure is only through 2008, so the total must be higher than that by now).

True enough, some of the owners asked for a lot as demonstrated by that $150,000 settlement of a $480,000 verdict, but hey man, three hundred bucks for an easement that blocks water view of beachfront property?! Were they trying to be funny?

As of now, the Borough is talking about appealing, but given the consistency of the orders of magnitude by which those verdicts exceed the Borough’s paltry $300 per home offer, it’s hard to be critical of the owners. In the meantime, the Borough Mayor is worrying about bankruptcy, being as the Borough’s annual budget is $3 million. So here is another lesson that even if you are the government, you have to live within your means, and, like it or not, there may be some things you just can’t afford.

For the full PressofAtlanticCity.com story reporting this caper (Donna Weaver, Harvey Cedars Paid $547,000 to Homeowners Last Month Over 2008 Beach-Fill Project), click here.

Mississippi Passes Restriction on “Economic Development” Eminent Domain Takings

WJTV, Channel 1 of Jackson, Mississippi, reports that in yesterday’s election the eminent domain amendment to the state constitution passed by a whoppping 73% to 27% margin, in spite of opposition by Republican Governor Haley Barbour. The new constitutional provision prohibits the taking of private property for commercial redevelopment. Under its terms the taker must hold the property for at least 10 years before conveying it.

Interestingly, the losing argument by the proposition’s opponents was that without the use of eminent domain for economic redevelopment, Mississippi would not be able to attract industry, like Toyota and Nissan both of which built plants in Mississippi on land taken by eminent domain and turned over to them. Mind you, both Totota and Nissan make good cars and if they want to enter the U.S. market by building and selling their cars here, that’s private enterprise. But we see no reason why an American state should abuse its citizens by taking their land, and subsidizing foreign car manufacturers so they can better compete against American car manufacturers and drive them out of business. What were these guys thinking?

For the full text of the WJTV news item see http://www2.wjtv.com/news/2011/nov/08/eminent-domain-passes-ar-2675503/

For a short article from The Jurist, a University of Pittsburgh Law School newspaper, that sums up the new Mississippi legislation and places it in the context of other, similar state enactments, click here.

Eminent Domain in Israel

Before we took off on our trip East (see our post of November 2, 2011) we noted in passing the appearance of a new article in the Israel Law Review concerning the frequency of use of eminent domain in Israel against Arab and Jewish land owners (43 Isr. L. Rev. 590), demonstrating that these days both groups are treated pretty much alike. Now there is more. We just came across a new book (at least new to us),  by Prof. Yifar Holzman-Gazit, entitled Land Expropriation in Israel: Law, Culture and Society (2007), ISBN 9-780-7546-2543-8, available at Amazon. For the benefit of our readers who are into eminent domain rather than history of the Middle East, we first offer a few words about that area’s modern history that Prof. Holzman-Gazit does not go into, but which is essential to understanding of land-related cntroversies in that part of the world.

The book covers current law, as well as the pre-1948 situation, starting with the late 19th century Turkish Ottoman Empire regime which governed that part of the world until the end of World War I — as you no doubt know, if only from watching Lawrence of Arabia. All that, however, is prologue to what happened after that war when the British first got and then in 1947 relinquished their League of Nations Mandate over Palestine which became in the words of a wit “the twice-promised land.” The Brits, recognizing the ancient, millenia-old Jewish connection to the Holy Land, promised it to the Jews via the 1917 Balfour Declaration, and also to Arabs — the difference being that in the case of the Arabs they delivered — they drew a north-south line along the Jordan River and gave the land on its Eastern Bank, encompassing some 80% of the British Palestine Mandate to the Arabs, in order to create a kingdom, the Emirate of Transjordan for Abdullah, a Hashemite prince who escaped from the Arabian Peninsula, having been defeated by the Saudis after whom Arabia is named to this day.

As for the Jews, illustrating the old saw that talk is cheap, the Brits showed no sign of delivering on the Balfour Declaration promise, and indeed strived to keep Jews from emigrating into Mandatory Palestine, before and even during WW II when doing so facilitated the carrying out of the Holocaust by the Germans, with the Arab Grand Mufti of Jerusalem, Hajj Amin al Husseini, lending Hitler a hand by recruiting Balkan Moslems for the German SS, and then returning to Jerusalem under British protection. Unsurpringly, the Jews took a dim view of this betrayal by the Brits, and insisted on re-establishing a state of their own, resorting after WW II first to resistance then to terrorism against the Brits who eventually got the message and split.

In 1947, the UN partitioned the remaining 20% of the original Palestine Mandate between Jews and Arabs, hoping that this “two-state” solution would be the end of the story. It wasn’t. The Jews accepted the partition and established the State of Israel, but the Arabs rejected it, vowing to destroy Israel and push its Jewish population “into the sea,” as they used to put it. Note that at the time there was not even talk about establishing a state of “Palestine” — the local Arabs and the neighboring Arab states gave no indication of wanting or even tolerating the establishing of such an entity.  They fiercely rejected the U.N.’s offer. And incidentally, in those days “Palestinian” meant Jewish — soldiers of the Jewish Brigade of the British Army in WW II wore shoulder patches that read “Palestine,” The Jerusalem Post was then called the “Palestine Post,” etc. Ironically, European and even American anti-Semites got into the act and used to say to Jews: “Go back to Palestine!” Now, they want the Jews to leave Palestine. The word “Palestinian” as a designation for Arabs was of artificial coinage in the mid-1950s.

After the 1947 U.N. vote of partition, a half-dozen Arab armies of neighboring states, Egypt, the Emirate of Transjordan (later rechristened Jordan), Syria, Lebanon, and Iraq, plus a bunch of Arab irregulars attacked the newly established State of Israel in an effort to destroy it and exterminate its Jewish population. They made no bones about that. But that invasion didn’t work out. Though lacking armor, an air force and modern artillery, and in spite of heavy casualties, the newly formed Israeli army kicked ass and defeated the Arabs decisively in what they came to call the nakhba — the catastrophe in which five of those six Arab armies suffered a humiliating defeat. The sixth one, the British-led, British-financed, and British-equipped  Transjordanian Arab Legion was different; it conquered the West Bank (Judea, Samaria, East Jerusalem, including its old Jewish Quarter, and the Jordan River Valley) and annexed the conquered land to what they now began calling “Jordan.” All Jews in that area were expelled or killed, with their synagogues and cemeteries desecrated and destroyed. No talk of any Palestinian state and no complaints  from the Arab population about that.  In an encore, and adding insult to insult, the attacking Arab armies met a similar fate in two subsequent wars in 1967 and 1973. In the former, Israel recaptured the West Bank from the invading Jordanians, including Eastern Jerusalem (from which the Jews had been expelled in 1948).

What transformed that 1948 military defeat into the nakhba was the Arabs’ misbegotten strategy that the local Arab population should get out of the way of the invading Arab armies to give them a clear field of fire, and then — after the Jews were duly driven into the sea — return as victors, not only regaining their own land but also capturing that of the now-gone Jews. It was foolhardy but understandable why many of them did so. The Arab elites had no stomach for a fight and, though they “talked a good game,” they decamped for safer venues even before the fighting started in earnest. The Arab folks, feeling both abandoned by their elites and threatened by their own fighters, followed suit. To be sure, many Arabs stayed put, and not all Arab departures were so motivated — some were forced. It was war, and war as Sherman put it, is hell. Not heck — hell, as he demonstrated in his march through Georgia in the American Civil War. But be all that as it may, after 1948 the victorious Israelis found themselves in control of much Arab-owned land whose owners, for one reason or another, had skedaddled, leaving their homes and farms behind. What to do?

This is where Prof. Holzman-Gazit’s book comes in in great detail, including the evolution of controlling Israeli law. So if you are into details, this book is for you. Since we can’t do it justice in the space of this post, suffice it to say for now that the victorious Israelis — contrary to the BS you will find in most American newspapers these days — did not just grab Arab land. They appointed a Custodian of Absentee Property who took charge of the abandoned Arab lands, at first to prevent their looting, and eventually to dispose of them in an orderly fashion. Many Arabs regained their lands under that law, after establishing title, others received substitute land, and still others (who had abandoned their lands in 1948 and left the Israeli jurisdiction) had their abandoned lands taken by eminent domain with compensation, plus interest. Was that the end of it? No. Why not? Among other reasons, because many of the Arab citizens affected by the Land Acquisition Law refused to claim their compensation.  Accepting compensation was regarded within the Arab community as a legal and moral recognition of the expropriation, and the Arabs would rather suffer uncompensated loss of their lands than do so and deal with the Israelis. Fanatical? You could say so. But that’s the way it was.

And speaking of the way it was, a few other things of historical interest need to be noted because they provide context in terms of how things were done in those days. First, even as these events were unfolding, Jews in Arab lands had their property confiscated without compensation, and were driven out — some 800,000 of them, most of whom settled in Israel. Yet we recall no calls for a right of return, no complaints about uncompensated confiscation, nor editorial lamentations over that, no lachrymose op-eds, and no indignant resolutions by the U.N.  In fact, in those days (right after WW II — not so long ago, well within the memory of many living people) that was the custom of nations. Large scale population transfers and exchanges, involving millions of people, took place in Poland, Germany, Russia, the Ukraine, India, Pakistan, and later in Cyprus, to name a few conspicuous examples. But no fuss about those. The Russians are hanging on to the Kurile Islands which they conquered ftrom Japan, and to eastern East Prussia which they conquered from Germany, with no intention of giving anything back. Speaking of which, there have likewise been no ongoing complaints about the Russians deporting to Germany millions of ethnic Germans who had been living in Russia for generations, or deporting the Crimean Tartars to Central Russia.

So what’s the bottom line? Actually, there are several.

First, it is inherent in war that lands are conquered and often kept by the victor. Today’s America may be different but we are privileged — we are separated from our enemies by two large oceans, and our neighbors to the north and south are either friendly, or incapable of waging war against us, or both. So it’s easy for us to be the “gentle giant” as far as they are concerned, although it was not always so. You can easily get an argument on that from Mexico which we partially conquered in 1848, and which we ain’t giving back. A fortiori, people who start a war of aggression boasting that they mean to exterminate their enemies, are in no position to complain when they lose and have to face the consequences of their own reckless actions.

Second, much of the Arab “narrative” that is at times uncritically repeated by the press, is simply false. It conveniently ignores the incontestable fact that the events over there were the direct consequence of the Arab attack on Israel in 1947, in 1967, and in 1973. The Jews did not just attack the poor, downtrodden, Arab tillers of soil and pluckers of olives, and seize their land. Before the 1947 partition they had no army and no means of doing so even if they had wanted to. It was the British ruled the area and maintained law and order. Before the 1947 war Jews acquired their land by purchase from willing Arab sellers. In 1947 they accepted the U.N. partition resolution and naively set out to live in peace with their  Arab neighbors. It was the Arabs who rejected that partitition and with it the very idea of a state of their own and started the war of 1947 as well as the two subsequent wars, so it is no more than just deserts that they should have to suffer the consequences of their own repeatedly chosen course of action.

Third, Arab land within the boundaries of Israel was not “confiscated” — it was, at least in a great many cases, abandoned for reasons good, bad or indifferent, and taken by eminent domain from its absentee owners with compensation, plus interest. Those who chose to remain in their homes and refrained from waging war on Israel, have been left alone. Today, they enjoy citizenship rights in Israel, they vote and elect representatives to Parliament, serve as judges (including the Israeli Supreme Court), and are free to serve in the army if they want to (Bedouin IDF soldiers are highly regarded as skilled desert trackers). Being an ethnic and religious minority is often no fun — just ask any grey-haired African-American what life was like in the good ol’ U.S. of A. in the 1940s, the time when Israel was created — but it is a gross perversion of the English language to refer to the lives of  Israeli Arab citizens as “apartheid,” notwithstanding Jimmy Carter whose family has been enjoying land ownership in Georgia whence the Cherokee Indians were illegally removed, and sent off on the “trail of tears” to Oklahoma, and who later benefited from real apartheid which they called “Jim Crow laws.”

Fourth, that brings us to the matter of how we do it — how our, American, law deals with such matters. If you haven’t done so, do read the U.S. Supreme Court’s unanimous opinion (by Marshall, C.J.) in Johnson v. M’Intosh (1823), and you will learn that under American law the conqueror gets to keep the conquered land, and by its act of conquest displaces not only the sovereignty of the conquered, but also their titles to land. Johnson held that therefore a land patent issued by the U.S. Government to American settlers in Illinois trumped the preexisting title of indigenous Piankeshaw Indians. So next time you hear folks go on about Israel being required to return conquered land, ask them if they also intend to give Chicago back to the Piankeshaw Indians. And by the way, Johnson has never been overruled, and remains good law. And to bring such matters closer to home, your faithful servant and millions of his neighbors live on the conquered, occupied, and settled North Bank of the Rio Grande, and we don’t see Jimmy Carter deanding that we give it back to the Mexicans who, interestingly, originally acquired it from the Indians.

Finally, Israel, warts, pimples and all, has been consistently a strong ally of the United States, whose intelligence and military prowess stood us in good stead when we had to confront the Soviet “evil empire’s” foray into the Middle East, whereas the Arabs have been consistently our enemies (going back to WW II when they sided with Germany, and later allied themselves with the Soviets during the Cold War, or the not-so-Cold-War in the Middle East). They have been killing American diplomats, to say nothing of thousands of American civilians as in 9/11. They still hate us as the “Great Satan,” and they continue killing Americans whenever they can. So the least we can do is differentiate between our friends and our enemies.

Follow up. This post got to be a bit long, so we plan to follow up soon with part two which will discuss the current law of eminent domain in Israel Stay tuned.

High Speed Rail (Cont’d.)

In our last post on this subject we noted how the projected cost of that California high-speed railroad from nowhere to nowhere or, (if the locals will forgive us) from Bakersfield to Fresno for openers, has been steadily rising. http://gideonstrumpet.info/?p=2134 Now there is more on that subject, except that this time that caper is beginning to assume farcical proportions.  See Ralph Vartabedian and Dan Weikel, California Rail Agency Requests Billions to Start Construction, L.A. Times, November 4, so11 – click here.

The Los Angeles Times’ latest tells us about “hearings” before the transit folks in charge of that “bullet train” in which, predictably, some folks were for it and others agin’ it. So far, so good except that the time alloted to each speaker was 90 seconds, reduced to 30 seconds as time went on. So you can imagine how much useful informaation was conveyed. So far so bad.

But the zinger is in the last sentence of this L.A. Times article, which blandly suggests that the cost of this caper, approved by the voters a few years back at $33 billion, has gone up to an estimate of $98 billion, and — get ready — it “could jump” an additional $19 billion depending on the route and construction features. And that is how through the magic of government design $33 billion became $117 billion. And counting, we predict.

In the meantime, California is broke. Further your affiant sayeth naught.

Follow up. Here is another reason  why California is broke. Here is an excerpt from today’s Los Angeles Times editorial:

Th[e Los Angeles Times editorial] page endorsed Proposition 1a, the 2008 bond measure for the [high-speed] train, with words that now seem prophetic: “If voters approve Proposition 1a, it seems close to a lead-pipe cinch that the California High Speed Rail Authority will ask for many billions more in the coming decades.” That’s because the financial projections and ridership figures used by the authority at the time were based on little more than conjecture, and now that such issues have been subjected to greater scrutiny, it’s clear that they were wildly optimistic. Voters have good reason to believe they were sold a bill of goods, and the project would be in less jeopardy today if its backers had been more honest about the price from the outset. Yet for the same reasons we shrugged and endorsed the bond measure anyway, we still think the train is worth building.”

So according to the Times it’s OK to persuade the people of this state that they should approve $30 billion in new bonded indebtedness for a new high-speed railroad, and to do so with the realization that this figure is wrong, and the real figure would be much higher. As it turns out, some $117 billion, and counting. Isn’t that what’s called bait-and-switch?

No wonder California is going broke.

For another view of the problem, this time by a Stanford history professor who has written a book on California railroads, and who thinks little of this boondoggle, click here.

We’ll Be Baaack!

We’re off to the Mysterious East, south of the Mason-Dixon line, the land of pretty girls and great barbeque. But we plan to be back within a week or so.

We are hot on the trail of some fascinating stuff about eminent domain in the Middle East, which we intend to share with our readers. In the meantime, if the subject is of interest to you, take a look at Haim Sandberg, Expropriations of Private Land of Arab Citizens in Israel: An Empirical Analysis of the Regular Course of Business, 43 Israel L. Rev. 590 (2010).

High Speed Rail (Cont’d.)

It never fails. The people who propose grand public project invariably start by giving us a projected cost that is, to put it mildly, unreliable. Then — guess what? — after the project is approved in principle, costs start going up. And up.  Now it’s the turn of the California high speed rail folks to perform this familiar Kabuki routine. We learn from Ralph Vartabedian, Bullet Train Cost estimates Rise to $98.5 Billion, L.A. Times, November 1, 2011 (click here) that what started out as a projected cost of $34 billion went up to $43 billion in 2009. And that was just the beginning.

The nonpartisan California Office of Legislative Analyst estimates the true cost will hit $65 billion, and rumors have it that the Rail Authority’s engineering contractors have warned that the cost could go up to $78 billion. Now, the projected tab has gone up to $98.5 billion. But all California has on hand for that project is $9 billion in state bonds and about $3 billion in federal grants. Where will the extra money come from? Nobody knows, and given the threadbare condition of Uncle Sam’s purse, the chances of federal funding of the shortfall are between zero and nil.

One reason for the increased figures is that, believe it or not, those wonderful folks failed to give consideration to inflation in their original estimates. Also, they estimated the date of completion to be 2020, whereas now they are thinking more like 2030.

But wait, there is more. It also turns out that the high speed rail planners are now rethinking the route and may go back to the cheaper direct route of putting the railroad right-of-way alongside the Interstate 5 corridor, which would cross the Tehachapi Mountains at the Grapevine and bypass Palmdale whose officials want the raoilroad to go through their community and are vowing to fight the Interstate 5 route.

Finally, all these estimates were originally based on an assumed inflation rate of 2% through 2033, but that figure has now been raised to 3%. We should only be so lucky.

Lowball Watch — Mississippi

The De Soto Times reports the results in a local condemnation case as follows. The Mississippi Transportation Commission offered the owner $197,775 for a 37.3-acre part of a 462-acre subdivision. The offer was declined and the case went to trial. The jury awarded $2.3 million, and the Mississippi Supreme Court affirmed. That verdict comes to over eleven times the amount of the state’s offer.

The large difference between the parties was evidently brought about because the state did not think that there were severance damages to the remainder of the subject parcel. The owner’s appraiser thought otherwise, and the jury agreed with him.

What is puzzling about this news item is that the offer was made in 2000, the jury verdict was filed in 2001, and the Mississippi Supreme Court affirmed two years later. So why is this litigation is being reported in 2011?

The story is Robert Lee Long, Eminent Domain Tested in 2000. desototribune.com, November 1, 2011 — click here.