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Archive for September, 2012

First Monday In October . . .

Sunday, September 30th, 2012

. . . is upon us, so here comes the New York Times Supreme Court maven, Adam Liptak, with a front-page story to guide the Great Unwashed through the thicket of this term’s SCOTUS calendar. Naturally, his list of cases to watch is politically correct, and omits entirely any reference to this term’s taking case, Arkansas Game & Fish Commission v. United States, in which SCOTUS will hear oral arguments next week. Adam Liptak, Justices Facing Weighty Rulings and New Dynamic, N.Y. Times, Sep. 30, 2012, on the front page, no less.

In the Arkansas case, the  lower court held that a temporary taking (by flooding and the resulting destruction of standing timber) was not a compensable taking within the meaning of the Fifth Amendment. Which if you stop and think about it for a moment was an absurd holding because condemnors, including Uncle Sam, take leaseholds and temporary easements by eminent domain all the time. Some of the famous, precedent-setting eminent domain cases of World War II vintage, like Kimball Laundry and General Motors,  were compensable temporary takings.

As it turned out, pace Mr. Liptak, the NY Times later found the Arkansas case worthy of a full-bore editorial comment. Go figure.

So what does the NY Times consider worthy of mention? Let’s see. There’s affirmative action (whether the University of Texas was justified in dinging a qualified applicant because using  a “race conscious” admissione process it chose another, minority applicant instead). Then there is good ol’ “same sex marrriage,” a hardy perennial if ever there was one, and the Voting Rights Act of 1965, to say nothing of the question whether federal courts have jurisdiction over lawsuits arising in foreign countries, against private companies said to be “complicit” in human rights abuses by foreign governments. That one remids us of a line of a California judge who characterized a certain type of tort case as “a search for a solvent bystander.” Other than that, there is nothing of interest in the Big Court this term — which is to say, of interest to the New York Times.

We claim no expertise in any of these topics, but the Lord works in mysterious ways, and so we find ourselves in the retroactive capacity of a prophet in the affirmative action debacle. Back in 1979, we wrote this:

“The U.S. Supreme Court increasingly grows institutionally incompetent to discharge its central function of definitive construction of the Constitution. Controversies that divide the country for years emerge from the marble temple in Washington in a form that can be charitably dexcribed as bewildering; cases such as Bakke,  for example, resolve nothing and only assure decades of litigation certain to consume kings’ ransoms in resources, with no assurance that in the end we will have any reliable guide.” Gideon Kanner, Competence, Competence, Who’s got the Competence? 65 ABA Jour. 160 (Feb. 1979).

That was thirty-three — count ‘em, 33 — years ago — and the Magnificent Nine are still screwing around with reverse discrimination which has been liguistically transmogrified into the more polite sounding (or is it politically correct?) term “affirmative action.” But call it what you will, it inherently involves giving preference to less  qualified applicats for sought-after position, over those of better-qualified ones. Quibble all you want about the terminology, but that’s what it is. So it shouldn’t come as a surprise to our readers that we’re agin’ it. If indeed we are to treat minority folks as equals — which is what sound moral standards and the law demand — they should be treated as equals, not as privileged folks whose privileged position stems from the facts that their ancestors were badly treated.

By ignoring that principle, the topic of affirmative action has spawned endless litigation that so far, hasn’t come close to a solution of the problem. Why? Because the Justices have chickened out time and again, and have refused to confront and resolve the basic problem: racial and ethnic discrimination is immoral and illegal, and it makes no difference whether it is practiced so as to favor one group or another.

Bottom line: If you want to read the best comment ever written on this subject – short, insightful and witty, read William Kai-Sheng Wang, The Devil Visits Justice Powell, Los Angeles Lawyer, July-August 1979, at p. 34. If you can think of a better comment on the wretched Bakke case, do let us know what it is.

And so we await the outcome of this controversy in which six Catholics and three Jews, mostly from New York, will be lecturing a traditionally and still largely Protestant country on the virtues of diversity. We can’t wait.

Are Shoe-Box Sized Apartments in Your Future?

Thursday, September 27th, 2012

Dispatches from New York and San Francisco aver that the latest shtick in trendy urban apartment living is the circa 220 square-foot apartment. That’s right. Apartment. See Malia Wollan, San Franciscans Divide Over Pint-Size Apartments, N.Y. Times, Sept. 27, 2012, at p. A19 – click here.

What not too long ago would have been considered tiny, squalid dwellings exploiting the poor who could afford nothing else, are now touted as the wave of the future — the trendy digs of up-and-coming geeks who work in the computer industry around (and increasingly in) San Francisco.

The average rent for a studio apartment in San Francisco is $2,126 (an increase of 22% since 2008) , but these “micro-apartments” will go for $1,200 to $1,500 per month.  You can do the comparative math — and make sure you do it from a landlord’s point of view; i.e., how many 220 sq. ft. micro-apartments will fit into the 1000 sq.ft. space now occupied by a real studio apartment.

It seems to us that these figures speak for themselves, and make clear what sort of future is envisioned  for America by the “new urbanists” whose spokesmen, as far as we can tell, tend to live in posh suburban homes or luxurious condos in the better parts of cities.

And so much for all the babble about “the bubble” that supposedly caused a collapse in the cost of housing in California, but which actually left housing prices unconscionably high in areas where people want to live, as opposed to foreclosure-ridden wastelands like the Central Valley or the Inland Empire.

In the meantime, businesses are leaving California at the rate of over five per week. As a clever fellow recently put it, if you want the truth, go stand in front of a U-Haul facility and check out which way the loaded trucks and trailers are headed — in or out.

The Atlantic Yards Redevelopment — An Arena for the Nets But Not Much for Anybody Else

Sunday, September 23rd, 2012

It’s official. The New York Times, the newspaper of record, has now delivered the verdict: except for the Barclays Center (the new arena for the Nets) nothing much is happening on the site of the Atlantic Yards redevelopment project in Brooklyn. See Liz Robbins, In Brooklyn, Bracing for Hurricane Barclays, N.Y. Times, Sept. 23, 2012, at p. 29-30 (New York Section) – click here.  However, curbed.com of September 24, 2012, reports that the ground for the first residential tower will be broken on December 18th. Take your pick.

Take note however: The headlines in the New York Times concerning controversial redevelopment projects tend to be more upbeat than the factual contents of the respective articles warrant. And so it is here. Amidst the hoopla about expected crowds thronging to attend events in the  about-to-be-opened Nets arena, we find the following factual summary:

 After noting that the Barclays arena “stands as an island, a reminder of what is missing” we get the following grim summary: “The 16 surrounding towers — primarily residential — that were originally planned  by the developer, Forest City Ratner Companies, for the 22-acre, $4.9 million Atlantic Yards project have yet to be built. The 10,000 or so jobs promised have not materialized.  Of the 2350 affordable housing units pledged out of 6,300, only 181 are planned for a first tower, and ground  for the building has yet to be broken.”

*     *     *

“The developer says it will build the remainder of the project, though it could take up to 25 years, and not the 10 originally planned.”

*     *     *

“This spring, Forest City sponsored job fairs for Brooklyn residents that drew more than 35,000 people — for 2000 arena jobs, 900 of which were part time.

“Build, the job training organization connected to Forest City, enrolled just 36 participants in an unpaid internship program, promising them construction jobs and union cards. [ ] Only two participants received union cards.”

And so it goes. The Atlantic Yards redevelopment project thus bids fair to join the list of other manifestly private projects that were poorly disguised as “public uses” for which private land was taken by eminent domain, only to fail either altogether or by producing something different than what the cities and the redeveloper-clients promised the voters and sold to judges.

Follow-up. Don’t miss the front-page article in today’s New York Times, Charles V. Bagli and Joseph Berger, Nets Helped Clear  Path for Builder in Brooklyn, Sept. 27, 2012, at p. A1 — click here. It’s mostly about Bruce  C. Ratner, the [re]developer of the Atlantic Yards project in Brooklyn, and the history  of his dealings with the city. Though not directly about eminent domain, it’s a good read for people interested in eminent domain and how it is used in cities for redevelopment.

California Choo-Choo — Get Set, Get Ready, Get Permits

Friday, September 21st, 2012

We don’t always believe everything we read in the papers, but even so, we take note of a dispatch duly reported in the Los Angeles Times (Ralph Vartabedian, U.S. Clears Bullet Train Construction, L.A. Times, Sep. 20, 2012, at p. AA3), informing us that Uncle Sam has blessed the California high-speed train, and given his permission to proceed with the construction of the first link of the high-speed train line between Merced and Bakersfield, thereby allowing the railroad authority to acquire some 1000 parcels of land for the 130-mile right of way. At least that will provide gainful employment for condemnation lawyers, and forensic appraisers.

But if you are thinking that this is the opening shot in the construction of an actual rail line, better think again. Before that happens, there is the matter of permits from the U.S. Army Corps of Engineers and the San Joaquin Valley Air Pollution Control District, and probably others. “Those approvals,” says the Times, “would normally take six months  or more.” But not to worry, “the state is working to expedite the procedure.” Rots of ruck on that one, fellows.

California, There It Goes

Friday, September 21st, 2012

The State Budget Crisis Task Force, an independent group that includes such prestigious gents as Paul A. Volcker and George P. Shultz, has issued a report that California debt is much larger than what we have been told. Instead of the $28 billion “wall of debt” that Governor Jerry Brown spoke of when he took office, the real figures are at least $167 billion, and perhaps as large as $335 billion.  It turns out that much of California’s debt is off-budget and as such was not included in the $28 billion estimate. What that means is that even if California voters approve the governor’s proposed tax increase (that would raise $50 billion over the next seven years),  the “wall of debt” would still be there and would have to be dealt with one way or another. See Mary Williams Walsh, California Debt Higher Than Earlier Estimates, a Task Force Reports, N.Y. Times, Sep. 21, 2012, at p. – click here

The task force assures us, however, that California general obligation bonds, low-rated as they are, are safe because our constitution provides that state funds must be used to service state debt before any funds are spent on anything else.

Interesting observation: Perhaps we are not as attentive a reader as we would like to believe, but we find no trace of that story in the Los Angeles Times.

Judicial Doubletalk

Wednesday, September 19th, 2012

We quote without comment, because none is necessary, the following bit of judicial doubletalk from Elena v. Municipality of San Juan (1st Cir. 2012) 677 F.3d 1, at footnote.8:

“The plaintiffs correctly note that Sec. 1983 does not require them to exhaust state remedies in order to state a claim; however, that is beside the point. A successful Sec. 1983 claim must be grounded in some substantive violation, and a takings violation requires exhaustion.”

 

Nature Imitates Art

Wednesday, September 19th, 2012

So said Oscar Wilde, and here is another example of that phenomenon for your consideration .

In light of current events in the Arab world (i.e., the attacks on American embassies) we depart from our usual topics to bring to your attention a movie that you must see. It’s “Rules of Engagement” with Samuel Jackson, Tommy Lee Jones and Ben Kingsley.

It’s positively eerie how that movie, made years ago, replicates some of the news events of the past week or so, not the least of which is the cowardly reaction of the State Department to this fictional attack on the U.S. embassy in Yemen.

A must see, that one.

Whatever Happened to the [In]famous Atlantic Yards Redevelopment Project?

Wednesday, September 19th, 2012

We just came across an admittedly partisan but revealing post by the Develop Don’t Destroy Brooklyn folks ([DDDB] 9/12) which informs its readers that the Brooklyn Atlantic Yards redevelopment project — the one that was judicially approved in Goldstein v. Pataki – is having problems. In a nutshell, these folks tell us that apart from the basketball arena, nothing much is being built there. In their words:

“After $300 million of taxpayer dollars, and nearly $1.6 billion in special breaks, government favors and below market public land sales, and two and one half years after the arena groundbreaking, not a single one of the promised 2,250 taxpayer subsidized, “affordable” housing units is under construction, and of the 10,000 “permanent” jobs promised, the developer has announced only 105 full time jobs and 1,900 non-living wage jobs. There is no groundbreaking scheduled for the first of 15 planned residential towers, and the office tower that was to provide space for those 10,000 jobs is unlikely to be constructed in this generation, if ever.”

Sounds like Kelo all over again, doesn’t it?

Program on Taking of Underwater Mortgages by Eminent Domain

Tuesday, September 18th, 2012

The American Action Forum will hold a program entitled The U.S. Housing Recovery: Lessons From California, is scheduled to take place on September 26, 2012, at 9:00 AM, at the Hyatt Regency Sacramento, 1209 L Street, Sacramento CA 95814. The program will include a panel on Using Eminent Domain to Boost Housing: Viable Solution or Constitutional Nightmare? We will be speaking on that panel.

For detailed information contact the American Action Forum, 555 13th St., NW, Ste.510 West, Washington DC 20004, www.americanactionforum.org, tel. (202)559-6320.

Which Comes First, Mr. Bernanke, the Chicken or the Egg?

Friday, September 14th, 2012

Let ‘s face it folks, your faithful servant is a person of limited intellectual resources, who is easily baffled by the insights of his betters. Case in point: The Fed’s announcement that it is going to rescue us from the ongoing economic bad times by buying “billions of dollars of mortgage-backed securities — essentially bonds that are made up of a bunch of home loans, packaged and then sold to investors.” So says the Los Angeles Times. Don Lee and Jim Puzzanghera, Fed Aims Stimulus to Boost Housing Market, L.A. Times, September 14, 2012, at p. A1.  That, goes the theory, will somehow get folks to  rush out and buy homes, creating more jobs for assorted wood choppers, tin bashers and other horny-handed sons of toil, who will build lots of new houses, earn money for doing so, and promptly rush out to spend it by maxing out their credit cards, thus bringing back prosperity.

We rise above the temptation of dwelling on the fact that it was a surfeit of easy mortgage money and the construction of lots and lots of homes for people who couldn’t afford them that got us into trouble in the first place. It seems to us that the high and the mighty might have learned a lesson from all that. But what do we know?

What is missing from the Fed’s optimistic picture is that though mortgage interest rates are way down, that’s not the whole story when it comes to home buying. It seems to us that this is not the problem. For one thing, banks aren’t eager to lend. So says Donald Trump, and while we are not exactly a fan of The Donald, given how he makes a living, he ought to know what he is talking about when he speaks of real estate financing. In fact, interest rates are way down, and are not the problem at all. The good old days of buying homes with no money down, and without demonstrable, solid evidence of ability to pay off the mortgage, are gone, and it is not clear who is going to buy all those new homes. Second, lenders are not exactly eager to lend, and when they do they require good credit ratings. Which reminds us, what about down payments? Will those be borrowed too, like it was done at the height of the bubble?

Moreover, lots of people have had had a rude awakening in the last few years, and it seems likely that few of them will blithely go in hock up to their eyeballs again, in order to buy a house which — if they stop and think about it — they cannot really afford.

Bottom line: What lies at the heart of the Fed’s latest proposal is the notion that this new “stimulus” will cause people to borrow more, spend more on housing, and thus create jobs. In turn, those jobs will produce more money in wages, and wage earners will buy more homes which will require more financing which will be provided by. . . Wait a minute! Isn’t this a bit circular? Sounds that way to us. We fail to see how creating another mountain of bundled mortgage-based securities is going to restore prosperity. Sounds like the fed is putting the cart before the horse. It is job creation and  higher wages that are likely to produce prosperity and higher levels of home ownership. Manageable debt is a byproduct of prosperity, that comes about when prosperous people, confident of their economic future,  buy homes, cars, etc.. Asking insecure people who are threatened by prospects of  job losses and an uncertain economic future to go in hock sounds to us like beating a dead horse in the hope that it will make him go giddy-up.

Maybe Mr. Bernanke, being a lot smarter than your humble servant can pull that economic rabbit out of the bankers’ top hat. But we doubt it.

Afterthought. You don’t suppose that Mr. Bernanke’s real motivation is to keep interest rates way down, near zero to banks, in order to give bankers a break,  to pump up the stock market, and perhaps more important, to facilitate Uncle Sam’s enormous and growing multi-trillion dollar debt that would lead to even larger deficits if Uncle had to pay real interest on his indebtedness, like you do when you borrow money, do you?


The purpose of this blog is to provide a forum for people, whether eminent domain professionals or not, for exchange of ideas and a discussion of eminent domain news and issues. It does not provide legal advice. Questions concerning actual cases should be directed to the readers' own legal, appraisal and real estate advisers.

We reserve the right to delete comments that in our judgment are abusive or otherwise inappropriate, or that digress from the topics that are the subject of this blog.