Pie in the Sky in New London — Again

You may recall the failure of the infamous New London, Connecticut, redevelopment project that gave us the awful 5 to 4 decision of the Supreme Court in Kelo v. New London. An entire unoffending, unblighted lower middle class neighborhood was seized  by eminent domain and razed to the ground by the New London redevelopment agency in order to build — or so the city plans asserted — a five star hotel, upscale shopping, pricy condos etc. to serve — according to the city — the well-paid employees of the Pfizer pharmaceutical corporation that had built a $300 million research center nearby, and thereby  to boost local taxes. But as you surely know, being a reader of this blog, the redevelopment project turned out to be an unmitigated failure in spite of the fact that the city’s plans called for a freebie to the redeveloper (turning over that land to him for 99 years for $1 per year). The cracks in the city’s project appeared when the selected redeveloper was unable to secure financing and had to default on his contract with the city. It went downhill from there. The city wound up with a vacant 92-acre waterfront parcel that it could not use but which ceased to generate taxes, and that no one would touch, even though the city took it by eminent domain in 2000, and the Supreme Court approved the taking in 2005 — that’s thirteen and eight years earlier, respectively. This caper cost the public somewhere north of $80 million; probably more like $120,000,000, with nothing to show for it. So much for boosting the community economy by the use of urban redevelopment.

And Pfizer for whose upscale employees’ benefit this caper had been undertaken, said “no thanks” and moved out of New London lock, stock and test tube, just as soon as the local tax breaks to it expired, taking some 1400 jobs with it.

Insult was added to injury, when that 90-acre waterfront parcel became a weed-overgrown wasteland, of interest only to birds and feral cats,  and was eventually used by the city as a dump in which to dispose of debris from a hurricane.

But in time, along came another redeveloper who was going to build — not the planned fancy-shmancy five-star hotel cum upscale shops and condos that the city sold to gullible judges as intrinsic parts of its “plan,” but plain ol’ housing that was first presented as 101 condos. But alas, those didn’t fly either (would you buy a condo in down-at-the-heels New London?). After the planned condos flopped, the new, new plans called for some rental units, except that didn’t work out either because history has repeated itself, and it turns out that the present redeveloper has not been able to secure financing either. So we are told by The Day, the local newspaper that has faithfully kept track of this caper all along.

“The first new construction in Fort Trumbull since the area became the focus of a national fight over  eminent domain was delayed Thursday after developers were apparently were unable to demonstrate how they were going to finance the $24 million Village on Thames project.”

“The Renaissance City Development Association said Monday’s groundbreaking ceremony for 34 units of  rental housing is postponed. A closing to transfer the property to developer Riverbank Construction did not take place Thursday as planned . . .” Kathleen Edgecomb, City Says Fort Trumbull Development Delayed, The Day, May 17, 2013.

What now? We have no idea. Maybe the city can get Justice Stevens whose majority opinion lauded the city’s plans, to invest in this land. You don’t think so? Neither do we.

The moral of it all is that where the players have no skin in the game, and judges, instead of keeping an eye on their doings, profess to be mere powerless automatons who have to accept the decisions of condemnor-redevelopers as long as they can be said merely to be “reasonably related to the conceivable,” which means that they have to uncritically buy the municipal BS about the wonders the proposed redevelopment scheme is about to perform, and do not hold anybody responsible for losses they inflict on the public fisc, that’s what you get.

We are once again  reminded of the line of Justice Macklin Fleming, of the California Court of Appeal who once observed in a redevelopment opinion (Regus v. City of Baldwin Park) that promoters of redevelopment projects like to argue that their favorite project will bake a bigger economic pie, with bigger shares for all, but in reality, what they often produce is pie in the sky. Here, in case you need a real life example of his wisdom, is the proverbial Exhibit A.

Edited May 18th, 2013, at 12:30 am

Follow up. For additional coverage of this latest debacle in the never-ending New London eminent domain fiasco, check out John K. Ross, Eminent Domain for No One’s Gain: New London Groundbreaking Ceremony Postponed, on the Reason.com blog — click here .