Follow up: The Wacky & Wonderful World of Eminent Domain After Kelo

Yesterday’s webinar “The Wacky & Wonderful World of Eminent Domain After Kelo” packed a lot of information into one quick hour. Speakers Robert Thomas, partner at Damon, Key, Leong, Kupchak, Hastert in Honolulu, Hawaii, and Andrew Schwartz, partner at Shute, Mihaly & Weinberger in San Francisco, California, presented their opposing viewpoints on the use of eminent domain for redevelopment. [Disclosure: Robert Thomas is the OCA member from the Aloha state.]

Robert Thomas titled his presentation “Schlimmbesserung – Eminent Domain for Redevelopment.” As Robert explained schlimmbesserung is one of those German words that does not translate directly to an English word and essentially means “to make worse by improving.” As Robert explained yesterday and in his blog post here, schlimmbesserung or worsening by improvement describes how he sees the more infamous eminent domain for redevelopment projects such as Kelo and Poletown.

A point that we would like to mention from Robert’s discussion: the Supreme Court in Kelo did not unequivocally permit eminent domain for economic development. Rather, the Court indicated that economic development might be a public use. Further, in Kelo the Court points to pretext and found that economic development as a pretext to hide a private benefit is not public use. The Court ultimately required lower courts to review the reasons for a taking to examine the benefit and determine whether the taking is truly for the public use or a pretext hiding a private use/benefit.

Robert’s PowerPoint presentation is available below for review or download and has also been posted on his blog here.

Uconn cre thomas_slides_10-2010

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The second speaker, Andrew Schwartz, approached redevelopment from a different angle and spoke of the “bigger picture.” Andrew argued that redevelopment is a tool used by the government to address situations of market failure. He suggested that for every redevelopment project that fails, 10 succeed. Andrew explained that in California, his home state, redevelopment has been enormously successful in creating affordable housing. He spoke of redevelopment, particularly “infill” redevelopment whereby underutilized or vacant property within an urban area is developed to craft a complete well-functioning neighborhood, as beneficial on climate change as it reduces sprawl. Finally, he argued that Kelo was only a “partial failure of redevelopment.” While we do not have a copy of Andrew’s PowerPoint that we can share at this time, we will do so if it becomes available.

In the end, the adage: “Beauty is in the eye of the beholder” comes to mind here. One man’s underutilized parcel is another man’s castle, home or business, while one individuals’ well-traveled sidewalk is another’s cracked and blighted eyesore. And, finally, while Pfizer may have built a beautiful 33-acre waterfront office complex (that it later announced it would vacate), schlimmbesserung really does seem to describe the redevelopment project initiated by the the New London Development Corporation to bring economic development and increased tax revenues to New London.

The webinar was sponsored by the Counselors of Real Estate, the University of Connecticut, and Robinson & Cole as part of the 2010 Real Estate Teleconference Series and we are looking forward to participating in more interesting conversations within this series.

We also recommend that you read Redevelopment’s Dismal Story posted by Professor Gideon Kanner at his blog, Gideon’s Trumpet.

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