Monthly Archives: January 2013

The Faster We Run, the Behinder We Get

This isn’t about eminent domain or land use, and therefore not within the purview of our usual dirt-related topics, but being a matter of urban governance, we can’t fail to take note of it because it illustrates just how crazy things can get. As you know, the country is overwhelmed with disputations over gun control legislation intended to declare certain weapons illegal. Given the recent horrors of Newtown, Connecticut, that’s hardly surprising. Most people are simply getting Airsoft Guns instead as they’re so much safer and more straightforward to own. But out here in la-la land, this dispute has unearthed something really, really crazy.

California already has a law whereby convicted felons and mentally ill folks are prohibited from owning guns. Their names are in a database so that the authorities can contact them and confiscate their illegally held guns. The state also has strict laws against high-capacity magazines (check that prohibit their possession, importation, manufacture, and sales. Sounds good, but . . .

It turns out that the State of California lacks sufficient funds and manpower to enforce this law and so, long story short, each year it investigates and seizes some 2000 illegally held guns. That’s good news. The bad news is that during the same period of time, 3000 guns and their owners of the felonious and/or dingaling persuasion are added to that database. And God only knows how many more of them have guns that are not in that database. See Patrick McGreevy, Felons Keep Guns as State Falls Behind, L.A. Times, January 30, 2013, at p. AA1.

While this is going on, our Senator, Dianne Feinstein, is moving heaven and earth to pass new laws that, at least as we understand them, will require the confiscation of so-called assault weapons and large-capacity magazines from everybody, not just felons and dingalings. This necessarily will add many guns to the list of proscribed ones, and add to the burdens of law enforcement folks who are unable to keep up with the flow of illegal guns that are in line for confiscation under existing law. Thankfully, the majority of gun owners are responsible and would never dream of doing anything illegal – they do proper research before purchasing anything firearm-related and check out Ammoland Gun Reviews and others to do this.

We were hoping to say something snappy in conclusion, but nothing comes to mind that would even come close to doing justice to this meshuggas.

Bubble, Bubble, Toil and Trouble — (Cont’d.)

When we noted the other day (1/17/13) that home prices are rising again at an unhealthy clip, we didn’t realize that there is more to this than we first thought. Today’s New York and Los Angeles Times treat this as a serious story; the L.A. Times headline that says it all (Prices Rise, and So Do Fears of a Bubble, L.A. Times, January 30, 2013, at p. B1). The top five cities show double digit price increases ranging from 22.8% (Phoenix) to to a “mere” 10% (Las Vegas). The 20-city composite is 5.5%.  Also see Reuters, Home Proces Surge More Than 5%, the Most Since 2006, N.Y. Times, January 30, 2013, at p. B6.

Do you suppose that another bubble is being blown up? But if you consider how low interest rates are, it may not be so crazy. Stay tuned.

Who Actually Owns Grand Central?

Here is a zinger for you, folks. It turns out that the actual owner of Grand Central is not the Metropolitan Transit Authority or some other highfalutin’ government transportation agency, but a fellow named Andrew S. Penson who tends to stay out of the limelight. Surprised? So were we. But it’s all there in black and white in the New York Times — Grand Central’s Flesh-and-Blood Landlord, January 29, 2013.

It seems that in 2006 an outfit called Midtown Trackage Ventures (Mr. Penson is the manging director) bought Grand Central from a bunch of obscure companies you never heard of, and the sale included 1.3 million square feet of air rights over Grand Central.* The MTA, however, leases Grand Central, and pays $2.24 million in rent annually. The lease expires in 2274. MTA has an option to buy the place in 2017. Who is Midtown Trackage Ventures? We don’t rightly know, though we tried to work our way through the lineage contained in the Times, but that was before our morning fix of Starbuck’s so we gave up, except to note that Midtown Trackage Ventures included two “institutional investors” that Mr. Penson would not identify — go ahead, read this item for yourself, and speculate your little hearts out if you are so inclined — we have better things to do.

And the cutest insight into the doings of Manhattan real estate nabobs is provided by the dispatch that only a a few MTA officials have ever met Mr. Penson who also declined to attend the whoop-te-do surrounding the Grand Central centennial dinner.  Talk about anonymity!


*       Remember those air rights? SCOTUS made no ruling concerning their role in the Penn Central taking saga, but it sure noted their presence and the possibility of them being sold so as to soothe some of the economic sting Penn Central felt when the city denied it the right to use them, thus providing the basis for Penn Central’s taking argument in the Supreme Court. Why mention that now? We’re glad you asked.  It seems that those air rights “could become more valuable if the Bloomberg administration’s proposed higher-density Midtown East rezoning plan is approved.” Stay tuned.

Grand Central — Again

The 100th anniversary of  the construction of Grand Central terminal is upon us, and unsurprisingly, various mavens are coming out of the woodwork to comment on it. The latest is another NY Times article (Clyde Haberman, Looking Out on Grand Central, and Looking Back on Saving It, NY Times, January 28, 2013, at p. A15). This is largely an interview with Kent L. Barwick, former president of New York’s Municipal Art Society which was instrumental in talking (and pressuring) the New York city attorney into backing off from his decision not to appeal from the trial court decision favoring Penn Central Transportation Company, in exchange for Penn Central forgoing its monetary claim against the city (that the trial court reserved until later).  Mr. Barwick gives credit to Jackie Kennedy for talking the Art Society into taking the initiative on this caper that eventually led to the notorious 1978 SCOTUS opinion in Penn Central Transportation Co. v. City of New York.

The rest  is history. If you want a better, and certainly more balanced and more thorough, description of these events, we recommend pp. 65-75 in the 1985 book THE ZONING GAME REVISITED, by Richard F. Babcock and Charles L. Siemon. Babcock was the Chicago-based dean of the nation’s land-use bar and Siemon (who now practices law in Florida) was his partner.

If you want to know more about the behind-the-scenes events involving the Penn Central case, we also recommend Looking  Back on Penn Central: A Panel Discussion with Supreme Court Litigators, 15 Fordham Envtl. L. Rev. 287 (2004). This is a transcript of a round table discussion among counsel who argued the Penn Central case, and former clerks for Justices Brennan (the author of the Penn Central majority opinion) as well as the clerk for Justice Rehnquist (who wrote the dissent). If you aspire to the status of a Penn Central maven, this is must reading because it reveals incontestably that these actors in the Penn Central drama were stunningly ignorant of the state of pertinent law and the doctrinal ramifications of the opinion they were about to spring on the unsuspecting legal world. They thought that the Penn Central case was not important, and certainly not important enough to be discussed by them in this fashion 25 years later (id. at 295). Lois Schiffer, head of the U.S. Justice Department litigation section, thought Penn Central was a “ho-hum” case (id. at 295). Of such ill-informed stuff are “polestar” cases made.

Last but not least, we suggest that you also look at our magnum opus on the subject of the Penn Central litigation, entitled Making Laws and Sausages: A Quarter Century Retrospective on Penn Central Transportation Co. v. City of New York, 13 Wm. & Mary Bill of Rights Jour 679 (2005).  See particularly the section following the subheading, X. The New York Establishment “Goes to the Mattresses,” accompanying footnotes  257-268, which covers the same ground as does the New York Times puff piece.

California Choo-Choo (Cont’d.)

No project in human experience has ever been completed on time, on budget and on spec.

                                                    Cheops’ law

This won’t come as a surprise to our faithful readers, but the latest dispatch from the California Choo-Choo front informs us that things are not going according to schedule and the budget has grown woefully inadequate to complete this projects. Ralph Vartabedian, California Still Hasn’t Bough Land For Bullet Train Route,  Los Angeles Times, January 27, 2013, at p. A1. The problems:

1.      The actual construction of the railroad is supposed to start in six months, in order to secure promised federal funds  but so far, permits from various regulatory agencies are lacking. These include the Corps of Engineers and the San Joaquin Valley Air Pollution  Control District. “Last month, the federal Government Accountability Office reported that about 100 parcels were at risk of not being available in time for construction.” In that connection, we offer for your consideration this quote of a GAO investigator as a promising candidate for the understatement of the year: “Not having the needed right of way could cause delays as well as add to project cost.” It could indeed. Reminds us of a sign we saw once in an office of the Navy Department in Washington D.C. It said: “A collision at sea could ruin your entire day.”

2.     Another feat of timing: “[T]he formal right-of-way plan indicates [the authority] does not expect to acquire the first properties until Sept. 15, despite other documents that  indicate construction would start in July. Last month, the federal Government Accountability Office reported that about 100 parcels were at risk of not being available in time for construction.”

3.     And to make things more interesting, last year, agricultural land prices have been rising, the average price going to $28,000 per acre, from $8000 per acre. Quoth the chief executive of the railroad authority: “We don’t thing we are wildly off.”

If you have an interest in such matters, we suggest you read Mr. Vartabedian’s entire article — click  here.

The Grand Mortgage Condemnation Scheme Goes Down the Tubes

We are on the road, speaking at the annual ALI-CLE (formerly ALI-ABA) annual program on eminent domain, held this year in Miami Beach, so all we know is what’s on the internet, but our screen is full of dispatches that the county of San Bernardino, California, whose decision to study the subject of condemning mortgages on underwater  homes started the whole hulabaloo, has decided to cancel its involvement in that scheme, and won’t proceed with it.

More after we are able to gain proper access to this information.

And here, your faithful servant and a few other mavens, wasted man-hours this dicussing this subject at that ALI-CLE program only this morning.

The Grey Lady Rounds Up the Usual Suspects

The U.S. Supreme Court has a taking case before it, so it’s time for the New York Times to come down on the side of the greedy government, and against the constitutional rights of the property owner who wants no more than to build on his land in accordance with zoning and land-use regulation law, but without being subjected to what the U.S. Supreme Court aptly called an outright act of extortion. Constitutional law has been settled since the 1980s that when private development imposes burdens on public resources, it is permissible for the local land-use regulators to require a dedication of land whose transfer to the government will tend to undo or mitigate those burdens. But under the Nollan and Dolan cases, such a “dedication”* must (a) have a nexus or connection to the harm sought to be mitigated by the government, and (b) the government demand must be proportional to the anticipated public burden it seeks to mitigate.

As it happened, both Nollan and Dolan cases involved demands for dedications of land, leaving open the question of whether the law was the same in cases where the government demanded something other than land (e.g. money). This remained an open question until  Koontz v. St. Johns River Water Management District case landed before the Supreme Court.

In Koontz the District demanded that as a condition of the District granting a development permit, Koontz had to pay for government improvements that had nothing to do with his project, and indeed would be located some distance away from it, so that they lacked the required nexus and proportionality. So why should Koontz have to pay for something that had nothing to do with him, his property, and his development? To the extent Koontz’s project would require filling of 3 acres of wetland, he offered to dedicate 11 acres of existing wetlands to the government as an act of mitigation. Eleven acres in exchange for three sounds like a good deal to us, but the District was greedy and demanded more.

In other words, what happened in Koontz was no request for a dedication, but an act of extortion: Give us money to pay for construction of government improvements that have nothing to do with you or your land, and are located miles offsite, or we won’t permit you to build on your land in a perfectly legal manner. This is an example of what lawyers call the doctrine of “unconstitutional conditions” — give us what we want, or we will deprive you of your constituionalm right. It’s sort of as if the govenment were to say to the New York Times: Pay us the cost of constructing a public school in Brooklyn, or we won’t let you put up your new building on 43rd Street in Manhattan. You think the Times would go for that? No? We don’t think so either. Why? Because after all the lawyer-talk is done with with, a situation like that beaars no resemblance to mitigation of any supposed harm done by the owner’s improvements. It is simply a case of baksheesh — an insitutionalized bribe, or if you prefer, since the District is saying “give or else,” it is an act of extortion — which is what the Supreme Court aptly called it in the Nollan case in 1987. So why change now?




*    Why quotation marks, you ask? Because in the context of land regulation law the word “dedication” means a gift of land to the government. But when the government demands a “dedication” before it will issue a permit for construction of a lawful private improvement, it’s no gift that it asks for — the donative intent is lacking, and such a transaction has all the attributes of a “gift” that took place when in the third grade you acceded to the request of the school bully who inquired if you would be good enough to give him your lunch money as a condition of him letting you go home in one piece.

New Urbanism, Or New Landed Aristocracy?

Back in the olden days, when His Majesty, the King, wanted to show his favor to a deserving subject, he bestowed upon him a title of nobility — not just the right to call himself the Lord of Giggleswick, or the Voyevoda of Podlipskie, or whatever, but with those titles of nobility came land. We may not think in  terms of landed gentry today, but the right to own (or occupy) land in certain places still carries with it enormous prestige as well as economic benefits.

New York, or more accurately, Manhattan, represents the ultimate in urbanization. But the urban environment is also the traditional habitat of the middle class. So we turned with great interest to a long article in today’s New York Times’ Real Estate department — Amy O’Leary,What Is Middle Class in Manhattan? Jan. 20, 2013, at p. 8, Business Section — click here.

It won’t come as a surprise to our sentient readers that the cost of housing has been soaring in New York for a long time, and this article contains partial copies of four older articles, reiterating the same theme going back to 1950: the cost of housing has been driving the middle class out of New York.. The one from 1969, by David K. Shipler, is headlined Many Families Find They Must Leave City for Housing. That pretty much says it all. What we learn from today’s article is that “only 17 percent of Manhattan households have children, according to census data. That is almost half the national average, making little ones the ultimate deal-breaker for otherwise die-hard middle class Manhattanites.”

So this is the “new urbanism” that we are urged to aspire to?


Grand Central Is Not Just a Case; It’s a Building

To us dirt lawyers, Penn Central is synonymous with Penn Central Transportation Co. v. City of New York, 438 U.S. 194 (1978), the landmark non-case in which the U.S. Supreme Court proclaimed itself “simply unable” to say what are the elements of a regulatory inverse condemnation action, but went ahead and decided the case anyway. In the process, it produced incomprehemsible verbiage that has confused the law  and that prevents lawyers from understanding precisely what they are supposed to present by way of evidence to make out their clients’ case. Worse, as U.S. Court of Appeal judge James L. Oakes put it in a law review article, it enables judges to reach whatever result thay want.

Today’s New York Times carries an article by Sam Roberts, on a different aspect of Grand Central Terminal, entitled 100 Years of Grandeur: The Birth of Grand Central Terminal, Jan. 18, 2013 — click here   It should be of interest to Penn Central junkies. It’s a story about the construction of Grand Central Terminal and the men who designed and built it. It’s a good read that should be perused by lawyers interested in the Grand Central case, if only for general background.

And to give ourselves a self-promoting toot on our horn, if you wish to become a true Penn Central junkie, you should also read our own contribution to the Grand Central’s moden legal history: Gideon Kanner, Making Laws and Sausages — A Quarter Century Retrospective on Penn Central Transportation Co. v. City of New York, 13 William & Mary Bill Rts. Jour. 679 (2005). Go for it! What have you got tto lose?

Koontz Again — And Now for a Word from the Grand Maven Himself

When it comes to takings law, there is usually no one like Professor Richard Epstein who tends to provide his readers with insights that others usually lack. And that’s what just happened in the Koontz case. Richard has published a piece in the January 2nd, 2012 issue of Defining Ideas, a journal of the Hoover Institution, entitled “When Government Takes You Hostage.” Click on We suggest you read it, but for now let us quote what we consider his core point that deals with what happens when you decouple the exaction demand from the specific private project for which the owner seeks a permit:

“[T]he entire mitigation doctrine amounts to nothing more than a form of grand theft larceny by which the state first claims for nothing a state-wide environmental easement, which it will then sell back to the landowner for the (mitigation) price that it regards as acceptable by its own standards. It is, quite literally, no better than allowing the state to confiscate land for nothing, which it then duly sells back to its original owner for a price. Ransom money involves the same dubious strategy.”

We like that formulation because we made a similar point a while back in Gideon Kanner, Tennis Anyone? How California Judges Made Land Ransom and Art Censorship Legal, 25 Real Est. L. Jour.,  214 (1997) in which we saw exactions unrelated to the burdens imposed by the developer on society, as the holding of private land for ransom, consisting of [monetary] exactions demanded before the owner may build perfectly innocuous and indeed publicly beneficial improvements.