You Just Can’t Make This Up: Pfizer to Leave New London, Leaving the City Holding the Bag

         Latest dispatches from New London inform us that Pfizer, Inc., the giant pharmaceutical company that established its $300 million research facility in New London, Connecticut, is pulling out of New London. You may recall that the presence of that Pfizer facility  in that community became the lynchpin of New London’s justification for the misbegotten redevelopment project that gave us the wretched Kelo case. That was the case in which the U.S. Supreme Court held that — notwithstanding the Fifth Amendment’s “public use” limitation on property takings — private property (in this case a well-maintained, unoffending lower middle-class neighborhood) could be taken by eminent domain in order to raze the homes, and give their vacant sites to a redeveloper for the construction of privately-owned upscale shops and condos that would — so went the theory — serve the needs of the well-paid, well-educated Pfizer work force.

         Now, not only is there no redevelopment project, but it also appears that there won’t be any such upscale workforce in the immediate area — Pfizer is moving its research center employees to Groton, Connecticut, leaving behind . . . What? The news available so far give no indication as to what is to be done with the huge research center that is about to be shut down. Here it is.


Stay tuned on that one.

For the full story see Lee Howard, Pfizer To Close New London Headquarters, The Day, November 9, 2009.

Postscript. In earlier blogs we used the figure of $80 million as the amount of money wasted by the State of Connecticut and the city of New London on this fiasco. We have since then come across a report that this total was more like $130 million by the State alone. See Fort Trumbull Must Be an Open Book, The Day, June 28, 2008.

Follow up. One of the criticisms of redevelopment as practiced, is that it’s a zero sum game — if one community attracts a redeveloper, that means that others won’t because there are only so many discretionary dollars in an area, so that if they are spent here they won’t be spent there. Here is a case in point. The Day reports that New London City Officials “Disheartened”  by Pfizer Closure (Nov. 9, 2009) since Pfizer is New London’s largest taxpayer. Evidently, not any more. The moral here would appear to be that he who lives by redevelopment, dies by it when the redeveloper moves on to greener pastures. And this is hardly the first time this has happened. Yonkers, New York, learned that the hard way a while back when it blew millions to condemn private land for Otis Elevator company which a few years later shut down its Yonkers plan and moved out of town, leaving the city holding the bag. 

This illustrates dramatically that all the BS about how a company’s move into a redevelopment area is a part of “public use” is indeed BS. These companies are out to make a profit, not to revirtalize New London or any other place. They do what they do because they find it profitable, but the moment profits end, they move on if they can. People who nevertheless go on about how these deals serve a “public purpose” or pursue “public use” are insulting our intelligence. And that includes judges who buy into this stuff. 

In the meantime, the Mayor of Groton is quoted as saying that Pfizer’s decision to move its research facility to Groton is “fantastic news.”

Second follow up. Remember all those confident predictions while Kelo was before the Supreme Court, about all those new jobs that were coming? It now turns out, according to the Hartford Courant (Pfizer to Close New London Headquarters,, November 9, 2009)  that instead, Pfizer’s move will “result in staff reductions” although no specific numbers have been revealed at this time. And it isn’t the recession. According to the Courant, this is an effect of the consolidation of Pfizer and Wyeth (another pharmaceutical company) that Pfizer merged with.

For some further details on the Pfizer-Wyeth merger, its impact on employment at Pfizer’s 20 research sites (including the New London facility), and the impact on employment figures at Pfizer and elsewhere in the drug industry, see Jonathan D. Rockoff, Pfizer Shuts Six R&D Sites After Takeover, Wall St. Jour., Nov. 10, 2009, at p. B3.

And speaking of the Wall Street Journal, don’t miss today’s editorial, Pfizer and Kelo’s Ghost Town,  Wall St. Jour., Nov. 11, 2009, at p. A20. To that, you can add the lengthy article by Patrick McGeehan, Pfizer to Leave City That Won Land-Use Suit, New York Times, Nov. 13, 2009, at p. A1, from which we learn that for all that BS about higher taxes, the deal between New London and Pfizer requires the latter to pay taxes on only 20% of its research center’s value, up until 2011 by which time Pfizer will have said ta-ta and left the community, taking 1400 jobs with it, and leaving New London holding the bag.

          Your tax money at work.