Is It Now Atlantic City’s Turn to Go Down the Tubes?

It would so appear. We noted not too long ago that Atlantic City was on its way down, what with casino/hotels closing and things nowhere like the rosy predictions of yore, when we were assured by our betters that its redevelopment — using the tired old condemn-and-bulldoze method — would turn things around and as the glittering casinos went up prosperity would rise with them. But it didn’t. See http://gideonstrumpet.info/?p=6829

Oh sure, for a while it glittered but as the proverb teaches, all that glitters isn’t  gold. It appeared good as long as long as Atlantic city enjoyed Las Vegas style gambling as a municipal monopoly. But it didn’t last. The gambling biz eventually became a government supported oligopoly, and then it had to face reality as other places on the East Coast also went into the gaming business and gambling-minded members of the hoi polloi discovered that it wasn’t necessary for them to travel to a far-off place like Atlantic City for a spot of blackjack, or whatever visions of getting rich quick floated their boat, because casinos started sprouting all over the place — Indian casinos in particular.

So here is the Times dispatch (Patrick McGeehan, Christie Uses Executive Order to Appoint an Emergency Manager in Atlantic City, Jan. 23, 2015, at p. A20); http://www.nytimes.com/2015/01/23/nyregion/christie-uses-executive-order-to-appoint-an-emergency-manager-in-atlantic-city.html?ref=nyregion. It brings the news that “Moving to take greater control over Atlantic City, which is struggling financially as its casino industry shrinks, Gov. Chris Christie on Thursday appointed a corporate finance lawyer to be the city’s emergency manager.”

And to make things really interesting, “along with the lawyer, Kevin Lavin, Mr. Christie brought in Kevyn Orr — the lawyer who led Detroit through the bankruptcy it emerged from last month — as a consultant.”

That, it seems to us, does not bode well for Atlantic City’s future. When in addition to a municipal finance maven you also retain a municipal bankruptcy maven, things are not looking good, and you won’t catch us rushing out to buy a fistful of Atlantic City municipal bonds, their tax-free interest status notwithstanding.

So stay tuned. We are convinced that we haven’t heard the last of this, and that more misadventures of redevelopment projects are in store for us.

Our own observation is mostly moral: if indeed gambling is considered a vice by the new Jersey Legislature, as evidenced by the state’s enactments of statutes that criminalize it, then how come gambling becomes a municipal virtue when it is sponsored by the state and conducted for private profit on land forcibly taken from faultless individuals who are undercompensated in the process?

The Horne California Raisin Case Is Back In the Supreme Court

Not much we can add to this headline. You no doubt remember the recent Horne case, in which the Supreme Court vacated the opinion of the 9th Circuit and sent the case back with directions to consider the Hornes’ claim of taking of a chunk of their raisin crop or else pay a fine north of $400,000. The 9th Circuit still couldn’t find a taking in this scenario, and hung tough — it more or less defied the Supreme Court and once again held that this physical seizure of the Hornes’ raisin crop was not a taking within the meaning of the Fifth Amendment.

The Hornes petitioned the Supreme Court for certiorari, which the court just granted. So it’s off to the races again.

Oral arguments should take place sometime later in the year and it is likely that a [second] SCOTUS decision will come down later in the year, probably by the end of June. Last time, the subtext of the court’s [first] opinion revealed — at least to us — that the court was not pleased with the government’s conduct whereby its physical seizure of tons of privately owned raisins and the resale of them in order to keep raisin prices up, without paying their owner a nickel. That weird legislative scheme was concocted in the depths of the Great Depression of the 1930s, as a means of keeping raisin prices up, and thereby keep raisin farmers from going broke. But it makes no sense today, and it was ridiculed during the last oral argument by none other than Justice Kagan, usually reliably lined up with the court’s liberal justices.

So stay tuned, folks. This one should be fun.

Follow up. Actually, this post should be called a “non-follow-up” if there is such a word. We understand that the same-sex marriage cases are of greater interest to more people than takings law, and understandably they take the lion’s share of SCOTUSblog publicity. But, hey, man. When a lower court pretty much defies the Supreme Court and sticks to the result achieved in its earlier, vacated decision, that might be of interest to SCOTUSblog readers. Yes? But evidently that’s not how our betters think. Other than a bare mention of the fact that cert was granted in the Horne case, we have not been able to find any SCOTUSblog reference to Horne, except a statement of the Issues Presented.

About All that Stuff Going on in France . . .

We thought it might be proper to share with our readers David Brooks’ insightful observation in the NY Times about freedom of expression in France as opposed to the good ol’ U.S. of A.:

“The journalists at Charlie Hebdo are now rightly being celebrated as martyrs on behalf of freedom of expression, but let’s face it: If they had tried to publish their satirical newspaper on any American university campus over the last two decades it wouldn’t have lasted 30 seconds. Student and faculty groups would have accused them of hate speech. The administration would have cut financing and shut them down.

*    *    *

“Americans may laud Charlie Hebdo for being brave enough to publish cartoons ridiculing the Prophet Muhammad, but, if Ayaan Hirsi Ali is invited to campus, [and wants to offer a sober critique of Islam]  there are often calls to deny her a podium.”

Guess What? Redevelopment Doesn’t Deliver on Its Promises.

 

“Florida Gulf Coast University economists Carrie Kerekes and Dean Stansel used data collected from states to quantify the empirical effect of eminent domain on local economies. If taking private property for public use is economically beneficial, tax revenue would correlate positively with increased eminent domain takings.



“Kerekes and Stansel found “virtually no evidence” of eminent domain’s economic benefit.

“The search for empirical evidence regarding government takings and tax revenue did turn up something surprising: There appears to be ‘a negative relationship between eminent domain and revenue growth.’” The author, Jesse Hathaway is a research fellow with The Heartland Institute.

http://www.timescall.com/columnists/opinion-local/ci_27297292/jesse-hathaway-re-evaluating-if-eminent-domains-benefits#top

$5 Million Taking Verdict in Connecticut

The Weston Forum reports that a jury in Stamford Connecticut has awarded $5,000,000 to a property owner who was prevented by the town from developing and selling his property, and eventually lost it by foreclosure. See Patricia Gay, Jury Awards $5 Million to Stones Trail Against the Town of Weston. Click on http://www.thewestonforum.com/24228/jury-awards-5-million-to-stones-trail-against-town-of-weston/

The jury found that the owner was denied equal protection, due process of law, and that “the Town of Weston imposed an inverse condemnation on Stone Trail’s property.” The facts reported in this article suggest that this jury verdict was amply justified; among other things, it tells us that the town’s First Selectman said in a meeting that the town was going to “shut down” the owner and keep him from developing his property. However, we are puzzled because the article also says that the case isn’t quite over because the judge is yet to rule “on the final inverse condemnation counts.”

Martin Anderson, R.I.P.

Martin Anderson, Senior Fellow Emeritus at the Hoover Institution, died at the age of 78. If you don’t recognize the name, he was the author of an early critique of urban renewal, which appeared as the book “The Federal Bulldozer: A Critical Analysis of Urban Renewal, 1949-1962″ (MIT Press, 1964).

Urban renewal (later re-christened “urban redevelopment,” and later still into “economic redevelopment” of Kelo v. New London infamy) proved to be a destructive force that over the years contributed to the decline of American cities, and in spite of the expenditure of kings’ ransoms in public funds, failed to revitalize American cities, even as it filled the pockets of urban redevelopers favored by city hall insiders, and holders of tax-free municipal bonds. Worse, it transmogrified legal doctrine concerning the “Public Use” clause of the 5th Amendment to the U.S. Constitution into an Orwellian mish-mash in which, in the hands of American judges, “public use” came to mean anything that city hall insiders wanted it to mean, i.e. that the latters’ decision to use eminent domain to displace urban populations to make room for redevelopment was “well-nigh conclusive” as long as it was merely ”rationally related to the conceivable.”

Kudos to Martin Anderson for discerning the coming urban catastrophe ahead of most people.

New York Condemnation Lawyer Passes Away — R.I.P. Mario Cuomo

Today’s dispatches bring the news that New York’s former governor, Mario Cuomo,  has passed away at 82. To the press and possibly to you ol’ Mario may have been a big time politician whose name, at one time, was bruited about as a presidential prospect. But to us, he was a customer who read our publication.

We never actually met the man but we knew of him as a condemnation lawyer in Queens. How? He was a subscriber to our monthly publication “Just Compensation” that began publishing in 1957 and continued in print for over a half-century.

Mr. Cuomo practiced law in Queens and, if the New York Times is to be believed, did right well by his clients. He defeated the taking of a 67-acre junkyard, thereby frustrating the desired of Robert Moses — quite a feat in itself – and succeeded in reducing the take of a 67-home tract of land for a school, down to 55 homes. Not bad.

Eventually, he went into public life and cancelled his subscription to “Just Compensation.” The rest as they say, is history.

If you want to read the whole story in his obituary, check it out in Adam Nagourney, Governor, Governor’s Father And an Eloquent Liberal Beacon, N.Y. Times, Jan. 2, 2015, at p. A1.

Follow up.  For another insight into Cuomo’s fight for the Queens property owners, see Sam Roberts, An Outsider’s Borough Shaped a Politician Who Helped Shape It, N.Y. Times, Jan. 3, 2015, at p. A13. See http://www.nytimes.com/2015/01/03/nyregion/mario-cuomo-rose-from-queens-the-outsiders-borough-.html?ref=nyregion

Bye, Bye Malls?

Quotable quote: “Retail analysts can’t say how many malls have failed. But they do know that only two new malls have been built in the past eight years.”

Remember all those eminent domain cases that in the name of “public use” were taking private land for privately-owned malls and shopping centers?

abandoned mall

According to http://money.cnn.com/2014/06/30/news/economy/dead-malls/index.html    what was the country’s largest mall, built in 1976, is being demolished.

AIG Trial (Cont’d.)

Our favorite financial reporter has weighed in again on the AIG litigation (Starr v. U.S.), seeking just compensation from the U.S. Court of Federal Claims for former shareholders of the insurance giant AIG which was taken over by Uncle Sam as part of the feds’ bailout, when the poop hit the fan back in 2008. As part of that bailout, Uncle Sam took some 80% of AIG’s stock and using it without the shareholders’ consent purported to act on behalf of the about-to-be-bailed-out company. Gretchen Morgenson, Fresh Doubt In the Bailout Of A.I.G., N.Y. Times, Dec. 21, 2014, at p. 1 (Business Sec.).

It turns out that some of the lawyers for the defendant Fed thought, before the lawsuit was filed, that “The government is on thin ice and they know it.” Now, their e-mails have been discovered and placed in evidence.

Otherwise, the article contains no heretofore unrevealed bombshells, but it makes clear why the feds fought tooth and nail to keep the plaintiffs and their lawyers from discovering some the e-mails authored by defendants’ lawyers. But the government put on some of its own lawyers on the stand as witnesses for the defense, and the jig was up – there went the government’s claim that this material was privileged.

If you are into this controversy, this is interesting stuff that you ought to peruse. See http://www.nytimes.com/2014/12/21/business/fresh-doubt-over-the-bailout-of-aig.html?ref=business&_r=0

A court decision is expected early next year. So stay tuned.