Unless you are from another planet you must have heard by now that (a) the Los Angeles Dodgers (formerly the Brooklyn Dodgers) filed for bankruptcy, and (b) as a result the team was sold to a consortium of investors who paid an astonishing $2.15 billion (with a “b”) for it. Why astonishing? Because, if the high-finance mavens are to be believed, the likely revenues from a major league baseball team are highly unlikely to provide a proper return on that kind of investment. But the buyers of the Dodger franchise are no dummies, and they did pay $2,150,000,000. Why? What’s the catch?
A front-page story in this morning’s Los Angeles Times provides a clue. Roger Vincent and Ken Bensinger, Chavez Ravine’s Wealth of Land in Play, L.A. Times, April 17, 2012, at p. A1. Though nothing is official or even firm, the story is that the new owners are planning a major development on land surrounding Dodger Stadium — it includes some 300 acres of vacant land. They may even tear down Dodger Stadium and move it to a downtown location, particularly if the ongoing effort to build a major NFL stadium in downtown Los Angeles fails.
So why is all this of interest to eminent domain mavens? Because it brings to mind the wretched and dishonest history of Dodger Stadium which was built on land taken by eminent domain for — are you ready? — low-cost housing. It never happened. The taking displaced an old working class Mexican community whose members owned homes in the area and were paid about $10,000 for each, without interest, though they were incontestably entitled to it. Eventually, the City of Los Angeles gave Chavez Ravine to the Dodgers to induce them to move to L.A. from Brooklyn, and the rest is history.
All of which goes to show — if any additional showing were needed — that eminent domain as practiced today is often a dishonest process that in the name of “public use” subsidizes well-connected redevelopers and other land nabobs, while simultaneously displacing and undercompensating indigenous populations located in the targeted areas. And make no mistake, we are not opposed to eminent domain per se like some libertarians. In the real world takings of private property are inevitable, which is why the law of most states requires the presence of public necessity for the exercise of eminent domain. But that is legal requirement that courts largely gloss over or ignore altogether.
During the oral argument in the Kelo case, Justice Kennedy observed that perhaps condemnees’ compensation should reflect the upside value potential of the taken land when it is to be used for private gain in the redevelopment context. Not a bad idea, although we haven’t heard much about it since.
So the bottom line is that first, the Dodgers got a multi-million dollar windfall, and now it looks like they and their new partners stand to make billions (if nothing else, to recover their investment), while Manuel Arechiga and the low-income Mexican homeowners who were his neighbors and who once lived in Chavez Ravine, got $10 grand each, plus a display of not-so-thinly-veiled contempt for their constitutional rights by the California courts.